Good afternoon!
Happy Friday! I hope this message finds everyone safe and well. I know that Wisconsin is now one of America’s hotspots for coronavirus spread. The next four to eight weeks are not going to be fun. I wish everyone good health and safety as we battle the current wave of virus in Wisconsin.
The prices for WTI Crude Oil closed below $40/barrel to end the week. The week started out with a rally in prices looking at shorter supplies from lackluster demand and refining. However, on Thursday, the combination of the economic data released and the “no deal” on coronavirus federal aid pushed crude prices below $40 barrel. Many believed the sell off was a breather from recent runs higher. But then at 2am this morning, President Trump announced that he and the FLOTUS have tested positive for COVID-19. The news sent markets into a tailspin, along with crude oil prices. In addition, the economy data released shows continued weakness and gaps in a chance for a faster than expected economic recovery. I am still bearish crude oi.
In local news, gasoline retail prices jumped about $2/gallon. I expect prices to hold for sometime. Diesel cost jumped as well, but retail prices have not quite moved yet. Diesel retail prices have potential to climb higher in the short term.
Propane prices have actually gone up this week. The move higher is a head scratcher to everyone. We experienced low demand, increased production, increased inventory levels, and increased exports. We now have over 102M barrels of propane in inventory. However, with a colder than normal start to winter, prices might find support. However, it’s not a bad idea to lock in propane prices for the year. The spot post delivery price on propane is the same as contract. Looking ahead, since spot price and off the truck price are near identical, it might bot be a good time to lock in your price for the year.
As always, if you have any questions, comments, or concerns feel free to give us a call.
Best regards,
Jon Crawford