Be Safe and Be Well

Good morning,
 
I just wanted to reach out and wish everyone a safe weekend. I know that days are very difficult for many people right now. All of our lives are turned upside down and fear of the unknown grips many of us daily. I know that I have had my many moments over the past two weeks.
 
Please know that our company is doing everything in our power to be safe and be able to deliver products through this difficult time. We are doing our daily best to support each other within our company and our families at home as well. We are also doing our best to stay isolated outside of work to ensure the lowest possibility of spread within the community and our company.
 
If you have any questions, comments, or concerns, please feel free to reach out to us.
 
Once again, be safe and be well!
 
Best regards,
 
Jon Crawford

UPDATE: Status for Crawford Businesses

Good morning,

I wanted to update everyone on where Crawford Oil and Propane is at with handling the unprecedented novel coronavirus situation.  Our thoughts and prayers are with everyone as try to ensure that everyone stays safe and healthy.  Crawford Oil and Propane is considered Essential Services for the State.  So right now, we are not anticipating any shut down of our delivery service.  However, we are making some changes at all our properties to make sure we operate as safely as possible.

Starting immediately, our office will be closed to all customers.  Payments can be mailed or done online.  You can also call the office and make arrangements over the phone.  We apologize for the inconvenience, but we feel it is necessary to stop the potential spread within our office staff and drivers.  Drivers will also no longer be able to accept payments on the truck.  We are practicing safe social distancing of six feet.  All payment arrangements can be made directly online, through mail, or feel free to call our office.  Our hours of operation are remaining the same, but could change in the future.

Our two gas stations are continuing to stay open and will do so with limited staffing for the time being.  We are also limiting hours of operation and the offerings available in the store.  We apologize for the inconvenience but we feel the changes are necessary to combat further spreading the virus.

The situation is changing day by day, and sometimes hour by hour.  I will continue to keep you updated as best I can.  For now, I ask that everyone take care of themselves, have patience, and know that everyone is doing the best they can to get through this situation.  I know many people are scared and have a lot of questions.  We all do and are all in this together.  But I believe that we will get through this and come together stronger in the end.  I will continue to keep you all in my thoughts and prayers.

Best regards,

Jon Crawford

COVID-19 Update

Good morning,

I know that this message finds many of our customers scared, confused, and anticipating answers.  Please know that Crawford Oil and Propane is taking all necessary precautions recommended by the CDC and Gov Evers here in Wisconsin.  Please take a moment to read up on the CDC website to best stop the spread of the virus.  We can calmly work together to stop the COVID-19 spread and hopefully watch this virus leave us as quickly as it came.

https://www.cdc.gov/coronavirus/2019-ncov/index.html

 

 

 

COVID-19 and Russia

Good morning,

The markets have been on the most volatile roller coaster possibly since 2008.  Crude oil prices have traded in a range of over $6/barrel all week.  The main driver has been the potential for demand destruction with COVID-19.  As prices fell this week, the FED  made a surprise announcement to make an emergency cut to interest rates, the most since 2008.  The announcement sent WTI crude prices higher for a bit but leveled off around $47/barrel.  OPEC yesterday announced an emergency cut of additional 1.5M barrel/day production cut which sent prices much higher for the day.  OPEC is trying anything to keep prices from falling off a cliff.  But the markets calmed after learning that Russia might not agree to the cuts.  This morning, Russia announced they will not comply with the proposed cuts to production.  WTI broke through the support level of $45/barrel and fell lower to $43/barrel on the news.  Basically, we are in a cycle that no matter what anyone tries to do, COVID-19 rules the day and all markets believe we will experience the worst pullback over the next few months probably since 2008.  In addition, COVID -19 could return in the fall with vengeance, which is why the race to a vaccine is so important to stabilize the world wide fears.  For now, regardless of how these situations turn out, we are preparing for lower prices on crude for longer.

Retail prices on gasoline and diesel moved lower this week along with the markets.  If we do not experience any positive news with COVID -19, I could see retail prices on gasoline fall below $2/gallon.

Propane prices are not being affected by these markets.  Propane is working on strict fundamentals for the moment.  There is a lot of propane in inventory, and prices just can’t go much lower or the product will be burned off through the petro-chem facilities.  For now, we can enjoy lower propane prices probably for the next year.  In addition, winter is winding down.  At this point in time, we are currently 10% colder than the warmest winter on record, but 10% warmer than last year’s winter.

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

Best regards,

Jon Crawford

Market Bloodbath

Good morning,

The spread of the coronavirus has taken all markets by storm and entered into correction territory.  No matter what any true market conditions are appearing, the markets have sold off at the highest capacity in one week since 2008.  Crude prices are down to over four year lows.  The massive sell off is creating potential future buying opportunities, but no one knows how long this could last.  For right now, it’s sit back and watch the falling knife.  However, I would like to point out, that in my opinion, there are some signs of supply tightness in the diesel market and no matter how low crude prices go, diesel might be starting to form a bottom.  Little early to call, but it’s something I am watching.

Local retail prices are not able to fall fast enough.  I expect retailers will slowly lower prices to make up for losses on the last run higher.  At the rate we are going, gas prices below $2/gallon are not out of the question in the coming week or so.  Diesel prices will also continue to come down.  At this point, we are at the potential for the lowest cost on diesel for planting season in many years.

Propane prices have not followed along with crude in the bloodbath sell off.  Propane prices are bouncing along a bottom sweet spot.  If they go any lower, the petro-chem companies will buy up everything in inventory, and I mean everything.  So traders are not throwing in the towel just yet.  However, I can safely predict that I believe next year’s heating contracts will be lower than the current year without some massive change to inventory.  As we go into the end of our current winter, we are looking to complete the second warmest winter in 10 years.

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

Best regards,

Jon Crawford

Crude Prices Continue Volatility

Good morning,

Crude prices rallied this due to draws in US inventory levels and OPEC commitments to cuts.  In addition, the US put new pressures on Russian oil companies after discovering that Russia was helping Venezuela escape US sanctions.  Also, a refinery fire in the Gulf caused Chicago spot markets to rally due to increased need for supply.  Crude prices and spot markets were set for a good weekly gain until this morning.  Today the coronavirus took the major headlines as the virus continues to spread and might not be as contained as the WHO concluded earlier in the week.  Crude prices tanked to start the day Friday bringing spot cash prices for refined fuel down with it.  So for now, the coronavirus is the new “hot headline”.  Whatever announcement hits the news each day seems to drive the market.  Volatility is back on big time in the crude trade.  Many hedge fund managers exited crude positions over the past few weeks and not many are reentering with these conditions.

Spot prices in Chicago jumped this week and I expect to see prices at the pump increase for gasoline.  Diesel prices were not affected as much.

Propane prices found some support with cold weather and high exports.  Also, there are discussions around the petrochem companies along the Gulf Coast buying into propane at these lower prices.  If the petrochems buy in, we could see the massive glut of propane decrease quickly.  For now, lower prices will continue but I don’t expect to see the bottom fall out.

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

Best regards,

Jon Crawford

Small Crude Rally

Good morning,

As the coronavirus continues to spark worries of demand erosion across the world, crude prices actually gained a small percentage this week.  The gains were mostly on the heels of the news that OPEC+ is going to cut production no matter what to keep WTI prices from falling into the basement.  In addition, many believe that maybe the coronavirus is being overstated in market pricing.  Regardless, crude prices increased a small percentage this week.  The IEA is calling for crude consumption to drop in Q1 for the first time in years.  Also, the crude oil inventories in the US continue to build.  I believe we are taking a breather, but the crude market still looks very bearish.

Refined products increased in price this week on a temporary price spike due to a Mobil refinery fire down in Louisiana.  The refinery is the 5th largest in the US.  Gasoline prices jumped almost 10 cents/gallon!  However, retail prices in our market DROPPED in price!  Go figure 🙂  Diesel prices gained a bit in cost, but not much movement at the pump.

Propane prices continue to remain very bearish.  Our national inventories are at record levels and even with the current demand increase, we don’t expect to see propane values increase at all over the coming months.  We believe that propane values will be very attractive over the next year.

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

Best regards,

Jon Crawford

Coronavirus and Warm Temps

Good morning,

The coronavirus continues to put downward pressure on crude prices.  WTI crude is holding near $50/barrel which is the lowest in almost a year.  OPEC+ is meeting early to try and convince everyone to pump less oil until the coronavirus is contained.  Russia is disagreeing to the terms and believes that nothing should be done until the coronavirus is further studied.  If Russia pumps less oil, the US will take the market share and Russia is not ok with that happening.  The US continues to pump at record levels and is not looking to slow down.  To try and help keep the steam in the economy, China announced slashing tariffs on US goods in a couple weeks.  China knows the coronavirus is going to slow things down a bit, and if anything, the virus is forcing the two countries to talk more about the trade dispute.  For now, we are seeing a floor carve out on oil prices.  I believe we will trade in the $50-55/barrel range on WTI until further notice on the coronavirus.  I believe that if a cure is found and the virus is contained, WTI crude will jump $5/barrel.  However, until real economic slowdown occurs, I don’t think traders are going to give up much more on crude prices.  For now, it’s a day-to-day move with the news cycle.

In local retail news, refined products have softened once again, so I expect to see retail prices on gasoline and diesel hold around their current levels for some time.

Propane prices have also softened with record warm temperatures.  The US actually experienced a BUILD in national inventory last week, when last year at this time it was a record drop!  We are looking at ending the winter with as much in inventory as we sometimes have to start winter!  I think that propane values are very attractive and I see very cheap prices on the horizon for the rest of this year and next winter.  So for those who heat with propane, hopefully you can keep more money in your pockets for 2020 and 2021!

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

Best regards,

Jon Crawford

Coronavirus and Groundhog’s Day

Good morning,

Well, the coronavirus is not getting any better.  In fact, the virus has now infected 15k people and killed over 300.  The first death outside of China was reported, and a few major US cities are reporting cases.  China built a giant hospital in nine days (yes, nine days) to have beds on hand ready to treat.  For now, the markets are very nervous.  China is shutting down factories, US companies have closed operations, and travel/shipments are starting to stop.  The virus could cause the world economy to grind to a halt while contagion is contained.  With demand erosion on the horizon, crude prices have tumbled.  WTI crude briefly traded below $49/barrel for the first time since last spring.  OPEC+ is already planning an emergency meeting to try and keep crude prices from falling off a cliff.  The US would actually not want prices to go much lower in order to keep production high and taking market share.  For now, it’s time to sit back and relax until we know where we are heading with the coronavirus.

Local prices of retail gasoline and diesel continue to fall.  Retail gasoline prices have fallen below $2.29/gallon and retail diesel prices are in the $2.70’s.  I don’t expect to see prices move any higher in the coming weeks.

Propane prices continue to stay soft with warmer than average temperatures and high volumes of supply.  As always, we like to have fun with our local groundhog, Jimmy The Groundhog from Sun Prairie.  Jimmy did see his shadow on Sunday, so for what’s it worth, Jimmy is saying we will have six more weeks of winter.  The forecast is continuing to call for average temperatures.  For now, I think it’s safe to say that a major polar vortex is less likely to occur this year compared to years past.

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

Best regards,

Jon Crawford

Coronavirus Causing Market Sell Off

Good morning,

The week started off with Libya’s production going offline due to internal civil war conflicts again.  In the past, this type of conflict caused at least a 5% spike in prices.  Instead, traders shrugged off the event due to the US hitting another week of record production runs and increases in inventory volumes.  The IEA is still calling for decreasing prices in the second half of the year due to crude supplies going into surplus while under current OPEC+ production cuts.  But the big news of the week is the Chinese Coronavirus.  The virus continues to spread to other countries and has killed close to 100 people already.  A city of almost 30M people is under quarantine in China.  The last time this happened was with SARS and crude prices tumbled due to demand erosion.  Well, history is proving itself to be true once again and crude prices tumbled to their lowest levels in the last three months.  WTI crude is starting to point closer to $50/barrel than $60/barrel.  For now, we are awaiting developments on the Coronavirus and taking cues from the WHO.  Until we know where the virus is heading, I think the last rally in crude prices is on ice.

Local retail prices on gasoline and diesel are slowly decreasing.  However, spot cash prices have not dropped as much as expected with the decrease in crude prices.  Regardless, I don’t expect to see prices at the pump go up in the coming week or so.

Propane prices dropped once again this past week.  The weather continues to be propane’s worst enemy.  We are getting very close to experiencing the warmest January/December on record.  The demand destruction on propane is very real, even though exports are at record levels.  At the current inventory levels, we are one pace to end the winter with the most propane in inventory post winter in the history of tracking inventory!  If the current state of propane holds, I would expect very low prices on summer fills this year.

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

Best regards,

Jon Crawford