Good morning,

Happy Friday.  Crude prices took a slight break mid-week due to a massive increase in crude oil inventory in the US.  But by end of the week, crude prices found much support from the continued global energy crunch.  Natural gas and coal prices continue to scream higher from lack of supply and fears of a cold winter.  The main driver comes from green energy projects in Europe and the UK not producing the anticipated outputs calculated going into winter.  The world crude producers are continuing to withhold lots of crude oil from the market in order to also keep prices high.  Many oil producers have a lot of revenue to make up from the losses in 2020.  The FED announced a possible tapering of bond buying in November.  However, even a stronger dollar is not weighing on energy prices.  I truly believe that energy commodities are in a momentum trade and will hold strong and even go higher until end of the year.  But it’s not all doom and gloom.  There is a strong scenario on the table predicting that crude prices will start to unwind fairly quickly in Q1-Q2 of next year and fall steady from that point.  For now, I believe there will be short-term inflationary pain on crude prices trickling down through natural gas, propane, gasoline, and diesel.

Retail prices for both gasoline and diesel continue to slowly creep higher.  Gasoline retail prices are averaging over $3/gallon and diesel retail is nearing $3.49/gallon.  As I have been writing for sometime, I believe your pocketbook is going to get a lot lighter fueling up for the next 3-5 months.

Propane prices finally took a breather at current rates.  Retail prices are holding over $2/gallon but seem to be in a slight holding pattern now that petro-chem companies are cancelling shipments of propane due to cost.  In addition, the lack-luster corn drying season and hot weather is helping to keep propane prices from really taking off.  I see that colder weather is in the forecast so demand will start to pick up going into November.  The Midwest is in decent shape for propane inventories.  Overall supplies are short, but the Midwest seems to be in better shape than some areas.  I expect a continued bumpy ride and higher prices on propane for the remainder of the season.

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

Best regards,

Jon Crawford

Good morning,

Energy prices are holding firm to end the week.  The FED announced this week that regardless of tapering or raising rates, inflation is going to persist into 2022 because of supply bottlenecks.  The domino effects of these supply constraints are supporting energy prices.  In addition, there is a huge supply crunch on fossil fuel energy due to Europe’s and UK’s miscalculations of green energy production.  They have fallen short on their green production and are in need of more fossil fuels.  And the purchases just can’t be fulfilled quick enough.  Although China is shutting down parts of their economy due to record high coal prices, some supply might be able to shift.  But these types of moves take months to sort themselves out.  Also, equities are starting to spook some investors and there is a lot of chatter saying to throw your money into energy for a quick return on your money in Q4 and possibly Q1 of 2022.  Therefore we have speculation money supporting crude prices as well.  Unfortunately, I am bullish on crude prices until the end of the year.  I just don’t see a situation where enough cards can can fall fast enough to drag down crude prices.  I do believe that there is downside risk in 2022.   I do not see these high prices persisting all the way through 2022.

Local retail prices on gasoline hold near $3/gallon and diesel retail has well surpassed $3/gallon.  Unfortunately with well supported crude prices as previously discussed, I believe these prices over $3/gallon are here to stay for some time.

Propane prices continued to gain momentum based on record low inventories going into the heating season coupled with a major fire in Canada.  Propane prices in September are at an all-time record high.  One can only hope that crude prices stabilize and the damage of index price spikes are mitigated to pockets here and there throughout winter.  Unfortunately, propane prices are going to be high this year.  Like crude oil, I am hopeful that supply and demand economics going into spring of 2022 will balance out bring some price relief for next heating season.  In the meantime, it’s not too late to lock in your heating cost for the upcoming season.

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

Best regards,

Jon Crawford

Good morning,

WTI Crude prices rocketed above $70/barrel this week on news of better than expected retail sales, decreasing jobless claims, and huge draws in crude oil supplies.  The US continues to rebound from the hurricanes down south, but production is looking to return to normal capacity very soon.  Depending on how Covid continues into the winter, crude oil prices are primed to be supported.  Until the US gets into full crude oil production and harvest is completed, prices are probably going to hold higher.  We will wait and see how the Delta variant moves throughout the world this fall and whether the Fed starts to slow down on their bond repurchases.

In local retail news, the cost of gasoline and diesel has gone up.  We expect to see prices at the pump remain near current levels.

Propane prices continue to go higher.  Contract and delivery prices continue to go up as we enter the heating season with record low inventories.  I can only believe at this point that prices will hold and maybe even go higher.  Europe is in terrible shape for propane supplies as well, and China bought extra propane exports fearing a price shock.  So right now we are seeing low propane supplies in Europe and the US going into peak demand season, even though we have record production.  The only way supplies will increase is if the price gets so high at the US export hubs, that Europe and others will be forced to purchase from others.  I would also like to piggy-back and let everyone know that natural gas supplies are in terrible shape as well in both the US and Europe.  Natural gas prices have doubled and they are primed to double again.  The scenario reminds me of 2007 and 2008 when natural gas heating bill could be well over $300/month on an average home.  I believe all heating commodities are going to be extremely high priced until increased supplies or warm weather curb the fears that are real.  It is not too late to lock in your propane price for the season.

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

Best regards,

Jon Crawford

Good morning!

I hope this message finds you well.  Crude prices held just under $70/barrel this week as the world waits to see how Covid-19 and the variants play out going into the fall.  Saudi Arabia announced deep discounts for October signaling weak demand, but then Europe and the US released info showing signs of stabilization in the Delta surge.  In addition, the Fed is signaling a slowing of bond repurchases and many other world banks are slowing bond repurchases.  South Korea even raised interest rates.  In America, 80% of Gulf oil production is still shuddered from Hurricane Ida but slowly coming back online.  But the weekly inventory report still showed strong exports.  And although the job market is looking primed to finally improve, consumer index pricing increased the largest ever at 8.5%!  Basically, a lot of bullish and bearish news for crude price direction.  I think with summer demand winding down but possible economic conditions improving in the US, many traders are going to wait and see.  Also, harvest is starting to kick in so many eyes will be watching crops in the coming weeks.

In local retail news, prices for gasoline and diesel have eased a little bit post Labor Day weekend as expected.  I believe most retail prices will be holding for a bit as well.

Propane prices continue to go up as national inventories are just not building.  The country is going to be short on propane and prices are going to remain high.  If corn drying demand is weak and temperatures stay warm, we could maybe see some price relief.  However, if we have any sort of cold snaps and demand bumps, propane prices could really blow out higher this season, well above $2/gallon.  If you have not done so, you can still contract and lock-in your heating price for the season.

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

Best regards,

Jon Crawford

Good afternoon!

Instead of a dismal update on prices continuing to go up, let’s just take a break and enjoy the last weekend of summer!  I hope everyone has a safe and fun Labor Day weekend!  We can get back to the world of commodity pricing and the state of affairs next week.  🙂

Thank you again for your business, and if you have any questions, comments, or concerns, please feel free to reach out!

Best regards,

Jon Crawford – Pres

Good morning,

What a difference a week makes.  Crude prices rebounded very strongly this week.  The dollar started losing strength as investors looked to the FED to unwind the easing programs.  Crude inventories showed a larger than anticipated draw on Wednesday.  China announced a reopening of their economy with a call for increased crude imports.  The exit from Afghanistan is causing unrest in the Middle East.  And the delta variant looks to be peaking for the majority of the United States.  All of these issues combined gave an enormous tailwind to the crude trade and pushed prices much higher.  In technical trading, WTI displayed what we call a “Golden Cross”.  A golden cross occurs when an asset’s shorter-term moving average crosses above its longer-term moving average.  A golden cross has only happened twice in the past twenty years, and both times prices rebounded 20-50%.  Therefore, there is a lot of chatter that crude prices could breakout for the end of year.

In local retail news, Chicago refineries are showing problems with upcoming fall maintenance season.  Differentials for gasoline and diesel prices jumped nearly 20 cents per gallon!  Therefore, I do not see much price relief at the retail level through Labor Day weekend.

Propane prices continue to hold firm.  As I have been writing for months, this year is the outlier in the past ten years.  Every ten years, there is always one year where price goes up in the summer.  Unfortunately, the US continues to export record levels of propane to China.  China is expanding their petrochemical businesses as their economy reopens.  Although I believe corn drying will be less than expected, national inventories will be tight going into winter.  I am not concerned about running out of propane, but logistics in moving propane to the correct areas of the county will be choppy.  I expect a bumpy ride with prices this winter if we experience any “polar vortex” or any prolonged colder than average temperatures.  We are still locking in heating contracts for the season and doing summer fills before the cooler temps begin.

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

Best regards,

Jon Crawford

Good afternoon,

I hope this message finds you well.  Crude prices dropped dramatically this week as the delta variant continued to spook investors on world demand for crude.  Also, many large retailers started to show a slowing down of their burning hot sales over the past year.  And then the FED announcement looks to position towards a tapering of bond purchases signaling a rate increase maybe next year.  As demand threats pulled down crude prices, the FED announcement gave strength to the dollar which pulled crude prices down even further.  Now that WTI crude prices are below $65/barrel, the possibility of sub-$60/barrel is on the table.  WTI is approaching a price range that is more in the normal pre-pandemic years of healthy crude oil supply and demand economics.  However, with the unrest in Afghanistan and lock-downs in China, anything can happen.

Retail prices of gasoline and diesel will probably start to ease next week with the drop in crude prices.  Considering the tight margin markets and summer demand starting to diminish as school starts, I don’t expect to see dramatic drops in prices at the pump.

Propane price continues to hold very firm, even in a downward market momentum for crude oil.  Propane inventories are now officially at eight year lows and exports are kicking back up again!  I believe the only way out of the propane supply mess at this point is higher prices.  The arb between US and Middle East exports has to increase.  There has been small dips here and there but overall, the price of propane continues to hold and track towards higher as we go.  If you have not contracted your propane for the season, there is still time to call and lock it in.

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

Best regards,

Jon Crawford

Good afternoon!

I wanted to make sure everyone was aware of our Customer Appreciation Day lunch tomorrow at Fort Bp location at 1901 Hwy 33 in Portage, WI.  We will be serving a free lunch between 11am-1pm tomorrow, including raffles and specials on items in store.  We will also have free koozies for everyone who attends!

WTI oil prices fell below $70/barrel this week as crude supplies in the US experienced a significant build in inventory.  In addition, the Delta variant is spooking the markets with fears of economic slowdown and schools not reopening.  Also, the private sector jobs report was half of expectations.  OPEC+ is worried about continued battles over production quotas as many nations have invested heavily in updated crude production facilities and want to be more in the market.  The last squabble in July might be signs of more to come.

In local news, the retail price for gasoline went above $3/gallon briefly in our market.  Gasoline and diesel retail prices are holding around $3/gallon and I don’t expect to see many changes in the coming weeks.

Propane prices are continuing to hold firm.  Contracts for the upcoming heating season are available.  And don’t forget to top off your tank at a slightly lower price this summer.

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

Best regards,

Jon Crawford