Oil Industry Dodges Immediate Tariff Hit with 30-Day Reprieve

The bulk of the Oil Industry was at Defcon 1 on Monday afternoon as 10% Tariffs on Canadian energy products were hours away from taking effect.  For much of the Northeast and Midwest, that would be an automatic and instant increase of about $.25 per gallon, depending on product price.  That did not account for what the futures market would tack on as well.  Luckily, cooler heads prevailed and a 30 day reprieve was put in place averting what would sure to be a disastrous trade war.  The underlying use of the Tariff threat is still being dissected.  Was it to force our neighbors to do more to curtail the flow of drugs and immigration, or was it to spur Domestic production of goods and energy?  On the point of Domestic Energy production, while huge gains were made on existing leased areas to reduce red tape and bureaucracy, little if any will movement will be seen on any “new” production or drill sites.  Producers are not likely to invest in new sites with only a four year time frame assured.  That is, if a new administration comes in with the next election and reverses course, all the cost, manpower and time invested into new sites could be lost.    Still, futures pricing look to be stabilizing, with a bit of a downward trend.   While we all want to think spring is just around the corner, February is still winter and that means sub zero temps, snow, and ice.  Keeping fills and tanks accessible helps immensely with getting the hundreds of deliveries we do a day completed on time.  Thank You!