Tag Archives: Pardeeville

Prices Fell Like Rock In Water

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Good morning!

Happy Friday! WTI crude oil prices posted their sharpest weekly decline since late June, falling from almost $68 to $64 per barrel over the past five days. The sell-off was driven almost entirely by geopolitical and supply-side developments that shifted market sentiment firmly into bearish territory.  The primary catalyst was news of an imminent Trump–Putin meeting aimed at ending the war in Ukraine. Reports on Friday suggested that the U.S. may consider recognizing some Russian territorial gains as part of a peace framework. This perceived diplomatic progress reduced fears of near-term supply disruptions, prompting traders to unwind risk premiums.  At the same time, President Trump escalated his sanctions strategy, imposing an additional 25% tariff on Indian goods in response to its Russian crude purchases, and warning of 100% secondary tariffs on all countries continuing to buy Russian oil. While such measures may reshape global trade flows over time, in the short term a peace deal and tariffs reinforced expectations of stable to increasing supply of crude oil in the marketplace.  On the global production side, OPEC+ announced a further 547,000 barrels per day increase for September—its fourth consecutive monthly hike since April—fully reversing 2.2 million bpd of earlier voluntary cuts. Adding to the pressure, the IEA updated its forecast for 2025, projecting global oil supply growth of 2.1 million bpd, roughly triple the anticipated demand growth of 700,000 bpd. This widening supply–demand imbalance fueled further concerns of crude oil oversupply into year-end.

U.S. economic data compounded the downward pressure. The July jobs report delivered a significant miss, with only 73,000 jobs added versus expectations of 100,000–115,000. Previous months were revised sharply lower, and unemployment edged up to 4.2%. The soft labor data reinforced concerns about slowing fuel demand, outweighing the supportive impact of a larger-than-expected 3 million barrel draw in U.S. crude inventories. Refinery utilization remained strong at 96%, but economic jitters in the US dominated trading psychology.

Overall, geopolitical events, global supply issues, US economic data all supported lower crude oil prices, hence the sharp decline in crude oil price over the past five days.  Considering the dramatic decline, we will probably experience a floor in prices starting next week based on historical price movements.

The Chicago spot market tracked WTI’s decline, with gasoline and diesel prices easing from recent highs. Price movements over the past few days were modestly volatile but largely in line with Group spot trends, signaling balanced supply conditions. Retail prices for both fuels remain widely spread due to the speed of the wholesale price drop, but declines at the pump are expected in higher-priced markets.

Propane spot prices remained soft, supporting favorable summer fill retail prices. Although futures have yet to breach earlier-year lows, inventories are now below last year’s levels—a notable shift from just last month when stocks were above both last year’s figures and the five-year average. This slow but steady draw is helping to keep forward pricing in check. Given current conditions, topping off tanks now and locking in winter gallons is strongly recommended.

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

Best regards,

Jon Crawford

Friday Retreat

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Happy Friday!

Crude oil prices increased all week until Friday.  WTI crude oil price closed the week ending August 1, 2025 around $67/barrel.  Friday was a retreat from the week high of $70/barrel.  On Friday, the jobs report was not great showing less than 100k jobs added in July and previous months all revised lower.  In addition, the unemployment rate ticked up slightly.  The announcement sent markets and crude oil prices dramatically lower.

The primary geopolitical catalyst for market unease this week stemmed from President Trump’s decision to accelerate his diplomatic timeline for ending Russia’s war in Ukraine. On July 28, Trump dramatically shortened his previous 50-day ultimatum to just 10–12 days, threatening 100% secondary tariffs on nations purchasing Russian oil. These aggressive measures injected fresh fears of global supply disruptions, particularly among large Russian oil buyers such as India and China. India, which sources roughly 35% of its crude from Russia, was hit with a new 25% tariff on its goods starting August 1, a move explicitly tied to its Russian energy trade.  In addition, OPEC+ continued its phased supply restoration, and is expected to announce the continued 548,000 bpd increase for September.  If OPEC continues with the proposed increases, the group’s plan to fully unwind its 2.2 million bpd of voluntary cuts by September will be achieved. The continued unwinding is interpreted as an effort to reclaim market share and test the resilience of U.S. shale producers—many of whom are already facing rising cost pressures and falling rig counts.

