Good morning,
I’m going to keep this short and sweet so you can get back outside and enjoy the spring weather that finally arrived!
Crude prices are continuing to stay at the highest levels since 2014 and WTI is preparing to break through $70/barrel. Gasoline retail prices are now over $2.50/gallon and diesel retail prices are over $3.00/gallon. Historically, these prices mean that customers start to consider changing behaviors. The amount of “free spending” money that has been sucked out of the economy due to these price increases is staggering. Based on the amount of gasoline gallons sold per day (this does not even include diesel fuel), $300,000,000/day additional is now being spent on gasoline compared to when gasoline prices were at $2.00/gallon! The increase in money spent on fuel is going to catch up quickly to consumer spending behaviors. Right now the risk premium is still on for crude. We need about $8/barrel to come off of crude prices to get cost back in line with consumer sentiment. But I don’t see a possibility of that happening until we get through the Iran nuclear deal deadline in the middle of May. So for now, be prepared to spend your extra cash on gasoline.
Propane prices have skyrocketed in the last week due to do increased demand in April and lack of building inventory. I don’t expect to see retail prices go much lower, if at all, over the coming two months. Next year’s contract pricing will be released probably in June. Summer fills are probably going to be very close to today’s prices. More information will continue to be released and updated.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford – Pres.
Crawford Oil and Propane