Good morning,

As you have noticed based on the price of gas at the pump, prices are continuing to drop.  WTI crude traded below $50/barrel for the first time in over a year this week, but jumped back up over $50/barrel right away.  I feel that the market is carving out a current bottom at about $50/barrel until OPEC+ meets on Dec 6th.  There is so much chatter going on right now that everyone seems to be on the sidelines just waiting for the meeting.  In addition, the FED stated that they might hold off on continuing to raise rates.  This helped support crude prices on a fundamental level.  But the geopolitical issues are outweighing supply and demand fundamentals right now.  When these situations occur, if we feel crude is undervalued, an opportunity is available.  And right now, I believe an opportunity is available.  I see no reason that OPEC+ will come out of the meeting without planned production cuts based on the price of  BRENT crude needed to balance national budgets.  They understand that cuts will lead to loss of market share to the U.S.  The U.S. just surpassed Russia to become the number one producer of crude at 11.7 million barrels/day.  And speculation is saying that the U.S. could grow by another 2 million barrels/day!  The cartel tried in 2016 to “punish” the U.S. with low prices, but the U.S. persevered and excelled.  So I don’t see OPEC+ going through that experiment again.  In addition, Russia is playing around with flexing it’s military muscle in the Ukraine again.  The U.S. Senate just voted to stop funding support for Saudi Arabia in the war in Yemen.  The Saudi Prince MBS is in hot water for his possible ordered killing of a journalist.  Some feel that Trump’s support of MBS is to try and convince him to not cut production.  However, Trump pulled out of a full enforcement of sanctions on Iran which threw egg in the face of Saudi Arabia and caused much of the current price drop and billions in revenue for Saudi Arabia.  MBS is already in trouble for the killing, so I don’t see him allowing his economy to tank as well.  That all said, there is an opportunity to purchase cheap refined product and lock in prices for next year.  I expect things to change in December.  But only time will tell if geopolitical factors continue to outweigh supply and demand fundamentals.  I believe we are about $5-10/barrel undervalued on crude prices right now.

In local news, gasoline retail prices continue to dip below $2.29/gallon.  Diesel retail prices are also heading towards $3.00/gallon depending on the winter treatments being used.  I expect to see these prices hold over the coming week leading up to the OPEC+ meeting.

Propane prices have remained steady with high demand.  I don’t expect to see propane prices drop any lower this winter.  As a reminder, please make sure there is a clear path to your tank and that the driveway is plowed.  If you are on a will-call for delivery service, please call at 30% and above to insure efficient and timely delivery.

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

Best regards,

Jon Crawford

Happy Thanksgiving!!!

We hope everyone enjoyed a safe and relaxing Thanksgiving! We are so grateful for all of our customers each and every day. We hope the coming holidays bring much happiness, love, and laughter.

From everyone at Crawford Oil and Propane!

P.S. Prices are continuing to drop.  Markets are closed on Thursday and Friday this week, so I will update everyone next week.  But for now, prices are continuing to slide.

Good morning,

Wow, myself and every hedge fund never saw this week coming.  I am still perplexed by the last week in crude oil trading.  Traders are now negative for the year on long crude oil trades.  This week hedge fund managers removed all money from forward crude positions and dumped them into natural gas.  Natural gas is seeing record price increases due to low inventory levels, high exports, and low production.  Natural gas is shaping up to be nasty in price and supply this winter, much like propane in 2014.  WTI Crude prices found a bit of support at $56/barrel after falling through the $57/barrel support price.  OPEC, mainly Saudi Arabia is trying as hard as they can to convince traders that they are going to cut production.  This week they announced cutting shipments but not production, but yesterday they finally announced that they are looking to cut 1.4M barrels/day in 2019.  They are looking to drum up support for the upcoming December OPEC meeting.  The IEA is also being very bizarre in their predictions as well.  They continue to say that 2019 shows a slowing economy and world demand, but then turns around and says the world needs another 10M, yes 10M, barrel/day production in the next five years?!  Basically, you can take it or leave it with the IEA announcements at this point.  There is not much predictability in their news.  For now, we can enjoy low gas and diesel prices going into Thanksgiving and wait and see what OPEC does in December.  At the end of the day, I still can’t believe crude prices fell this far so fast.  I expect the pendulum to swing back up closer to WTI $60/barrel in December.  But for now, sit back and relax.

Local retail prices on gasoline have finally broke through $2.49/gallon.  I expect the price at the pump to continue on the downward trend.  Diesel retail prices are even getting close to $2.99/gallon.  We might see $2.99/gallon diesel in the next week, especially with some farm demand starting to dry up in the Midwest.

Propane prices are slowly breaking away from the crude trade and starting to rise.  We are experiencing colder than normal temps and expecting the cold to continue into December.  Regardless of what NOAA is saying, the weather prediction services that I subscribe to are calling for a potential Polar Vortex showing in December.  I should know more next week.  For now, if you are a will-call customer, please keep a close eye on your tank as most users are going through more than normal this month.  Heating demand is already up over 20% for the season!

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,

President Trump’s plan to keep crude prices low for midterm elections worked perfectly.  He convinced Saudi Arabia and Russia to pump more oil to make up for the sanctions being put on Iran which started on November 1st.  Leading up to November 1st, crude prices started to relax as world demand and possible surplus crude supplies from the US were in question.  Then to put the icing on the cake to insure that prices stayed low, President Trump on November 1st granted eight waivers to countries allowing them to buy Iranian crude.  This action sent prices falling even further.  Now Saudi Arabia, Russia, and the rest of OPEC are very upset.  OPEC countries are mad at Saudi Arabia and Russia for trying to help the U.S. with the Iran sanctions which put prices at risk.  And Saudi Arabi is furious at the U.S. for granting the waivers putting crude supplies into possible greater surplus.  Regardless, lower prices will be here for a little while until the OPEC meeting during the first part of December.  I  expect OPEC to announce supply cuts.  The U.S. made too many moves to help the elections and I fear retaliation.  So for now, enjoy the cheaper prices.  But I wouldn’t hold out that these current prices stay through Christmas.

Local retail prices on gasoline continue to inch down closer to $2.49/gallon.  With the latest price drops, I wouldn’t be surprised if we see $2.49/gallon on gasoline this weekend or early next week.  Diesel prices continue to remain higher now that winter additives are in the price as well increased demand for harvest.  I don’t expect to see too much movement on diesel prices.

Propane prices continue to remain calm.  As I have been saying for months, once we have a demand event or crude turns around, hold on.  Propane is still setup for a nice price jump at some point this season.  If you are a will-call customer, I highly recommend that you fill your tank now.  In addition, if you monitor your own tank levels, please make sure to call us when you are around 30% to give us sufficient time to complete your delivery during the winter months.

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

Best regards,

Jon Crawford