WTI crude oil prices are down over 8% the past two weeks to a spot price today around $72/barrel. Prices crashed the day after Thanksgiving sparked by concerns about the omicron Covid-19 variant, a trading session known for incredibly poor liquidity.
Many analysts, including us at BlueClover, remain bullish crude oil and expect WTI crude oil pricing to rally towards $100/barrel this winter.
Natural gas prices are down 26% over the past two weeks and more than 40% from their October peak. Spot Natural Gas is trading around $3.68/mmbtu.
Physical PGP prices are down 15% to a spot price of 50cpp. Physical pricing for December reached a low price of 48.5cpp on Dec 2 but have rallied from this price point.
BlueClover accurately called for PGP pricing to break 60cpp in November and did expect pricing to reach the mid 50s. We are not surprised at the price action over the past two weeks but there does seem to be support for PGP in the upper 40s from a demand perspective for consumers to turn the PGP into PGP derivatives. Even from a supply cost standpoint, physical PGP at 50cpp only represents a 21cpp gross margin for PDH units given today’s propane price.