Instead of my usual update, I just want to take a moment and wish everyone a safe and enjoyable 4th of July weekend. I know the last three months have been difficult for many people. I hope we can all take a break for a couple days and enjoy the beautiful weather. I know that our country will survive through all of the current turmoil and I hope we all come out stronger in the end. Our nation has a history of resilience and determination. We can all come together and be better in the end.
I will just say quick, that next season’s propane heating contracts are released and will be hitting mailboxes next week. If you would like more information, please call our office and we will be happy to assist you with writing a contract.
As always, if you have any questions, comments, or concerns, please feel free to give us call.
Although the US economic data looks to be improving a bit and the unemployment rate looks to be bottoming, the surging of COVID-19 in Texas, Arizona, California, and Florida have rocked the markets this week. WTI Crude has come off of recent highs and is very skittish in trades due to the possibility of economic downturn from the surging coronavirus. Across the globe, many countries are continuing to slowly reopen without the major resurgence as the US is experiencing. Time will tell if the coronavirus rages back up in Europe as well. But for now, the US is a cautionary tale to the rest of the world. Supply and demand for crude oil seem to be somewhat in balance for the time being, but any major cutback in current demand will rapidly build surplus supplies in the US. In addition, shale producers are saying they will need three years to peak at 16% of top level production levels experienced in February of 2020! That is a terrible outlook for oil in the US. We are now officially operating the LOWEST number of oil rigs in the country since the 1980’s. Also, shale companies are looking at $300 billion in losses this year and that will put pressure on banks that are just now starting to experience some financial stress due to the pandemic. The next three months will be very crucial in determining how we end 2020 and look to 2021.
In local news, demand for gasoline and diesel continues to remain steady. Retail prices are dropping back down closer to $2/gallon on both gasoline and diesel. If there is no peak in COVID-19 cases in the South by the end of next week, we will be looking at the lowest retail prices for gasoline and diesel on the 4th of July in almost 20 years.
Propane prices have stabilized due to high capacity production. I do not believe that propane will continue at the current production runs. Exports are starting to slow down as well. Contracts for this coming heating season will be released very soon and will be cheaper than last season. Stay tuned for more info.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.