I hope this message finds everyone safe and well. I know the past few weeks have been very difficult and scary at times. I also know that we are not out of the woods yet. Crawford Oil and Propane is continuing to do everything we can to operate safely. Our services are in full operation, but with a few changes to help with stopping the spread of the coronavirus. We support everyone during this challenging time and hope everyone stays safe.
Crude oil is starting to carve out a bottom as Saudi Arabia and Russia work to cut production. Rumors are also floating that the US will possibly cut production. From best estimates, more than 10-15M barrels/day need to go offline to balance the demand destruction in April. We are about the experience the largest drop in oil demand ever.
Retail prices on gasoline and diesel have also balanced out around the market. I do not expect to see gasoline or diesel prices go much lower as long as OPEC, Russia, and the US cut production. If the countries fail on a deal, single digit crude prices are possible.
Propane prices are actually firming up. There is a potential for summer fill prices to be higher than today’s price. We are actually encouraging everyone to take advantage of these current prices. There is more upside potential in propane prices than downside. Next season’s heating contract prices will be released sometime this summer.
As always, if you have any questions, comments, or concerns, please feel free to contact us.