Monthly Archives: December 2021

HERE’S TO 2022!!!

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Good morning!

I wanted to take a quick moment and thank everyone again for their support through a difficult year in 2021.  I am optimistic for 2022 and hopefully you are too!  Although crude oil prices are ending the year at almost all-time highs for 2021, I am seeing headwinds on the horizon.  I do not believe we will be at these prices come this time next year.  The US is locked-and-loaded to increase production right out of the gate starting in 2022.  There are economic headwinds starting the year in China.  And OPEC’s relationship with Russia will be put to the test as Russia flexes its’ muscle on the geopolitical world stage.  Overall, demand for jet fuel will increase, but demand for crude has been steady.  Consumers had plenty of money in their pockets to keep the demand train moving forward the past year.  As COVID-19 becomes less dominant in the news, the amount of demand increase will not be the shock that many are predicting.  The only increase could be in jet fuel, but even jet fuel will not bounce back to pre-COVID times as many businesses have permanently pivoted to more efficient models of operation.  As propane continues to be a highly exported commodity in the US, unless crude prices tumble below $50/barrel, I don’t see propane retail prices going under $1/gallon anytime soon.  Propane price as a percentage to crude will probably continue to operate in average to higher-than-average ranges until production starts to really overtake exports again.  So until then, propane retail prices will probably remain in the 10-15 year averages of over $1/gal but under $2/gal.  Although we all enjoy propane prices under $1/gal, the averages predicted are still good value in today’s economy.

But just as COVID-19 was unpredictable, commodity prices are nearly impossible to predict.  My 20k foot prediction for commodity prices in 2022 is based on as much current information and historical data I can synthesize.  Regardless of what crude prices do in 2022, I hope that COVID-19 moves toward the rearview mirror and we start to look forward to more peace and calm in our daily lives.

Thank you again for your business in 2021 and we look forward to providing you with more guidance and great customer service in 2022.  Happy New Year!

Best regards,

Jon Crawford

Merry Christmas and Happy New Year!

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Good morning!

I just wanted to take a quick moment and wish everyone a safe and enjoyable time with family and friends over the coming week.  Thank you so much to all our customers for their loyalty and patience through a tough year in 2021.  Hopefully 2022 brings some much needed relief to everyone.  Merry Christmas and a Happy New Year!

Best regards,

Jon Crawford

It’s a Pogo Stick For Christmas!

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Good morning!

I hope this message finds everyone safe and well.  I didn’t know that I asked for a pogo stick this Christmas, but that’s what I got!  🙂  Crude prices continue to bounce up and down the past week.  WTI jumped back up over $70/barrel due to most traders shrugging off omicron as a threat to the economy.  Well, then this week omicron is looking to spread like wildfire, some countries are putting in economic shutdowns and slowdowns, and the FED announced a faster-to-market rate increase next year.  WTI prices peaked at about $75/barrel this week but are now looking to close near $70/barrel.  The bullish factors playing on crude prices are Russia/Ukraine relations, OPEC+ and their production quotas, and COVID-19 treatments hitting the market along with omicron being less in severity of disease.  Only time over the next few weeks will flush out these bullish potentials.  For now, I eating Christmas cookies while I ride my new pogo stick on crude prices into the end of 2021!

Local retail prices on gasoline and diesel have stabilized and I don’t see much movement going into the year end.  I believe most consumers in Wisconsin will pay under $3/gallon on gasoline and near $3.25/gallon on diesel until the new year.

Propane prices have also found a floor and stabilized as we enter the depths of winter.  Cold winter is being predicted from here on out.  In fact, our winter is mirroring 2017 which had two polar vortexes in the first quarter of the new year!  So don’t let your guard down with this recent warm snap!  I think propane prices will start to recover and go higher in the first part of the new year as supply chains and logistics could get occasionally dodgy with cold snaps.  As a reminder, please make sure to keep your driveway salted and a clear path to your propane tank to ensure an efficient and safe delivery this winter!

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

Best regards,

Jon Crawford

Crude Confusion For Christmas?

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Good morning!

Happy Friday!  WTI crude prices shot up through $70/barrel on the hype of continued increased world demand.  In addition, Saudi Arabia announced price increases for shipments starting in January.  However, the news also gives further support to the continued increased production from the US and OPEC+ going into 2022.  The FED continues to push for rate increases in 2022 and inflation data is off the charts!  I am still sitting on the sidelines waiting for the end of the year to pass.  Markets can behave irrationally, and I am seeing some irrationality taking hold into year end.  Besides the current economic facts surrounding crude oil, I am watching some of the smartest people sell their stocks.  Elon Musk, Jeff Bezos, and Chamath Palihapitiya are all clearing positions going into the the year end.  If a market correction happens, crude prices will sink as well.  I can also see world oil supply going into surplus in Q1 of 2022.  Therefore, in the meantime I am keeping Pepto-Bismol handy and hoping for some entry positions on futures buying to open up the first part of next year.

In local news, gasoline and diesel retail prices have stabilized.  There was a quick sell-off on pricing in the market, but Chicago quickly recovered due to some refinery issues in Toledo, OH.  As crude prices recovered, we are now stable in the market at current retail prices.

Propane prices have stabilized as well with crude oil, but I think propane is oversold.  Propane prices coupled with crude oil on the news of warmer weather.  Yes, propane supplies are getting better, but any sort of cold snap is prime for a whip-saw higher on propane prices.  Propane price has been de-coupled from crude price all year, so am skeptical on the current congruent movement.  For now, customer that didn’t contract at higher prices are getting a little relief, but I don’t see propane prices holding at current levels long-term.  There is too much winter left in the season.  As a reminder, please make sure your driveway is plowed and salted if necessary, and there is a clear path to your tank to receive your propane delivery.  The snow will be here before we know it!

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

Best regards,

Jon Crawford

New Holding Pattern For Crude Prices?

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Good morning,

After an epic collapse in crude prices on Black Friday, the energy markets seem to be carving out their new ceiling and floor.  For now, WTI seems to be carving out a floor of around $64/barrel and a ceiling of $69/barrel.  The difference in price from last week seems to be the profit taking of hedge funds and a bit of skepticism on the world recovery due to the introduction of the omicron variant.  OPEC+ met this week and is still planning on increasing production in January.  In addition, US oil firms have said they will be moving more rigs online starting in Q1 of 2022.  Therefore, crude supplies are looking to be very robust in Q1 of 2022.  The US jobs report was less than stellar for November and the FED is talking more and more about raising rates.  I believe this week was a rebalancing act and crude price are currently sitting in the middle of a larger potential range.  The range is as much as $15/barrel in my opinion!  So at the current price of $69/barrel, the low end potential is $55/barrel and the high end potential is $84/barrel!  Volatility is EXTREMELY high right now with crude prices!

In local news, the large drop in crude prices is making its way into the retail supply chain.  Gasoline retail prices are falling below $3/gallon, and diesel prices have eased around 10 cpg.  Diesel prices are supported at a higher rate due to some supply issues in Chicago, but once the issues are resolved, I could see diesel retail prices falling further.

Propane prices have fallen due to lack of demand going into December.  Our board price has fallen again this week and I am shocked at how over-sold propane is.  Any sort of demand bump is going to firm up propane prices quickly, so beware.  I don’t believe this mid-winter price relief is going to last long-term through 2022.  I remember about four years ago I put up my Christmas lights in December in shorts and a t-shirt, then in Jan/Feb we had -30 degree wind chills!  But for now, prices will be lower.

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

Best regards,

Jon Crawford