I wanted to take a quick moment and thank everyone again for their support through a difficult year in 2021. I am optimistic for 2022 and hopefully you are too! Although crude oil prices are ending the year at almost all-time highs for 2021, I am seeing headwinds on the horizon. I do not believe we will be at these prices come this time next year. The US is locked-and-loaded to increase production right out of the gate starting in 2022. There are economic headwinds starting the year in China. And OPEC’s relationship with Russia will be put to the test as Russia flexes its’ muscle on the geopolitical world stage. Overall, demand for jet fuel will increase, but demand for crude has been steady. Consumers had plenty of money in their pockets to keep the demand train moving forward the past year. As COVID-19 becomes less dominant in the news, the amount of demand increase will not be the shock that many are predicting. The only increase could be in jet fuel, but even jet fuel will not bounce back to pre-COVID times as many businesses have permanently pivoted to more efficient models of operation. As propane continues to be a highly exported commodity in the US, unless crude prices tumble below $50/barrel, I don’t see propane retail prices going under $1/gallon anytime soon. Propane price as a percentage to crude will probably continue to operate in average to higher-than-average ranges until production starts to really overtake exports again. So until then, propane retail prices will probably remain in the 10-15 year averages of over $1/gal but under $2/gal. Although we all enjoy propane prices under $1/gal, the averages predicted are still good value in today’s economy.
But just as COVID-19 was unpredictable, commodity prices are nearly impossible to predict. My 20k foot prediction for commodity prices in 2022 is based on as much current information and historical data I can synthesize. Regardless of what crude prices do in 2022, I hope that COVID-19 moves toward the rearview mirror and we start to look forward to more peace and calm in our daily lives.
Thank you again for your business in 2021 and we look forward to providing you with more guidance and great customer service in 2022. Happy New Year!