Crude oil prices have made a big push from the lows both before and after OPEC plus announced it will cut production another 1.2 million barrels per day starting May 1. Nearby futures have topped $80 a barrel but some analysts are now projecting prices to move back near $100 by the end of the year. That’s fueling talk of more interest rate hikes by the Fed.
Shawn Hackett, Hackett Financial Advisors says, " Yeah, the market is thinking if that’s a more permanent move higher that’s going to take longer for the inflation numbers to come down. Until we get a big knock down in that inflation number month over month the Fed is going to want to be safer than sorry.”
So, farmers will continue to face higher interest and fuel costs down the road. Market experts are advising farmers to get some of their diesel fuel inventory locked in ahead of spring planting.
Rich Nelson with Allendale says, “A lot of the trade still expects further higher price action. Keep in mind for crude the general story has been one of disappointment for several weeks and several months. So, I think its great to suggest higher prices and I would get spring needs, spring and early summer needs taken care of but at this point and time I’m not sure we need to panic just yet and go whole hog on getting all our needs.”
However, Nelson isn’t expecting the record diesel prices of last summer because refining capacity has improved.
