I hope everyone enjoyed their 4th of July celebration and was safe. With a short week in trading and many traders on vacation, the markets were very out of balance the past seven days due to light volumes. However, news hit the airwaves that many OPEC countries, including Saudi Arabia increased exports in June. There is a delicate balance between the continued increase in exports and the production cuts. In addition, the U.S. seems to be hitting a peak in production and I think will be taking a breather for a bit. I don’t think we will see much change in the oil rig counts until we get through summer. The EIA released it’s weekly inventory report today, and although the results look bullish on the surface, crude oil gave back all the initial gains by the day’s end. The national crude oil inventories decreased 6.3MM barrels, gasoline decreased by 3.7MM barrels, distillates decreased by 1.9MM barrels, and propane inventories increased by 2.1MM barrels. The only disappointment in my opinion was the propane build. I was hoping with the holiday week, we might have seen that number closer to 2.5MM barrels. As propane inventories continue to lag, the crop drying situation continues to point more towards higher demand this fall. With inventories at historical lows based on demand, I am still calling for a price spike in propane this year regardless of price in crude.
In local news, gasoline prices have averaged out to about $2.15/gallon and diesel prices around $2.39/gallon. Propane summer fill is in full swing. I am highly recommending that everyone fill their tanks this summer. The current price is very attractive compared to future contract pricing. We also have released our contracts for next year. Please call the office now for current prices on summer fill and heating contracts.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Jon Crawford – Pres.
Crawford Oil and Propane