Good morning one and all.
Things remain bearish on the crude oil front. I’ve been reading dozens of articles and speaking to a few analysts and there just doesn’t seem to be anything there to support it. Here is a quote from this item:
“The oil market has been oversupplied for some time now and that hasn’t changed,” Myrto Sokou, senior research analyst at Sucden Financial Ltd. in London, said by phone. “It is now reacting more to macro-financial news than fundamental data, so the main focus of the day will be the release of key U.S. economic data.”
Libya is preparing to increase its crude oil outputs to normal levels and in past years and decades, we’d be expecting OPEC to collude right about now and shut off the flow of oil to the world in order to push prices back up and take so much supply off of the market. However, these times are not those times…it’s a new day thanks to shale oil extraction boom in the United States. Combine that with the gains Russia has made in crude oil production and exporting in the last decade and OPEC is no longer holding a gun to our heads.
I’d hazard a guess to say that we’ll wind up below $90/bbl in the next two months unless some geopolitical event sends it the other way.
As for propane and its pricing, it feels as though it’s detached from crude for the time being…I think it will stay that way unless crude TOTALLY falls out of bed or we have a mild start to the winter. the second half of this month and December.
Overnight lows are forecast in the upper 20’s and lower 30’s this week in Minneapolis and and about 8 to 10 degrees warmer than that in central Iowa, Illinois, Indiana and the Chicago area. A late week cold snap in the Southeast could send temps tumbling into the upper 30’s during the overnight.
In other news, Enterprise has lifted allocation on its east and west leg terminals. It was on for a whopping three days…they were late in putting it on and that was quite an exercise in futility.