Crude oil finally unwound from its highs last week. Over $10/barrel came off of the WTI crude oil contract last week due to increased production in the US and the strength of the dollar. Futures prices dropped dramatically and crossed our strike price of $60/barrel. This week, crude prices rebounded a bit on a weaker dollar and news from Saudi Arabia that they plan to keep production low even though the US overtook them in production. The US also started building inventories of products going into the spring. In addition, the US also shipped their first “super-tanker” of crude. And some of our crude oil is showing up in new countries meaning that our customer base is growing. I do not believe that we bottomed out last week. I believe we will see a tug and pull between $59-62/barrel for sometime. If the dollar index starts to move higher and hold above 90, I don’t believe WTI crude will hold above $60/barrel. Lots of talk going on and rebalancing of hedge fund monies right now, so hold on because it’s going to be bumpy for a few weeks.
In local retail news, gasoline and diesel prices continue to drop. If you are considering locking in fuel prices for this year, now is good time to start thinking about it. I am still advising clients to lock up prices for the fall and maybe let the spring ride. Feel free to call me for more info.
Propane prices rebounded off of the lows due to a slight increase in demand. However, I do not see the recent price increase affecting retail prices. As of right now, we are seeing prices for next heating season being about the same as this season. More pricing info will be released this summer.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.