Happy 4th of July!
Good afternoon!
I would like to wish everyone a safe and happy 4th of July! Crude oil prices have risen throughout the week, along with finished products, ahead of the busiest travel weekend of the year. Additionally, the Federal Reserve holding rates steady and the approach of hurricanes in the south have continued to support higher crude prices. Consequently, I expect pump prices to increase. All finished product prices, including propane, ended the week higher. With many traders out of the office, trading volumes are light, which can lead to price volatility. Enjoy the rest of the holiday week!
Best regards,
Jon Crawford
Welcome To The New Floor
Happy Friday!
I am back from vacation and a lot has happened since I returned! WTI Crude has established a new floor at $80 per barrel, with all attempts to fall below this price failing. This week, the price of WTI is expected to hold and close above $80/barrel. Traders have moved away from short positions and instead are placing longer-term position bets on crude prices. This shift is largely due to a reassessment of the market’s reaction to the OPEC+ meeting, which initially seemed bearish but has now been digested as bullish. Additionally, geopolitical risks have intensified, notably with Russia and North Korea’s recent pact. The pact offers increasing concerns about a nuclear weapon ending up in Iran. Ukraine’s military reported an average soldier age of 43, indicating a shortage of younger troops. France is considering deploying troops to Ukraine escalating tensions even further. In Israel, tensions persist between the government and military regarding ongoing operations. Domestically, the EIA report indicated increasing demand with U.S. families prioritizing travel over other discretionary spending despite higher gas prices. Overall, crude oil prices are aligning with my previous predictions and analysis.
The Chicago spot market is showing signs of tightness, with gasoline and diesel prices surpassing those in neighboring regions. This is surprising given the healthy refinery runs in Chicago and storm damage impacts elsewhere. It appears Chicago oil companies are redirecting barrels east due to rising demand. Barrels from Chicago and the Gulf are finding increased profitability with supplying the New York Harbor market which relies heavily on imports.
Propane prices have risen in tandem with crude oil prices. It is advisable to fill your propane tanks and lock in prices for the upcoming heating season. Prices have bottomed out recently and are now on the rise. Hopefully prices will not rise too much more.
For any questions, comments, or concerns, please feel free to contact us.
Best regards,
Jon Crawford