Author Archive: Jon Crawford

Rapid Rise In Price

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Good morning!

Happy Friday!  Oversupply continued to dominate headlines earlier this week, keeping crude prices pinned below $60 per barrel. However, oil is now on pace for a weekly gain after climbing back above that key $60 psychological level late in the week.

The big story came out of the White House, where President Trump imposed deep sanctions on Russian energy giants Lukoil and Rosneft, targeting nearly 500,000 barrels per day of supply. Both India and China have already said they won’t buy from those companies, and Russia responded by conducting nuclear readiness drills—a move that sent crude prices soaring about $3 per barrel midweek.  Ceasefire talks between Ukraine and Russia broke down once again, with Moscow rejecting the latest proposal and intensifying its bombing campaign. In addition, a gas facility in Kazakhstan experienced operational issues, prompting Shell and Chevron to suspend part of their production there. Kazakhstan has been one of the most aggressive OPEC+ members in overproducing, so this cutback could tighten supply and lend some bullish support to the market.  Elsewhere, Iran once again rejected Trump’s offer for peace talks, while Israel launched strikes in Gaza after accusing Hamas of violating the truce. Those developments didn’t move prices much, suggesting traders remain focused on global supply balances rather than Middle East flare-ups for now.

On the economic front, another major headline came from Washington, where the U.S. canceled all trade talks with Canada. The announcement initially pressured oil prices lower, as traders worried about additional crude backing up in the system if the U.S. stops purchasing Canadian barrels. However, after further reflection, markets decided the situation could actually be bullish if Canada is able to find alternative buyers.  The latest EIA report gave the market an extra boost, showing a draw in U.S. crude inventories, which helped extend the late-week rally. Meanwhile, the U.S. inflation rate came in at 3%, reinforcing expectations of an upcoming Federal Reserve rate cut, which would typically lend support to oil prices. At the same time, the ongoing government shutdown is beginning to hit federal paychecks, and that’s starting to weigh on consumer confidence and fuel demand expectations.  Midweek, trade optimism provided another spark as the U.S. and China scheduled new trade talks in Malaysia for Friday. Hopes for a potential deal helped lift crude prices earlier in the week, with traders betting that global demand may hold up better than feared.

Chicago product prices are finally easing after several weeks of volatility. The Whiting refinery is coming back online, helping to stabilize local supply and bring gasoline differentials down from recent highs. Diesel prices, however, have been more resilient due to strong harvest-related demand across the Midwest.  Meanwhile, Phillips 66 and Kinder Morgan are exploring new shipping routes to the West Coast to help fill that region’s refining shortfall. If that plan moves forward, it could divert barrels away from the Midwest and tighten Chicago supply for the foreseeable future.  For now, I expect gasoline prices to drift lower from recent peaks, while diesel remains firm into November.

Propane fundamentals remain soft, but the market is starting to transition into winter economics. Crop-drying demand is active, and colder weather is right around the corner. While inventories remain comfortable, I expect to see price movement by early November as seasonal demand ramps up.  Globally, as more countries ban Russian LPG imports, the U.S. will play a key backstop role in meeting international demand. That could create some upside potential in the export market later this winter.

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

Best regards,

Jon Crawford

Bears Are Not Ready To Hibernate

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Good morning!

Happy Friday!  Crude oil prices held steady to start the week, supported by geopolitical headlines even as oversupply concerns grow louder. Washington remains locked in a government shutdown, and that uncertainty has weighed on markets broadly.  However, all geopolitical and economic data released this week was bearish and pushed WTI below $60/barrel with a fairly firm ceiling.

President Trump is expected to meet with both Ukrainian President Zelensky and Russian President Putin in the coming weeks.  Zelensky is reportedly asking for more advanced weapons like Tomahawk missiles, while Trump’s follow-up meeting with Putin in Budapest could prove critical for the ongoing ceasefire efforts. In the Middle East, minor flare-ups continue in Gaza, but the ceasefire remains largely intact. So far, it hasn’t been enough to push oil prices one way or another.

