Good morning,
I hope everyone has a safe and enjoyable Easter weekend. Nice to see the Brewers start out their season with a come-from-behind win yesterday! Markets are closed today due to Good Friday. WTI Crude prices closed for the week above $60/barrel. Many were surprised, including myself, because yesterday OPEC+ decided to start easing production cuts which usually causes a bit of softening. But the anticipation of the strong jobs report and the drop in the value of the dollar supported much higher crude prices. I have a feeling that inflation fears coupled with anticipated stronger demand will hold crude prices steady into summer. I think we won’t get to a point of seeing potential oversupply in the market until after Fourth of July. There is a chance that we could experience the backwardation of cheaper prices on the back half of summer. But I think that would also mean that the fourth wave of COVID-19 in Europe would need to greatly accelerate, which would be bad in general. For now, keep your wallet out. Prices at the pump are going to hold.
Gasoline retail prices continue to climb going into spring. I do not expect to see much relief on gasoline prices in the near term. Diesel retail prices have eased a bit but stabilized. I feel that diesel retail prices will hold under $3/gallon for the next couple of weeks.
Propane prices are starting to stabilize. Retail prices have unwound a little bit, but I do not see any downward pressure on propane prices until national inventory levels start to build. We are very low on national inventory. Production is strong so rebuilding can begin in April. But the rate of rebuild will be watched very closely. We are not out of the woods yet. So for now, if you have last season’s contract gallons remaining on your account that expire in April, I recommend that you take delivery of those gallons if you have the storage capacity.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford