The market outlook for fuel and propane is highly complex with many influencing factors. Distribution chains are global and elaborate. It starts with multiple methods of production, like offshore drilling and oilsands. Moving the crude product with large scale transportation methods involving pipelines, tanker ships, and rail cars to highly advanced and centralized refineries. Distribution of the finished product to the end-user has multiple levels of transportation and storage as well. There are many moving parts, but this is the world we live in.
The price of crude oil has begun to level out, even dropping slightly in August, however in September we are seeing marginal increases. Propane generally mirrors the uptrends and downtrends of crude oil, but not this year. While crude oil was flat in August and September, propane continued to trend upward. Inventory in eastern Canada continues to rise to meet winter demand. Inventory in Western Canada has dropped compared to last year.
Unfortunately, with increased carbon taxes and countless worldwide factors, we are experiencing unusually high prices for propane. Here’s hoping that the weatherman is correct in predicting 45% higher-than-average temperatures for the next few months.