On the demand and supply side, the International Energy Agency (IEA) revised its global outlook sharply lower last week, citing a bigger-than-expected supply glut and weaker demand growth. Some agencies are now projecting an oversupply as high as 2.5% next year. The market consensus is that prices near or below $60 per barrel could eventually slow down U.S. shale activity, and the glut may persist through at least the first half of 2026.  OPEC continues to face pressure as members are being audited on their so-called “paper barrels.” The group has trimmed its official demand forecast but still insists that by 2026, demand will once again outpace supply.

Trade developments added another twist. The U.S. has placed new sanctions on certain Chinese crude imports, creating a brief wave of buying as traders positioned ahead of potential disruptions. Meanwhile, in a surprise announcement, China continues to take in as much Canadian crude as possible through its new western export terminal. India is reportedly considering halting Russian crude imports, which could temporarily offer some support though global prices, though history suggests Russia always finds a buyer somewhere.

Domestically, the latest EIA data showed a build in U.S. crude inventories, reinforcing the near-term oversupply narrative. Futures markets have now flipped into contango across the five-year curve—meaning future prices are higher than today’s. That structure encourages storage and near-term buying as traders look to lock in cheaper barrels now in hopes of stronger prices later.  The EIA did release a large draw in distillate inventories reporting that harvest east of the Rockies is in full demand season.

All in all, the market remains caught between potential geopolitical support and fundamental weakness. The wars may keep a floor under prices for now, but with international inventories rising and demand projections slipping, the near-term direction still looks soft for crude oil prices unless something major shifts in the headlines.

Chicago spot prices rocketed higher to end the week after the region’s largest refinery experienced an emergency shutdown. Products were already tight in the neighboring Group market from harvest, and the outage immediately sent gasoline prices up roughly 20 cents per gallon. Diesel prices also moved higher, helped along by strong seasonal demand from harvest. Given these conditions, retail pump prices are likely to move higher in the short term.

Propane prices held narrow as usual even as crop-drying demand picked up across areas east of the Rockies.  The latest EIA report showed a surprise build in propane inventories, but with colder weather approaching, demand should pick up quickly. While the market still leans slightly bearish for now, any sustained crop drying along with a cold snap could spark a sharp, bullish move higher in prices.

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

Best regards,

Jon Crawford

The Week Of The Trap Door?

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Good morning!

Happy Saturday!  Crude oil prices took quite a swing this week. After holding firm early on, WTI fell below the key $60/barrel level on Friday — a major psychological and technical support point. Once that line broke, prices quickly tumbled to around $58/barrel.  The week began with an escalation in the war in Ukraine. Russian strikes destroyed nearly half of Ukraine’s natural gas infrastructure, forcing the country to rely more heavily on imports. The U.S. still has spare export capacity to meet some of that need. In retaliation, Ukraine hit another Russian oil terminal — this time in Crimea. Meanwhile, Israel launched major strikes on Gaza to mark the anniversary of the October 7th attacks.

While these geopolitical tensions kept crude prices supported early in the week, bearish news gradually took over. President Trump announced progress toward a ceasefire between Hamas and Israel, and by Friday, a deal was officially reached. That ceasefire news stripped away much of the “war premium,” pushing crude decisively below $60/barrel.  Before that headline hit, the tone was already softening due to economic and supply developments. OPEC reported it slightly underproduced last month, and Russia lost roughly one-fifth of its gasoline production capacity due to ongoing strikes. However, these bullish factors were outweighed by new U.S. sanctions on Iran — sanctions that China and India immediately downplayed, stating they will continue purchasing Iranian crude. China has been rapidly building storage capacity, shifting purchases away from Saudi Arabia and toward cheaper Iranian barrels — a move that could accelerate the looming global crude oversupply. Additionally, ExxonMobil announced a deal with Iraq to open a new production facility, adding even more long-term supply pressure.

On the U.S. front, economic data added fuel to the bearish sentiment. The EIA reported another crude inventory build despite higher refinery runs. The Federal Reserve’s September minutes showed officials split 50/50 on total number rate cuts this year. Unemployment claims rose again, and delinquencies on auto loans continue to climb. Meanwhile, the federal government remains shut down, with roughly 750,000 workers now furloughed. Even as President Trump pushes to include healthcare subsidies in a potential deal, negotiations to reopen the government remain at a standstill.

