I caught the flu last week, and it knocked me out all weekend. My mother in law was in town, so I was banished to a hotel room…in effect, my family quarantined me. I didn’t take it personally and have since returned home with the full love of my wife and daughters. Well, maybe not so much my wife, since she now has the flu, too.
So I had a lot of thinking time this weekend, and I thought about the havoc that a microscopic virus can wreak on the human body. It’s fascinating, really.
Then I spent a great deal reading about the ongoing threat of the coronavirus and what it is doing to the world, psychologically as well as logistically.
All of the ‘surgeon masks’ normally available at Walgreen’s or CVC were sold out in a five-county radius of Tulsa, OK. Respirator masks were on short supply at Lowe’s, too. A search on Amazon led me to find that the prices for such items had shot up well beyond normal and availability was even harder to find.
All of this because of the coronavirus outbreak.
It’s having an impact on the energy world, too, via fears of a global economic slowdown.
WTI crude oil is flirting with the $51/bbl barrier this morning and the Saudi’s are considering a proposal before OPEC+ of an additional production cut to stave off an oversupply situation due to the economic slowdown from the virus outbreak, or rather, the quarantine of tens of millions of people in China.
OPEC representatives are set to meet tomorrow and Wednesday to debate such an emergency cut.
WTI crude oil prices began January over $61/bbl.
Propane values at Conway and MTB ended January about a nickel lower than their in-month high point. Last week’s 3.6M/bbl draw seemed to inject a little bit of life into propane values, but one wonders if there weren’t some month-end wet barrel delivery aspects involved in the strength in propane prices, because the overall fundamental picture for propane is still quite bearish on its own. Add in the potential bearishness for crude oil and propane pricing outlooks are even more bearish.
The first image below are propane inventories when compared to this year against last year:
This next image is propane inventories compared over the past three years, with this year in blue, last year in red and two years ago in yellow:
With what is taking place globally relative to energy demand and the fears over the coronavirus, OPEC considering an out of the normal meeting this week to address the issue and the ongoing warm winter for much of the United States and US propane inventories heading towards a record, year-end surplus, there are few bullish scenarios in sight relative to propane pricing.