While geopolitical escalation spurred bullish sentiment, that was partially offset by concrete developments on the trade front. Over the weekend of July 27–28, the United States and European Union reached a landmark trade agreement that reduced looming tariffs on EU goods from 30% to 15%. In return, the EU committed to purchase $750 billion in U.S. energy products over the coming years. The deal helped lift crude prices, affirming U.S. export prospects and stabilizing broader energy trade flows.  Still, market participants remained cautious due to tariff deadlines targeting other major economies. While Trump granted Mexico a 90-day extension on certain trade terms, tariffs on energy, automobiles, and metals remained in place. The opaque nature of trade policy evolution contributed to demand uncertainty, further amplifying volatility in oil pricing.  Federal Reserve policy also loomed over the oil complex. The Fed held interest rates steady at 4.25%–4.50% for a fifth straight meeting, citing inflation and economic uncertainty linked to global trade disruptions. Fed Chair Jerome Powell reiterated that rate cuts were on the table but gave no timetable, injecting uncertainty into energy demand forecasts.

From a supply standpoint, U.S. production offered a mixed picture. After hitting a record 13.49 million barrels per day in May, domestic output hit another record of over 13.5 million bpd in July. This was surprising given weaker drilling activity, with active oil rigs dropping to 415 in July — down significantly from 482 a year prior. Along with record production this week, U.S. crude inventories posted a substantial build of 7.7 million barrels for the week ending July 25, contradicting analyst expectations of a 1.3-million-barrel draw. The increase was largely attributed to soft export levels, despite healthy refinery activity.  Refiners operated at 95.5% capacity, the highest in recent months, processing nearly 17 million bpd. Gasoline inventories dropped by 2.7 million barrels, driven by strong summer driving demand, but distillate stocks rose by 3.6 million barrels—well above forecasts—reflecting slower-than-expected industrial draws.  The U.S. gasoline market reflected seasonal strength, with large inventory draws indicating robust summer driving activity. And the build in distillate stocks was much needed as the US tries to refine it’s way out of a 20%+  year-over-year deficit.

In local news, the Chicago Spot market traded in tandem with crude oil prices.  Gasoline prices increased dramatically, but with the sell-off on Friday, we could see stability settling going into the weekend.  Therefore, we might now see gasoline retail prices at the pump change too much.  Diesel prices also moved in tandem with gasoline, however not as dramatically.  Again, with the deep sell-off on Friday, I don’t expect to see diesel retail prices at the pump move too much.

Propane prices held steady this week.  We are definitely at the low for the year.  I highly recommend filling up your tank at these prices.  Winter economics will kick in on October 1st and propane inventories are starting to not build as expected.  In addition, exports continue to be very robust.  Therefore, I’m starting to see some headwinds for future propane prices.  I recommend locking in some gallons for the upcoming season to protect yourself from market volatility this winter.

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

Tariffs and Diesel Disruption

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Good morning!

Happy Friday!  Crude oil markets traded within a narrow range during the week of July 21 to 25.  WTI crude finished the week down 3%, settling at around $66 per barrel.  While prices looked relatively steady, significant intraday volatility exposed deeper tensions building across both physical inventories and news headlines.

The biggest downward move came on July 22, when news broke that U.S.–EU trade negotiations had broken down. Fears of a potential 30% tariff resurfaced, rattling markets and sending WTI sharply lower. By the end of the week, sentiment rebounded somewhat as reports emerged of a tentative 15% baseline tariff agreement, alongside news of a landmark U.S.–Japan trade accord. These developments helped ease investor nerves and lent some support to crude prices. Still, the market stayed highly sensitive to trade headlines, and it’s clear policy risk continues to set the tone for oil price movement in the near term.

International dynamics added even more complexity this week.  In Europe, sanctions policy took center stage. The EU passed another sanction package on Russian crude oil and refined products.  Although the sanctions were designed to put pressure on Russian revenues, these measures had an immediate impact driving up the cost of diesel in Europe.  In addition to European sanctions, OPEC+ restored 400k barrels per day of crude in July and signaled plans to add 550k barrels per day in August. Those volumes, however, were largely absorbed by an imbalance in diesel inventory.  At the same time, the IEA revised its 2025 forecast for Chinese oil demand growth sharply downward, cutting expectations to just 80k barrels per day. That downgrade reinforced a growing sense that Asia’s largest consumer is nearing a plateau in oil consumption.

U.S. market fundamentals were tighter. Commercial crude inventories fell by 3.2M barrels, pushing stocks 9% below the five-year seasonal average.  And U.S. total liquids output reached a record 20.8M barrels per day. And drilling activity held steady, with only a minor decline in active rigs.  Demand trends painted a mixed picture. U.S. gasoline consumption was soft, averaging 9.5M barrels per day, down over 700k barrels from the same period last year. On the diesel side, things looked very different. While weekly implied demand appeared modest, monthly data showed that April usage ran nearly 5% above weekly estimates suggesting underlying freight and industrial demand remained solid. Inventories rose by 2.9M barrels, but still sat 19% below seasonal norms, which helped keep ULSD futures strong and widened the premium over gasoline.

In short, the crude market this week was more about refined-product tightness and geopolitical noise than about physical crude balances. WTI closed modestly lower, but the diesel market saw continued tightening.  Looking ahead, the market will be watching closely to see if OPEC+’s planned August supply increase can help offset diesel shortages, whether EU sanctions enforcement holds up, and if U.S. gasoline demand finds some legs.  Until we see a sharp downturn in global demand, diesel strength should continue to offer support for crude prices in the near term.

In local markets, gasoline and diesel prices continued to fall in the Chicago Spot market as refinery crack spread prices collapsed.  I believe we have peaked in price for the summer season as long as crude oil prices remain steady.  However, on Friday, the prompt spot month for Chicago changed to the September contract causing some basis support.  Therefore, I don’t expect to see much movement of retail prices on both gasoline and diesel in the coming days.

Propane inventories experienced a surprise draw this past week.  The announcement put an immediate floor on spot propane prices.  Summer fill prices are at the lowest price of the year and the same as last summer.  I highly recommend topping off your propane tank and locking in some gallons for the upcoming winter.

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

Best regards,

Jon Crawford

 

Continued Volatility Is The Name Of The Game

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Happy Friday!

Crude oil prices saw a modest increase this week, despite a market still dealing with a lot of uncertainty on both the supply and demand sides. The week started with serious supply disruptions in Iraqi Kurdistan, where drone attacks reportedly tied to Iran-backed militias knocked out nearly half of the region’s production for four consecutive days.  At the same time, the European Union rolled out its 18th round of sanctions against Russia. But enforcement is still questionable, and so far, these actions haven’t had the teeth to seriously dent Russia’s export ability. Meanwhile, President Trump threw in another wrinkle by giving Russia a 50-day deadline to resolve the war in Ukraine, threatening secondary sanctions on countries still buying Russian oil if a peace deal isn’t reached. The deadline gave the market some breathing room short-term, but traders are still uneasy over what could come next.

On the demand side, China reported a slowdown in economic growth in Q2, and the outlook for the second half isn’t looking too hot. Exports are dropping and consumer confidence is shaky. Since China makes up over 16% of global crude demand, their slowdown directly affects how oil trades. The concern is that even if supply tightens, slowing Chinese demand could soften prices, especially in the back half of the year.  Tariffs continue to be a wildcard. The administration announced new 25% tariffs on imports from Japan and South Korea, with more likely on the way for Canada, Mexico, and the EU. Energy products will most likely be excluded, but the uncertainty around broader global growth and trade relationships continues to hang over the market.  OPEC’s long-term view is that demand will keep climbing through 2050, with projections hitting 123 million barrels per day. The IEA doesn’t share the same opinions, calling for demand to slow and only hit around 104.4 million barrels per day next year. The difference in these forecasts continues to divide the industry on where we’re really headed.  Fuel consumption in the United States remains strong, especially in aviation and diesel. With summer driving season in full swing, demand is supporting higher gasoline consumption as well as higher global crude oil consumption.  In addition, drilling activities in the US are slowing down, supporting higher prices.

All-in-all, crude oil prices seem to be finding some support to move higher.  Diesel prices are climbing at a higher rate than gasoline.  My hope is that as summer demand decreases, we start to see inventory builds in diesel causing lower prices and higher supply going into the harvest season.

In local news, Chicago spot prices of gasoline continue to be weak in-line with other spot markets.  Even though demand for gasoline has been decent, supplies are outweighing demand keeping prices in check.   I don’t expect to see much movement on gasoline retail prices at the pump.  Diesel prices continue to whipsaw 20 cents back and forth.  Diesel prices are very volatile.  Prices were pushing back to recent lows and then climbed right back up.  I expect to see diesel retail prices at the pump to have high spreads depending on when retailers purchased fuel.

Propane spot prices fell this week due to another surprise massive build in inventory.  I truly believed that propane prices had found a floor.  Due to recent activity, we might see our retail price move lower.  I am stunned at the arbitrage between propane price and crude oil price.  I highly recommend taking advantage of the recent prices and contracting some heating gallons for the next 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

The Tariffs Have Returned

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Happy Friday!

I hope everyone had a great 4th of July weekend!  Crude oil prices saw moderate volatility between July 7 and July 11, ultimately rising 1.8% over the period. WTI began the week at $67.93 per barrel and closed at $68.45. That small net gain masked a week full of major market-moving headlines—ranging from OPEC+ supply shifts and renewed conflict in the Red Sea to fresh trade policy curveballs out of Washington and mixed demand signals globally.

On the supply side, the biggest news came from OPEC+. On July 5, eight member countries agreed to accelerate their production increases, committing to add 548,000 barrels per day in August—well above the previously expected 411,000 barrels per day. This marked a notable shift from the group’s earlier monthly hikes of 411,000 barrels per day in May, June, and July. OPEC+ framed the decision as a response to what it called a “steady global economic outlook and current healthy market fundamentals,” pointing to low oil inventories as justification. With this move, the coalition has restored 1.918 million barrels per day of the 2.2 million barrels originally withheld in voluntary cuts. That leaves just 280,000 barrels per day left to bring back online.

Geopolitical tensions also flared back into focus, with the first Red Sea shipping attacks since late 2024. Iran-backed Houthi militants in Yemen launched two major assaults. The Liberian-flagged Magic Seas was hit by drones, missiles, gunfire, and explosive-laden boats—ultimately sinking after its crew was evacuated to Djibouti. Another Liberian-flagged vessel, the Eternity C, was targeted over two days with drones and missiles, also sinking. Tragically, three crew members were killed and several others remain missing. The U.S. Embassy in Yemen accused the Houthis of kidnapping survivors. These incidents marked a renewed effort by the Houthis to disrupt global trade in retaliation for Israeli actions in Gaza. Given the Red Sea’s role in transporting roughly $1 trillion worth of goods annually, the attacks pushed a fresh geopolitical risk premium into oil prices.

Meanwhile, U.S. trade policy once again stirred market uncertainty. On July 7, President Trump announced a three-week delay in the implementation of new tariff rates, pushing the start date from July 9 to August 1. But the delay came alongside more aggressive measures: reciprocal tariffs between 15% and 46% on a wide range of countries, a 50% tariff on copper imports announced July 9, and new threats of additional tariffs on BRICS nations and other trade partners including Canada. These developments reignited worries about global growth and added another layer of volatility to the oil market.

The Energy Information Administration (EIA) also trimmed its 2025 oil production forecast, lowering it from 13.42 to 13.37 million barrels per day. The revision reflected softer oil prices, declining drilling activity, and mounting uncertainty tied to tariffs and rising OPEC+ output. Still, U.S. production remains on track to hit a record high this year, having already reached 13.4 million barrels per day in the second quarter.  Crude inventories in the U.S. posted a surprise build, rising by 7.07 million barrels—the largest increase since January. The size of the build caught markets off guard and added downward pressure to prices, signaling that supply was again outpacing demand despite peak summer driving season.  All told, it was an action-packed week. Looking ahead, until the trade policy picture becomes clearer, I expect continued volatility in oil markets.

In local markets, Chicago spot diesel price finally collapsed after a sharp runup. It looks like the earlier supply constraints have been resolved. I expect to see retail diesel prices trend lower next week. Gasoline demand, however, remains strong as we sit at peak summer consumption levels. That’s pushed gasoline prices up slightly.  I expect prices at the pump to hold steady around current levels for now.

Propane prices dipped a bit this week. Fundamentals remain weak due to strong national inventories running above the 5-year average.  And unless we get a very cold winter, the U.S. is well supplied. That said, we still recommend contracting some propane for the upcoming heating season—prices are currently in line with last year, and prompt-month values look to be at their lowest point for the year. If you can top off your tank by the end of August, now’s a good time to do it.

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 4th of July!

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Good morning!

I just wanted to take a quick moment and wish everyone a safe and happy 4th of July!  It’s going to be a hot one!  🙂  Also, I wanted to thank all our customers for thier business through the first half of the year!  Hard to believe that 2025 is half over!

I’m going to keep the update short and sweet.  Markets are always a bit wonky the week of holidays as traders take time off causing low liquidity.  Crude prices have been trading between $65-67/barrel.  Tariffs are getting worked out, the US economy looks good, but the dollar is losing value.  All of the these events are supporting crude oil prices.  However, OPEC meets over the weekend and expectations are for increased exports.  So far oversupply of crude oil in the world market seems to be keeping a lid on oil prices.  After the holiday weekend we will have a better idea of where things are heading.

Gasoline prices held this week so I don’t expect too many changes at the pump for the travel weekend.  However, diesel prices again jumped another 20+ cents/gallon this week on tight supplies.  Diesel inventories continue to be constrained.  I believe diesel prices will continue to be volatile throughout the next month or so.  Propane prices are holding steady with healthy inventories.  I still recommend topping off your tank this summer and contracting some gallons for the upcoming heating season.

Again, I hope everyone has a safe and happy 4th of July, and I will explore the markets in more detail next week after traders return to their desks.

Best regards,

Jon Crawford

Two Week Roller Coaster

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Happy Friday!  Over the past two weeks, crude oil and refined product prices went through one of the wildest stretches in recent memory. The biggest market-moving event was the outbreak of war between Israel and Iran. In just twelve trading days, the oil market priced in what felt like a year’s worth of geopolitical risk.  WTI crude oil price surged from $66/barrel on June 9th to $76/barrel by the close on June 20th, a staggering 15% gain—only to give it all back by June 27th! The price swing marked the most volatile move in nearly a decade.  The geopolitical rollercoaster started on June 13, when Israel launched airstrikes on Iranian nuclear facilities. WTI spiked 7% that day, settling at $74/barrel as traders scrambled trying to price in the risk of disruption in the Strait of Hormuz. That weekend, the situation escalated further when the United States joined the fight, targeting additional Iranian sites in Fordo, Natanz, and Isfahan. Futures opened 2 to 3% higher on Sunday night in response. But on June 23rd, President Trump announced a ceasefire brokered between Israel and Iran. Prices reversed sharply, with WTI falling 6% to $69 per barrel. In addition, Trump announced that China could continue to purchase Iranian oil pushing WTI price below $65/barrel.  The roller coaster ride reminded us once again, that geopolitical risk premium can appear—and disappear—almost overnight.

While markets were absorbing Israel/Iran headlines, traders were also anticipating pre-announced OPEC+ supply increases. The group had already scheduled 411,000 barrels per day in monthly hikes from April through June, part of the second phase in unwinding 2.2 million barrels per day of voluntary cuts. But traders largely shrugged off the supply-side developments, with compliance looking uneven and demand into mid-year still uncertain. Saudi and Russian officials, however, hinted that the July 6th meeting could lead to a pause—or even a reversal—of the August increment if prices softened. That signaling helped put a modest floor on WTI around $65/barrel.

In the United States, fundamentals tightened again. Commercial crude inventories fell by 11.5 million barrels in the week ending June 13 and another 5.8 million barrels the following week. That brought the total US crude oil stocks to about 11% below the five-year average. Refinery utilization surged to 94.7%, the highest level since July 2024, as plants pushed hard to meet summer-grade gasoline demand. Finished motor gasoline consumption hit 9.7 million barrels per day—a three-year high—driven by early summer travel and lower retail prices compared to 2022 and 2023. Meanwhile, distillate inventories dropped by 4.1 million barrels and are now sitting 20% below the five-year norm, keeping diesel spreads firm despite ongoing weakness in economic data.

Overall, the past two weeks displayed how volatile crude oil prices trade when conflict arises in the Middle East.  And again, there is always the reminder of looking at the 20k foot view when these events occur.  When looking above and ahead, not much really changed across the globe in terms of supply/demand.  Therefore, when these geopolitical events occur, it’s best to be patient before making any permanent decisions.  I expect Iran to not attack the Strait of Hormuz since they need the Strait to move their own products.  Therefore, as long as a ceasefire continues, the Middle East war premium seems to be back on the sidelines.  I expect to see WTI trade in a narrow range around $65/barrel until some supply/demand fundamentals are worked out.  Again, my advice is to be patient and play the cost-average game for the remainder of the year.

In local news, the Chicago Spot Market moved to trading the July contract this week without much fanfare.  The contract pricing fundamentals show that supply is predicting to be steady.  Diesel prices jumped nearly 35 cents per gallon and dropped right back down, along with gasoline prices: absolutely bananas!  I don’t know what to expect at the pump for retail prices.  Everything depends on when stations purchased fuel.  The volatility of spot pricing usually takes about a week to flush through the retail system, so I would expect erratic pump prices over the next few days.

Propane prices were not too affected by the roller coaster.  However, I do not expect to see summer prices fall unless we experience a significant pull-back in crude oil price.  The next season’s heating contracts have been released and the prices are the same as last year.  There is great value in contracting for the upcoming year.  I always recommend locking in at least some of your predicted heating consumption for the winter.  And if you have room in your tank, I also highly recommend topping your tank off these current rates.

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

Where Do We Go From Here

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Good morning!

Happy Friday the 13th.  Crude oil markets saw one of the most volatile weeks in years following a major military escalation in the Middle East. In the early hours of June 13, Israel launched its largest attack on Iran since the Iran-Iraq War, codenamed “Operation Rising Lion.” The operation involved over 200 aircraft dropping more than 330 munitions across roughly 100 targets throughout Iran. The strikes focused on nuclear facilities, key military infrastructure, and high-level leadership sites. Reports confirmed that various nuclear enrichment locations, air defense systems, IRGC headquarters, and several military leaders and nuclear scientists were all targeted and hit.  Iran wasted no time in responding, launching more than 100 drones toward Israel. Supreme Leader Ayatollah Ali Khamenei issued a stern warning that Israel would face a “bitter and painful” response. Despite the intense military exchange, Iranian state media announced that oil production and operations remained unaffected. The country’s largest refinery, the 700,000 barrel-per-day Abadan plant, reportedly continued running at full capacity without disruption.  The timing of the Israeli operation is especially notable, coming just days ahead of planned nuclear negotiations between the U.S. and Iran in Oman. Two U.S. officials said the Trump administration had told Israel that any strike would be a “solo mission” and that the U.S. would not provide direct military support. Following the attacks, Trump issued a strong warning to Iran, stating that if another wave of Israeli strikes occurred, they would be “even more brutal,” and he encouraged Iran to strike a deal “before there is nothing left.”

