Crude prices started the week out strong with Trump announcing continued pressure on China trying to force the sale of the app TikTok. The action is renewing skepticism that the US and China will not be able to reconcile their trade differences in the near term. In addition, as COVID-19 continues to spread, Congress and Trump have still not passed a relief package as the previous relief package expired. Many Americans are finally starting to get back to work, but with the majority of schools going virtual in the fall, without some sort of financial package to help families with the cost of keeping kids home, many are worried our economy will start to decline again. Although the oil industry is starting to recover and the strength of the dollar is weaker, the continued China trade and COVID issues are putting downward pressure on crude. I still expect WTI prices to hold near $40/barrel until a COVID relief package is passed.
In local news, retail prices on gasoline and diesel continue to climb. I expect to see gasoline retail prices at or above $2/gallon and diesel retail prices will be over $2/gallon. As the futures trading months are moving more into harvest months, diesel prices are gaining some momentum with increased demand forecast.
Propane prices continue to follow crude. If you have not filled your tank this summer, please do so. The retail value of summer fill pricing has very high value for the consumer. I expect our retail prices to climb 10+ cents/gallon going into September. I also recommend contracting your propane usage for the upcoming heating season. I am reading reports of a colder winter this year and with all the instability in the marketplace, I think that the safety of locking in your pricing is very attractive.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.