Happy New Year!

Good morning!

I just wanted to wish everyone a Happy New Year and a thank you to all of our customers in 2023. I hope your New Year’s celebration is safe and enjoyable. I also wish that we all have an excellent 2024! As far as crude oil prices are concerned, there are so many geopolitical issues at play ending the year. In addition, with so many traders on vacation there is little trading liquidity in the market. The Red Sea situation with the Suez Canal seems to be getting better, as 75% of the daily traffic is starting to move through again. The entire Middle East is still a powder keg. Israel is worried that Lebanon will not take care of Hezbollah, causing Israel to intervene. Iran is so close to nuclear weapons grade uranium. The Houthis in Yemen and Iranian rebels in Iraq continue to attack the US Embassy in Iraq and occasional ships in the Red Sea. In addition, Saudi Arabia and UAE are getting worried that they will not be able to hold OPEC+ together and be dragged into a possible conflict with surrounding countries in the Middle East. Also, the war in Ukraine continues to hold steady as Ukraine sunk a major Russian battleship in the Crimea port this week. And with a surprise, North Korea launched rockets and displayed nuclear capabilities that now threaten the United States. All of the geopolitical issues are bullish for crude oil prices. However, prices dropped this week due to many investors believing that the FED and Central Banks across the globe will cut interest rates in Q1 causing oil demand to increase globally. Even though the US is at record oil production with 13M bpd flowing, Saudi Arabia has almost 5M bpd of spare capacity. THerefore, many believe that oil production will start to surpass global demand needs and move into surplus. Crude oil prices are ending the year closer to $70/barrel.

In local news, the Chicago Spot market continues to be well supplied offering prices much lower than the NYMEX. THerefore I expect retail prices at the pump to stay at current lows for sometime into the New Year.

Propane prices gained a bit of momentum this week. The major cause was the EIA “adjusting” their inventory report for the Midwest and other markets. Propane inventories shrunk by 9M barrels to end the year. Therefore, we are BARELY above the five year average for national propane storage at this time of year. If demand picks up strong in January and February, I do expect to see retail prices of propane climb.

As always, if you have any questions, comments, or concerns, please feel free to give us a call.

Best regards,

Jon Crawford

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