Happy Friday!

This week’s big news was, of course, the U.S. Presidential Election, with Donald Trump emerging as the winner. Markets responded swiftly, pricing in what’s been termed the “Trump Trade.” Following the election, the stock market surged. While equities saw gains, crude oil prices remained relatively flat. Initial price support came from the potential for a hurricane in the Gulf, coupled with the anticipation of this week’s Federal Reserve meeting. However, as the hurricane threat subsided, crude prices began to decline as the “Trump Trade” took effect, with traders anticipating that Trump’s pro-oil stance might put downward pressure on crude prices.

Despite this, WTI crude prices held above the psychological support level of $70 per barrel. Along with China releasing continued poor economic data with weak stimulus, the Fed cut rates by another 25 basis points, and Chairman Powell stated he would not step down if requested by President Trump. Additionally, Trump is expected to exert significant pressure on Iran’s crude oil exports. Although Saudi Arabia could potentially fill any supply gaps, it’s unclear whether OPEC, alongside U.S. producers, would be interested in driving crude prices downward. As the dollar retreats from recent highs, crude oil becomes more expensive, which further supports prices. Should Trump successfully implement additional tax cuts and navigate the complexities of tariffs, American oil consumption could rise.

For these reasons, the “Trump Trade” has not pushed crude prices as low as some had anticipated. In fact, many traders predict that WTI will remain within the $70–$80 per barrel range throughout next year. I tend to agree; while the Trump administration may be “pro-oil,” this stance may not necessarily translate to lower crude prices.

In local news, the Chicago Spot Market has stabilized relative to the Group Spot market, and the harvest season is nearing completion without major disruptions. Prices traded steadily this week, so I do not expect significant changes at the pump in the coming days.

As for propane, it remains steady. Inventory levels are high, but any uptick in Chinese demand could lead to a surge in exports. Additionally, there’s caution surrounding the winter forecast, which suggests colder-than-average temperatures and above-average precipitation. For now, we enjoy the transition from autumn into the holiday season and await what the winter may bring.

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

Best regards,

Jon Crawford

Good morning!

Happy Friday! I hope that everyone had a safe and fun Halloween! Crude oil prices went on a wild ride this week, but again are looking to end where they started. Crude prices skyrocketed on Monday after Israel performed retaliatory strikes on Iran. After crude prices moved higher on potential supply disruptions in Iran, crude oil prices collapsed. In fact, crude oil prices fell the most in one day over the past six months! Israel only attacked military sites and not any nuclear or oil facilities in Iran. Therefore, the markets interpreted the retaliation as Israel not wanting to escalate the conflict any further. Rumors started floating that Israel was willing to consider a ceasefire in Gaza. However, Israel continued strikes in Gaza and Lebanon this week. But then in a head-fake, Iran announced today that they are planning a retaliation strike on Israel for the bombing of their military sites on Monday. The news pushed WTI crude price back over $70/barrel. In more geopolitical news, Russia is looking to send North Korean troops into battle in the Kursk region in Russia that Ukraine currently occupies. The potential for further escalation involving North Korea put more risk premium from the war in Ukraine back into the market. In world economic news, China’s economy seems to be rebounding. Economic analysts are now calling for increased crude oil demand in China. I have been writing about this for months! I said China would fix their economic problems. They are a huge economy with many tools in the box to spur growth. With only a week of positive economic news, the markets changed their next year outlook after six previous months of poor economic data! The US continues to be producing crude at a record pace and supply seems to be healthy. In addition, OPEC announced that they might kick the can down the road for increasing crude oil outputs. I was optimistic that Saudi Arabia would try and lead the charge to not increase production this month. At this point, OPEC is looking to review in January. Again, WTI crude oil price is stuck in a $5/barrel trading range. There is definitely some value in the market at these current prices. The “Election Trade” is a complete crapshoot and predictions are all over the map where crude prices go after November 5th. I am a bit more bullish on crude oil prices moving forward due to continued loss of refineries. Crude supply is healthy, but refineries are continuing to shut down even as new ones come online. At the current rate, refining capacity looks to possibly decline in the coming year. Therefore, regardless of crude oil price, low refining capacity will prop up gasoline and diesel prices.

In local news, the Chicago spot market is experiencing some supply tightness as harvest cleans up. Our neighbors in the Group are experiencing lower diesel prices due to being ahead with their harvest. I expect Chicago spot prices for diesel to fall back below the Group by the end of November. Gasoline prices continue to trade in a narrow range along with the price of crude. I do not expect to see any major changes on the the retail price of gasoline and diesel next week.

Propane prices are starting to move higher even though supply is very robust. The potential for further exports and production cuts in the coming months is possible if crude oil prices move lower. In addition, the weather is looking to spur early winter heating demand. We are already getting to the point where contract price and spot price are about the same. Again, if you are not contracted for the heated season, I recommend filling your tank and contracting at least some of your heating needs for the season to protect from potential basis blowouts.

