Harvest Season Energy Update: Diesel, Propane & Oil Market Trends

Hello from your man with the gas!

As the wheels are already turning on this year’s harvest, I wanted to take a moment to give you a quick update on the energy markets.

Oil prices have recently held above the support level of $62 per barrel. Crude has been climbing, largely due to concerns over Russian supply — outweighing downward pressure from oversupply and weaker U.S. demand. On September 5, the Kremlin announced that negotiations between Russia and Ukraine have been paused. With both sides far apart on any potential peace deal, the risk of further sanctions on Russia is rising.

While technical indicators suggest we should be seeing a drop in crude prices, the fundamentals are keeping the market supported. Tight global distillate supplies, continued buying from China, and the potential for expanded sanctions on Russia and its customers are all adding bullish pressure.

On the propane and diesel front:

• Propane inventories are above the 5-year average.
• Diesel inventories are tighter than normal for this time of year.

As diesel demand increases during harvest, I expect basis levels to jump. For reference, we’re currently sitting at negative ¼ cent local basis, but during harvest, it’s common to see +5 to +10 cents.
If your diesel barrels aren’t full, now’s the time — contact your driver or your nearest IAS location to schedule a fill.

Wishing you a great and safe harvest season!