Monthly Archives: November 2019

PROPANE UPDATE:

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Good morning!

I hope everyone has a safe and enjoyable Thanksgiving!  Good news yesterday, as the Teamsters and CN agreed to a tentative deal and workers returned to work last night.  We are not out of the woods yet, but now we have a target and some light at the end of the tunnel.  We expect supply to be tight for the next few weeks as rail shipments get caught up.  But with allocations resetting in December we feel that the potential for a December disaster is starting to subside.

Crude prices rallied this week with hopes of a China/US trade deal.  In addition, OPEC+ is talking it up that supply cuts will continue.  I believe that the rally is a little premature.  I’m not too concerned with crude prices breaking out much higher.

Retail prices of gasoline and diesel will continue to rise as costs increased this week.  We believe that once again this might subside after Thanksgiving.

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

Best regards,

Jon Crawford

PROPANE SUPPLY UPDATE:

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Good morning,

Well, the propane distribution logistics were finally starting to see the light at the end of the tunnel, and then the CN Railroad in Canada went on strike Tuesday.  CN ships all the rail propane into Wisconsin.  The strike is not over yet but making progress.  If the strike continues through next week, Wisconsin is going to be in trouble.  Enterprise and Oneok pipelines are finally starting to flow a little better now that corn drying is starting to get over the hump.  We were actually looking at getting back to normal by December until the CN strike was announced.  Seems like as soon as one issue is solved, another pops up.  For now, we are grateful for warmer temps and shorter weeks with holidays coming.  If the strike ends over the weekend, we will be able to breath a bit.

Crude prices jumped higher with some additional unrest in the Middle East and the announcement of a possible China/US trade deal.  However, any further movement higher has been tempered with skepticism on a true deal with China.  I continue to see WTI crude trading in a yo-yo pattern between $55-58/barrel until after the OPEC meeting in the beginning of December.

Retail prices on gasoline and diesel moved slightly higher this week with the upward movement in crude prices.  Inventories are in good shape.  I don’t expect any major blowouts in price before Thanksgiving Day travel.

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

Best regards,

Jon Crawford

Propane Update:

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Good morning!
Well, warmer temps are finally on the way. And by warmer I mean at least the 30’s! 🙂 Propane supplies in Wisconsin have been tight but are not at an emergency status. Our neighbors in Minnesota and Iowa are in the middle of a crisis. There is no propane available in those states. There is more than average levels of propane in Conway Cavern storage, but propane can’t be shipped as fast as it’s going out. There is no worry of running out of propane like in 2014. The issue is pipeline and train distribution. Even if there were 500 more semi trucks on the road, the situation would be the same.  Corn drying demand along with an early cold snap caused supplies in Minnesota and Iowa to deplete quickly. Natural Gas companies had to shut off corn dryers because even the Natural Gas companies could not keep up with demand. Corn drying is at a halt in Iowa where there is still 50% of the corn left to dry! Regardless, Crawford Oil and Propane is in good shape. The supply tightness will hopefully start to ease in the coming weeks. Because there is truly no shortage of propane, prices are remaining fairly stable. There is no need to panic that a massive price spike like in 2014 is coming.
In other news, crude oil prices are continuing on their narrow trading path between OPEC talking about cutting, China and the US reaching a trade deal, and the world economies slowing down affecting demand. I still don’t see much of anything happening for crude prices anytime soon.
Local prices of gasoline have gone higher due to a refinery issue at the Phillips 66 Wood River Refinery. Gasoline stocks will be short for some time, hence the higher price at the pump. By Thanksgiving I expect to see prices ease back just in time for the holidays.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford

Cold, Cold, and More Cold

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Greetings!

Well, winter snuck up on us pretty fast to start November!  Single digit temps and lots of snow the past week have made November feel like January!  Corn drying demand and the colder than normal temperatures have put a lot of pressure on propane distribution.  There is not a shortage of propane, but there is only so much propane that can move through distribution at one time.  Hopefully by the end of November harvest will be almost completed and temperatures will be back up to normal.  But for right now, we are calling for colder than normal through the end of November.

Crude prices spiked on the hopes of a China trade deal.  Although crude prices are still very low, we don’t expect to see much more upward movement.  I am not convinced that demand is going to outstrip supply in the coming six months.

Retail prices on gasoline have dipped a bit.  But I would not expect to see prices drop much more.  Diesel prices have risen since winter additive blending and #1 oil have entered the supply picture due to the extreme cold.  Winter additive blending and #1 oil can add up to 20 cents/gallon to the cost of diesel fuel.  I would expect to see diesel prices remain higher now that winter temps are here.

Propane prices have risen due to the massive demand spike in the Midwest.  I do not expect to see prices relax from their current levels anytime soon.  If you are a will-call customer, please make sure to check your tank!  This cold snap has caught many customers off guard.  Also, please make sure to salt or sand your driveway to ensure a safe and efficient delivery, and that there is a clear path to your tank.

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

Best regards,

Jon Crawford

No Propane Emergency

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Good afternoon!

I hope everyone had a great Halloween even though it was cold and snowy out.  Sounds like the cold weather is going to stick around for awhile.  If all weather patterns hold, we are in store for a colder winter with a lot of snow.  I will keep you updated based on the prediction services we subscribe to.

Also, I wanted to clarify that there is no propane emergency in Wisconsin.  Gov Evers issued an extension of service hours exemption this week and made reference to a propane emergency.  This is not true.  We are having a high demand cycle with corn drying and the early cold weather, but there is no emergency.  Basically, trucks are waiting extra long hours to load product, so we want to make sure that drivers have enough hours on their books to deliver the product.  Once corn drying is over, distribution will be back to normal.  But there is no emergency, shortage of product for this winter, massive price spikes on the way, or anything to be too concerned about at this time.  I will keep you posted as the month goes along.

Crude prices continue to trade narrow range.  We are still predicting that WTI crude oil will trade around $55/barrel through the end of the year.  Nothing new on this front.

In local retail news, refinery maintenance has been longer than expected and supplies are starting to get a bit tight.  I would expect to see prices at the pump on gasoline and diesel rise next week.

Propane prices are rising due to increased demand, but nothing out of the ordinary.  If you are on a will-call, please remember to check your tank.  The early cold and snow has caught some customers by surprise! 🙂

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

Best regards,

Jon Crawford