I hope everyone had a great Halloween even though it was cold and snowy out. Sounds like the cold weather is going to stick around for awhile. If all weather patterns hold, we are in store for a colder winter with a lot of snow. I will keep you updated based on the prediction services we subscribe to.
Also, I wanted to clarify that there is no propane emergency in Wisconsin. Gov Evers issued an extension of service hours exemption this week and made reference to a propane emergency. This is not true. We are having a high demand cycle with corn drying and the early cold weather, but there is no emergency. Basically, trucks are waiting extra long hours to load product, so we want to make sure that drivers have enough hours on their books to deliver the product. Once corn drying is over, distribution will be back to normal. But there is no emergency, shortage of product for this winter, massive price spikes on the way, or anything to be too concerned about at this time. I will keep you posted as the month goes along.
Crude prices continue to trade narrow range. We are still predicting that WTI crude oil will trade around $55/barrel through the end of the year. Nothing new on this front.
In local retail news, refinery maintenance has been longer than expected and supplies are starting to get a bit tight. I would expect to see prices at the pump on gasoline and diesel rise next week.
Propane prices are rising due to increased demand, but nothing out of the ordinary. If you are on a will-call, please remember to check your tank. The early cold and snow has caught some customers by surprise! 🙂
If you have any questions, comments, or concerns, please feel free to give us a call.
Crude oil continues to trade sideways on a lack of hedge fund positions in the market place. Crude markets are very soft on long positions. Traders are continuing to believe that economic headwinds will deteriorate crude demand next year. The only possible bullish headlines moving crude right now are coming from OPEC saying they might consider deeper cuts next year. However, most of the talk from OPEC is just talk, so the news is only keeping a lid on crude prices, not moving them higher. As the US looks at impeachment and a trade war, England/Europe at Brexit, ceasefire between Turkey and Syria began, and China at a trade war and Hong Kong unrest, I don’t see a lot of potential out there to pop crude prices higher. For now, I expect crude to remain narrow and calm through the end of year until the OPEC meeting in December.
In local news, harvest demand finally hit the Midwest and the glut of diesel fuel out of the Chicago market started to deplete. Diesel prices jumped almost 15 cents/gallon in two days. I expect to see retail prices on diesel increase in the coming week. Gasoline prices have remained steady with crude as supply has been meeting demand.
Propane prices moved a bit higher but not much. Corn drying demand is now moving and cold temps are sticking around. I expect to see propane prices slowly move higher if the end of year stays colder than normal. However, if crude prices fall off a cliff, with how much propane is still in inventory, propane prices will be hard pressed to not move lower with crude. Time will tell.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Jon Crawford – Pres.