We always say that propane has two parents, and natural gas inventories are as low as they’ve been in 15 years to start November, while prices are as high as they've been in 4 years. When propane trades at this level or lower as a percentage of crude oil, it encourages higher exports and creates larger inventory draws. It's a little concerning that propane as a percentage of crude has been trading lately in the 51 percent range, which is on the low side and probably not sustainable.
What do you think? A healthy correction or a new, lower price trend? Since the price of crude oil and the value of the US dollar generally trend in opposite directions, a stronger dollar effectively means that foreign countries need to pay more (in their local currency) for the same barrel of crude oil, which can reduce demand. Bear in mind, one of the biggest factors for determining the price of crude oil is the value of the US dollar. And it's been exacerbated by a rising US dollar. It could be that there’s no end in sight to the recent drop in prices.īut for all that's happened, the price drop for crude oil and propane that we’ve seen in the past six weeks seems fairly calm to me.
The market closed on Tuesday near $56.00/bbl., after suffering the longest daily losing streak since 1983 … the year before the original Apple personal computer went on sale. Crude oil started its most recent climb in February, 2016, at $29/bbl.
But the largest downward price trends for crude oil in the past 30 years followed a price spike (2008) and then a series of failed attempts at new highs (2014).įast forward to today. In hindsight, there are always a million logical and illogical reasons for why something happens. drop in about 5 months) and 2014 ($80/bbl. The major downward price trends were in 2008 ($100/bbl.
And while no one can predict the future, let’s look back at WTI crude oil prices over the past 10 years or so for some direction. Market Correction or Start of a New Price Trend?Ībout a month ago, a customer from western Pennsylvania asked, “How can I tell the difference between a price correction and the start of a new lower price trend?" We can also lock in the base price for a portion of next year's propane requirements from May 2019 thru April 2020. Propane prices have fallen along with crude oil since October.īut that’s a good thing, right? I think we'd all rather see the current price of propane than a price spike to $2.00 per gallon.Īnd, if you're comfortable with propane prices being at their lowest level in 16 months we can lock in the price of propane for the balance of this winter. It’s probably not wise to try and predict the future, but it is kind of fun, so I’ll just share some thoughts and let you decide.