Monthly Archives: June 2023

Happy 4th of July Weekend!

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Happy 4th of July weekend!

I want to wish everyone safe and happy travels this weekend! I hope the weekend is fun and full of laughter! I will keep the update fairly short and straight forward. And that’s easy because not much happened this week! 🙂 Crude oil price traded in a very narrow range all week. There was a little news here and there that would try and move prices: possible civil war in Russia, Saudi Arabia cutting oil shipments to the US, and the US Crude Oil Inventories reporting a huge draw on Wednesday. I guess traders are still in a “wait and see” pattern. The week leading up to a holiday and the week after can be a bit wonky as many traders take vacation and not much liquidity moves in the market. So we should probably see some more action in the coming weeks.

Gasoline cost ended the week only five cents higher than Monday. And diesel cost ended the week about five cents lower. Therefore, I would not expect to see much change in retail prices at the pump going into the travel weekend. This is good news to all the drivers out there. The usual “run up” on gasoline price going into a big holiday weekend did not happen.

Propane prices traded so narrow it’s almost like they didn’t even trade. We are officially at a new low price as competition for summer fills heated up (no pun intended). We highly recommend everyone to fill their tanks now and contract for the next heating season.

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

Best regards,

Jon Crawford

Same Old, Same Old

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Good evening!

I hope this message finds everyone well. I wanted to first announce that there will be no updates for at least the next two weeks as I travel with family. But I’ll get back into the swing of things when I return!

WTI crude oil traded this week again in the same narrow range of just below $70/barrel and just above $70/barrel. OPEC+ had their meeting last weekend and decided to keep current cuts in place. However, Saudi Arabia voluntarily announced another 1M barrels/day cut in oil production. The additional cut puts Saudi Arabia’s production at the lowest level in over 20 years. The news pushed the oil markets higher to start the week. But as the week dragged on, recession fears and too much refined products in America started to move crude prices lower. Even though crude prices eased a bit based on recession fears, refiners are being very vigilant to keep refined prices high. Producers and refiners are very comfortable selling less product for more money. The mentality of “less for more” is new since Covid and doesn’t seem to be going away. And as margins increase from production to refining, the cost is passed along all the way to the end consumer. And as the cost other goods and services remain inflated, I expect to see healthy margins on gasoline and diesel at the pump as well.

In local news, farming is in full swing, even though most of the Midwest is in drought. Supply tightness coming out of Chicago is keeping a floor on both gasoline and diesel prices, and even pushing them higher. I expect prices for gasoline and diesel to remain inflated throughout farming season and throughout summer into harvest.

Propane prices continue to remain weaker in comparison to other commodities. We highly recommend everyone take a summer fill now and contract their next season’s heating gallons. Considering how weak propane is trading in percentage to crude, if crude oil breaks out higher in price, propane price will follow. Our contracts are slowly being mailed out, but feel free to call our office, order a summer fill, and lock in your price for next heating season!

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

Best regards,

Jon Crawford

Crude Oil On A Swing Set

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Good morning!

Happy Friday! I hope everyone is staying cool. There is not much to report this week. The possibility of not passing a bill to raise the debt ceiling coupled with some not so great economic data from China and the US sent WTI Crude prices below $70/barrel in the middle of the week. In addition, OPEC+ meets this weekend. Saudi Arabia is calling for possibly more cuts in production while Russia is looking to stay the course. Russia has taken some Saudi market share. However, Saudi Arabia is more interested in gaining cash for diversity investment from oil. Therefore, the calls for Saudi to “flood the market” and teach Russia a lesson I believe are wrong. Saudi Arabia has some of the lowest cash reserves on hand due to continued investment in US and other countries’ companies as well as their own infrastructure. The prediction that Saudi would risk in a demand environment as volatile as we have seen in years seems reckless. Their behavior over the past two years has been much more disciplined and I believe their actions will continue to reflect their on going concerns. WTI oil prices, again, dropped below $70/barrel for about one day on the combo of all the aforementioned news coupled with the EIA report showing builds in national inventory. But as soon as the debt ceiling bill passed the House, and then the Senate, WTI price popped right back above $70/barrel. So prices were on a swing set this week. WTI price started the week above $70/barrel, fell to about $67/barrel mid-week, and then look to end the week at the price right about were it started above $70/barrel. OPEC+ meets over the weekend, so the announced decision from the meeting will drive markets next week.

In local news, refined products followed the crude oil market for the most part. Gasoline prices continue to stay steady as refiners continue to take profit margins over market share based on jitters of lower summer gasoline demand. Diesel prices dropped a bit further due to recession fears. The main drivers of potential recession were the debt ceiling talks, OPEC+ meeting, and the FED raising rates further which would raise crude oil price. But if crude prices drive too high, the possibility of pushing the country into recession becomes stronger which in turn hurts diesel demand. There is a tightrope balancing act going on between oil harvesting and refiners.

Propane prompt prices fell a bit further. However, the out months have been staying fairly steady. I would highly recommend ordering a summer fill and locking in your price for next year. Our summer fill price is probably the lowest we will see and contracts are well under the $2/gallon price of last year. Please call the office to place your order and request a contract. We will be very liberal with summer fill arrangements to try and give everyone the opportunity to take advantage of the low price.

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

Best regards,

Jon Crawford