Crude prices traded in a very narrow range this week. Supplies are ample and demand is healthy in the largest economies, but the virus variants and targeted lockdowns in various countries are keeping any major price runup in check. On the downside, a potential deal with the US and Iran is back on the table which would throw the crude markets into supply surplus. The beginning of talks is putting downward pressure on crude prices, but not too much pressure as the negotiations with Iran are usually quite volatile and unpredictable. For now, WTI crude price seems to be in a holding pattern around $59/barrel. Jobless claims were a bit higher than expected and small business closures are climbing which is keeping American demand in check. However, vaccinations are flowing at a record pace and a fourth wave seems like it will be targeted areas as opposed to widespread. The crude market continues to be in a push-pull relationship with many economic issues, but the range of the swing has become much more narrow.
In local retail news, gasoline prices have eased a little from recent highs, but not much. I don’t see gasoline retail prices falling below $2.49/gallon anytime soon based on current market conditions. Diesel cost has also balanced out which will keep retail prices from breaching $3/gallon which is good for farming, construction, and shipping this spring.
Propane prices continue to slowly unwind but not as fast as some would like. I am not expecting very cheap summer fill prices below $1. I also know that next season’s heating contracts will be priced higher than this year. I highly recommend that customers take delivery of any remaining contract gallons on their account. If propane prices start to drop dramatically, I don’t see that possibly happening until at least August. Stay tuned for more info as we wind down the heating season and approach allocation building season.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.