Good afternoon,
The crude markets have been behaving very strangely this week. I am starting to believe that maybe traders are putting the cart before the horse with the global recovery from the pandemic. Crude prices continue to be buoyed by a weaker dollar. However, if the global recovery slows down at all, lack of demand will overtake a weaker dollar on crude price prediction. There was a draw in US inventories this week and reports of crude shipments from the US going to China. But sources are saying that Chinese demand for crude is not what is being displayed. Overall, I feel that going into the election with the continued massive amounts of unemployment is going to catch up after summer and show that our economic recovery is far from over. Although the stock markets have recovered in many ways, the economy is not tracking the same. I do feel that crude is over bought and lower prices will come going into the fall. Historically, prices always collapse around the time of presidential election.
In local news, margins are very slim at retail in many markets. I expect that eventually gasoline and diesel retail prices will be easily over $2/gallon if they are not already in your market. I am floored at the street value for gasoline and diesel currently. If gasoline or diesel is under $2/gallon in your market, I recommend filling up!
Propane prices are continuing to stay stable and I expect prices to remain fairly stable through the fall into the end of the year. Production surprisingly remained strong through summer and corn drying demand is looking to be much weaker. I am not worried about supplies going into this winter. However, summer economics will start to change in September regardless of supplies, so if you have not filled your tank yet, please make arrangements to do so! The current prices are good value right now! And don’t forget to lock in your heating price for the upcoming winter!
As always, if you have any questions, comments, or concerns, please feel free to give us a call!
Best regards,
Jon Crawford