Good morning!
I just wanted to take a moment and wish everyone a safe and enjoyable Labor Day weekend! As we head into the fall, prices are starting to ease a bit more on demand worries outweighing tight supplies. Although the world crude oil market is in slight surplus, any hiccup could be a disaster. Europe is trying to shore up more energy supplies and so far, things are starting to look a little better. Countries are now talking about trying to cap Russian crude prices. But the action would be fairly futile since India and China would never agree. Russia has continued to make record profits as they sell crude oil to new customers at high prices. For now, WTI prices are holding just under $90/barrel after jumping last week. If economies around the globe start to slow down, the major peaks of oil pricing could be behind us. The headwinds include hurricanes at the US and the upcoming severity of winter around the globe. Although crude supplies are looking at being in deficit next year, the US production continues to slowly increase and I believe the rest of the world will catch up by next spring. I’m not as “doom and gloom” as others for next year. But, this is the world of commodities so anything is possible!
In local news, a fire at the BP Whiting refinery in Indiana halted the production of 300k barrels per day of gasoline to the market. Thankfully the outage will be short lived and the heavy travel of summer will be behind us. Gasoline prices will probably hold into next week. Diesel prices have finally eased from record delta spreads to gasoline. I expect to see diesel prices at the pump come down next week.
Propane is the broken record. Propane prices are steady as she goes with great value compared to all other petroleum products. We highly recommend filling up now before it gets cold, as well as locking in at least some of your winter usage. Propane prices could catch a ride higher at any time when looking at the value prop compared to crude prices.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford