Crude Oil Confusion

Good afternoon,

After retail prices touched the highest level since 2014, the crude oil rally has decided to take a breather. Saudi Arabia, Russia, and Iraq have all pledged to maybe relax production cuts because of sanctions on Iran and Venezuela. In addition, Iran is trying to work a deal the EU and China to keep the nuclear agreement in place without the U.S. Higher prices are starting to put a little dent on demand and crude inventory levels rose sharply in the U.S. last week. The U.S. also added another rig to the overall count and increased daily crude production to over 10.7MM barrels/day. And Trump’s talk of continued trade war with China is spooking the hot markets right now. On the bullish side, we are entering high volume driving season and geopolitical tensions with N. Korea and Iran are a bit unsettling. But from true supply and demand fundamentals, a surplus in crude production could be on the way which could wipe out $5-7/barrel on WTI.

Local retail gasoline prices have climbed over 2.84/gallon and diesel prices are approaching $3.19/gallon. These prices are getting people talking and we could not be more disappointed at the timing of these increases. Although based on the previous paragraph, hopefully these are the highest prices for summer and we go down from here.

Propane prices are very steady and we are recommending that everyone fill their propane tanks when they can. Based on inventory levels in the country, we don’t expect to see much of a price drop in propane prices this summer. Next season heating contracts will be out closer to the end of June. Please stay tuned for more info.

Have a safe and happy Memorial Day weekend!

Best regards,

Jon Crawford – Pres.

Congrats To All High School Scholarship Winners in 2018!!!

Good afternoon,

As the WTI crude market continues to remain flat around $70/barrel and retail prices continue to climb, I feel like taking a break from discussing high prices going into summer and instead talk about something positive.

Crawford Oil and Propane has served Portage and the surrounding communities in four counties since 1935. My family has always enjoyed giving back to the communities that have supported our company. About seven years ago, I decided to start the Crawford Oil and Propane “Fueling for Success” Scholarship Program at Portage High School. The scholarships are centered around two values important to our family. One, is the honoring of a student’s academic achievement, and the other is supporting a student’s pursuit of music performance as career.

To honor a graduating high school student’s academic success, I decided to give out a $1,000 scholarship to the class valedictorian. Becoming valedictorian is an achievement that my family knows very well. Both of my older sisters were back-to-back high school valedictorian recipients… I was not… I was close, and graduated in the top ten competing for valedictorian. And I can say with great confidence, that the achievement of valedictorian is under celebrated at scholarship ceremonies. Achieving valedictorian takes four years of intense focus, hard work, and sometimes a little luck. I am proud to acknowledge these students and the effort they have exhausted over the last four years.

In regards to supporting music performance as a career, I decided to give out a $2,000 scholarship payable over four years to any graduating senior attending college with music performance as an intended major. Music is an important part of my family. My parents are very musical and pushed all of us kids to pursue music. In fact, my one sister is a professional violinist. I started my college career in music performance. I also tried becoming an indie rock star. Although I achieved some success, I ended up leaving the pursuit of music as career and now perform only as a hobby. I have been so blessed to follow the music careers of these students during their time in college and they remind me that the dream of music performance as a career is still achievable today, no matter what anyone says.

Since I started the scholarship program seven years ago at Portage High School, I have been able to expand the program to seven high schools. Myself or another employee attend ceremonies and hand out scholarships at Portage, Pardeeville, Wisconsin Dells, Poynette, Rio, Westfield, and Montello. The month of May is our “awards season” and I could not be happier supporting the next generation and the future of our country.

Thank you again, to all of our customers for supporting Crawford Oil and Propane. Without our customers the “Fueling for Success” Scholarship Program would not be possible. Thank you for helping us give back and support the values important to our family.

Best regards,

Jon Crawford – Pres.

Buckle Up…

Good morning,

Well, the fear of Trump leaving the Iran deal and issuing sanctions became a reality this Tuesday. The fear of crude supply constraint, further Middle East tensions between Iran, Israel, and Saudi Arabia, and a potential for future war sent crude oil and refined product prices through the roof. Many analysts believe we might have at least $3-7/barrel more to go which would well push our retail price of gasoline over $3/gallon. I wish I had some good news to share or some optimism in regards to the coming weeks, but I do not. Expect prices to increase from where they are at until at least the OPEC meeting in the middle of June. By the time OPEC meets, we should have some understanding on the upcoming sanctions and their potential affects on the markets. For now, get ready to spend a lot more money at the pump for the summer.

Retail prices of gasoline and diesel continue to rise. I expect to see gasoline prices near $3/gallon in the coming weeks and the potential for diesel fuel to approach $3.50/gallon. These prices come at the biggest demand season in our country for farming and travel.

Propane prices have surprisingly stayed calm during this storm. Prices have gone up, but not at the same percentage as gasoline or diesel. I do believe that our current retail pricing is probably going to be close to summer fill prices, and next season’s contracts will be about 15 cents/gallon more than last year. Considering that crude and refined product prices have gone up 47% in price compared to last year, the increase in propane seasonal contract price is potentially only 13%. Therefore, propane heating contracts are offering good value in comparison to other refined products. Contract prices will be released in June or early July.

As always, if you have any questions, comments, or concerns, please feel free to give us a call.

Best regards,

Jon Crawford – Pres.

Waiting Game

Good morning,

The crude markets are now in a “wait and see” pattern. Little bits of info here and there are moving WTI prices above and below $67/barrel with no clear direction until Trump makes up his mind on the Iran nuclear deal. Missiles in Syria again, as well as small attacks in Saudi Arabia caused a small uptick price, but then the continued increase in U.S. production put the brakes on the rally. We are seeing the highest prices at the pump prior to the last crude oil market collapse in 2014. Therefore, we are going to need a major event to take us higher, but any jitters to cause selling could move WTI prices down over $5/barrel. The market is so fragile right now and rattling with anticipation looking towards the middle of May. So for now, it’s a waiting game and we are all going to pay more at the pump in the meantime.

Retail gasoline prices are approaching $2.70/gallon and diesel prices are around $3.09/gallon. I expect to see these prices continue for at least two to three weeks.

Propane has been unable to really build any inventory due to the cold April. Therefore prices are not dropping as much as expected with the warmer weather on the way. In addition to the lack of building inventory, exports continue to be healthy. Comparing current propane prices to crude prices past, propane currently has good value. Therefore, I don’t think that summer fill prices will be much lower than today’s retail price unless we see WTI crude prices collapse back down to near $60/barrel. Summer fills and next season’s contracts will be released in a couple months. Stay tuned for more info.

As always, if you have any questions, comments, or concerns, please feel free to give us a call.

Best regards,

Jon Crawford – Pres.
Crawford Oil and Propane