As goes crude oil, so goes propane…something we have been discussing for months now.
Crude oil is going to go back up, and go back up significantly…it’s just a matter of when. Here were a few articles I read this weekend:
I remain bearish in the near term on crude oil. We saw a sizeable dip on Monday and propane prices dipped with it. I still think that stair stepping at cost averaging points is a good strategy..step in and pick up like-sized pieces as things move up or down a few cents at this point. Crude is just $4/bbl or so off of it’s lows from earlier this year.
If you lift out of our Lebanon, IN facility, you can lock in this coming winter’s entire supply for $.7600 right now. If East St Louis is your terminal, you’re at .7300. You can lock in Fourth Quarter of 2016 for under $.8000 at those locations, as well as any location along the MAPCO and ONEOK pipeline as well as product in Scio, OH. If you lift at Farmington, IL, you can lock in next winter under $.7000, just as you can at any of the MAPCO terminals you lift out of and most all of the ONEOK terminals.
If you lift on the Dixie Pipeline at Apex, which has the highest pipeline tariff, you’re looking at .7475 for the entire winter, next year. $.7200 at Milner and .7125 at Opelika.
The point is simple; we are back to levels right now where you will not get hurt for this coming winter. Give serious thought to cost averaging and hopefully you can keep cost averaging down if crude keep dropping.