Monthly Archives: August 2019

Happy Labor Day!

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Greetings!

Instead of a weekly update, I would instead like to just wish everyone safe travels and an enjoyable Labor Day weekend!  The prices at the pump are at three year lows so I’m sure many will be on the road.  I hope everyone had a great summer and is ready for the school season to start!  I will be back with an update next week.

Thank you again for your business and have an awesome long weekend!

If you have any questions, comments, or concerns, always feel free to give us a call!

Best regards,

Jon Crawford – Pres.

Trade War and Recession Fears Grow

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Good afternoon,

WTI Crude prices continue to trade in their narrow range of about $53-57/barrel.  On the supply side, with the current OPEC cuts in place, the Venezuela shut down, and the US slowly shutting down rigs, the market is actually tighter than the price is displaying.  Right now, all eyes and ears are on recession fears due to the trade war with China.  If the world economy slows down, then I don’t expect crude prices to tank much more than below $50/barrel.  So much of the recession fear is baked into the current price.  However, if the trade war starts to wind down and the world economy continues as is, then we could easily experience a $7-10 spike in crude prices.  The FED said that they are willing to act appropriately but not committed to rate cuts and the trade with China does not seem to be slowing down anytime soon.  For now, WTI crude will continue to bounce in mid $50’s.

Retail prices on gasoline and diesel have continued to ease.  Gas prices have fallen below $2.49/gallon in some markets, and diesel has dropped below $2.69.  I expect to see these lower prices at the pump through Labor Day.

Propane prices are at historical lows and inventories remain at historical highs.  We expect propane inventories to hit the largest volume ever recorded.  We encourage everyone to enjoy these low prices with a summer fill and contract for the next heating season.  Please call our office or go online to place an order!

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

Best regards,

Jon Crawford – Pres.

Recession Fears Drag Down Crude Prices

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Greetings!

Another wild ride for crude prices this week.  The week started off with crude prices skyrocketing higher on the announcement that Trump would delay additional Chinese tariffs.  The news coincided with Saudi Arabia announcing another run at taking Aramco public and saying they will do whatever it takes to keep prices from going lower.  But oh, what a difference a day makes.  China responded by continuing to devalue their currency and markets got a little shaky.  Then, the US reported large builds in crude and refined product inventories.  As crude prices started to fall, the bond market displayed indications of a looming recession and the stock market along with crude prices cratered.  We are now back to almost the low price of the year again in three days!  I would expect Saudi Arabia to start hitting the airwaves again soon if this continues.  I just don’t see them allowing WTI to fall below $50/barrel.

In local retail news, prices for gasoline and diesel are all over the map due to high fluctuations in cost and price spreads between terminals marketing either Chicago Spot or Group 3 Spot.  I expect wild discrepancies on street prices of gasoline and diesel over the next month or two.

Propane prices continue to stay very low based on high volume of national inventory.  Please take advantage of summer fill prices.  With the potential for high corn drying demand and an additional export terminal coming on board in Q4, propane prices could start to swing up quickly by the end of the year.  Please call our office or go online to place an order.  If you have not contracted propane for the next heating season, I also suggest talking with our staff about options that might work for you.

If you have any questions, comments, or concerns, please feel free to give us a call!

Best regards,

Jon Crawford – Pres.

Customer Appreciation Day!

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Happy Friday!!!

Thank you to all our customers who made it out to the Fort Bp in Portage to celebrate Crawford Oil and Propane Customer Appreciation Day!  We had a beautiful day and served over 400 people!  A great time was had by all.  Prizes were awarded, kids jumped in a bouncy house, and everyone had time to sit down and relax.  Money was raised for River Haven Homeless Shelter in Portage.  We appreciate all of our customers and just love throwing a celebration every year!

In crude oil news, crude oil prices closed at their lowest point of the year this week before rebounding.  We are currently back to the low prices of a few months prior.  WTI is just unable to hold above $55/barrel right now with the China trade war in bloom.  China is devaluing their currency and threatening to use crude oil as a bargaining chip.  If they unload the Iranian crude sitting in port, the market will absolutely collapse and bring some pain to the US oil industry.  Also, the world is worried about economic slowdown coupled with the ability for the US to increase export capacity.  Basically, the US will be putting more oil into the market over the coming six months with potentially less customer demand.  And the US inventories rose over the past week during peak demand!  There are a lot of bears out there right now!  The only bullish news that kept WTI from breaking through the psychological price of $50/barrel was an emergency announcement from Saudi Arabia that they will do anything to keep prices from going lower.  The announcement bumped crude back up over $4/barrel to finish the week just under $55/barrel.  Next week will be very interesting.

In local news, prices of gasoline and diesel will continue to drop a bit at the pump.  I believe prices will firm up again next week, but for now, you should see a little more relief on prices at the pump!

Propane prices continue to stay low, low, low.  Propane inventories remain historically high and until a demand event kicks in, propane prices will follow crude.  If you have have not ordered a summer fill, please do so!  These prices are just too good to pass up.  We also recommend contracting for the coming season.  Our prices are lower than last year which is always a plus!  Feel free to call the office or go online to place an order.

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

Best regards,

Jon Crawford – Pres.

The Wild Crude Yo-Yo

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Good morning,

I hope everyone has been enjoying the most beautiful week of summer so far.  The weather has been fantastic!  Crude oil prices took a nose dive this week after Trump announced that he would break the truce with China on the trade war.  Trump says that he wants to put another $300 billion tariffs on Chinese goods starting September 1st.  The news was an absolute shock to the financial sector and WTI price broke through the technical floor of $55/barrel.  Once the price broke the floor, the bottom fell out and WTI closed at the lowest price of the year.  WTI dropped over $4/barrel which is the largest single day drop in over four years!  The week started with a rally in crude prices as the markets expected the FED to move towards a dovish pattern.  In addition, the US inventories of crude oil, gasoline, and diesel all experienced major draw downs.  So crude prices were primed for upward movement this week.  But the FED gave the tone that they remain hawkish in their views and the announced rate drop is only an adjustment.  And then Trump announced the September Chinese tariffs.  And the cherry on top was the report that China has purchased almost 12 million barrels of Iranian crude legally and has the crude in bonded storage at port in China which does not violate US sanctions.  This means that Iran has been able to offload crude to China at discounted rates for the work that China does in Iran without violating US sanctions.  Therefore, Iran has found a way around the sanctions.  If China decides to violate and start using the bonded crude oil, some traders believe another $5-7/barrel could come off of crude prices.  In other words, there is a glut of crude oil sitting out there just waiting to be used.  More will develop on this I’m sure.

In local retail news, retail prices have stabilized on gasoline and diesel.  Although there was a slight uptick in prices this week, I don’t expect to see any major changes on retail prices in the coming week.

Propane prices continue to move with crude.  As I have been writing, propane inventories remain very high, but the petrochemical companies started buying propane a couple weeks back.  The petrochems can blow through inventory pretty quickly, so we remained patient to see if a trend was forming.  Then this week, there was a fire at the largest Exxon/Mobil petrochemical factory in Houston.  This caused price spreads between the two storage hubs to collapse.  With the loss of more demand, propane just can’t seem to find any legs for upward momentum.  If you have not filled your tank this summer, please do so.  In addition, we have contracts for next heating season available.  Please call the office or go online to place an order!

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

Best regards,

Jon Crawford