Starting Off 2024 With A Bang!

Happy New Year and Happy Friday!

Well, WTI prices were moving closer to $69/barrel to end the year, and now they are rocketing towards $75/barrel. The unrest in the Middle East does not seem to let up. ISIS claimed responsibility for the largest terrorist attack in Iran since the 1970’s. Iran is vowing revenge. Russia assaulted the Capital of Ukraine, Kyiv, for the first time in months. However, this time, the attacks were using North Korean missiles which brings a whole new dimension into the war. In the US, the FED minutes were released and some cold water was dumped on the idea of rate cuts coming in Q1 of 2024. The minutes explained that there is no real timeline for rate cuts. In addition, jobs picked up in December, along with wage increases. The data release gives support to inflation going flat and possibly increasing again. The EIA finished the year with crude oil inventories drawing down again, even though production remained at all-time highs. Therefore, the New Year has started off with all bullish news and “risk-on” situations for supporting higher crude oil prices. As I have been writing, I truly believe WTI price will carve out a range of $70-80/barrel in 2024 with the possibility of one or maybe two “black swan” events below $70/barrel. But these “black swan” events will be extremely short lived and offer a very tiny buying window for futures purchasing and options.

In local news, gasoline and diesel prices have climbed along with the price of crude oil. However, since prices dropped dramatically at the end of last month, retail margins were unable to catch up to the bottom. So now with the increase in price, margins have criss-crossed. Therefore, even though cost has increased, I don’t expect to see much change in retail prices at the pump.

Propane prices soared 10 cents/gallon to end the year following the trend in crude oil prices higher. Retail prices have risen a bit as well. I expect retail prices to remain at current levels and possibly move higher due to lack of demand. Retailers will have to make up demand loss with higher prices. So far from September of 2023 to January of 2024, this current winter is 17% WARMER than last year! Bananas! However, some colder weather is in the forecast along with snow. And February is always the wild card. As we start the new year, just another reminder to please keep your driveway clean and have a clear path to your propane tank to ensure a safe and efficient delivery. Working together will make sure that drivers can deliver to as many customers as needed each day. 🙂

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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