I hope everyone had an enjoyable Christmas yesterday. Just wanted to take a moment and wish everyone a safe and Happy New Year! Thank you to all our customers in 2019. We have the best customers around and enjoy working hard to ensure the best possible customer experience! We hope 2020 is full of laughter and success!
From everyone at Crawford Oil and Propane
Good morning!
Happy Friday! So WTI closed above $60/barrel this week and held. The move higher is being mostly blamed on sentiment and not fundamentals. In addition, trading volume is light at the end of the year, so I have caution that this will hold into 2020. All eyes are on trade deals, the FED, and end of year economic data. For now, I always tell people to close their eyes, enjoy the holidays, and we will revisit after New Year’s. 🙂
In local news, gasoline prices continue to have a wide range across the market. Retail prices on gasoline are ranging from $2.19 – 2.59! Diesel prices are holding steady below $3/gallon and I expect to see that trend continue. Hopefully we will see these lower prices through the holiday travel season.
Propane prices dropped off a bit with ease in supply problems. In addition, warm weather is on the horizon which is putting a lid on price increases. Propane prices are truly following the price of crude, but supply fundamentals are keeping propane in check. If you are a will-call customer, please make sure to call when your tank is around 30%. We are very busy this time of year and we want to ensure efficient delivery to your home. 🙂
As always, if you have any questions, comments, or concerns, please feel free to give us a call!
Best regards,
Jon Crawford – Pres.
Good morning!
I hope this message finds everyone well and ready for the weekend. Crude prices went on the positive this week on news that the US/China were going to FINALLY complete a major trade deal. The news, like usual, sparked a rally on crude and the stock market. Details of the possible deal included no new tariffs on China and relief on previous tariffs. WTI Crude was JUST about to break through $60/barrel when the news came that the current 25% tariffs on China will remain, however, no new tariffs will be applied. The news cooled off the crude market. WTI struggles to find the footing to leg higher above $60/barrel. Even the FED chimed in this week and said that they are planning on not raising rates which make crude prices go up. For now, it’s looking like crude prices are going to stay in a narrow range below $60/barrel.
In local retail news, gasoline and diesel prices are all over the map. Some markets are $2.49/gallon on gasoline and others within 15 miles are $2.19/gallon. The spreads are ugly and some markets are losing money. Diesel prices are all over the map as well depending on whether the diesel is treated for winter or not. Don’t let cheap diesel prices fool you! The retailer might not be blending for winter and we are finding that treatment is already needed on these single digit nights. Make sure to ask your local gas station how they are treating their diesel.
Propane supply has rounded the corner and getting much better. Prices have stabilized as well. We appreciate everyone’s patience over the past two months as we navigated one of the worst supply crunches since 2014. Our company has already made changes based on the experience this year to gain access to even more product during a possible supply crunch in the future. Anytime there is a major incident, I try to find the positive and improve. Please make sure if you are a call-in customer to call when your tank is above 30% to ensure an efficient delivery.
If you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford
Good afternoon,
Earlier today, OPEC+ agreed to increase daily production cuts to 1.7M barrels of oil. The increase from 1.2M to 1.7M was a surprise to the markets, but the devil is in the details. When you look at the past six months and the reported quotas from members of OPEC, the daily average was actually close to 1.7M barrels per day. Due to Saudi Arabia and others cutting more than promised, the deal, although higher in posted cuts, is actually not much of a change from current market conditions. In addition, waivers were granted for condensates which lessens the blow on the market. Saudi Arabia announced they will continue to cut an additional 400k barrels/day off their runs which could make the cut closer to 2.1M barrels/day. But time will tell. Saudi Arabia received their evaluation for Aramco and is looking to go public with a 5% stake in their 1.7 trillion dollar evaluated state owned company. OPEC+ is planning on meeting again on March 5th, 2020 to reevaluate the market conditions. Crude prices jumped higher on the announcement but not as high as expected. Then the US Jobs report was released as well as rumors of a China/US trade deal. All the combined news today pushed WTI crude prices to $59/barrel. However, WTI is still struggling to regain the highs reached earlier in the year. Even though the news today was very bullish crude, the continued high prices will allow the US shale producers to hold their record production levels keeping overall crude supplies in balance. At this time, I don’t see crude prices making any runs higher to end the year unless an epic US/China trade deal is reached.
Retail gasoline and diesel prices relaxed a bit to start the week, but clawed back much of the cost by the week’s end. I don’t expect to see much price movement at the pump over the coming week.
Propane supply is starting to improve since the CN Railroad ended their strike last week. Propane prices have held firm even though crude prices have risen. There is still an abundance of propane available in the country and production is healthy. Plus, warmer than average weather continues to show up in our area keeping propane prices from rising any further. Next week we will experience a two-day cold snap, but that looks to be about it for cold weather in the coming weeks.
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 everyone has a safe and enjoyable Thanksgiving! Good news yesterday, as the Teamsters and CN agreed to a tentative deal and workers returned to work last night. We are not out of the woods yet, but now we have a target and some light at the end of the tunnel. We expect supply to be tight for the next few weeks as rail shipments get caught up. But with allocations resetting in December we feel that the potential for a December disaster is starting to subside.
Crude prices rallied this week with hopes of a China/US trade deal. In addition, OPEC+ is talking it up that supply cuts will continue. I believe that the rally is a little premature. I’m not too concerned with crude prices breaking out much higher.
Retail prices of gasoline and diesel will continue to rise as costs increased this week. We believe that once again this might subside after Thanksgiving.
As always, if you you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford
Good morning,
Well, the propane distribution logistics were finally starting to see the light at the end of the tunnel, and then the CN Railroad in Canada went on strike Tuesday. CN ships all the rail propane into Wisconsin. The strike is not over yet but making progress. If the strike continues through next week, Wisconsin is going to be in trouble. Enterprise and Oneok pipelines are finally starting to flow a little better now that corn drying is starting to get over the hump. We were actually looking at getting back to normal by December until the CN strike was announced. Seems like as soon as one issue is solved, another pops up. For now, we are grateful for warmer temps and shorter weeks with holidays coming. If the strike ends over the weekend, we will be able to breath a bit.
Crude prices jumped higher with some additional unrest in the Middle East and the announcement of a possible China/US trade deal. However, any further movement higher has been tempered with skepticism on a true deal with China. I continue to see WTI crude trading in a yo-yo pattern between $55-58/barrel until after the OPEC meeting in the beginning of December.
Retail prices on gasoline and diesel moved slightly higher this week with the upward movement in crude prices. Inventories are in good shape. I don’t expect any major blowouts in price before Thanksgiving Day travel.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford
Greetings!
Well, winter snuck up on us pretty fast to start November! Single digit temps and lots of snow the past week have made November feel like January! Corn drying demand and the colder than normal temperatures have put a lot of pressure on propane distribution. There is not a shortage of propane, but there is only so much propane that can move through distribution at one time. Hopefully by the end of November harvest will be almost completed and temperatures will be back up to normal. But for right now, we are calling for colder than normal through the end of November.
Crude prices spiked on the hopes of a China trade deal. Although crude prices are still very low, we don’t expect to see much more upward movement. I am not convinced that demand is going to outstrip supply in the coming six months.
Retail prices on gasoline have dipped a bit. But I would not expect to see prices drop much more. Diesel prices have risen since winter additive blending and #1 oil have entered the supply picture due to the extreme cold. Winter additive blending and #1 oil can add up to 20 cents/gallon to the cost of diesel fuel. I would expect to see diesel prices remain higher now that winter temps are here.
Propane prices have risen due to the massive demand spike in the Midwest. I do not expect to see prices relax from their current levels anytime soon. If you are a will-call customer, please make sure to check your tank! This cold snap has caught many customers off guard. Also, please make sure to salt or sand your driveway to ensure a safe and efficient delivery, and that there is a clear path to your tank.
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 everyone had a great Halloween even though it was cold and snowy out. Sounds like the cold weather is going to stick around for awhile. If all weather patterns hold, we are in store for a colder winter with a lot of snow. I will keep you updated based on the prediction services we subscribe to.
Also, I wanted to clarify that there is no propane emergency in Wisconsin. Gov Evers issued an extension of service hours exemption this week and made reference to a propane emergency. This is not true. We are having a high demand cycle with corn drying and the early cold weather, but there is no emergency. Basically, trucks are waiting extra long hours to load product, so we want to make sure that drivers have enough hours on their books to deliver the product. Once corn drying is over, distribution will be back to normal. But there is no emergency, shortage of product for this winter, massive price spikes on the way, or anything to be too concerned about at this time. I will keep you posted as the month goes along.
Crude prices continue to trade narrow range. We are still predicting that WTI crude oil will trade around $55/barrel through the end of the year. Nothing new on this front.
In local retail news, refinery maintenance has been longer than expected and supplies are starting to get a bit tight. I would expect to see prices at the pump on gasoline and diesel rise next week.
Propane prices are rising due to increased demand, but nothing out of the ordinary. If you are on a will-call, please remember to check your tank. The early cold and snow has caught some customers by surprise! 🙂
If you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford
Good morning!
Crude oil continues to trade sideways on a lack of hedge fund positions in the market place. Crude markets are very soft on long positions. Traders are continuing to believe that economic headwinds will deteriorate crude demand next year. The only possible bullish headlines moving crude right now are coming from OPEC saying they might consider deeper cuts next year. However, most of the talk from OPEC is just talk, so the news is only keeping a lid on crude prices, not moving them higher. As the US looks at impeachment and a trade war, England/Europe at Brexit, ceasefire between Turkey and Syria began, and China at a trade war and Hong Kong unrest, I don’t see a lot of potential out there to pop crude prices higher. For now, I expect crude to remain narrow and calm through the end of year until the OPEC meeting in December.
In local news, harvest demand finally hit the Midwest and the glut of diesel fuel out of the Chicago market started to deplete. Diesel prices jumped almost 15 cents/gallon in two days. I expect to see retail prices on diesel increase in the coming week. Gasoline prices have remained steady with crude as supply has been meeting demand.
Propane prices moved a bit higher but not much. Corn drying demand is now moving and cold temps are sticking around. I expect to see propane prices slowly move higher if the end of year stays colder than normal. However, if crude prices fall off a cliff, with how much propane is still in inventory, propane prices will be hard pressed to not move lower with crude. Time will tell.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford – Pres.