Today’s Market News – July Update for Midwest Producers
China’s Two-Track Energy Strategy:
China is leading the world in adding renewable energy like wind and solar—but it’s not phasing out coal as fast as other countries. Instead of replacing coal, China is using its clean energy growth to power electric vehicles and factories that would otherwise run on oil. So while over 90% of China’s new power this year came from renewables, they’re still building new coal plants. It’s a balancing act: keeping energy reliable and affordable while planning for a greener future.
Changes in U.S. Renewable Energy Policy:
Here at home, major solar and wind projects are hitting roadblocks. President Trump’s administration is cutting back on tax breaks for clean energy and tightening the rules for what still qualifies. Some companies have already delayed or canceled plans for new solar manufacturing facilities and offshore wind farms. These changes could slow down renewable energy growth and potentially raise electricity bills down the road—both for farmers and for industries. Some analysts are warning this could also limit power supply for growing technologies like AI and data centers.
Energy Inventory Update:
This week’s U.S. Department of Energy report showed a bigger-than-expected drop in crude oil supplies—down 3.2 million barrels, compared to a forecasted 600,000. Refineries boosted production by 1.6%, helping meet strong summer demand. Gasoline stocks dropped too (down 1.7 million barrels), while diesel saw a 2.9 million barrel increase as demand slipped. Even with the diesel build, both diesel and crude inventories remain well below their 5-year averages—something to keep an eye on as harvest prep gets closer.
Market Overview:
Oil prices are creeping upward thanks to the tighter supply and some positive news on U.S. trade negotiations—possibly smoothing tensions with the EU. Temporary shipping issues in Turkey and Russia are also putting upward pressure on prices. Still, uncertainty with China and the ongoing conflict in Ukraine is keeping things volatile. Energy markets will be watching closely for signs of summer demand picking up, especially as we move into peak usage months.
Energy Highlights – Heating Oil Trends
Heating oil prices have been climbing steadily since June. As of today, the price is $2.43 per gallon and it’s sitting above key technical levels (the 40-, 100-, and 200-day averages), meaning prices could keep trending higher. Diesel supplies are low, which keeps upward pressure on prices. Traders will be watching closely for the next DOE report to see if inventories continue tightening.
📞 Want to know what this could mean for your farm fuel budget? Give your account manager a call—we’re here to help you stay ahead.
