The coronavirus continues to put downward pressure on crude prices. WTI crude is holding near $50/barrel which is the lowest in almost a year. OPEC+ is meeting early to try and convince everyone to pump less oil until the coronavirus is contained. Russia is disagreeing to the terms and believes that nothing should be done until the coronavirus is further studied. If Russia pumps less oil, the US will take the market share and Russia is not ok with that happening. The US continues to pump at record levels and is not looking to slow down. To try and help keep the steam in the economy, China announced slashing tariffs on US goods in a couple weeks. China knows the coronavirus is going to slow things down a bit, and if anything, the virus is forcing the two countries to talk more about the trade dispute. For now, we are seeing a floor carve out on oil prices. I believe we will trade in the $50-55/barrel range on WTI until further notice on the coronavirus. I believe that if a cure is found and the virus is contained, WTI crude will jump $5/barrel. However, until real economic slowdown occurs, I don’t think traders are going to give up much more on crude prices. For now, it’s a day-to-day move with the news cycle.
In local retail news, refined products have softened once again, so I expect to see retail prices on gasoline and diesel hold around their current levels for some time.
Propane prices have also softened with record warm temperatures. The US actually experienced a BUILD in national inventory last week, when last year at this time it was a record drop! We are looking at ending the winter with as much in inventory as we sometimes have to start winter! I think that propane values are very attractive and I see very cheap prices on the horizon for the rest of this year and next winter. So for those who heat with propane, hopefully you can keep more money in your pockets for 2020 and 2021!
As always, if you have any questions, comments, or concerns, please feel free to give us a call.