I hope this message finds you well. Crude prices held just under $70/barrel this week as the world waits to see how Covid-19 and the variants play out going into the fall. Saudi Arabia announced deep discounts for October signaling weak demand, but then Europe and the US released info showing signs of stabilization in the Delta surge. In addition, the Fed is signaling a slowing of bond repurchases and many other world banks are slowing bond repurchases. South Korea even raised interest rates. In America, 80% of Gulf oil production is still shuddered from Hurricane Ida but slowly coming back online. But the weekly inventory report still showed strong exports. And although the job market is looking primed to finally improve, consumer index pricing increased the largest ever at 8.5%! Basically, a lot of bullish and bearish news for crude price direction. I think with summer demand winding down but possible economic conditions improving in the US, many traders are going to wait and see. Also, harvest is starting to kick in so many eyes will be watching crops in the coming weeks.
In local retail news, prices for gasoline and diesel have eased a little bit post Labor Day weekend as expected. I believe most retail prices will be holding for a bit as well.
Propane prices continue to go up as national inventories are just not building. The country is going to be short on propane and prices are going to remain high. If corn drying demand is weak and temperatures stay warm, we could maybe see some price relief. However, if we have any sort of cold snaps and demand bumps, propane prices could really blow out higher this season, well above $2/gallon. If you have not done so, you can still contract and lock-in your heating price for the season.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.