Energy Market Update

Aug 08, 2023


Key Highlights from Last Week

  1. Black Sea Tensions: Ukraine and Russia's tensions in the Black Sea heightened. Ukraine marked specific Russian ports as military targets after recent altercations. A Ukrainian drone struck a Russian military ship and a commercial oil freighter. Six Russian Black Sea ports now face a military target designation. Russia's Novorossiysk port facility resumed operations after a naval drone attack, which temporarily halted traffic. 

  1. Crude Oil & Refined Fuels: Crude oil prices trended upwards due to production cuts by Saudi Arabia and Russia. Saudi extended its 1 MMbpd cut, while Russia's cut was less than in previous months, seeming more opportunistic than strategic. OPEC+’s July production was down by over 1 MMbpd. 

  1. Gasoline & Diesel: Diesel prices rose modestly, while gasoline declined. The shift is attributed to the US surpassing peak gasoline demand and refineries choosing cheaper crude blends producing more gasoline. 

  1. US Strategic Petroleum Reserve (SPR): Biden's administration retracted its offer to buy 6 MMbbl of crude for the SPR. Historically, the SPR has been a tool to manage US gasoline prices, suggesting refilling might occur only at lower WTI crude oil prices. 

  1. Inventory Data: The US saw a record 17 MMbbl drop in crude stock. Conversely, Singapore stocks added 2.1 MMbbl. 

  1. Propane: Despite an inventory build, propane prices gained. MB and Conway prices both rose, maintaining a consistent percentage of crude. 

Recommendation: With escalating Black Sea tensions and rising crude oil prices due to production cuts, the energy market shows potential volatility. Farmers might consider locking in fuel prices for the upcoming Fall harvest to hedge against future increases. Contact our Certified Energy Specialist, Shane McCully, at 608-504-6281 to contract your fuel today. 



David Fiene



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Aug 29, 2023

I hope everyone had the chance to enjoy the Independence Day holiday with family and friends. Thanks to all of you who called in your orders early so our staff could adjust to the mid-week holiday and help minimize the added pressure that the short work week brings. I’d also like to thank all of you who returned your propane contracts by the end of June. With a short window of when contracts are mailed to when they are due back, we really appreciate your patience and support. If reading this reminded you that your contract is still sitting on the kitchen table, just pick up the phone and call the energy office nearest to you. I’m sure we’ll be able to take care of you. The last of the propane contracts (Cap renewals) and safety mailings will be sent out later this month. On behalf of our energy team and everyone at your cooperative, thank you for choosing us to serve your propane needs again this year.