Good morning!
Crude oil traded in the “Bizarro World” this week. Meaning, if you thought the price of crude oil would drop, the price instead went up. And when all the data pointed to a price increase, the price decreased. I felt like I was in the episode of Seinfeld “The Bizarro Jerry” where everyone meets their opposites in real life. Almost every day this week, the crude oil market performed in the opposite direction of expectations. And let me tell you from experience, it’s not fun hanging out with the “Bizarro Crude Oil Market!” 🙂 We went into the week on the news from Saudi Arabia that Aramco posted the largest ever quarterly profit. Aramco announced they would be investing more than $20B of the profit into expanding capacity and improving crude oil refining downstream operations. The markets sold off on the news as expected. But then the rest of the week everything went bizarro. Poor retail data from large American corporations: crude price went up… Inventories of crude oil in the United States decreased according to the weekly report: crude price went down. Housing data was awful and the FED looks to continue raising rates: crude price went up. China announced a joint deal Russia and North Korea on crude supplies going forward: crude prices went down. All week long, the opposite of what was expected to happen occurred; very bizarro. We will see how the week ends. WTI price is looking to once again end up right about where it started for the week after living in “bizarro world.”
In local news, the price of gasoline and diesel in the Chicago spot market seems to have leveled off. So I would expect to see the current average retail pump prices hold going into the weekend. We are getting into the end of summer driving season, so all bets are off on the price of gasoline going into September.
Propane prices continue to hold steady. The corn maturity data was released this week and most of the crop around the country looks to be in good shape compared to the five-year average. If we continue to have warm weather in September with a little rain, the anticipated increase in corn drying demand compared to last year could end up being a dud. If the corn drying season ends up being a “nothing burger”, then I would expect propane prices to continue their flatline trajectory into the holidays. If you have not ordered a summer fill, please do so. And we recommend contracting at least come of your propane gallons for the winter heating season. There are still many volatile markers out there and it’s better to be safe than sorry.
As always, if you have any questions, comments, or concerns, please feel free to give us a call!
Best regards,
Jon Crawford