Syria Premium in WTI

Hello,

As the trade war potential with China was cooling and putting a little floor on WTI around $61/barrel, President Trump tweeted aggressive responses in Syria and taunted Russia. With stability in Syria being very fragile at the moment, the tweets from President Trump caused an immediate $5 premium to be added on to both WTI and Brent, along with a 20 cent per gallon increase in cost of both gasoline and diesel. Until we hear what the U.S. is going to do in Syria, we will hold these numbers. If we decide to not escalate the situation any further, traders will sell the news and back down towards $60 WTI we will go. Regardless, for right not it’s sit tight until maybe the end of the month.

In local news, retail cost of gasoline and diesel both increased near 20 cents/gallon, so I would expect to see retail prices climb.

Propane prices are nearing the lowest of the last six months. However, demand has been very high this April. I would expect to see summer fill prices not start until towards the end of May at this rate. More info to come over the coming weeks.

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

Jon Crawford – Pres.

Trade War and Geo-Political Tensions

Good morning,

Well, the game of Ping-Pong continues on the crude market. This week, due to the fears of a trade war with China, WTI crude took a dip to it’s lowest close in almost six weeks. In addition, geo-political concerns in the Middle East and North Korea seem to have taken a back seat to the talks on Chinese tariffs and NAFTA. Like the DOW, WTI has been very volatile this week. WTI seems to have a bit more momentum to push back towards $60, but there are still a lot of long positions on crude that would need to unwind. Also, a cooling of the economy coupled with a week dollar will put the crude trade in an interesting position now the China is trying to push crude purchases using the Yuan. If demand erodes and the dollar tanks, it will be interesting to see how crude reacts.

Retail prices on gasoline have stabilized for now. Summer pricing for gasoline is now baked in to our cost. So now we should see retail move more based on crude. Diesel is done with winter blending so pricing will be most affected based on demand going into planting season whenever this cold weather ends.

Propane futures hit an excellent entry point and most suppliers entered positions for next winter. As I’ve stated before, so far we are seeing contract prices for next heating season very close to this season’s prices. Please make sure to check your tank if you are on will-call delivery service with us. This cold weather has caused a late season demand that most people were not prepared for. Summer fill and next season’s contracts will be out in a couple of months. More info to come.

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