After Biden’s trip to Saudi Arabia, oil prices have failed to maintain any rally this week. Demand erosion continues to threaten markets as fears of recession loom in the US and Europe. The European Central Bank finally raised interest rates this week. In addition, mortgage demand in the US plunged to a 22 year low. And to top off the week, Russia reopened their main natural gas line to Europe showing signs that maybe Russia will be unable to economically self-support a complete shut down. WTI oil prices took a ride this week above $100/barrel but have settled out around $95/barrel for the week. The Ukrainian “War Premium” is getting close to being wiped out of the futures market. If oil supplies start to build around the globe, a race back to $70/barrel will be very possible.
As discussed last week, in local retail news, gasoline prices fell below $4 and diesel prices fell below $5/barrel. I expect gasoline and diesel prices to hold near current posting into next week. The drop in price is a nice little relief going into the end of summer. I don’t want to jinx it, but we might have peaked on retail prices for the year.
Propane prices continue to skip along the bottom. I really don’t believe there is much more downside risk in propane. However, I do believe there is much more upside risk to propane this heating season. We highly recommend that you order a summer fill and contract some propane for the upcoming heating season.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.