Christmas Truce
On December 7, 1914, Pope Benedict suggested a temporary break during World War I for the celebration of Christmas “that the guns may fall silent at least upon the night the angels sang.” Believing, perhaps, that cooler heads would prevail given some time.
But no country involved in the five-month-old war accepted the Pope’s idea of a truce.
Blessed be the Peacemakers.
Weeks later, on a bitter cold Christmas Eve near Ypres, Belgium, a German opera singer who was sent to the Western Front began singing “Stille Nacht.” Across the way, British bagpipes spontaneously began to accompany the German singer. This emotional collaboration was followed by loud cheers from both sides, and back and forth caroling that went into the night.
On Christmas morning, church bells rang from the villages. Then all was silent; no sound of war. British and German soldiers slowly emerged from their trenches and created what the politicians couldn’t, a brief but marvelous ceasefire.
Most of these men would soon die. But on Christmas Day 1914, they met with their “enemy” in “No Man’s Land” for true fellowship, shaking hands and exchanging gifts such as tobacco, schnapps, plum pudding, bread, and ham.
Holiday Truce with the Fossil-Free Crowd.
In the spirit of the holidays, I propose that the energy industry observes a holiday truce with the fossil-free crowd.
We know that massive power outages will ensue if the push for legislation mandating that all electric generation must come solely from fossil-free energy sources instead of natural gas, or nuclear power, or some combination that includes renewable energy is successful.
Why won’t fossil-free electric generation work?
Because 20 to 25 percent of our country would need to be covered in windmills and solar power, but that’s not happening. We also know that efforts to electrify everything would deny consumers energy choice.
Keep in mind that clean-burning, portable propane can heat homes and cook food in even the most remote regions of the world, raising the quality of life for millions of people.
And propane is used for emergency response and generators to save lives during catastrophic events when there is no electricity. And to fuel cars, fleet vehicles, and school busses with a cleaner alternative to gasoline or diesel.
The Bottom Line.
The bottom line is that propane greatly improves the quality of life while also making the world a cleaner place.
But this month, around the holidays, I propose that we take a break from the battle and spread holiday cheer .… even with those whom we may disagree.
What’s Happening with Propane Prices?
The Omicron variant hit the international stage around the second week in November. It wasn’t long before energy traders said, “Here we go again – demand destruction,” before selling everything they owned and everything they didn't own.
December propane prices have finally found some support around $1.00/gallon FOB Mt. Belvieu, TX. That’s still about $.32/gallon higher than the average of the last five Decembers.
The determining factors now for crude oil prices will be new information on Omicron (are its impacts more or less severe?) and evidence of loosening or tightening global supplies.
Propane prices usually follow crude’s lead, but until we see significant inventory drawdowns, propane prices will likely move with more enthusiasm on the way down than the way up.
Propane Price Chart
Weekly Inventory Numbers
U.S. propane inventories showed a draw of 2.4 mmbbls. for the week ending December 10, 2021, on the higher end of industry expectations. This brings national inventory levels to 70.872 mmbbls., about 16 percent behind last year and 10 percent behind the 5-year average.
PADD 2 (Midwest/Conway) inventories had a fairly modest draw of .448 mmbbls. They currently stand at 23.249 mmbbls., roughly 4 percent behind last year.
PADD 3 (Gulf Coast/Belvieu) inventories showed a healthy draw of 1.32 mmbbls. They now stand at 34.216 mmbbls., nearly 25 percent behind last year.
The Skinny
Which way are prices going? Watch for new information on the Omicron variation and whether global crude supplies are building or drawing. Propane prices usually follow crude prices.
But price doesn’t matter if your storage tanks are empty. Please reach out to us as soon as possible whenever you need extra propane supply.
We’re here to help!
Happy Holidays from all of your friends at Ray Energy!
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