The impact on oil markets was immediate. Brent crude surged as much as 13% in early trading, briefly topping $78 per barrel, while WTI jumped over 8%, hitting $73.61 per barrel. This was the largest single-day percentage gain in years. Analysts attributed the spike to both immediate supply concerns and broader fears of escalation across the region. The Middle East is responsible for roughly one-third of global oil production, and markets are on edge over any threat to the Strait of Hormuz, where nearly 20% of the world’s crude oil is transported. If Iran were to block the Strait, many analysts predict oil could surge past $100 per barrel. That said, both Saudi Arabia and the UAE have significant spare capacity and could offset a shortfall in Iranian exports relatively quickly, within about 30 days.

Amid all of this, trade talks between the U.S. and China continued to move in a positive direction. The two countries reached a major trade framework agreement after meetings in London on June 9 and 10. This follows earlier progress made in Geneva last month. One of the key items addressed was China’s export of rare earth minerals and magnets to the U.S., a topic that has been front and center in negotiations. The announcement of the deal helped support oil prices earlier in the week, and the U.S. continues to push forward with trade discussions with the UK, India, Japan, and the EU.

However, not all news this week was bullish for crude oil prices.  Another factor that played into oil price movements this week was the strength of the U.S. dollar. A strong dollar usually keeps oil prices lower, and this week was no exception. A better-than-expected 30-year treasury auction drove traders into the dollar as a safe haven amid mounting geopolitical risk. This helped limit the upside for crude prices before the Israel-Iran situation unfolded.

Meanwhile, the domestic supply situation in the U.S. remains a bit bullish. The EIA reported another drawdown of 1.7 million barrels from crude oil inventories. Diesel remains a little tight, with inventories still sitting at 17% below the five-year average.  However, I am not concerned about major supply disruptions as we move through summer and into the harvest season.  Although supply logistics will be an issue in the fall, we will still be able to handle harvest.

With so much news this week, I think it’s important to take a step back and look at the bigger picture. Yes, we saw a big move in crude oil prices, and yes, geopolitical risk is very real. But when we strip it all down, the fundamentals of supply and demand still remain fairly balanced. There is enough crude oil in the world to meet demand, and while shipping disruptions could happen, they should likely be short-lived. I believe this price surge is temporary, and unless there is another major escalation, we’ll see WTI settle back into the $60–$65 per barrel range.

In local markets, the Chicago spot market continues to be well supplied and is trading below the Group, offering great value for our customers. Gasoline prices have stayed fairly stable, but diesel prices have been climbing due to tighter inventories and the recent jump in crude oil price. With the spike in oil today, I expect to see both diesel and gasoline prices at the pump move higher in the coming days.

Propane is also being impacted by the increase in oil price, although the price rise has been modest so far. We are doing our best to hold current retail prices. With crude oil running hot right now, I strongly recommend filling up your propane tank at the current rate. We also encourage customers to contract gallons now for the upcoming winter season. Contracts are available and offer excellent value considering the current environment.

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

Best regards,

Jon Crawford

A Little Boring Last Week

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Happy Monday!

I ran out of time last week to send out a quick update, however, not much happened in the world of crude oil.  Last week crude oil markets were driven by global trade negotiations and wildfires in Canada.  WTI price continues to hold a strong floor at $60/barrel.  On June 5th, Trump and Xi Jinping were reported to have a positive discussion on resolving the trade war between both countries.  Crude oil markets were well supported due to potential increased consumption in both the U.S. and China.  Although OPEC has reported to increase production by 400k barrels per day, wildfires in Canada have shut down about 400k barrels per day of production.  Therefore, the markets are currently experiencing a bit of an offset to the OPEC production increases.  The EIA reported another draw of crude oil stockpiles.  The past week inventories fell by 4.3M barrels.  Currently, the U.S. inventories are 7% below the five-year average.  Therefore, although the potential for an oversupplied market are in the cards, for now other

In local markets, the Chicago spot market continues to be volatile as predictions for summer demand season differ.  In addition, supplies are tight in various markets.  However, gasoline prices continue to fall.  As you have noticed, retail prices of gasoline continue to drop.  However, diesel prices continue to trade volatile, but very narrow.  Therefore I don’t expect to see much change of on retail diesel prices.