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

Happy Friday!

This week’s crude oil trade was largely influenced by geopolitical news, although the trading itself was relatively uneventful. Crude oil prices fluctuated within a narrow range, with WTI briefly dipping below $70 per barrel before recovering to end the week at a fairly flat level. Despite continued disappointing economic data and stimulus efforts from China, both the IEA and OPEC have issued projections for increased oil demand in China, creating a mix of perspectives on China’s future economic health. Headlines continue to lean bullish for crude oil demand, even as some traders predict a slower year in 2025. Global geopolitical tensions have provided price support and established a solid price floor for crude oil.

Among this week’s key developments, there was an attempted attack on Israeli Prime Minister Netanyahu’s home, prompting Israel to intensify its strikes in Lebanon and Gaza. Israel is now considering more aggressive actions against Iran in response. Additionally, reports emerged indicating that Russia has supported Houthi attacks in the Red Sea, and North Korean troops have reportedly entered Russia, with many speculating that they may join the fighting in Ukraine. If North Korean forces are drawn into the Ukraine conflict, this would represent one of the highest levels of escalation since the war began. Meanwhile, domestic inventories of crude oil and refined products have remained stable, even with peak harvest season underway. Overall, crude oil prices traded within a narrow band this week and are likely to end the week relatively unchanged.

In the Chicago market, the diesel spot basis has realigned with the Group market, providing some price relief for diesel despite strong demand from the harvest season. Gasoline spot prices also maintained their lower differential compared to the Group. I anticipate that diesel retail prices may dip slightly, while gasoline retail prices should remain steady.

Propane inventories saw a decline last week as crop drying demand ramped up. However, propane prices have held steady overall. If you haven’t yet secured a propane contract for the winter, I recommend contracting at least a portion of your expected usage. For those without contracts, it’s a good time to consider filling your tank.

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

Best regards,

Jon Crawford

Good morning! Our phones are back up and running. We are so sorry for the inconvenience.

– Jon

Happy Monday! Our servers crashed this morning. We hope to have services back up tomorrow. If possible, please share on social media to help spread the word. Thank you!  You can place orders at www.crawfordoilandpropane.com 

Good morning,

Happy Friday!

Crude oil prices took a significant hit this week. Over the weekend, Israel reportedly announced they would not be attacking Iranian oil infrastructure, deflating the potential supply shock that had caused last week’s price surge. At the same time, weak Chinese economic data continues to drag down market sentiment. Despite stimulus packages targeting housing and economic recovery, markets remain unconvinced that China will bounce back anytime soon. Chinese factory output continues to decline, and imports of refined products have reached a 15-month low. Refinery runs, particularly on diesel, are also decreasing. Moreover, China has missed its 5% GDP growth target for six consecutive quarters. Given China’s role as one of the world’s largest oil consumers, traders are now flipping their positions on crude oil futures.

Adding to the bearish outlook, OPEC has reversed its position on future oil demand, now forecasting that peak oil demand could arrive as early as 2030. This, combined with the International Energy Agency’s (IEA) similar projections, sent shockwaves through day trading, pushing WTI crude oil prices below the critical psychological floor of $70 per barrel. Even though the EIA reported draws in U.S. crude, gasoline, and distillate inventories, the broader global bearish sentiment overpowered any potential bullish news from the U.S. With Middle East tensions easing, discussions of peak oil demand gaining traction, and China’s continued economic downturn, crude oil prices are struggling to find firm support.

In local news, the Chicago spot basis for gasoline has returned to normal levels, with gasoline spot prices holding lower relative to the NYMEX. I expect these lower retail gasoline prices to hold or potentially decline into next week. On the diesel front, the Chicago spot basis remains in sync with the NYMEX, but supplies are strong. Current data indicates that the Chicago market has enough diesel supply to meet harvest demand in the coming weeks, so I don’t foresee significant changes in diesel retail prices in the near term.

Propane inventories remain at record highs nationwide, but forecasts for a colder-than-normal winter are keeping prices relatively stable. The good news is that with such high inventory levels, even a harsh winter will be manageable in terms of supply. If you haven’t topped off your propane tank yet, I still recommend doing so. We are also still offering propane contracts for the coming winter, and I suggest contracting at least some of your heating needs. Propane prices tend to spike at least once every winter, and locking in now could protect you from paying higher prices during those periods.

