22 RVC Insights Spring - Flipbook - Page 6
River Valley Cooperative CEO. “Having
the ability to bring together two
dedicated employee teams, shared
culture, and values, along with
financial stability, is a tremendous
opportunity. This partnership, along
with our current energy business
footprint in the Clinton, Scott, and
Whiteside County areas, further
enhances our commitment to serving
customers in Eastern Iowa and
Western Illinois.”
MARKET UPDATE
The energy market is continuing
its volatility as we enter 2022. Most
recently, the headlines are very
bullish and are not following historical
trends in the refined fuels market.
The energy analysts point to the
continued supply disruptions causing
lower inventories and higher pricing.
Many point to the COVID recovery
resurgence in demand has been
outpacing the production increases in
2021. U.S. energy companies are slow
to come back online as the focus is on
returns to shareholders, and OPEC +
countries are not producing increased
allocations. As of December, OPEC+
countries have underproduced 800,000
barrels per day.
Many ask what has changed in
the propane industry to drive the
volatility we haven’t seen in the past;
the answer is exports! The U.S. has
tripled its export capacity in the last
five years and is exporting two-thirds
of the propane inventory. In the past,
propane providers were concerned
with the domestic weather forecast;
now, the propane market is much
more global due to the exports. The
propane industry has genuinely
changed the reliance on historical
trends and conditions irrelevant in
today’s world.
One thing can be certain as we look
to the 2022 energy market, volatility
will remain. Our Energy Account
managers are here to support you and
provide insight and risk management
guidance. Please call your account
manager for assistance in securing
your refined fuels and propane needs.
For weekly energy updates, please see
the River Valley Cooperative website.
THE C
A QUISITION
DS
A :
23 ES
YOLMP
2 RETIA L OC
L TA IONS
4,555 CUSTOR
ME ES
IOA W + ILIL NOIS
In 2022, petroleum production is
expected to increase while the growth
in demand will moderate. It was
anticipated the typical supply and
demand balance would occur earlier
than now being forecasted. Please see
the EIA’s published short-term energy
outlook chart.
The U. S. propane market continues to
run at extremely low inventory levels.
This invariably causes volatility as any
weather or news event immediately
impacts the market. Please see the
chart for the five-year inventory range
chart.
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