Overall, after starting the week on a bullish note, crude spent the rest of the week under heavy selling pressure. I’ve been calling for sub-$60 crude by year-end — and we hit that level a bit earlier than expected. The key question now is whether this is a sustainable move lower or just the beginning of a short-term “dead cat bounce.”

Here in the Midwest, the Chicago spot market followed NYMEX lower, but gasoline and diesel prices diverged. Gasoline fell more sharply as demand continues to weaken, while diesel held steadier thanks to strong harvest demand. A local refinery remains offline for maintenance, adding pressure to diesel supply. Refiners are also beginning to shift toward #1 diesel for winter, tightening inventories of #2 diesel at terminals. As a result, retail gasoline prices should decline faster than diesel in the coming week.

Propane prices continue to trade in a narrow range. Crop drying season is in full swing, and the EIA reported a large national inventory draw even with above-normal temperatures. The data suggests a higher-than-expected crop drying volume this year. Despite the warm weather, a heavy crop-drying season can quickly chip away at surplus inventories — something we’ll be watching closely in the coming weeks.

As always, if you have any questions, comments, or concerns, please don’t hesitate to give us a call. Have a great weekend!

Best regards,

Jon Crawford

Floor Not Falling Out Just Yet

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Happy Friday!

Crude oil prices are set to close the week at their lowest level in 16 weeks, with WTI hovering around $61/barrel. At this point, it looks more likely that prices will break lower rather than higher. Even though geopolitical headlines would normally push prices up, the world’s oversupply of crude oil has finally taken center stage. I’ve been emphasizing the oversupply theme for some time, and it seems traders are now seeing it the same way.

The biggest weight on prices this week comes from OPEC+, ahead of their weekend meeting. The group has made it clear they plan to keep raising production, citing a more optimistic view of global oil demand. Last month, OPEC+ already met its production increase target, further adding to the market glut. These moves are keeping strong downward pressure on crude, despite ongoing geopolitical risks.  With OPEC+ increased production, China continues to buy heavily for storage, which has provided a price floor. But if Beijing slows purchases, oil prices could quickly collapse.

On the geopolitical front, President Trump unveiled a 20-point peace plan for Israel and Palestine. So far, world leaders doubt it will lead to a ceasefire. Fighting continues, but since it hasn’t spread into neighboring countries, oil traders aren’t treating it as a supply risk.  Ukraine also made headlines. The U.S. announced it is going “all-in” on the war, supplying Ukraine with long-range missile intelligence targeting Russian energy infrastructure, and even considering sending Tomahawk missiles. While such developments could normally send oil prices higher, markets have largely shrugged them off. Russian oil revenue is down, though the true amount is hard to measure. Meanwhile, U.S. and G7 leaders are pushing for tighter sanctions, but some Eastern European nations remain reliant on Russian crude out of necessity.

In the U.S., crude inventories rose again this week, reinforcing the oversupply narrative. On the economic front, consumer confidence fell to a five-month low, and the government shutdown cancelled the jobs report. Normally, a weaker dollar would support higher oil prices, but historically crude demand falls during shutdowns, and traders are pricing that in.

Here at home, Chicago spot gasoline and diesel prices fell alongside crude. That should translate into lower pump prices next week. Harvest season is in full swing, which could cause some isolated diesel shortages, but inventories look healthy overall.  I don’t expect any long-term diesel issues during harvest.

Propane prices ticked up slightly as we shift into winter pricing, though with strong storage levels and warm weather in the forecast, I don’t expect much movement in the near term.  Propane is somewhat boring at the moment but depending on crop-drying, the situation could change quickly.

As always, if you have any questions, comments, or concerns, please don’t hesitate to reach out. Wishing you a great weekend!

Best regards,

Jon Crawford

Is There A Rocket Ship On A Launch Pad?

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Good morning!

Happy Friday!  This past week, crude oil prices are on track to close at their highest level in over three months.  On Friday WTI shot through the psychological barrier of $65/barrel.  A mix of geopolitical developments and economic data, both domestic and global, pushed prices higher.

The biggest news came from President Trump, who shifted his stance on Ukraine. He now believes Ukraine can fully reclaim its lost territory and win the war. That rhetoric rattled oil markets on fears of a potential cutoff of Russian crude and refined products from the global market.  Russia added fuel to those concerns by officially announcing a ban on diesel exports. Ukrainian drone strikes have knocked out roughly 25% of Russia’s diesel production capacity. At the same time, tensions are rising as drones continue to cross into Polish airspace, prompting worries of potential NATO involvement. Any expansion of the conflict beyond Russia and Ukraine would be extremely bullish for oil prices.