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

Best regards,

Jon Crawford

Good morning,

Happy Friday! This week has been a roller coaster for crude oil prices. WTI crude is holding steady near $75 per barrel after a week of extreme price swings, including a $3 per barrel spike in one day. Prices fluctuated dramatically throughout the week, driven by a barrage of conflicting information that left traders scrambling. By Friday, the market seemed to take a breather, with traders digesting the week’s events. China introduced additional economic stimulus, but markets largely dismissed it as insufficient, leading to a drop in crude prices. Then, Israel abruptly canceled a meeting with the U.S. to discuss a potential military response to Iran, heightening geopolitical tensions. While Israeli Prime Minister Netanyahu did meet with President Biden, many believe Israel is preparing to target Iran’s oil infrastructure. Meanwhile, Ukraine launched more attacks on Russia’s oil infrastructure. In the U.S., inflation showed signs of cooling, though not enough to calm concerns. The minutes from the latest Federal Reserve meeting revealed that several Fed Board members were against the aggressive half-point rate cut, adding further uncertainty. This instability in Fed monetary policy sent crude oil on a wild ride. To complicate matters further, Hurricane Milton pummeled Florida, following closely on the heels of Hurricane Helene. Despite all this volatility, demand for crude oil remains strong, as indicated by the latest EIA inventory report. Some traders are beginning to anticipate a scenario where stagflation develops, but still drives economic spending, which could increase crude oil demand. However, the biggest issue on the horizon for crude prices is the potential conflict between Israel and Iran. Should Israel target Iran’s oil supply, we could see up to a $20 per barrel price shock until Saudi Arabia can ramp up production to offset the supply shortfall.

In local news, the Chicago Spot Market mirrored the volatility of the NYMEX. The Chicago basis fluctuated wildly as harvest demand picked up, refinery maintenance updates were announced, and the potential supply crunch from Hurricane Milton was assessed. However, by the end of the week, diesel and gasoline prices returned to where they started. Supply levels in the Midwest appear healthy, and as of now, I don’t foresee a significant spike in refined fuel costs related to harvest demand. Barring an escalation in the Israel-Iran situation, I do not expect major changes in retail prices over the coming week.

Propane inventories remain at record highs, but forecasts for a colder winter continue to roll in. I continue to strongly recommend topping off your propane tank and locking in some of your winter usage now to protect against a potential price spike this winter.

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

Best regards,

Jon Crawford

Good morning,

Happy Friday! This week’s news cycle rattled the oil markets, causing a selloff that pushed WTI crude oil prices back below $70 per barrel, with prices expected to close the week at a loss. Several factors contributed to the downward pressure on prices. Firstly, Chinese demand remains weak, and despite China announcing a series of economic stimulus plans to reinvigorate its economy, global markets, including commodities, remained skeptical. Many traders believe these measures are insufficient and too late to make a significant impact.

Additionally, Libya announced an agreement between the government and militant groups to restore 700,000 barrels per day of crude oil production, adding further bearish pressure to the market. The biggest surprise, however, came from Saudi Arabia, which announced that it would abandon its push to drive crude oil prices to $100 per barrel. Instead, Saudi Arabia plans to increase production in December to compete for market share. This announcement triggered a sharp decline in crude oil prices. Historically, Saudi Arabia’s strategy of increasing production to gain market share has led to significant price drops—by as much as 25% in the past. However, the kingdom did not provide any new price target, leaving the market uncertain about future pricing dynamics.

Despite these developments, I believe that crude oil prices will stabilize above $70 per barrel going into next year. Other OPEC+ members and even U.S. producers are unlikely to allow prices to collapse. In my view, $70 per barrel represents a sustainable operational price. I also anticipate that Chinese demand will recover next year, with global demand remaining steady. While the threat of oversupply persists, I believe the market has already priced this in, which means crude oil is currently oversold.

On the geopolitical front, several major events could trigger a sudden price spike. Ukraine may launch deeper attacks into Russian territory, Israel is preparing for an offensive against Hezbollah in Lebanon—the first since 2006—and China recently tested an intercontinental missile near Japan. If any of these situations escalate, the potential for a sharp increase in crude oil prices remains high.

In local markets, the Chicago spot market continues to face significant product shortages, as does the Group market. As a result, spot prices have surged compared to the Nymex benchmark. Both gasoline and diesel are trading at a premium due to several factors: Midwest refineries are offline for maintenance, demand is increasing with the harvest season, and Hurricane Helene is putting pressure on Chicago and Group markets to ship refined products they don’t currently have to the Gulf Coast. I expect retail gasoline and diesel prices to rise at the pump, and we could see elevated prices for the next couple of months until refining capacity returns to normal.

While propane prices remain relatively soft, I believe this will be short-lived. Hurricane Helene temporarily halted both exports and production, balancing supply and demand dynamics. NGL has also announced that it will take its export terminal offline for maintenance, though this will only be a brief disruption. As demand picks up east of the Rockies, particularly with corn drying and eventually home heating, I expect propane prices to recover.

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