Good morning,
The crude oil market continues to ride a narrow wave between $38-41/barrel. As I have been discussing, the price movement is completely driven by headlines and not always based on supply/demand economics. Prices continued their downward trend below $40/barrel until late Tuesday when vaccine announcements were made along with a very bullish prediction on the weekly EIA Inventory report. Crude prices jumped back up above $40/barrel. On Wednesday, the EIA Inventory report was confirmed and major banks released their earnings showing strong profits. However, the rally was quieted as OPEC+ decided to relax production quotas starting in August until the end of the year. The main economic driver for crude has been gasoline demand in the US. As the coronavirus cases continue to surge, if economies slow down and more crude enters the market, a balance from surplus crude will be broken quickly causing prices to severely drop. In addition, China’s economic data was not very strong and American unemployment filings were over 1M again. I believe we are going to experience a very narrow range on the crude trade for the next few months.
Gasoline and diesel retail prices have not changed from last week. The average retail price on both gasoline and diesel is around $2.05-2.19/gallon depending the market. I do not expect to see much if any movement on retail prices.
Propane prices have been following the crude market fairly closely. I continue to write that all customers should fill up now while prices are cheap. We also released our contract pricing for next heating season and the prices are fantastic. I also recommend that all customers contract for the upcoming heating season.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford