Fuel for Thought - November 30, 2018

by Brian Beck

El Nino. The weather trend that that comes out of the Pacific and in theory creates above average temps throughout the Midwest doesn’t appear to be as sure of a thing as forecasters thought a short time ago. Judging by the temps this month I would agree. The last article I read mentioned an arctic blast out of Canada in December and maybe El Nino from January on. Only time will tell.
Energy markets have taken an interesting ride as of late. Or to be more precise there has been a bear market for approximately six weeks. Strangely enough in early October there was concern about supplying the world market because of the looming sanctions on Iran. Today there are talks of production cuts due to the glut of crude in inventory. This has caused the markets to drop dramatically. The million-dollar question is how far will they go. One report I read this morning mentioned that although Russia is dead against any more cuts, they did agree that “something” may need to be done to curb supply. That simple statement alone caused the markets to move back into positive territory. Less than a penny but positive. There is also a major meeting on 12.6.18 with OPEC, Russia, and others to discuss production and policy for the upcoming year. OPEC (Saudi Arabia) wants cuts, Russia and President Trump do not. How will this meeting affect the markets? My gut feeling tells me that if cuts are agreed to the markets will turn around…maybe. In the meantime, have we reached the bottom ahead of the meeting or is there room for more downside?

Transport Price Ruby Fieldmaster 7500 gal minimum
Britton Area $2.3485**
Aberdeen/Groton Area $2.3244**
Doland Area $2.3485**
Forman/Gwinner Area $2.3477**

Thanks for your patronage and have a safe harvest

Brian Beck

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