Good morning!
Happy Friday! Well, crude oil prices ended the week where they started on Monday. The markets are trading all over the place and trying to make sense of all the chaos. From the Ukraine conflict, to potential tight crude oil supplies, to OPEC trying to ramp up production, to figuring out what the FED is going to do, to inflation running wild… things are just a mess… At least for now, WTI crude price seems to have found a footing around $90/barrel. I hope that we can hold around this price because any further upward movement is really going to hurt the economy and demand. I did some math this week on how crude prices are affecting the American economy. Based on current gasoline and diesel consumption in the US, every time the national average retail price at the pump goes up 1 penny, $5M/day of consumer cash is sucked out of our spending economy. Since Jan 1st of this year, combined prices now average 20 cents higher into February. That’s $100M/day more than last month! If we keep up at this rate, our economy will pullback. Our consumer based goods economy for the past two years is JUST starting to transition back to service based. And these higher energy prices from gasoline to natural gas are putting an absolute heavy cloud on the service based economy returning. The next few months will be vital for how we recover coming out of full pandemic. I believe that energy cost is in the top three of most important issues affecting Americans right now. Our American economy can not recover or continue at these current energy prices.
In local news, gasoline prices jumped over $3.20/gallon and don’t look to be going down. Diesel retail prices are moving past $3.50/gal and I don’t see any downward pressure on the horizon. For now, your wallet will be much lighter every time you pull into a gas station.
Propane prices have stabilized going into the end of winter. Supply chain logistics are improving, especially with the remainder of winter prediction looking warmer than normal. We will probably have a few colder snaps here and there, but it’s looking like the worst of winter could be behind us. But don’t relax too much, because winter has been extending into April for most recent years. The temps might not be super cold, but I don’t count out snow in mid-March or even beginning of April! For now, please make sure your driveway is plowed and there is a clear path to your propane tank to ensure a safe and efficient delivery during these busy times.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford