Good morning,

I’m going to keep this short and sweet so you can get back outside and enjoy the spring weather that finally arrived!

Crude prices are continuing to stay at the highest levels since 2014 and WTI is preparing to break through $70/barrel. Gasoline retail prices are now over $2.50/gallon and diesel retail prices are over $3.00/gallon. Historically, these prices mean that customers start to consider changing behaviors. The amount of “free spending” money that has been sucked out of the economy due to these price increases is staggering. Based on the amount of gasoline gallons sold per day (this does not even include diesel fuel), $300,000,000/day additional is now being spent on gasoline compared to when gasoline prices were at $2.00/gallon! The increase in money spent on fuel is going to catch up quickly to consumer spending behaviors. Right now the risk premium is still on for crude. We need about $8/barrel to come off of crude prices to get cost back in line with consumer sentiment. But I don’t see a possibility of that happening until we get through the Iran nuclear deal deadline in the middle of May. So for now, be prepared to spend your extra cash on gasoline.

Propane prices have skyrocketed in the last week due to do increased demand in April and lack of building inventory. I don’t expect to see retail prices go much lower, if at all, over the coming two months. Next year’s contract pricing will be released probably in June. Summer fills are probably going to be very close to today’s prices. More information will continue to be released and updated.

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

Good morning,

Crude oil prices have been on an absolute run this week. Continuing from the Syria attacks, crude prices continue to find bullish support in geopolitical tensions. Traders are worried that Trump will pull out of the Iran deal and cause 500k barrels of crude to come off the table which would put the market into deficit by end of summer. In addition, physical inventories in the U.S. dropped to four year lows this week. Then after WTI broke through $67/barrel, Saudi Arabia came out and said that they would love to push WTI crude past $70/barrel towards $80/barrel. Seems like no matter what anyone says that can be interpreted as bullish for crude, traders are finding tread to grind prices higher. An interesting fact though is that the U.S. increased production to another record and is now pumping 10.6M barrels/day of crude. We are getting very close to over taking Russia and our increase in production is happening much faster than expected. At these rates, without any change in supply disruptions from the Middle East or Venezuela, the world crude oil market will start to move into surplus inventory building by the end of the year or sooner. In other words, a major correction could be on the horizon towards the end of the year. I just don’t see what has drastically changed in true physical crude fundamentals to cause a $10/barrel spike in prices. But for now, we are holding on tight until the end of the month.

In local news, spreads in gasoline prices are all over the marketplace. The fact is that gasoline and diesel prices have gone up. I expect to see gasoline prices well above $2.49 gallon, and diesel prices above $2.89/gallon.

Propane has steadied out due to the massive increase in demand for April. We are officially experiencing the coldest April on record which is very supportive of propane prices. Like crude oil, we are hanging on tight until the end of the month and then reevaluating. Information on summer fill and next season’s contracts will follow at some point in June.

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

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

Good morning,

I would like to wish everyone a safe and happy Easter weekend. I know the weather is colder but I hope family time is fun and enjoyable.

As far as the markets go, WTI crude has settled down. The geopolitical issues have relaxed and WTI closed below $65/barrel this week. Whew!… I hope that we have peaked on crude pricing going into the spring. With the close of Q1, we will see if there is some profit taking on the WTI trade starting in April. Crude inventories did increase this last week. And although refinery maintenance has been minimal keep utilization high, crude production ticked up another 100k barrels/day last week. Right now the U.S. has Russia production levels in their sites. We might be able to surpass Russia by the end of the year which could put the OPEC deals in jeopardy.

In local news, gasoline prices have peaked going into the Easter weekend. Diesel prices have remained somewhat flat. With the change in RVP to summer on gasoline, I don’t expect to see prices come down on gasoline until WTI drops in price.

Propane prices have been steady due to the cold weather. I am expecting to see good demand yet through mid-April. Hopefully we will see some more price relief on propane going into May. More info on summer fills and next year’s heating contracts will be coming out in few months.

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

Best regards,

Jon Crawford – Pres.

Good morning,

I was out of the office for a week and it’s amazing how volatile the crude market is right now. Two weeks ago we were just about to break back down below $60/barrel on WTI. Two weeks later we are sitting above $65/barrel! In fact, the last three trading sessions were the largest increases on WTI in trading since November of 2017. Most of this was driven by a surprise drawdown in crude inventory here in the U.S. as well as geopolitical tensions in the Middle East. Right now Saudi Arabia is demanding that Iran be curbed further from nuclear development or else they will develop a nuke. The Crown Prince is meeting with Trump to decide how to proceed with Iran. Some are thinking that the tensions could lead to sanctions on Iran and diminish Iran’s output causing world levels of crude inventory to go into deficit, riding the back of Venezuela’s significant decline. However, I do not believe that Iran’s customers would follow through with sanctions, considering that they like the current deal with Iran. Since Iran was agreed upon to open its doors for crude sales, China, India, and Europe are now buying more crude from Iran than ever before. With Iran’s steep discounts and trying to gain market share if possible, I do not see these countries following a lead by the U.S. in calling for sanctions. This is the largest geopolitical development since the middle of the Syria conflict when Russia and the U.S. got involved. Although I think this is significant news, I do not think there is enough “news” to push crude much higher. The inventory projections from both the EIA and IAA change every week. I agree with the thought that WTI crude will continue to trade in the $60-65/barrel range. However, my call of a “calm spring” for planting season is now a bit shaken. I am now urging some to cover costs in spring just a bit to be safe. And the last bit to remember is that we are coming to the end of Q1 and if crude prices hold, some traders might “ring the register” on a nice start of the year bump in profit and move money elsewhere. That would not be the first time we see the “selling in March” scenario.

In local retail news, gasoline prices have spike due to the change in RVP for summer. I believe that the retail price of $2.49/gallon will be about the peak for now. Where we go from here will all depend upon crude pricing. Diesel prices are jumping all over due to market volatility and street price volatility unwinding from winter blends. As with gasoline, the current prices will probably hold unless crude can find some legs and break out to the highest close of the year.

Propane has bounced back up off its lows with the increase in crude. We are still hoping to be able to lock in prices for next heating season very close to what we were at this year. Right now there is not much value in future prices until the market can digest this recent uptick in crude prices and the unwinding of winter heating demand. More information to come in the following months.

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

Good morning,

Not too much to report this week. WTI crude oil is dancing with breaking back down below $60/barrel. A stronger dollar and continued increases in crude production and products in the U.S. is putting pressure on prices. Although OPEC is really pushing the success of their agreed upon agenda, I am skeptical the agreement will hold for the rest of the year. The good news is that if we continue on this path, we will have descent retail prices across the country for the year which is good for the economy. I think that we are back in a pattern where any bit of news is going to push us either to $59/barrel or $64/barrel on WTI. So until anything drastically changes, we are going to dance back and forth for a while.

In local news, we are seeing diesel prices starting to fall with the price of crude as well as major winter blending components coming out of the market. Gasoline prices are holding a bit steady with a small concern on supply going into spring with refinery maintenance. I don’t see any major price spikes in gasoline ahead, just not as big of a drop as expected in relation to crude.

Propane prices are continuing to drop with the winter starting to wind down and major deep freezes behind us. I expect contract prices and board prices to even up by the middle of April. As far as next year goes, we are seeing prices for next winter being very good in comparison to this year. Contract information and summer fill prices will be released sometime after June. More 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.

Good morning,

As I stated before, I believed the claw back on crude was too quick and would correct at some point in March. Well, we are at March 2nd and WTI is close to breaking back below $60/barrel! As I like to say, what a difference a week makes! Oil production is continuing to rise and stocks are building again in the U.S. going into the spring maintenance season. OPEC is getting wavy on commitments due to the U.S. has Russia in their sights to overtake on production. Also, our dollar is finally gaining back some strength from the recent sell off a couple weeks back. And just like that, crude prices fall $4/barrel. I don’t think we are out of the woods yet. Crude might tumble a bit more, but I feel that crude will trade in the $55-$60/barrel average range for maybe the year if all components stay constant.

In local retail news, I am suggesting that all farmers lock in some portion of fall fuel needs at this time. We have some excellent prices and I believe one should hedge the supply crunch that always occurs in October and November due to the harvest and refinery maintenance. Gasoline retail prices will remain somewhat in the current range due to the change in RVP for summer. This change adds a premium cost to gasoline. As the temperatures rise and costs of product fall, I expect to see diesel prices at the pump come down a little bit. Most of this will be from retailers no longer having to blend products with #1 diesel to meet winter usage needs.

Propane prices are falling off as predicted. We are not locking in next season contracts for customers yet, but the numbers are looking very good for next heating season in comparison to this year. We suggest that all customers fill their tanks this summer and lock in prices when available this summer. More information will available in the coming months.

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

Best regards,

Jon Crawford – Pres.

Good afternoon,

After entering into correction, WTI pricing has whipsawed back to above $62/barrel. With the dollar recovering from the low and production increasing in the U.S. and Nigeria of OPEC, many of us are scratching our heads at the quick claw back in crude pricing. In addition, Iraq is investing in more production, and if Nigeria is truly cheating on quotes, I wonder how much longer others will hold out. Russia has been stomaching their quota but their players in the country really would like to increase production. I’m thinking that maybe crude recovered much like the DOW. There was still money left on the table from the tax cuts and record profits to throw into the market when the first round of selling triggered across equities and commodities. At this point, I’m sticking with what one trader called earlier this month “the appetizer before the meal.” I really do think that crude will come back down below $60/barrel one more time this spring, possibly in March. If the Fed raises rates in March, pressure on crude will mount. Also, traders will have to decide if they want to cash out of crude in Q1 and move the money into something else.

In local news, retail prices are all over the board. In a 45 mile radius from Madison, retail prices on gasoline have ranged from $2.35 to $2.49. Diesel prices are starting to ease a bit as #1 ULSD blends fade out a bit. Just as prices were going to break into the possible teens on gasoline, crude clawed right back.

Propane retail prices have a eased a bit from the highs. We expect to see prices go down from here for the rest of the heating season into spring. Summer fill and contract information for 2018 will be available closer to June/July.

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

Best regards,

Jon Crawford – Pres.

Good morning,

Crude oil finally unwound from its highs last week. Over $10/barrel came off of the WTI crude oil contract last week due to increased production in the US and the strength of the dollar. Futures prices dropped dramatically and crossed our strike price of $60/barrel. This week, crude prices rebounded a bit on a weaker dollar and news from Saudi Arabia that they plan to keep production low even though the US overtook them in production. The US also started building inventories of products going into the spring. In addition, the US also shipped their first “super-tanker” of crude. And some of our crude oil is showing up in new countries meaning that our customer base is growing. I do not believe that we bottomed out last week. I believe we will see a tug and pull between $59-62/barrel for sometime. If the dollar index starts to move higher and hold above 90, I don’t believe WTI crude will hold above $60/barrel. Lots of talk going on and rebalancing of hedge fund monies right now, so hold on because it’s going to be bumpy for a few weeks.

In local retail news, gasoline and diesel prices continue to drop. If you are considering locking in fuel prices for this year, now is good time to start thinking about it. I am still advising clients to lock up prices for the fall and maybe let the spring ride. Feel free to call me for more info.

Propane prices rebounded off of the lows due to a slight increase in demand. However, I do not see the recent price increase affecting retail prices. As of right now, we are seeing prices for next heating season being about the same as this season. More pricing info will be released this summer.

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

Best regards,

Jon Crawford