08.23.2023 Energy

Aug 23, 2023

In today’s Energy Information Agency (EIA) weekly inventory report we saw crude oil stocks decrease by 6.1 MB putting us roughly 12 MB more compared to last year at this time. Although demand is down production is not exactly through the roof and imports are lagging, the threat of another interest rate hike and a poor Chinese economy are holding the price of crude from going higher.

Diesel stocks increased 900,000 barrels putting us 5 MB above this time in 2022, seemingly a good place to be however with low production and the hurricane season upon us we could see crude and diesel prices rise significantly if any one of these hurricanes has a major impact on the Gulf Coast which is responsible for 13% of US oil production.

As for gasoline we saw a 1.5 MB stock increase as driving season winds down, unfortunately the national average price of gasoline is currently the 2nd highest we have seen since 2008.
Propane inventories currently sit 16 MB above the 5 year average, this is a great thing for propane consumers especially since the propane market is mainly driven by international exporting through the Panama Canal, as we speak the Panama Canal water level is too low to float propane export ships through causing US inventories to rise also attributing to flat to lower propane contract pricing!

To summarize fall harvest is fast approaching it is time to think about filling tanks and forward contracting diesel fuel and cautiously watch the propane market being ready to lock in relatively low propane costs.

The energy staff in all 3 CRC locations can help you with pricing and market intel, I send my admin staff as well as Scott Johnson, Jesse Fischer, and Brian Stueber daily energy updates they are all very well versed and trained to help you with all Energy positioning.

Thank you,

Bill Pelzel
CRC Energy Manager