08.25.2022 Energy

As we inch closer to harvest we are certainly seeing analysts’ predictions of higher pricing come to light. This week’s EIA inventory report showed a large draw in crude oil and diesel stocks, this is again propping prices up as we move forward. Another negative bit of news supporting higher pricing is OPEC stating they may “moderate” production to combat the recent drop of crude oil price. This recent activity has investors buying back into the energy complex also supporting an increase in product pricing. Continuing the negative theme I must add that an Iranian nuclear deal is not likely to happen another bit of news enabling prices to rise. Long story short if you have not filled and or contracted your diesel needs for harvest now appears to be a good time to strongly consider doing so.
International exports almost exclusively drive the propane market. In the last week we saw a record amount of propane exported 1.72 MM/day!! This prevented a large domestic build of propane stocks per the EIA weekly report. During this low demand time of year a typical propane stock build of 1.5MM is expected, due to this massive amount of exporting stocks built a mere 100 KB, this caused a recent uptick in propane pricing. Although I do not see a large price increase imminent I would encourage all to take a look at your corn crop, consider the later planting effect and take a good hard look at your harvest propane needs as it seems pricing has found a floor.
 
Thank you,
 
Bill Pelzel