Be Safe and Be Well

Good morning,
 
I just wanted to reach out and wish everyone a safe weekend. I know that days are very difficult for many people right now. All of our lives are turned upside down and fear of the unknown grips many of us daily. I know that I have had my many moments over the past two weeks.
 
Please know that our company is doing everything in our power to be safe and be able to deliver products through this difficult time. We are doing our daily best to support each other within our company and our families at home as well. We are also doing our best to stay isolated outside of work to ensure the lowest possibility of spread within the community and our company.
 
If you have any questions, comments, or concerns, please feel free to reach out to us.
 
Once again, be safe and be well!
 
Best regards,
 
Jon Crawford

Crude Prices Continue Volatility

Good morning,

Crude prices rallied this due to draws in US inventory levels and OPEC commitments to cuts.  In addition, the US put new pressures on Russian oil companies after discovering that Russia was helping Venezuela escape US sanctions.  Also, a refinery fire in the Gulf caused Chicago spot markets to rally due to increased need for supply.  Crude prices and spot markets were set for a good weekly gain until this morning.  Today the coronavirus took the major headlines as the virus continues to spread and might not be as contained as the WHO concluded earlier in the week.  Crude prices tanked to start the day Friday bringing spot cash prices for refined fuel down with it.  So for now, the coronavirus is the new “hot headline”.  Whatever announcement hits the news each day seems to drive the market.  Volatility is back on big time in the crude trade.  Many hedge fund managers exited crude positions over the past few weeks and not many are reentering with these conditions.

Spot prices in Chicago jumped this week and I expect to see prices at the pump increase for gasoline.  Diesel prices were not affected as much.

Propane prices found some support with cold weather and high exports.  Also, there are discussions around the petrochem companies along the Gulf Coast buying into propane at these lower prices.  If the petrochems buy in, we could see the massive glut of propane decrease quickly.  For now, lower prices will continue but I don’t expect to see the bottom fall out.

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

Best regards,

Jon Crawford

Coronavirus and Groundhog’s Day

Good morning,

Well, the coronavirus is not getting any better.  In fact, the virus has now infected 15k people and killed over 300.  The first death outside of China was reported, and a few major US cities are reporting cases.  China built a giant hospital in nine days (yes, nine days) to have beds on hand ready to treat.  For now, the markets are very nervous.  China is shutting down factories, US companies have closed operations, and travel/shipments are starting to stop.  The virus could cause the world economy to grind to a halt while contagion is contained.  With demand erosion on the horizon, crude prices have tumbled.  WTI crude briefly traded below $49/barrel for the first time since last spring.  OPEC+ is already planning an emergency meeting to try and keep crude prices from falling off a cliff.  The US would actually not want prices to go much lower in order to keep production high and taking market share.  For now, it’s time to sit back and relax until we know where we are heading with the coronavirus.

Local prices of retail gasoline and diesel continue to fall.  Retail gasoline prices have fallen below $2.29/gallon and retail diesel prices are in the $2.70’s.  I don’t expect to see prices move any higher in the coming weeks.

Propane prices continue to stay soft with warmer than average temperatures and high volumes of supply.  As always, we like to have fun with our local groundhog, Jimmy The Groundhog from Sun Prairie.  Jimmy did see his shadow on Sunday, so for what’s it worth, Jimmy is saying we will have six more weeks of winter.  The forecast is continuing to call for average temperatures.  For now, I think it’s safe to say that a major polar vortex is less likely to occur this year compared to years past.

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

Best regards,

Jon Crawford

Coronavirus Causing Market Sell Off

Good morning,

The week started off with Libya’s production going offline due to internal civil war conflicts again.  In the past, this type of conflict caused at least a 5% spike in prices.  Instead, traders shrugged off the event due to the US hitting another week of record production runs and increases in inventory volumes.  The IEA is still calling for decreasing prices in the second half of the year due to crude supplies going into surplus while under current OPEC+ production cuts.  But the big news of the week is the Chinese Coronavirus.  The virus continues to spread to other countries and has killed close to 100 people already.  A city of almost 30M people is under quarantine in China.  The last time this happened was with SARS and crude prices tumbled due to demand erosion.  Well, history is proving itself to be true once again and crude prices tumbled to their lowest levels in the last three months.  WTI crude is starting to point closer to $50/barrel than $60/barrel.  For now, we are awaiting developments on the Coronavirus and taking cues from the WHO.  Until we know where the virus is heading, I think the last rally in crude prices is on ice.

Local retail prices on gasoline and diesel are slowly decreasing.  However, spot cash prices have not dropped as much as expected with the decrease in crude prices.  Regardless, I don’t expect to see prices at the pump go up in the coming week or so.

Propane prices dropped once again this past week.  The weather continues to be propane’s worst enemy.  We are getting very close to experiencing the warmest January/December on record.  The demand destruction on propane is very real, even though exports are at record levels.  At the current inventory levels, we are one pace to end the winter with the most propane in inventory post winter in the history of tracking inventory!  If the current state of propane holds, I would expect very low prices on summer fills this year.

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

Best regards,

Jon Crawford

Crude Slide Continues

Good afternoon!

Crude oil prices continue to remain weak and received very little support from events that unfolded.  Even though US and China struck a “light” trade deal, crude did not respond positively.  The deal is not seen as changing the world economic environment.  Basically, most see the phase one deal as a “stop measure” from the situation getting any worse.  OPEC also released information that even with the purposed crude oil cuts, crude production will beat demand.  This news is very bearish and tracks as the US officially hit a new production record of 13M barrels/day.  Gasoline and diesel stock inventories rose again this week.  And even though exports are strong, petroleum productions continue to be ample in supply.  Overall, the outlook for crude prices is very bearish and this is on the heels of a potential conflict with Iran only two weeks ago!

Gasoline and diesel retail prices dropped a bit this week.  We are seeing about $2.39/gallon on gasoline and $2.84/gallon on diesel fuel.  I don’t expect to see much change on prices at the pump.

Propane prices dropped again this week.  Propane is very bearish.  Supplies are at national record levels and the lack of demand is making it worse.  I don’t expect to see any major blow out in propane prices this season.  For right now, we are waiting to see if winter will ever stick around!  Even with the recent cold snap, nothing looks to ever stay longer than a couple days.

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

Best regards,

Jon Crawford

Craziest Week Ever…

Good morning,

Well, I think this might be the craziest week with crude prices I have ever experienced.  President Trump issued the order for the execution of General Soleimani from Iran in Bahgdad on January 2nd.  The drone attack caused crude oil prices to sky rocket.  Iran threatened retaliation and Trump responded with further attacks if Iran killed any more Americans.  The escalation in the Middle East pushed WTI prices to the highest level since April 2019 when Iran attacked Saudi Arabia’s oil refineries.  Then on Wednesday, Iran launched rockets into Iraq targeting bases that housed American soldiers.  As we feared for the worst, we were told that no American lives were lost.  Trump gave a speech declaring that Iran announced the rockets were the retaliatory strike and no more attacks would be issued.  Trump considered the escalation diffused.  Then something strange happened.  Crude oil prices sold off at a greater volume prior to the attacks and are now sitting below $60/barrel and continuing to find weakness.  The US executed an Iranian general, Iran launches rockets at American bases, and crude prices go down.  Never before have we experienced this type of fluctuation based on the events.

This week shows how oil production in Russia and the US have taken away much of the risk premium in the Middle East.  We were on the brink of potential conflict with Iran and oil prices only rallied 5% and now sold off more than 6%.  The incident really displayed the new world we live in with crude oil production.  Production is incredibly strong and no major supply hurdles are on the horizon.  Therefore traders are shrugging off the Iran conflict, just like the Iran attack on Saudi Arabia.

In local news, gasoline prices and diesel prices continue to move around with crude price fluctuations.  Gasoline retail prices are averaging 2.44/gallon across the state and diesel prices are averaging 2.84/gallon.

Propane supply continues to be very high and the warm temperatures are not helping demand.  I do not see any issues for supply problems coming from our main storage facilities in the US.  As of right now, we are about to experience the most propane in inventory for January in our nation’s history.  If crude prices continue to fall and the weather stays warm, I would expect to see softer propane retail prices and good prices for next year as well.

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

Best regards,

Jon Crawford

Merry Christmas and Happy New Year!!!

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

WTI Holds Above $60/Barrel

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.

WTI Crude Approaches $60/Barrel

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

OPEC+ Agree On Production Cuts

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