OPEC to Continue Monitoring the Market
With tensions simmering in the Middle East after several attacks last week on Saudi Arabian oil infrastructure, OPEC and its allies met Sunday to discuss crude oil production dynamics, as they attempt to balance global oil supply amid regional tensions. While the panel of top oil producers, including Saudi Arabia and Russia, did not recommend a specific course of action on output policy, members did highlight the need to continue monitoring the market until the next meeting in June.
Crude prices rose more than 2 percent last week amid news of this regional tension, following several alleged attacks on oil tankers in the Persian Gulf, and on two pumping stations along Saudi Aramco’s East-West pipeline. Following this news, the US State Department announced on Wednesday that all non-essential staff would be removed from Iraq, citing threatening statements from Iran-backed agents in the wake of the end of Iranian sanction waivers.
While no major decision has been announced at this time, the OPEC+ meeting scheduled for June will offer a clearer understanding of future production dynamics–whether cuts continue or not–and will continue to motivate subsequent energy prices.
Unmanned Truck Operates on Public Road in Sweden
A new Level-4 autonomous vehicle has been successfully deployed in Jönköping, Sweden by Swedish autonomous trucking company Einride and transportation firm DB Schenker. Named the “T-pod,” this vehicle will be used in day-to-day commercial operations to move goods between a warehouse and terminal at the facility, utilizing “machine vision” and onboard sensors to navigate its surroundings. With the ability to carry up to 15 pallets, and driving at a speed of 5kpm (3mph), these trucks will be unmanned, but will continue to be monitored by remote drivers who can take control of the vehicles if necessary.
In Other News
China will increase tariffs on US LNG imports to 25% from 10% effective from June 1, the State Council under the Finance Ministry said in a statement late Monday, but it left out US crude imports from its current tariff lists.
Saudi Arabia said on Monday that two of its oil tankers were among those attacked off the coast of the United Arab Emirates and described it as an attempt to undermine the security of crude supplies amid tensions between the United States and Iran.
Germany opened the first stretch of a so-called electric highway that will connect hybrid trucks to overhead wires, allowing them to recharge while traveling on the country’s main transportation arteries.
Shell has carried out trials with 19 shipowners to test its new 0.5 percent Sulphur content marine fuel in preparation for new International Maritime Organization (IMO) rules next year.
A number of rail equipment lessors and manufacturers have been merging and consolidating in recent months as a way to leverage themselves against marketplace changes brought about by precision scheduled railroading (PSR).
The U.S.-China trade dispute escalated sharply Monday, as Beijing retaliated against higher U.S. tariffs with plans to increase levies on $60 billion in U.S. imports and Washington laid out nearly $300 billion of new Chinese imports that would face 25% levies as early as this summer.
The world’s top oil exporter Saudi Arabia said explosive-packed drones attacked two pumping stations belonging to state oil company Aramco, according to a report from local media and the Associated Press.
The United States faces stiff challenges as it moves to create its own electric vehicle supply chain, industry analysts say, with the extent of the country’s metal reserves largely unknown and only a few facilities to process minerals and produce batteries.
The conclusion of annual trans-Pacific service contracts this month showed that container lines for the most part got shippers to agree to reimburse them for expected higher fuel costs as of Jan. 1, when tougher restrictions for sulfur content in bunker fuel take effect. But while the trans-Pacific is the world’s largest trade lane, it represents just 13 percent of global volumes.
The decision to list the trucks unit came late Monday, just two months after the world’s largest carmaker shelved the proposal, citing market conditions. While it didn’t explain the about-face, VW said it hopes to list the business — which sells Scania, MAN, and VW-branded heavy trucks — by its August break.
Shippers spooked by the sudden collapse of New England Motor Freight (NEMF) in February and Falcon Transport in April should not to expect a spate of big trucking bankruptcies. Pressure on smaller trucking firms, however, is rising as spot rates drop and costs rise.
More than a dozen companies, including large US electric utilities and major oil refiners, are joining together to push the federal government to put a price on greenhouse gas emissions.
Venezuela’s crucial oil upgraders have stopped processing heavy crude citing a decline in exports due to U.S. sanctions that have left the OPEC nation without sufficient storage space.
The Federal Motor Carrier Safety Administration is seeking public comment on a potential pilot program that would allow drivers between the ages of 18 and 20 to operate trucks interstate.
West Coast refinery outages have pushed prompt refined products prices to multi-year highs, sending all markets into a strong backwardation through the summer as the area overcomes production issues.
The sharp and sudden escalation of trade tensions between the United States and China, after a deal seemed imminent, casts a shadow on trans-Pacific containerized supply chains, elevating risk for carriers after exhibiting newfound strength in recently concluded service contracting.
Recent attacks on Saudi Arabian oil tankers and pipelines are set to increase the cost of insuring and securing crude shipments in the Persian Gulf region, added expenses that will likely lead to higher oil prices, industry executives said.
Executives with eastern railroads CSX (NYSE: CSX) and Norfolk Southern (NYSE: NSC) expressed confidence this week that they can compete alongside trucks for e-commerce business.
A top California environmental regulator is threatening to enact tougher pollution rules that could include a ban on vehicles that burn petroleum-based fuels in retaliation for the Trump administration’s plan to relax vehicle emission standards.
Freight-matching startups Convoy and Uber Technologies Inc.’s Freight division recently launched fleets of trailers that shippers can preload with goods to speed up cargo transfers for drivers and shippers on their networks.
Pemex’s growing maintenance spending is constraining the Mexican state oil and natural gas company’s ability to develop new, potentially lucrative fields, analysts say. Pemex plans to spend $5.9 billion on upstream maintenance this year, according to the company’s annual report to the US Securities and Exchange Commission.
The International Maritime Organization (IMO) on Friday agreed stricter energy efficiency targets for certain types of ships in an effort to speed up action to cut the sector’s emissions.
The Trump administration hasn’t ruled out increasing the gas tax to help finance a $2 trillion infrastructure plan, but the idea has little support among officials who are wary of a politically risky move heading into the 2020 election.
Iranian crude oil exports have fallen in May to 500,000 barrels per day (bpd) or lower, tanker data showed, and industry sources said, after the United States tightened the screws on Tehran’s main source of income, deepening global supply losses.
Wait times for trucks importing and exporting cargo across the U.S.-Mexico border have dropped considerably from April crisis levels but industry experts warn threats to the supply chain haven’t been eliminated.
Expanding routes for those who drive alternative fuel vehicles in Pennsylvania, the state’s Department of Environmental Protection has announced grants for electric vehicle charging stations and the designation of 500 more miles of highway as “Alternative Fuel Corridors,” with compressed natural gas (CNG) or EV charging stations readily accessible.