THE PROPANE BUZZ --- JANUARY 2024 |
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Propane prices have been on a run as of late, and propane's value to crude oil has been rising rather sharply, to levels not seen since the spring of 2023.
The image on the right shows the propane-to-crude relationship since January 1st, 2023.
Both Conway and TET saw closing averages north of $.8000/cpg yesterday for the second day in a row, the first time that has happened since last spring, too.
Given propane's weak fundamentals, as there are ample inventories at this time, and the restricted export flows through the Panama Canal due to drought, this price rise seems to be due to the weather, as there have been some production cutbacks in Texas due to the cold and the demands on the electrical grid. Nothing that is going to lead to a macro-level sea change, but apparently enough to push in-month demands higher.
The weather forecast is turning warmer for much of the country as we head into the weekend and look to begin next week, and our friends at BAM believe the US GWHDD's will start to move above normal (warmer) on January 22nd through the first few days of February. In the video below, Michael Clark says he thinks winter 'comes back' around February 5th, and his team is seeing snow and colder risks lingering into March this year, too.
The impending warm-up has been forecast for a while, and some modeling sees the colder than normal anomalies returning to the eastern half of the country around the start of February, but Clark feels that is rushed a bit and it's more like February 5th, which was the title of today's video.
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EXTENDED FORECAST FROM BAMWX.com |
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As we have been saying and writing for a long time, pricing volatility is the new normal in the propane industry, whether we like it or not. This is different from our parent's or grandparent's propane industry...and in some cases, purchasing our propane the way we have always done it will not allow you to maximize the margin potential in your area.
That is not to say you need to scrap everything you are doing and look at doing everything differently. Still, you owe it to yourself, your employer, and your family to take a long, hard look at how you can add more margin to your business.
We consult and sell physical and financial propane products to companies nationwide. We help propane retailers mitigate the financial risks involved with their propane supply, even if we don't sell them a physical drop of gas.
The video above (also linked here), which is just three minutes long, asks you a few questions relative to your propane supply...and if some of the things I talk about in this short video are foreign to you, that may be a sign of additional profits you are leaving on the table...and we would love to set up a time to speak with you. THIS LINK takes you to a simple calendar sign up page, where you can reserve a time to speak with Jon Miller and Darius Lechtenberger, two of the partners at Flashpoint Energy Partners and industry veterans who have been involved in propane wholesale, consulting, and risk management since the 1990's. There is no cost for this consultation, and you have zero obligations. In other words, you have nothing to lose and everything to gain, and we will shoot you straight; the proof is always in the numbers.
So click on this link today and set an appointment to speak with us over Zoom, and let us show you how to add more profits back into your propane business as opposed to giving those profits away to others.
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WHO ARE FLASHPOINT ENERGY PARTNERS? |
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Some of you have received The Propane Buzz since its inception in 2013. Others have been here a few months or years. Regardless of your tenure here, I want to bring something to your attention.
The Propane Buzz is a part of Flashpoint Energy Partners, a full-service propane wholesale company. By full service, we sell physical propane at various locations nationwide. That is what we do, be it spot-load deals, traditional fixed-priced deposit contracts, or traditional index contracts.
In conjunction with our physical product offerings, we offer all traditional financial instruments (i.e., puts, calls, and swaps) to allow retailers to hedge their physical positions. Scores of propane retailers, just like you, are already working with us and protecting not only their physical supply but also their retail propane margins.
Our industry is only getting more competitive with each passing year, so every penny added to your bottom line counts and increases your business's value. We would love to discuss how we can help you maximize margins and use the numerous tools and instruments available, regardless of your business location.
If you want to learn more about how we can add value to what you do, please email us at jon@flashpointep.com. As always, thank you for your time and for reading The Propane Buzz. - Jon Miller
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Flashpoint sells propane and other NGL's across the United States, in addition to offering hedging and consulting services for propane retailers from coast to coast.
We are talking with dozens of propane retailers every day, helping them secure and manage their supply. If you are interested in learning about how we can help you, email us at sales@flashpointep.com.
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BAMWx.com are the official meteorological partners of The Propane Buzz and Flashpoint Energy Partners. BAM offers commercial weather services specifically tailored to several industries, including Ag and Energy.
BAM also has a very popular App Service, The Weather Porthole (www.weatherporthole.com) where there clients have access to current and long term forecasts unique to a specific location or locations.
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Trading carries a risk of loss and is not appropriate for everyone |
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