Good morning!
Happy Friday! The big news this week was the inauguration of the 47th President, Donald Trump. Wasting no time, President Trump began implementing his agenda, which includes expanding access to American fossil fuels. Following the inauguration, WTI crude oil prices dipped below $75 per barrel for the first time in several weeks. Many traders sold on the news, influenced by indications that Trump may impose fewer tariffs on China and other countries than initially expected. His stated approach is to limit tariffs wherever possible while keeping the option to increase them if necessary. Trump also called on OPEC+ to increase production, though the request seemed to fall on deaf ears. Geopolitical developments added to the mix, with the Houthi rebels announcing they would cease attacks on ships in the Red Sea and Iran stating they will no longer pursue nuclear weapons. Additionally, China expressed a willingness to negotiate with the Trump administration. Trump has also prioritized refilling the U.S. Strategic Petroleum Reserves and increasing petroleum product exports. Overall, the tone in the crude oil market is leaning bearish. Chinese demand remains weak, and while NATO and Trump disagree on the best approach to ending the war in Ukraine, there is an increasing sense of urgency to bring Putin to the negotiating table. However, negotiations with both China and Russia are expected to be more challenging this term, as their economies have become more interconnected under the pressure of global sanctions on Russia. For now, crude oil prices are stabilizing and have shifted into a “wait-and-see” mode.
The Chicago spot market mirrored the dip in crude oil prices this week. As a result, I expect retail prices of gasoline and diesel at the pump to decrease slightly. However, with lingering uncertainty in the market, any decreases may happen gradually.
Propane prices saw a spike during the recent cold snap due to increased index prices from suppliers. Thankfully, supply distribution is beginning to improve across the East of the Rockies. I anticipate propane prices could ease in February as January contracts expire, distribution issues improve, and temperatures return to normal winter levels. As always, we kindly ask that you keep your driveway clear of ice and snow and ensure there is an accessible path to your propane tank. This helps our drivers make safe and efficient deliveries.
If you have any questions, comments, or concerns, please don’t hesitate to give us a call. Have a great weekend!
Best regards,
Jon Crawford