Good morning,

Crude oil continues it’s trend of volatility. Crude recently closed at it’s highest price since May. WTI experienced a rise from $43/barrel to $50/barrel based on weak dollar, OPEC future cutting, and a sprinkle of geopolitical issues. Oh, and not to mention the large amount of long calls from speculators that entered the market a couple weeks ago. After today’s weekly inventory report, crude is back below $49/barrel and not moving much. I believe that many market makers were able to buy in quick on the rally at the end of July and sell in August. Positions left the market yesterday, so clearly some short-term profit making to boost financials was on the agenda. In addition, OPEC’s numbers came out and compliance has eroded to below 75%/, down from 90% at the beginning of the year. Even with a proposed deeper cut from Saudi Arabia, it’s not big enough to truly cut into the glut. Basically it’s enough to hold the status quo. Although the amount of rigs coming online seems to be slowing up, we are still at peak production here in the U.S. I am still calling $45-50/barrel crude for the rest of 2017. Now here’s the potential geopolitical issues that could spike crude. Oil sanctions against Venezuela, conflict with North Korea, breakdown with China, sanctions on Iran, and overall supply disruptions from political unrest. However, I feel that these issues are already baked into the price of crude right now. In other words, we will continue to ride this bumpy tight trading range around $5 for some more time. The weekly EIA Inventory Report showed a 1.5MM barrel draw in crude (not that surprising), a 2.5MM barrel draw in gasoline (not that much for this time of year), a 200k draw of distillates (this is very small for this time of year), and a 1.7MM barrel increase in propane inventory (which still puts us at peak propane levels about 20MM barrels below last year).

In retail news, gasoline and diesel costs have risen dramatically due to the rise in crude. Gasoline retail is averaging around $2.21/gallon and diesel around $2.49/gallon. I expect diesel prices to climb at least 10 cents and gasoline another 5 cents in the coming days before the weekend.

The propane situation is still not pretty. Supplies are not building and prices are rising. Retail prices have risen and will continue to rise. As I have been saying since May, please fill your tanks now and contract your winter usage. This propane season is continuing to look like a bad year for price spikes.

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,

The crude oil picture continues to be interesting. OPEC has continued to push exporting of refined products with little drawdown in inventory, showing that the glut of crude is not curtailing as quickly as planned. However, the U.S. production is starting to peak and inventories of crude fell for the second straight week causing a knee-jerk rally earlier today after the sell-off Friday on the news of more rigs added into production. But then the dollar, which has been pounded recently, started to rally hard on news from Janet Yellen that rate hikes are going to continue to come. In other words; volatility, volatility, volatility. I still believe that we are going to see crude trade in the $42-48 range for the remainder of the year.

The weekly EIA Inventory report showed a 7.6MM barrel draw in crude inventories, a surprise build of 3.1MM barrels of distillates, a small draw of 1.6MM barrels of gasoline, and a less than stellar build of 1.7MM barrels of propane. As I stated earlier, and bullish reaction to this report has been capped by the FED reporting. The important number is the propane build. The build is still very weak in terms of the past week and holiday. Unless a surprise large build comes next week, I am holding firm on a future price spike in propane and supply tightness.

In local retail news, gasoline prices averaged around $2.15/gallon and diesel prices around $2.39/gal. Our summer-fill program has started for propane and we are currently at the lowest prices of the year! Please call now to have your tank filled and sign up for one of our contract options. I highly recommend everyone contracting this year due to limited supplies and the potential for large price spike.

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 afternoon,

I hope everyone enjoyed their 4th of July celebration and was safe. With a short week in trading and many traders on vacation, the markets were very out of balance the past seven days due to light volumes. However, news hit the airwaves that many OPEC countries, including Saudi Arabia increased exports in June. There is a delicate balance between the continued increase in exports and the production cuts. In addition, the U.S. seems to be hitting a peak in production and I think will be taking a breather for a bit. I don’t think we will see much change in the oil rig counts until we get through summer. The EIA released it’s weekly inventory report today, and although the results look bullish on the surface, crude oil gave back all the initial gains by the day’s end. The national crude oil inventories decreased 6.3MM barrels, gasoline decreased by 3.7MM barrels, distillates decreased by 1.9MM barrels, and propane inventories increased by 2.1MM barrels. The only disappointment in my opinion was the propane build. I was hoping with the holiday week, we might have seen that number closer to 2.5MM barrels. As propane inventories continue to lag, the crop drying situation continues to point more towards higher demand this fall. With inventories at historical lows based on demand, I am still calling for a price spike in propane this year regardless of price in crude.

In local news, gasoline prices have averaged out to about $2.15/gallon and diesel prices around $2.39/gallon. Propane summer fill is in full swing. I am highly recommending that everyone fill their tanks this summer. The current price is very attractive compared to future contract pricing. We also have released our contracts for next year. Please call the office now for current prices on summer fill and heating contracts.

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 afternoon,

After weeks of downward momentum, crude oil finally found some support in the last couple of days on a falling dollar and draw in U.S. petroleum inventories. The data caused some traders to cover some short positions and in doing so has developed some support for crude prices. I am reluctant to call a “bottom”. Summer demand is in full swing and consumption has not been stellar. In addition, storage facilities on the East Coast are filling up and the oil rig count continues to rise. In addition, Nigeria and Libya increased production in June and even Saudi Arabia increased exports in June. Unfortunately, I am not seeing where demand is outstripping the glut of crude we continue to keep on hand. Therefore, I am calling the last few days as a short covering rally and nothing to be too excited about. I am still calling that we will not see crude above $50 by the end of summer. The EIA reported national crude inventory draws of 1.3MM barrels, gasoline draws of 900k barrels, distillate draws of 200k barrels, and propane builds of 3.9MM barrels. The draws were all in line with expectations and better than some. Propane’s large build was mainly offset by the tropical storm in the south. All exports were shut off due to the storm last week. So if you take that into account, the build in propane inventory was modest at best and still leaving us well behind the inventory levels needed for winter. I am still calling for a quick rally in propane prices at some point in the next two months.

In local retail news, gasoline prices are holding around $2.17/gallon and diesel prices are around $2.39/gallon. Propane is at the lowest price of the year. I recommend that everyone fill up their propane tanks this summer. I also recommend that everyone lock in their price for next year. There is a major risk of propane price spikes in 2017-2018 due to low inventories and the potential for larger than average crop drying demand.

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

Best regards,

Jon Crawford – Pres.