On the global supply side, the Kurdistan oil export pipeline in Iraq officially restarted, adding about 200,000 barrels per day of crude. OPEC has asked Iraq to cut production since most spare capacity rests with Saudi Arabia and the UAE, but Iraq has resisted and continues to pump above quota.  India surprised the market by increasing exports of gasoline and diesel, though much of this appears to be offsetting Russia’s lost exports, leaving global balances little changed. ExxonMobil also announced it is doubling down on Guyana, with production there expected to reach 1.7 million barrels per day by 2030. Meanwhile, Iran’s exports remain strong even though China cut its purchases nearly in half.

The only notably bullish global supply headline this week came from Chevron, which can now export only half of its normal quota from Venezuela. Overall, while most supply data leaned bearish, the market is beginning to shift toward expectations of stronger world demand ahead.

As the world’s largest consumer of oil, U.S. data was interpreted as supportive for crude prices, though I remain cautious. Q2 consumer spending was revised higher, though much of that came from inflation caused by tariffs rather than true growth. Traders continue to price in additional Fed rate cuts to stimulate the economy.  At the same time, jobless claims dropped, while inflation moved higher—signs of potential stagflation, where growth slows but inflation persists. This scenario could keep energy prices elevated. Looming in the background is also the risk of a U.S. government shutdown.  On the US supply side, the EIA reported a smaller-than-expected decline in crude inventories, though it was still a draw. Diesel prices are steadily climbing as Midwest harvest demand ramps up and the Northeast begins storing heating oil barrels for winter heating. With Russian diesel exports banned, traders are adding further upward pressure.

Locally, the Chicago Spot Market rolled to the November contract. Diesel prices rose modestly on increased harvest demand, while gasoline prices held relatively steady. I expect retail gasoline prices to remain stable, but diesel prices at the pump are likely to move higher in the coming weeks.  Unfortunately, I believe we will see diesel prices elevated while demand in the US remains strong and the global supply of diesel gets direction.

Propane prices continue to trade sideways despite the rise in crude oil prices. The EIA reported a smaller-than-expected build in inventories, but usage reports for crop drying remain inconsistent. By mid-October, demand trends should become clearer.  Weather forecasts have also shifted—October is now expected to be slightly warmer than normal rather than colder. For now, propane is taking a breather, though I expect modest price increases once contracts roll into October and winter economics take effect.

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

Still Trading In A Small Window

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Good morning!

Happy Friday!  Crude oil prices traded in a very narrow range this week, with few geopolitical or economic developments to push the market decisively in either direction. Every piece of news seemed to be offset by another data point or forecast, keeping prices relatively steady.  The biggest global news came from the war in Ukraine. Over the past weekend, Ukraine struck another oil refinery and export facility, followed on Thursday by an attack on a major petrochemical plant and refinery. Ukraine has now hit more than ten Russian refineries in total. By the end of the week, Russia announced that exports could fall by 300,000–400,000 barrels per day due to the damage. While this caused a brief price spike, overall supply and demand concerns continued to weigh heavily on sentiment.

China again released very weak economic data this past week. Retail sales, fixed-asset investment, and industrial production all missed expectations, with some readings hitting nearly five-year lows. As one of the world’s largest crude importers, any decline in Chinese demand raises the risk of oversupply. Both the IEA and EIA continue to warn that global markets will face a supply surplus by late 2025. OPEC, on the other hand, insists demand will keep pace with production growth—but so far, traders see little evidence of a sharp increase in demand on the horizon.

In the U.S., attention shifted to the Federal Reserve. While the EIA reported a large crude inventory draw on Wednesday, markets were more focused on the Fed’s rate cut. The Fed lowered rates by 25 basis points and signaled up to 50 more basis points of cuts could come before year-end. Stocks jumped on the news, but crude oil did not follow as many expected. The U.S. dollar continues to trade near its lowest level in a decade. Normally, a weaker dollar supports higher oil prices, since commodities are dollar-denominated. But this time, uncertainty around tariffs and inflation is dampening enthusiasm. Some economists argue that without stronger tax relief, tariffs may do more harm than good, leaving the economy struggling to grow despite lower rates. For now, oil markets remain on edge, with traders waiting for clearer signals. I don’t expect much movement in crude prices until harvest season wraps up.

Harvest is now underway in the Midwest. Supplies remain ample, even though a major regional refinery is offline for maintenance until the end of October. The Chicago Spot Market is trading at a slight premium to the Group market, though the spread is narrow. Prices have been volatile but range-bound, moving in step with crude. Expect to see gasoline and diesel pump prices fluctuate frequently in the days ahead, but in a very narrow window.

Propane inventories remain healthy, though this week’s EIA report showed a smaller-than-expected build. The lighter build may be tied to the start of harvest, higher export volumes, and lower refining runs. Over the next six to eight weeks, we’ll get a much clearer picture of propane supply heading into winter. For now, I continue to recommend topping off tanks before cold weather arrives and locking in winter gallons while prices remain favorable.

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

Jitters Continue To Hold Steady

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Happy Saturday!

This past week crude oil prices were very volatile but ultimately ended lower, driven by forecasts of a global supply surplus in Q4 2025 and throughout 2026. While OPEC continues to emphasize that demand will grow next year, the IEA stated this week that a surplus in daily production is inevitable at current levels unless there is a sharp increase in demand or a significant loss of supply.  Geopolitical events, however, were strongly bullish for crude oil. Israel carried out an airstrike in Qatar, targeting Hamas leadership that was meeting in Doha to discuss a ceasefire deal. The attack angered the United States, which had been brokering the talks, and all but eliminated the possibility of a ceasefire between Israel and Hamas. This escalation also raised concerns that the conflict could spill into nearby oil-producing countries.  Meanwhile, Ukraine struck Russian crude export terminals and even hit two oil cargo ships—an unprecedented escalation aimed at disrupting Russia’s main source of revenue. Still, Russia has managed to keep its exports flowing. India announced it would scale back some purchases of Russian crude, but China stepped in to take additional volumes, ensuring Russia continues to find buyers.

In the U.S., the economic data released this week leaned heavily bearish for oil demand and raised fears of stagflation—a scenario where economic growth slows while inflation keeps rising. Jobless claims were revised sharply higher, lumber prices fell, payroll figures were adjusted downward, and inflation readings came in hotter than expected. This leaves the Federal Reserve in a difficult position: cut rates to stimulate growth and risk fueling inflation, or hold rates steady to keep the dollar strong and press inflation lower, while potentially slowing the economy further. Either way, the uncertainty is making oil traders cautious and keeping prices under pressure.  Adding to the bearish tone, the EIA reported a very large build in crude, gasoline, and distillate inventories. Following the report, oil producers in the Permian Basin announced they are lowering job forecasts for the rest of 2025 and into 2026—further confirmation of a softening outlook.

In summary, my strategy remains the same—sit back and wait. The risks point more toward crude oil moving lower than spiking back toward $70 per barrel.

In our local spot market, gasoline prices continue to fall as summer demand drops off. Chicago refiners have also transitioned to producing winter-grade gasoline (lower RVP), which is cheaper to make than summer blends, adding more downward pressure. Diesel prices also moved lower alongside crude, despite a major Midwestern refinery currently offline for annual maintenance. For now, supplies in the Chicago market appear ample heading into harvest season.

Propane prices remain range-bound, showing little movement despite volatility in crude. That said, I continue to strongly recommend topping off propane tanks now and locking in gallons for the winter. The 90-day forecast is calling for colder weather compared to last year. If strong heating demand overlaps with crop drying season, propane prices could spike earlier than usual.

Best regards,

Jon Crawford

First Loss In Weeks

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Happy Friday!

I hope everyone had a safe and enjoyable Labor Day weekend. With markets closed on Monday for the holiday, this was a shortened trading week. WTI is on track to close lower, marking the first weekly loss in three weeks. The main drivers were growing signs of a supply glut and weaker U.S. economic data.

Geopolitical headlines leaned bearish as well. While Ukraine continues to successfully target Russian oil infrastructure, Russian crude exports remained strong, particularly to China. In fact, China purchased a record amount of Russian crude last week, underscoring its allegiance with Moscow. The Trump administration responded by tightening sanctions on Iranian oil and enforcing sanctions on India for continuing to buy Russian barrels. Still, Iranian exports flowed uninterrupted, Russian shipments to China remained steady, and India—though trimming volumes—continued buying regardless of sanctions. Russia has kept prices low to help offset the impact of these restrictions.

OPEC is meeting this weekend, and most expect the group to continue with its expanded supply quotas. The increase has now unwound years of prior production cuts. Saudi Arabia has also signaled that any remaining voluntary cuts will be phased out. Traders widely believe that even if OPEC were to freeze production quotas at current levels, the global market will still tip into oversupply. Adding to that, Mexico recently announced large shale discoveries, and Syria has resumed oil exports for the first time in years.

In the U.S., the EIA reported that crude inventories rose last week despite strong refinery utilization. On Friday, the jobs report came in below expectations, with unemployment ticking higher. This combination of supply builds and weaker labor data reinforced expectations that the Federal Reserve will cut rates at its September meeting. While lower interest rates and a weaker dollar would typically support oil prices, concerns about an economic slowdown—driven by tariffs and widespread corporate cost-cutting—are outweighing that effect. Many companies are now grappling with stretched balance sheets as the extra liquidity from COVID-era stimulus and Fed equity purchases has dried up. Layoffs of 25% or more have already been announced at several major firms heading into year-end.

Overall, while conflict risks in Israel/Palestine/Yemen and Russia/Ukraine still create a war premium, the world economic data increasingly points toward a global crude supply glut heading into late 2025 and 2026.

In local news, the Chicago diesel market briefly spiked on expectations of strong demand for the upcoming harvest. With Midwest harvest yields projected to be very high, diesel demand could be elevated. By week’s end, however, diesel prices eased as crude oil price fell and refinery utilization stayed strong. I don’t expect significant changes in diesel pump prices near term. Gasoline prices, meanwhile, declined following the Labor Day holiday. This was expected as summer driving season winds down and demand softens. I anticipate retail gasoline prices to move lower next week.

Like a broken record, propane remains the “sleeper” of the market. While prices are still trading in a narrow range, winter economics officially begin October 1. In central Wisconsin, we are already seeing some of the coldest September weather in years. With forecasts pointing to colder-than-normal conditions in October—and strong crop yields—there is a real risk of heating demand overlapping with corn drying needs. Northern Wisconsin has already experienced brief frost, and early frost across parts of the Midwest remains a possibility next month. I continue to strongly recommend topping off propane tanks now at summer pricing and locking in heating gallons ahead 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

China Is Flexing Some Muscle

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Good morning, and Happy Friday! I hope everyone has a safe and enjoyable Labor Day weekend!

This past week was fairly steady for oil prices, with WTI holding around $64 per barrel. Traders remain cautious as global economic and geopolitical issues continue to play out.  On the geopolitical front, India openly defied U.S. sanctions, announcing it will continue purchasing Russian crude oil in September. While buying discounted Russian barrels may look attractive, the sanctions imposed on India could easily erase any savings from cheaper oil. India’s move sends a clear message that the U.S. cannot dictate where they do business. In a show of solidarity, Xi Jinping, Vladimir Putin, and Narendra Modi met to reinforce their alignment against U.S. sanctions. Looking ahead, Xi, Putin, and Kim Jong Un are scheduled to meet next week to signal a deeper military alliance with the West in mind. The trend is clear: countries are rallying around China, not just in trade but also in mutual security commitments.

On the supply side, Russia managed to reopen its pipeline to Slovakia and Hungary after being shut for seven days. It is currently operating at 50% capacity but is expected to be fully functional soon. While Ukraine has succeeded in disrupting some Russian energy infrastructure, Russia’s export capacity remains strong with no shortage of buyers. At the same time, China’s growing investment in solar, wind, and nuclear suggests that its need for imported crude will decline in the years ahead. Combine that with OPEC steadily increasing production, and it’s no surprise that more than half of U.S. energy economists now predict an oversupplied oil market by 2026. Goldman Sachs even forecasts crude prices could fall as much as 15% next year.

Domestically, the EIA reported draws in crude, gasoline, and diesel inventories. Normally this would support higher prices, but the market reaction was muted as traders weighed ongoing economic headwinds. Inflation ticked up to 2.9% last month, while consumer spending also rose—but largely in line with inflation, making it difficult to gauge real growth. Summer spending patterns also skew the data. Looking ahead, next week’s jobs report will be closely watched, especially after President Trump dismissed the head of the reporting department earlier this month.

For now, crude oil continues to trade in a narrow band, with bullish and bearish signals offsetting one another. September could prove pivotal: if the Federal Reserve cuts rates, prices may find some support. But if global production outpaces demand, WTI could slip below $60 per barrel.

The Chicago Spot Market rolled to the October contract this week, with basis largely unchanged. As summer gasoline demand winds down, I don’t expect any major price swings. Prices have also normalized following last week’s BP Whiting outage, and I expect retail gasoline to remain below $3 per gallon through the holiday weekend and into next week. Diesel prices inched higher, supported by a surprise national inventory draw and the approaching harvest season. Expect pump prices for diesel to climb slightly in the days ahead.

Propane spot prices remain in a narrow range, but forecasts point to a colder-than-normal late September and October, with the possibility of early snowfall. That combination, paired with strong crop drying demand, could quickly push propane prices higher. I strongly recommend filling your propane tanks now while summer pricing holds, and also locking in contracts for the coming winter. We will continue writing contracts through early September.

As always, if you have any questions, comments, or concerns, please don’t hesitate to reach out. Wishing you and your families a safe and enjoyable Labor Day weekend!

Best regards,

Jon Crawford

A Surprise Move Higher

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Crude oil prices managed to break a three-week losing streak, with WTI crude oil climbing nearly 4% last week from about $61 to $64 per barrel. The rebound happened even though worries about too much supply and slowing global demand continue to hang over the market.  A big reason for the move higher was renewed uncertainty in the Ukraine war. Hopes for peace talks faded as both Russia and Ukraine blamed each other for stalled negotiations. Russian airstrikes near the EU border and Ukrainian strikes on Russian oil facilities added fresh risk, which helped lift oil prices.  U.S. trade policy also had an impact on prices this past week. The Trump administration confirmed a new 25% tariff on Indian goods starting August 27. The move is meant to pressure India, which gets more than a third of its oil from Russia. As a result, Indian refiners have been pulling back on Russian barrels, leaving space for Chinese buyers to scoop them up.

On the demand side, China’s economy showed signs of slowing.  Factory surveys showed contraction, pointing to falling exports and weaker manufacturing. Markets were also disappointed when China’s central bank left lending rates unchanged instead of cutting to boost growth.  Oil also got support from U.S. data and supply news. The government’s weekly oil report showed much bigger-than-expected drops in crude and gasoline inventories, while refineries ran near full tilt. That news sent oil prices higher right away. On top of that, U.S. manufacturing activity jumped to its highest level in more than three years, pointing to stronger industrial demand for energy. The housing market also perked up, with more sales and cheaper mortgages hinting at more construction activity and higher diesel use.  The U.S. labor market, however, looked a little softer as more people filed for jobless claims. That raised some concern about demand, but it also increased expectations that the Federal Reserve might cut interest rates soon—something that generally gives oil prices a boost.

For now, the market is still being driven by headlines and hopes for stronger demand. But looking ahead, world oil production is expected to move into surplus later this year and into 2026. For many, that means it may be best to stay patient and wait.

Closer to home, BP’s Whiting refinery near Chicago was forced to shut down gasoline production after flood damage. Supplies were already tight heading into the end of summer, and gasoline prices jumped more than 30 cents per gallon in just two days. While reports suggest the refinery could restart next week, it will take some time for gasoline supplies to catch up. Expect pump prices on gasoline to stay higher as we head into Labor Day weekend. Diesel wasn’t directly affected by the outage, though prices are still inching up in line with crude oil.

Propane price also followed crude oil higher. Even though the EIA reported another build in U.S. propane inventories, overall stocks are still below where they were a year ago. With farm demand expected to be strong and the Farmers’ Almanac predicting a colder-than-normal winter, it’s still a smart move to top off propane tanks and lock in supply ahead of heating 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