Propane prices are also holding very steady.  I do not expect to see any movement on propane retail prices unless crude oil prices fall hard below $60/barrel.  I suggest that everyone tops off their propane tank at the current prices and contract some gallons for the upcoming heating season.

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

Best regards,

Jon Crawford

A Little Topsy-Turvy

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Good morning!

Happy Friday! Crude oil prices are closing out the final week of May in a bit of a slide, with traders trying to make sense of a whirlwind of geopolitical events, supply shifts, and the ever-changing outlook for global demand. While some of the news out there could push prices up, we’re seeing more downward pressure—at least for now.  One of the big drivers this week was chatter around OPEC+ hinting at a larger production increase starting in July. The increase, possibly over 400,000 barrels per day, would come sooner than expected and, if finalized, would be a major step toward rolling back pandemic-era cuts. The market responded fast—just the idea of more barrels coming into play was enough to send prices lower.  Globally, we saw a split in demand forecasts. The International Energy Agency is calling for demand to hit 104 million barrels per day in 2025, while OPEC is still expecting closer to 105 million. That gap in outlooks is making traders second-guess where prices might head next.

At the same time, the U.S. tossed another curveball into the mix. Early in the week, we saw prices climb briefly after a trade court ruled that some Trump-era tariffs were illegal. But that bounce didn’t last long. A federal appeals court stepped in and put the tariffs back in place—at least for now—reigniting market worries and pulling prices down more than one percent in a single day. The uncertainty around trade policy continues to rattle investors and oil markets alike.  Looking at domestic numbers, crude oil fundamentals in the U.S. remained fairly strong. The EIA reported a 2.8 million barrel draw in commercial inventories, bringing the total down to about 440 million barrels, which is six percent below the five-year average. Production is holding up, with the four-week average running at just over 13.3 million barrels per day—well above where we were this time last year. Refiners are still busy, although we saw a slight dip in utilization, now just above 90 percent. Imports bumped up to 6.4 million barrels per day, but on average are still running more than ten percent below 2024 levels. Exports are holding steady too, sitting just over 4.3 million barrels per day, keeping the U.S. in its role as a major supplier to the world.

China added some weight to the bearish outlook this week. A new forecast from CNPC has China’s oil demand peaking in 2025, a full five years earlier than previous estimates. This change is driven by the country’s shift toward electric vehicles and other clean energy sources. They’re expecting demand to top out at 770 million tons this year, before falling steadily over the coming decades. The long-term implications are huge—not just for oil demand in China, but for the entire global energy landscape.

Despite all that, gasoline and diesel numbers offered a little relief. Gasoline inventories dropped by 2.4 million barrels and are now about three percent below normal. Production was strong at 9.8 million barrels per day, and demand looked healthy with supplied product just over 9 million barrels. Diesel and heating oil also showed signs of tightening. Inventories fell again and are now 17 percent below the five-year average. Demand was strong here too, with a four-week average just under 3.7 million barrels per day—still being driven by industrial and ag sectors.

All in all, the past week in crude markets was marked by a balancing act. On one side, you’ve got decent domestic demand and falling inventories helping to keep things steady. On the other, you’ve got rising global production, mixed demand forecasts, and a huge amount of trade and policy uncertainty dragging things down. As we move into June, eyes will stay focused on OPEC’s production decisions, how the U.S. handles its trade policy, and what kind of ripple effects come from the global energy transition.

In local news, as crude oil prices dropped, the Chicago spot market experienced a decline in refined prices as well.  The current contract-trading month moved to July this past week and the spot market moved lower.  The price signal lower on out months means that the Chicago spot market is possibly oversupplied going into high demand season.  Or the markets are predicting weaker demand this summer.  I expect to see prices of both gasoline and diesel drop at the pump in the coming week.

Propane prices continue to trade very narrowly.  Conway propane storage is not building at a fast enough rate to push inventories above the 10-year average for this time of year.  Although there is weakness with crude oil prices, I don’t expect to see propane spot prices drop hard during the summer.  I would recommend topping off your tank by September if you can and contracting some propane for the upcoming heating season.  Our contracts are out, and you can call the office today to sign up!

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