Good morning!
Crude prices are ending the week higher than where they started. The week was the most volatile we have experienced in over six months. Monday started with over a $5/barrel correction in crude price due to OPEC announcing an end to production cuts starting April 2022. Many companies took profits on the news, rang the register, and waited to see happened next. Crude prices are up almost 60% for the year, so it’s not a bad return on some positions for traders. However, the market called a bluff and basically clawed back all the losses by the end of week. Even though COVID is causing issues in many parts of the world and the US inventory report was very bearish, crude prices continued to climb. Although the price did not fully recover from Monday’s bloodbath, WTI crude still settled back above $70/barrel. I’m not sure we will see $100/barrel crude oil, but for now, crude prices seem supported at current levels.
Gasoline and diesel retail prices will probably remain pretty steady at the current rate. Although cost dropped dramatically on Monday, the cost increased back to the starting point by the end of the week. So unfortunately, there looks to be no change in site for prices at the pump.
Propane price is continuing to remain very bullish and well supported. Inventories are over 25% lower than last year and we are now at the lowest inventory level in nine years. Even though crude prices eased a bit, propane price did not give up much ground and quickly recovered. I do not see much relief for propane prices on the horizon. We will have to wait until after harvest before we really get a better feel on the winter supply situation. However, Canada continues to have ample inventories so our rail terminals will be able to hopefully provide a much anticipated supply relief this winter. Our contracts for the upcoming season are out. Please feel free to call the office to sign up today!
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford