Good morning!
There is not much news to report this week. Crude oil prices continue to follow the news cycle. We started out the week with prices dropping based on fears of a second wave with the coronavirus. But prices recovered as more news of potential treatments for COVID-19 were released and the EIA reported draws in US refined product inventory. OPEC+ seem to be holding strong on their production quotas and the US is not ramping up production quickly as crude prices slowly recover. The combination of everything that happened this week is leaving investors with an appetite for more. So as we close the week, WTI Crude oil topped $40/barrel for the first time since the beginning of March! But will this recent rally last? I’m not so sure. The economy is still slow with another 1M people filing for unemployment this past week. I believe we are hanging on by a thread and any resurgence of the coronavirus in previous hot-spots forcing any sort of shutdowns will squash this rally. For now, all trajectory is on the heels of any coronavirus news.
In local retail news, gasoline and diesel retail prices have climbed above $2/gallon in most areas. Due to the 10% rise in crude prices, retail prices have followed accordingly. I expect to see retail prices for both gasoline and diesel to remain above $2/gallon.
Propane prices have held steady and climbed a bit the past week. I continue to be bullish on propane. Although inventory levels are OK right now, any hiccups in production could put us into deficit very quickly with all of our export capacity running strong. In addition, if we have a cold winter, demand could put pressure on our production facilities, which at the moment are making NO contract commitments for retailers this coming winter. As always, propane will be interesting. I recommend that everyone fill their tank now and contract for next heating season. We expect next heating season contracts to be out in July.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford