There is NO Propane Shortage in Wisconsin

Good morning,

There was an announcement late last week from the Governor’s office issuing an Executive Order lifting the Hours of Service limits on drivers delivering propane due to a shortage. The information released was not true. The press releases misunderstood the actually problem. The problem we are facing is a transportation issue, not a shortage of propane issue. Due to the high volume demand from the longer than expected cold snap, most propane terminals have put customers on allocation to make sure that all Wisconsin companies have steady access to propane. With allocations in place and some terminal areas running low, long lines can form at these terminals. A driver’s logged hours include the wait time to load. Under these circumstances, most drivers fill their log book waiting in line and not delivering propane. So the Executive Order lifts the hours mandate so drivers can deliver the propane after waiting in line. Lifting these restrictions also allows companies such as Crawford Oil and Propane to deliver extra hours at night and on the weekends. We delivered over the weekend last weekend and we will probably do so this weekend in order to stay on top of all our orders and take care of our customers.

I have also included a link below to an article from the Wisconsin Propane Gas Association retracting the information in regards to a “shortage”.

http://wxpr.org/post/no-shortage-propane-driver-shortage-led-walker-order#stream/0

We have received many phones calls about a potential shortage. The media coverage on the issue has also spurred additional “panic buying”. I wanted to make sure you all knew that the current situation is transportation and logistically due to high demand, and not a shortage of propane coming to Wisconsin. Please keep this in mind as you order. Our crew is extremely busy and working overtime to meet the demand of this cold snap and panic buying based on news of a false shortage. We are meeting all demands of our customers at this time and see no issue with access to product. We expect to be all caught up by the end of the weekend.

Once again, thank you for your business and 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

Happy New Year!

Good morning,

I just wanted to take a quick moment and thank everyone again for their business in 2017. The year had a lot of up’s and down’s, but overall turned out pretty well with all things considered. I am optimistic looking into 2018 and feel prepared to take on the potential challenges. I wish you all a safe and happy New Year celebration, and I look forward to servicing and helping our customers achieve a successful 2018!

Best regards,

Jon Crawford – Pres.
Crawford Oil and Propane

PHONES ARE BACK UP!!!!

PHONES UPDATE: our phones are FINALLY back up! We apologize for the inconvenience today. Thank you SO much for your patience. Charter apologizes to you all as well for the problems they caused today.

I hope you all have a great rest of your week.

Best regards,

Jon Crawford – Pres.
Crawford Oil and Propane

Phone Issues

Good afternoon,

This morning, Charter Spectrum caused our entire phone system to crash. We have been without phones since 10am. I wanted to let you all know that our email still works and you can reach us at angela@crawfordoilco.com or jen@crawfordoilco.com. We are still in business and our numbers will still be the same. We apologize for the inconvenience. I will update you as soon as we are up and running.

Best regards,

Jon Crawford – Pres.
Crawford Oil and Propane

The Grinch Who Stole Christmas Gas Prices

Merry Christmas everyone!

Geopolitical news has been very quiet going into the end of the year. Crude prices rallied a little with the shutdown of the Forties Pipeline in England that carries 400k barrel/day. The tax cut bill from Congress really ate up the news cycle of this week. But as predicted last week, retail prices were falling and stabilizing to the lowest of the last 2 months. We were seeing lower prices coming for Christmas which always makes for better holidays. In fact, historically prices usually fall before Christmas.

But unfortunately the Grinch showed up this Christmas…

http://peoriapublicradio.org/post/high-gas-prices-greet-holiday-motorists#stream/0

Please read the article posted above. In Chicago, the Exxon/Mobil and Marathon refineries went down and were unable to be fixed. The issues are being kept very secret. However, from the contacts that I have in Chicago, the outages are expected to remain for the first couple weeks of 2018. These issues sent the spot price of gasoline rocketing up 30 cents/gallon in Wisconsin, Michigan, Illinois, Indiana, and Ohio. So unfortunately, the Christmas gift of cheaper fuel as in years past was stolen by Exxon/Mobil and Marathon.

I expect retail gas prices to edge up closer to $2.49/gallon and diesel prices near $3.00/gallon. These prices could hold for up to two to three more weeks. Once Exxon/Mobil and Marathon are back on line, gasoline spot prices will drop fast. I will keep you updated as information is released.

Propane prices are very stable due to the overall lack of winter demand in the country. Here in our neck of the woods, we are a bit colder than last year. However, we are still not that cold in comparison to four or five years ago. For now supplies and prices are stable which makes the delivery logistics much easier for the industry.

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

U.S. Crude Production Predicted to Surge in 2018

Good morning,

Happy Thursday. Oh, what a difference a week makes. For the past few weeks the markets have been digesting the OPEC cut extension set to move through 2018. These cuts are looking to remove a giant glut of crude in the world marketplace and bring the fundamentals back into a shortfall scenario. The “fly in in the ointment” is non-OPEC production in 2018, and most importantly the United States. The IEA came out with a bearish report for crude going through 2018. The IEA predicts that the non-OPEC supply of crude will rise to 1.6MM barrels/day versus the 600k in 2017! This incredible surge in production could potentially wipe out the cuts from OPEC by mid-year in 2018. OPEC concurred that the non-OPEC production, particularly from the U.S. is of concern. One potential scenario is that if crude grows to surplus inventory again, Saudi Arabia and Russia will go toe-to-toe. Russia will want to increase production to flood the market and wipe out future production for the U.S., and Saudi Arabia will threaten to cut as much as Russia over-produces to keep the market in balance. Saudi Arabia likes the current crude price for their IPO offering in 2018, and Russia does not like this price because the U.S. is starting to take their customers.

In local inventory news, the EIA showed another dramatic drop in U.S. crude inventories, but an incredible build in gasoline. The offset displays the robust refining margins on the current crack spread for WTI and the WTI/Brent spread for export. Propane inventories actually showed a small increase during one of the highest potential demand months of the year. Propane markets are starting to sell off a bit due to the lack of demand events that were predicted. We are not in the “falling knife” scenario yet, but if January doesn’t get cold, I expect propane prices to fall dramatically.

In local news, gasoline prices continue to remain stable and fall slightly averaging around $2.25-2.29/gallon. Diesel prices remain below $3/gallon, even though most sites are using winter additive and #1 oil for winter blending which increases costs. I predict gasoline to be around $2.25/gallon for Christmas. Propane prices are starting to move downward, but still well above contracted prices. Therefore, all customers who have contracted their fuel have done very well in the first half of winter. January through March is yet to be determined as demand has yet to show itself due to warmer temperatures.

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

U.S. Surges with Production of Refined Fuels

Good morning!

The WTI crude oil market seems to have found a floor at around $55/barrel. After the announcement of the OPEC extension, there was a little uptick in crude prices at the end of last week. However, on Friday, the U.S. continued to show growth by adding more production rigs. Some traders took a little profit and the volatility train kicked in this week. In addition, the U.S. announced a large drawdown in crude inventory this week (5.6MM barrels), but skyrocketed supplies of finished product (8.5MM barrels) due to very attractive crack spreads. Also, WTI continues to be very competitive to Brent making the U.S. a competitive player on the open market. Another big surprise this week was the large build in propane inventory (1.3MM barrels). Due to the large drop in corn drying demand, some are thinking that production will keep up with demand. For now propane prices have steadied, but any large increase in demand or a drop in crude causing drops in production could cause propane prices to spike due to low inventory levels.

In local retail news, the retail price of gasoline is near $2.30/gallon, down from almost $2.49/gallon a month ago. Diesel prices have steadied to about $2.79/gallon. However, most diesel is now blended with winter additive and #1 oil adding almost a 10cent/gal cost to the product. If crude prices stay in a tight range, I expect to see these lower prices going into Christmas driving season which would be great for everyone!

Propane retail prices have not moved since last week. I believe we have potentially reached the highest price for the month. For now we will wait and see what happens if the cold weather holds on. For those who contracted, you are still way under the market which is a good win going into the holidays.

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

OPEC and Russia

Good afternoon,

Well the buildup is finally over. OPEC and Russia met today and decided to extend production cuts through 2018. After days of potential pullout from Russia, everyone came to the table and announced the agreement today. The markets did not react with any positive bounce. In fact, the extension sort of holds a “business as usual” tone. The extension agreement has been baked into crude prices for some weeks now. Now had OPEC and Russia cut more, you would have seen WTI jump through $60/barrel. Based on the results of the meeting today, I am now calling for WTI to trade in the $55-60/barrel range through June of next year. The US had large builds in gasoline and diesel inventories after a drop in crude inventories. The build in finished product is showing that refinery runs are good and the US is going to be going to market with product. So Russia and OPEC are going to have to concede market share to the U.S. I am hesitant that Russia will hold these cuts for the entire year. Russian oil companies will struggle to lose customers to the U.S. for a long period of time.

In local news, the Keystone Pipeline restarted and Chicago refineries all came back online. These announcements caused a massive drop in spot prices in Chicago as we moved to the next refinery cycle timing. I would expect to see diesel prices average around $2.85 and gasoline get down to $2.30/gallon very soon. Hopefully these will hold and we can all save some money during the Christmas and New Year’s travel season.

Propane prices have been holding steady. Supplies are in better condition with pipelines reopened and a drawdown in corn drying demand. Propane inventories had a smaller than expected draw today which surprised the market. The weather is going to truly dictate the price movement in propane. Any drop in crude prices will not affect propane if temperatures drop back to normal. As a reminder, please call in your propane order when your tank is at 30% or higher to ensure we have up to five days to get there during the busy season.

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

Happy Thanksgiving!

Good morning!

Crawford Oil and Propane hopes everyone had a safe and enjoyable Thanksgiving! We are so thankful for all of our customers and a safe delivery season in 2017. We look forward to another safe and successful year in 2018!

Jon Crawford – Pres.
Crawford Oil and Propane