Crude prices have been on a yo-yo ride all week. The price moves have been dramatic. The motion is being blamed mostly on the ship stuck in the Suez Canal. The canal allows the movement of many commodities, including crude oil and refined products. In addition, so many other goods that were behind on shipment are now even further behind. Crude oil moved $2/barrel-plus per day back and forth all week! I have not seen such volatile yo-yo motion in quite some time. Couple the Suez Canal event with lockdowns in Europe, a stronger dollar, supplies building again in the US, a talk of a carbon tax, decrease in unemployment, a rocket attack in Saudi Arabia, and North Korea firing a couple of ballistic missiles for a cherry on top, and we made for one heck of a week in news for crude oil! And I’m sure I’m missing even more events. Honestly, I think traders are trying to figure out if a retreat from $60/barrel WTI is real or not. I don’t think the swings will calm down until the ship is moved in the canal. For now, buckle your seat belt and keep your helmet on!
Retail cost of gasoline and diesel experienced extremely volatile moves all week. In addition to the market news, in production news, Chicago moved the forward price curve on RVP causing the cost of gasoline to jump 10 cents in one day as opposed to going down 7 cents according to the spot market. Therefore, I do not expect to see retail gasoline prices ease in the coming weeks. Diesel cost has eased a little and I could see retail prices now holding below $3/gallon.
Propane prices continue to slowly unwind but are holding on tightly until the expiration of the March contract. I was pleased to see an increase in inventory levels this past week. I hope the country continues to build inventory going into the summer. If so, we have a shot at some more attractive summer fill rates. For now, I am still advising customers to use up their remaining contract gallons by the end of April just to be safe.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.