WTI Crude prices rocketed above $70/barrel this week on news of better than expected retail sales, decreasing jobless claims, and huge draws in crude oil supplies. The US continues to rebound from the hurricanes down south, but production is looking to return to normal capacity very soon. Depending on how Covid continues into the winter, crude oil prices are primed to be supported. Until the US gets into full crude oil production and harvest is completed, prices are probably going to hold higher. We will wait and see how the Delta variant moves throughout the world this fall and whether the Fed starts to slow down on their bond repurchases.
In local retail news, the cost of gasoline and diesel has gone up. We expect to see prices at the pump remain near current levels.
Propane prices continue to go higher. Contract and delivery prices continue to go up as we enter the heating season with record low inventories. I can only believe at this point that prices will hold and maybe even go higher. Europe is in terrible shape for propane supplies as well, and China bought extra propane exports fearing a price shock. So right now we are seeing low propane supplies in Europe and the US going into peak demand season, even though we have record production. The only way supplies will increase is if the price gets so high at the US export hubs, that Europe and others will be forced to purchase from others. I would also like to piggy-back and let everyone know that natural gas supplies are in terrible shape as well in both the US and Europe. Natural gas prices have doubled and they are primed to double again. The scenario reminds me of 2007 and 2008 when natural gas heating bill could be well over $300/month on an average home. I believe all heating commodities are going to be extremely high priced until increased supplies or warm weather curb the fears that are real. It is not too late to lock in your propane price for the season.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.