10.29.2024 Tidbits
Oct 29, 2024
10-29-24
In a turnaround from my previous Energy Tidbits article on October 3rd, we have seen the price of crude oil drop significantly as it appears there will not be targeting of crude oil infrastructure in the Middle East fighting. Today’s prices of diesel and gas are at an approximate 3 year low, as crude oil is hovering just under $68 per barrel. Logic would say now is a good time to consider fuel purchases for your 2025 needs. To double down on this logic, keep in mind that supply is outpacing demand, this causes “spot” prices to fall and puts somewhat of a premium on “futures”. When demand outpaces supply, we see a market inverse which is spot pricing more expensive than the future price. Common sense would say the upside price risk is larger than any continued lower pricing, I will not guarantee that, as today’s Energy pricing is much too volatile to predict! I will say as we move forward in the coming days and weeks take a hard look at current pricing and determine if these prices fit your operational budget. Filling tanks in advance of Spring work and forward contracting for Fall of 2025 needs can certainly limit higher pricing exposure.
Propane pricing has continued to remain flat, lower than normal exports and a lack of domestic demand has propane moving sideways. As Energy Manager, I am praying for a nasty cold winter, as a consumer I like it warm, so hopefully we get happy medium out of the coming winter! Keep in mind propane corn dryer contracts expire November 30th, as we approach that date there will need to be discussion as to what to do with unused gallons. Please reach out to any of our CRC Energy offices and the staff will work through options to clean up unused gallons. Understand that propane suppliers will penalize CRC on all unused contract gallons and gallons rolled forward that we were not able to distribute to patrons during this abnormally dry harvest. Trust the staff of CRC will work with you to make this situation minimally painful for all!
Thanks for reading, enjoy the nice (albeit unfriendly to your Energy Department sales) weather we are having!
Bill Pelzel
CRC Energy Manager
In a turnaround from my previous Energy Tidbits article on October 3rd, we have seen the price of crude oil drop significantly as it appears there will not be targeting of crude oil infrastructure in the Middle East fighting. Today’s prices of diesel and gas are at an approximate 3 year low, as crude oil is hovering just under $68 per barrel. Logic would say now is a good time to consider fuel purchases for your 2025 needs. To double down on this logic, keep in mind that supply is outpacing demand, this causes “spot” prices to fall and puts somewhat of a premium on “futures”. When demand outpaces supply, we see a market inverse which is spot pricing more expensive than the future price. Common sense would say the upside price risk is larger than any continued lower pricing, I will not guarantee that, as today’s Energy pricing is much too volatile to predict! I will say as we move forward in the coming days and weeks take a hard look at current pricing and determine if these prices fit your operational budget. Filling tanks in advance of Spring work and forward contracting for Fall of 2025 needs can certainly limit higher pricing exposure.
Propane pricing has continued to remain flat, lower than normal exports and a lack of domestic demand has propane moving sideways. As Energy Manager, I am praying for a nasty cold winter, as a consumer I like it warm, so hopefully we get happy medium out of the coming winter! Keep in mind propane corn dryer contracts expire November 30th, as we approach that date there will need to be discussion as to what to do with unused gallons. Please reach out to any of our CRC Energy offices and the staff will work through options to clean up unused gallons. Understand that propane suppliers will penalize CRC on all unused contract gallons and gallons rolled forward that we were not able to distribute to patrons during this abnormally dry harvest. Trust the staff of CRC will work with you to make this situation minimally painful for all!
Thanks for reading, enjoy the nice (albeit unfriendly to your Energy Department sales) weather we are having!
Bill Pelzel
CRC Energy Manager