The markets were fairly quiet and calm this week except for Wednesday. On Wednesday, the EIA released their weekly inventory report and the drawdown on crude oil inventories was almost 6M barrels. The report supported the statements from many shale oil producers saying there were going to hold off on pumping crude back into the market too quickly. In addition, demand for gasoline and diesel fuel outside of jet fuel is starting to return. Crude prices spiked over $2/gallon this week. But, OPEC+ is slowly unwinding their cuts and I do think that eventually someone will blink. China and India are increasing imports at a dramatic rate and all producers want a slice of that pie. In addition, Iran and the US continue to try and negotiate a new nuclear deal that will allow Iran to export more oil with transparency. So although we are experiencing this slight uptick in crude price, I don’t see the trend continuing too much higher.
In retail news, gasoline cost continues to go up, and retail prices continue to go down. Therefore, I expect to see retail gasoline prices jump fast past $2.69/gallon at any moment. Diesel retail prices have eased a bit, even though cost has increased. But I don’t see diesel retail prices going over $3/gal anytime soon.
Propane prices continue their slow and cautious moves lower. The cold snap in April will provide a bit of support for prices, but national inventories are slowly starting to rebuild. We have a long ways to go to move our national inventory above the five-year average. Therefore, I still see prices being higher than usual for summer. I still believe that customers should consider taking delivery of any contract gallons left on account by end of April.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.