11.26.2024 Energy
Nov 26, 2024
11-26-24
As of late, oil prices have been flat to lower. Worldly demand is down, mainly from China as they are continuing to struggle economically. The EIA has predicted production and supply to outpace demand in 2025 even if OPEC continues with current production cuts. The U.S. and other non-OPEC producers are pegged to continue increasing production. As I write this crude oil is sitting just under $70 a barrel, this has current diesel fuel prices at least .50 cents per gallon or more lower than at this time last year. Is this the low of the year? That’s anyone’s guess! Is it a good time to position for 2025 fuel needs? Yes, I believe in limiting higher price risk so you should strongly consider taking some coverage for 2025 fuel needs, up to 50% of your usage would be a nice place to start. As consumers it’s difficult to add coverage when the market is flat to lower, (this is an ideal time) if you cover 50% of your needs it gives you a neutral position allowing you to add more if/when the price moves higher. At a minimum consider taking advantage of spot pricing and get those tanks full now, this gives you partial coverage for next season and allows you to monitor the market adding a fixed forward contract in the coming weeks/months as we see how the EIA’s forecast plays out.
Propane pricing remains flat although we are seeing an uptick in international exports which almost singlehandedly drives the propane market, this could equate to higher prices as we move into and through winter. If you do not have a propane contract in place for this coming winter you are exposing yourself to the possibility of higher pricing during peak demand, not a good recipe! We offer propane contracts year-round so it’s not too late to call your favorite CRC Energy office and get some LP coverage in place!
Lastly, please remember that when blending diesel fuel for winter use, it’s best to do so when temps are at or above freezing. Don’t hesitate to top off those barrels with a winter blend!
Thanks for reading!
Bill Pelzel
Energy Manager CRC
As of late, oil prices have been flat to lower. Worldly demand is down, mainly from China as they are continuing to struggle economically. The EIA has predicted production and supply to outpace demand in 2025 even if OPEC continues with current production cuts. The U.S. and other non-OPEC producers are pegged to continue increasing production. As I write this crude oil is sitting just under $70 a barrel, this has current diesel fuel prices at least .50 cents per gallon or more lower than at this time last year. Is this the low of the year? That’s anyone’s guess! Is it a good time to position for 2025 fuel needs? Yes, I believe in limiting higher price risk so you should strongly consider taking some coverage for 2025 fuel needs, up to 50% of your usage would be a nice place to start. As consumers it’s difficult to add coverage when the market is flat to lower, (this is an ideal time) if you cover 50% of your needs it gives you a neutral position allowing you to add more if/when the price moves higher. At a minimum consider taking advantage of spot pricing and get those tanks full now, this gives you partial coverage for next season and allows you to monitor the market adding a fixed forward contract in the coming weeks/months as we see how the EIA’s forecast plays out.
Propane pricing remains flat although we are seeing an uptick in international exports which almost singlehandedly drives the propane market, this could equate to higher prices as we move into and through winter. If you do not have a propane contract in place for this coming winter you are exposing yourself to the possibility of higher pricing during peak demand, not a good recipe! We offer propane contracts year-round so it’s not too late to call your favorite CRC Energy office and get some LP coverage in place!
Lastly, please remember that when blending diesel fuel for winter use, it’s best to do so when temps are at or above freezing. Don’t hesitate to top off those barrels with a winter blend!
Thanks for reading!
Bill Pelzel
Energy Manager CRC