Happy Friday! The US Midterm elections are finally over. TV watching and web browsing can finally go back to normal. Although all the results will not be known for a bit, it looks like we will have a Congress divided. The markets this week went bonkers on a slight decrease in CPI. Many are starting to believe that peak inflation is behind us. But I feel it’s still too early to wave the victory flag. Russia also retreated from Kherson and Ukraine is starting to show signs that they might consider exploring peace agreements. In addition to the US, countries are starting to put a little pressure trying to end the war. China threw two head-fakes this week. Starting the week, China pivoted back to no-Covid policy and shut down factories and other areas of the country. Then today, China decided to lower quarantine times for exposures as well as travelers. The flip-flop decisions from China on Covid are causing waves through the energy markets. WTI crude price is looking to close below $90/barrel for the week. Although WTI dropped below $85/barrel briefly, prices look to close at about the same price as last week. Holiday season will be interesting. Many consumers are saying they are going to spend less on stuff and purchase just a few nice items for the holidays. Instead, consumers will focus on experiences and travel. The shift in potential spending habits of consumers will cause ripple effects through the energy markets. I have never experienced such a fast changing landscape in the energy sector!
In local retail news, diesel cost in the Chicago market is inflated by about 50 cents per gallon due to strong demand with harvest and tight supplies. Once harvest is completed in the coming weeks, I expect to see diesel cost plummet in our market. I can see diesel retail prices much lower going into December. Gasoline cost has fallen off a cliff and I expect to see gasoline retail prices continue the downward trend next week.
Propane supplies are healthy but demand is finally on the way! Extended forecast is showing not one day over 50 degrees from here on out through the end of the year! Colder than normal temps and lots of snow are being predicted in December. Propane prices can jump higher on a moments notice due to the current arbitrage in value to crude. As a reminder going into winter, please call us when you no lower than 25% and keep your driveway plowed along with a clear path to your tank. Winter is starting to show up!
As always, if you have any questions, comments, or concerns, please feel free to give us a call.