I’ve never been a believer in the whole 'global warming' thing, but I would have to guess that our weather pattern since our first snowfall in October tips the scales for the non-believers.

I don’t have to reiterate our most recent weather pattern. Saying that an extended period of warm dry weather would be a blessing right now should do it.

Last week's energy markets had down-days on Monday and Friday. The rest of the week was positive and, in which case, the week ended with an overall upside. This week has been a mixed bag, leaning toward the downside. The first quarter 2019 saw a drastic uptick in energy prices but since that time, it has been mostly give and take depending on the day and the current noteworthy news story. Diesel is within a couple of pennies of what it was at this time in March. The downside I mentioned a couple sentences ago is happening. Currently just before market close WTI is down $3 plus and products are down about $.09.
 
The information I read and talking to my marketers the general consensus is that the markets will be in a sideways movement for the short term. The bulls and the bears are butting heads pretty hard due mostly to the geopolitical issues going on right now. One of the big stories is the US/China trade war. As you may remember a couple of weeks ago the trade talks and any progress made had fallen apart and they were basically starting from square one, and in addition each country was raising tariffs on each other’s goods. News today claims China has walked away from the talks until the US rights its wrongs but does not list what the “wrongs” may be. OPEC+ has a scheduled meeting on June 25th and 26th to discuss production policy but as of right now an increase in production doesn’t seem likely, although Saudi Arabia does maintain that it is ready to make up any shortfall that may occur due to political unrest and sanctions in Venezuela and sanctions on Iran. Speaking of Iran, within the last two weeks there have been missile strikes on two Saudi Arabian oil tankers and drone strikes on two of their pumping stations. At this point there really hasn’t been any effect on their ability to move oil. There was also a rocket sent into the “Green Zone” of Bagdad where the US embassy sits prompting evacuation. The rocket and technology are antiquated dating back to WWII. The only reason I mention this is the fact that Iran hopes to distance itself from this type of activity claiming they don’t use rockets that old. Although Iran has threatened to disrupt the Strait of Hormuz citing that if they are unable move oil through it neither will anyone else, they have obviously not claimed any credit for the other attacks. The common thought process is that they are prompting a 3rd party to initiate the attacks in return for future favors. President Trump’s latest tweet this past weekend “If Iran wants to fight, that will be the official end of Iran!! Never threaten the United States again!!”  How serious is he? There has been a large military presence sent to the middle east to watch over things. There again if I had a US aircraft carrier and supporting equipment staring me in the face caution would be my friend.
 
A quick note on Russian oil. A couple of weeks ago I mentioned that Russia had gotten chlorine contaminated crude in their Drubzda pipeline. This week news has surfaced that it was a robbery! A small company stole crude and replaced it with chlorine hoping no one would notice. Unfortunately for them someone did notice. The suspects have been all arrested and are in custody, but no identity given. Apparently if it isn’t nailed down it’s ripe for the taking…sometimes even if it is nailed down!
 
Thanks for your patronage and have a safe and productive planting season!!



Brian Beck
Energy Department Manager/Safety Coordinator
605-470-0622

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