Good morning,
Not too much to report this week. WTI crude prices have risen this week to nearly $30/barrel. There is much optimism on the continued cuts from OPEC and the US. In addition to the cuts, China’s crude demand is ticking back up as the country is reopening. The traders are also hopeful that US demand will continue to rebound from the lows in March and April as states begin to reopen. The FED is also calling for more stimulus which always raises commodity prices. I feel that the current WTI price recovery is too fast. Although there are some bullish headlines out there, the supply balance in the US is still on the bearish side. I’m not hopeful that WTI will break out much beyond $30/barrel. If for some reason WTI does break much above $30/barrel, we will see rig counts increase and another price collapse. I still think we are six to twelve months away from complete supply re-balance in the marketplace.
In local retail news, prices of gasoline and diesel continue to rise. I do not expect to see pump prices go down anytime soon. I would count on gas prices above $1.50/gallon throughout the summer at this point in time.
Propane prices also continue to rise. The supply economics of propane continue to be bullish. By no means is the propane supply situation looking like an emergency, but the world of overabundance in supply are behind us. I highly recommend filling your tank and contracting for next season when the contracts become available.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford