Tag Archives: endeavor

All Sights On $90/Barrel WTI Crude Oil

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Good morning and Happy Friday!

I hope this email finds everyone ready for the weekend. This week WTI Crude Oil price pushed through $90/barrel for the first time since November 2022. The US economy possibly experienced increased inflation in August, but the cause was mostly due to increased cost in of gasoline as summer finished. The world economy is looking healthy and the potential for a soft landing continues to win out on the news airwaves. In addition, as I’ve said all along, don’t bet against China. China had some commercial real estate issues and a slower than anticipated reopening GDP which caused a panic sell-off in crude late spring. China instituted a full bailout for the commercial real estate and added further stimulus to the economy. Within one month, China is seeing an increase in GDP and their stock market is roaring higher. World demand for crude continues to be strong and the US crop harvest looks to be a fast harvest which puts supply pressures on markets to stay wet with refined products. The supply pressure in turn supports crude oil prices, pushing them higher. I am still convinced that $80/barrel is the new floor for WTI crude and any dip in price below $80/barrel is a great futures buying opportunity. For now, we just sit back and let the market do it’s thing.

In local news, our neighbors to the west are finally calming down on as harvest is on the down slope. However, Chicago Spot is so heavy with diesel that an increase in cost of 30 cents per gallon could occur at any moment in our market. My advice is to keep all your diesel tanks full. It’s not a matter of IF diesel prices in our market skyrocket higher, it’s a matter of WHEN. And I believe the blowout will happen within two weeks. I think when the futures October contract expires at the end of this month, we better strap on our seatbelts for a roller coaster in volatility in the Chicago Spot Market. Gasoline prices have continued the slow grind higher so I don’t expect to see retail prices of gasoline go down at the pump anytime soon.

Propane prices have climbed higher and retail prices have followed. Our board price is getting closer to our contract price to start the winter, even though we have a record level of inventory of propane in the US. I believe higher crude oil prices will continue to support higher propane prices all winter long, especially if the winter is warmer than average.

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

Best regards,

Jon Crawford

What A Mess…

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Good morning!

Happy Friday! WTI Crude prices continue to slowly grind higher. China announced a financial plan to bail out the failing commercial real estate problem. The announcement caused all commercial real estate stocks in China to soar over 75%. In addition, Saudi Arabia announced that they will keep their voluntary additional crude production cuts to 1M barrels/month until the end of the year. Then, in a surprise to everyone, LNG employees in Australia announced a strike which will put pressure on nat gas production globally. Without an increase in crude harvesting, opening up new nat gas production will be difficult. And then fall is here in the US, so harvest is starting. Demand for refined products is skyrocketing across the US which is supporting crude prices as well. And the US economy is trending towards a soft landing rather than a recession. Overall, I do not see any signs pointing to a bearish scenario for crude prices in the months of September or October. I still am holding my call that $80/barrel WTI crude oil is going to be the floor price moving into 2024. In 2024 there are possibilities of some occasional dips in price below $80/barrel presenting some futures buying opportunities. But I don’t see any long-term scenarios holding WTI Crude price below $80/barrel.

In local news, refined products east of the Rockies is an absolute mess. Refineries are down for turnaround and one in particular has been down much longer than anticipated. As harvest begins in the western states, east of Rockies, not enough gasoline was put into inventory and supplies are pinched tight. The price of gasoline in the Spot Group Market shot up over $1/gallon in comparison to the Spot Chicago Market. The blowout caused trucks from Minnesota and Iowa to flood Wisconsin terminals. Therefore, WI terminals have been forced to raise prices to protect product promised for WI contract customers and keep out of state trucks away from WI. In addition, terminals have run out of product and allocations have been put in place all over the state. I expect to see prices for gasoline and diesel increase in WI for the next two months. In addition, finding product will be extremely difficult for distributors as terminals temporarily run out of products. Logistics for supply will be a nightmare. The good news is that we have dealt with this type of scenario many times before and Crawford Oil is positioned very well to survive through the struggle. We will make sure that all our customers receive their deliveries.

Propane prices continue their slow grind higher as crude prices increase. Although our retail price for propane has increased, you can still save some money ordering a fill now and contracting your remainder of gallons for the heating season. Feel free to call our office for more details.

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

Best regards,

Jon Crawford

Happy Labor Day Weekend!

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Good morning!

Happy Friday! I just wanted to take a quick moment and wish everyone a safe and fun-filled Labor Day weekend! For those traveling, I hope the traffic is not too bad. 🙂 Not much changed in the marketplace this week so we will get back to regular updates next week.

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

Best regards,

Jon Crawford

WTI Crude Price Still Holding Around $80/Barrel

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Good moring!

Happy Friday and cooler weather! Wow, was that a week of heat! As I have been writing, WTI crude oil prices continue to hold around $80/barrel. China reported less than stellar economic data again this week and crude oil prices dropped below $80/barrel for a couple days. But then recession fears in the US hit the news and the next day crude price jumped right back to $80/barrel. This week the top bank CEO’s and the FED are all meeting in Jackson Hole for the annual meeting on the analysis of the US economy. This morning, FED Chairman Powell stated that inflation is still too high and interest rates might go up a little more and hold for a longer period of time. The news sent crude prices higher, which is the opposite under normal economic conditions. Usually as the dollar gains strength, crude oil prices drop because crude oil is traded in dollars and customers can get more bang for their buck when purchasing crude. However, higher interest rates for longer have a greater chance of slowing down the US economy which lowers crude demand. Therefore, producers will cut production to increase the price rather than compete for market share. Crude producers are saying loud and clear they would rather pump less crude and make more money than collapse price and pursue market share competition strategy. I’m not too concerned about the economic issues in China since they have the power to do whatever is necessary to fix their economy. And I am still convinced that $80/barrel is the new norm for WTI Crude price. All oil companies are needing to make investments outside of oil, and $80/barrel works for all crude producers. We might see the occasional dip, but US producers will shut down rigs and Saudi Arabia will cut production to keep prices from collapsing.

In local news, diesel prices calmed down a bit. But the September futures contract expired, and just as I have been writing, the October contract shot up 15 cents per gallon. The reason is that diesel supply will be tight in Chicago during harvest. The Midwest is not going to run out of diesel, but logistics are going to be tough to manage and distributors like myself will have to chase terminals for a month or so. Gasoline prices have calmed down as summer ends. I see gasoline retail prices staying around $3.49/gal. However, diesel retail prices could jump back above $4.00/gallon and hold for the next few months.

Propane prices gained a little bit of ground this week even though the US is at record inventories. I believe exports will continue to skyrocket going into winter and Canada will use as much propane as possible for manufacturing as opposed to shipping to the US. In addition, if we have a warm winter, suppliers will keep prices high to make up for the loss in volume, which in turn will raise retail prices. As a reminder, contracts start in September and you still have time to take advantage of summer fill pricing.

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

Best regards,

Jon Crawford

China Doom and Gloom Affecting Crude Prices?… Not Just Yet.

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Good morning!

Happy Friday! WTI crude prices took a little hit this week. China released less than stellar economic data, cut interest rates, and stopped reporting youth unemployment which has been at all time highs. The news caused crude oil prices to tumble and fall below $80/barrel for a brief second. But the strength of the US economy, the decreasing oil rig count in the US, and the cooperative discipline from OPEC+ to keep production cuts steady continue to support the narrative of tightening world crude oil supplies. In fact, regardless of China’s economy, crude producers seem to be in lock-step keeping production low in order to prop up prices and avoid a massive collapse. As I have been writing, I believe $80/barrel WTI to be the “new norm” moving forward for quite some time. Yes, we might have some dips below $80/barrel. But the timing will be brief as traders hedge bets at those prices which in turn prop prices right back up to $80/barrel. I also believe there is potential for upside price in WTI crude to breach $90/barrel. But for now, we should all start accepting the reality that current crude oil prices will probably remain the new norm regardless of what happens in the world economy.

In local news, diesel spot prices have come down from their highs. Diesel supplies in the US are still very tight and any major disruption in refining prior to harvest could cause a massive increase in diesel prices east of the Rockies. Most people in the industry are keeping their fingers crossed that the harvest is mostly completed before any hurricanes potentially affect Gulf Coast production. Gasoline prices have fallen a touch from their peaks as well. But again, as long as crude oil prices remain strong, both gasoline and diesel prices will hold firm.

Propane prices remain steady going into end of the summer. Although supplies are very high in the country, the appetite for exporting and Canada keeping more propane in house for manufacturing, prices will probably start to climb in Q4 of this year. If we have a mild winter, I also believe suppliers will increase their margin index to make up for lost volume. The action from suppliers will in turn raise the retail price of propane. I highly recommend topping off your tank by the end of September. We are being very liberal with our summer fill volumes.

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

Best regards,

Jon Crawford

$80/Barrel WTI the New Price Floor for Crude Oil?

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Good morning!

Happy Friday! WTI crude oil prices held above $80/barrel this week. OPEC+ confirmed Saudi Arabia’s announced production cuts of 1M bpd happened in July. In addition, the IEA increased their outlook on crude demand for the end of year and into 2024. The US seems to be experiencing a softer landing around inflation which will continue to fuel demand for more crude oil. Producers seem to be determined to try and keep oil prices as high as possible. I believe that the world economies can survive at $80/barrel WTI. Therefore, I don’t see any incentives for a producer to go after market share by flooding the market with crude oil and collapsing price. Although the war in Ukraine is a wild card, the US Presidential election is coming next year and many voters are starting to rank ending the war in Ukraine as a top priority. So politics at home could play a major role in how the US government continues to send money to Ukraine. I would have to write for now that crude oil prices are nicely supported and I don’t see too many headwinds besides a complete collapse in the Chinese or American economies. But both countries have tools in the toolbox to heed any major recession.

In local news, diesel spot prices continue to be volatile as harvest approaches and two major refiners are going into maintenance mode. I could see diesel prices at the pump blowing out higher this fall for a brief period of time. Gasoline spot prices continue their slow burn higher. I expect to see gasoline prices peak towards end of summer. However, prices of gasoline could remain higher if refiners choose to produce more diesel due to the potential tight diesel market in the fall. The next few months will be very interesting in our local spot market.

Propane prices have followed crude oil prices higher. Spot prices have moved almost 20 cents/gal higher from the bottom. I recommend everyone to top off their propane tanks now and contract for the upcoming heating season. It’s hard to believe that colder temperatures are right around the corner!

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

Best regards,

Jon Crawford

Seat Belted For $80 WTI Crude Oil?

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Good morning,

Happy Friday! WTI crude oil prices went ripping higher even though the FED raised interest rates to the highest in over 20 years. Inflation is finally starting to cool but demand seems to be strong and producers continue to be vigilant in limiting supplies. WTI crude prices are almost touching $80/barrel which has not been seen since last year. Unfortunately, unless a “harder landing” or recession starts to build contagion across the globe, I believe these higher oil prices are here to stay. As I have been writing, OPEC+, including American producers, are just not going to let WTI crude prices drop below $70/barrel for extended periods of time. Since crude oil prices have risen hard in the past week, the cost of all products connected to crude oil have risen as well. We have not seen prices drop one day the entire week. I guess we’ll see if there is any cooling or profit taking on crude prices next week.

The Chicago market has rocketed higher and given back all of the low spot basis of the past few weeks. Diesel prices have gone up 70 cents/gallon and gasoline continues it’s slow grind higher. Unfortunately, diesel supplies are going to be tight when harvest starts. Two of the main refiners in our market are going down for maintenance. So if there is a rush on harvest, prices of diesel could rocket even higher on tight supplies. For now, the days of cheap diesel are behind us. In addition, if Saudi Arabia continues to limit diesel shipments to the East Coast, Chicago refiners will move barrels east.

Propane spot prices have actually gone up 10 cents in cost the past week and a half. Propane future pricing continues to be weak. Given so many unknowns in the marketplace, we highly recommend everyone topping their tanks off by the end of August and contracting for next year. Even though propane inventories are in great shape, logistics of moving propane around the country continue to be difficult and could cause issues resulting in higher prices.

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

Best regards,

Jon Crawford

Slow And Steady Wins The Race

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Good morning!

Happy Friday! Not much has changed in the crude oil markets since last week. Crude oil prices continue their slow and steady climb higher. WTI looks to close above $75/barrel this week. I believe $80/barrel on WTI is a better bet than price falling back below $70/barrel. There is so much synergy between all crude oil harvesting companies around the globe. Demand for crude oil will only increase as inflation eases and banks get comfortable with de-risking. Most large banks are merging/purchasing smaller banks and the portfolio of potential losses from office space rentals seems to be much less of a concern than previously reported. In cities where office space is dwindling and risky, other cities are experiencing massive growth. So the office space crises supposedly will be localized to certain markets, not a national crisis

In local retail news, I wrote last week that the Chicago spot market was very long on diesel and could go up possibly 50 cents/gallon at any point in the coming weeks. Well, the night I wrote my last blog post, diesel cost rose 50 cents/gallon in our market. The cost of gasoline and diesel continued to rise this week. I expect to see retail prices of diesel and gasoline at the pump move higher next week.

Although propane fundamentals remain weak, crude oil prices are starting to offer support from the floor that landed a couple weeks ago. However, propane prices did still drop overall in the month of July and we might see just a small decrease in propane retail prices/contracts in August. However, the price change, if it happens, would be minimal and we still have a week left in July.

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

Best regards,

Jon Crawford

Crude Oil Prices On A Stair Climber

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Good morning!

Happy Friday! Crude oil prices continue to climb higher even though recession fears in the US and China linger in the background. I believe that traders are buying into the idea that oil producers in OPEC+, including the US, are being very disciplined with their harvesting and capital expenses. Everyone would rather sell less oil and make more money than gain market share from a competitor. As all oil companies look to diversify their businesses, the action of “flooding the market” seems to be off the table. WTI crude oil prices broke through $75/barrel this week. As I have been writing, I do not see a scenario where WTI prices hold under $70/barrel. American producers will cut production to keep prices higher if WTI starts to drop dramatically. The war in Ukraine is continuing to put pressure on Russian crude oil sales, but as long as China and India continue to purchase Russian crude, we shouldn’t experience any major spike in price. We will probably continue to see WTI price ebb and flow between $70-80/barrel. In addition, Saudi Arabia announced further cuts on shipments to the US East Coast. The move will put pressure on the Gulf Coast and Chicago markets to move barrels east. The scenario will eventually cause a spike in refined products in Chicago and the Gulf Coast due to higher demand for diesel during harvest and supplying the East Coast. Although recession fears continue to dominate the news, I would not relax and bet on crude oil prices dropping through the floor.

In local news, refined diesel prices out of the Chicago market are hitting the lowest cost of the year. But the devil is in the details. Chicago diesel is trading over 30 cents/gal under the Group and East Coast markets. Chicago has the ability to move barrels to the East Coast markets. I believe there is a “head fake” going on. In other words, what’s going on in Chicago will probably be short lived and diesel prices will jump much higher at some point in the near future. The futures on diesel out of Chicago are much higher and off the lows of back in January. Gasoline prices continue to remain in a narrow range and I don’t expect to see pump prices on gasoline drop much in the near term. Diesel retail prices might drop, but most retailers will use caution because the cost could jump much higher on any given day.

Propane prices continue to climb higher. We are at the lowest retail price of the year, but if crude prices continue to climb higher propane prices will follow. We highly recommend all customers top off their tank right now and contract for the upcoming heating season. Remember that you have until the end of August to lock in your price.

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

Best regards,

Jon Crawford

Our Friend Volatility Will Return At Some Point

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Good morning and happy Friday!

WTI crude oil prices continue to trade in the narrow range of around $69/barrel and $71/barrel. The continued hot US economy is pushing treasury yields higher. And Saudi Arabia announced their cuts in production will continue indefinitely to keep WTI price above $70/barrel. Saudi’s are cutting shipments to the US as well which puts pressure on crude oil producers to move barrels east. Quite honestly, the crude oil trade is fairly boring these days. Although, we did have a longer holiday weekend with low volume trading on the market. The US is trying to make peace with China, but India is stepping up to the plate to fill the gap of cheaper labor and production in the world economy. There is definitely a shift in the world economic order taking place, but the resolve will still take a long time to play out. Oh, and there is still the war in Ukraine that is not showing any signs of slowing down. The US has a presidential election coming up. I believe that the next election will be one of the hottest elections in years. We are dealing with the most issues at home and abroad that I have ever witnessed in my lifetime. The following year will be wild and intense. I’m not quite sure how everything will play out in the marketplace, but I do know that our old friend “volatility” will return at some point.

In local news, the cost of gasoline continued a slow burn trend higher. Gasoline retail prices will continue to move in a very narrow range, but possibly higher in the coming week or so. I do not see gasoline retail prices jumping above $3.50/gal unless prices start to move in the crude oil market. Diesel prices continue to fall as our Chicago market seems to be longer on diesel inventory than expected. And just like gasoline, I expect to see diesel retail prices stay below $3.50/gal for the coming week or so.

Propane spot prices unexpectedly fell some more over the past weeks, but out months continue to stay higher. Our summer fill prices dropped a bit but nothing drastic enough to cause FOMO for those who purchased earlier. Our contract prices for next year are out and I highly recommend everyone to contract because the value of propane price percentage compared to crude oil price is extremely attractive. The best strategy is to top your tank off by the end of August, and then contract for your remaining winter gallons.

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

Best regards,

Jon Crawford