COVID concerns and oversupply weigh on oil markets
Crude oil prices were recovering early Monday on signs that President Trump’s health was improving, but the sentiment driving the rally is unlikely to last. Phil Flynn, an analyst at The Price Futures Group in Chicago, said Trump’s diagnosis underscores the stubbornness of pandemic and the continued threat to the energy demand as cities such as New York and London renew lockdowns in some areas. As a result, Flynn expects oil to remain in a funk.
Another factor playing into volatility in crude oil is Libyan supplies returning to the market. After having been idled by civil strife since January they are quickly coming back to the market. This in turn jeopardizes OPEC’s efforts to balance an oversupplied market with production restraint. That will likely factor in when OPEC releases its annual world outlook report on Thursday.
Trucking Approaches Holiday Shipping Season ‘Unlike Any Seen Before’
An exceptionally busy holiday shipping season appears to be on the horizon, and with it comes concerns about capacity. A survey by Ware2Go showed market shifts brought on by the coronavirus are signaling unprecedented demand. This comes less than a month after FedEx Corp. made the same prediction. Now some experts are warning the industry to prepare.
The survey found 74 percent of merchants expect to see a holiday demand spike this year, with 56 percent believing that spike will be at or above peak 2019 volumes. The company also is predicting the holiday season will be longer, with retailers announcing earlier Black Friday sales to accommodate social distancing.
Top Energy Stories
Total SA pledged to ramp up its spending on renewable energy and reduce its dependence on petroleum, the latest move by a major oil company toward cleaner power.
The final tanker in a flotilla of three Iranian fuel tankers docked at eastern Venezuela’s Guaraguao port on Sunday, according to Refinitiv Eikon data and a person familiar with the matter, as President Nicolas Maduro promised to normalize fuel supply in the gasoline-starved country.
Energy producer Royal Dutch Shell plc said Wednesday it’s planning to cut between 7,000 and 9,000 jobs worldwide by the end of 2022 following a collapse in demand for oil and a subsequent slide in prices during the coronavirus pandemic.
U.S. oil refineries are moving aggressively to produce renewable diesel, partly to cash in on Canada’s greener fuel standard before Canadian refiners modify their own plants.
Top Freight Transportation Stories
Schneider has upped its pay for drivers, giving new team drivers with at least one year of experience an increase of 4 cents per mile, the carrier said in a recent blog post. Drivers with less than a year of driving experience will get a 2-cent increase when starting with Schneider.
Nikola gave an update on its progress in a public release on Wednesday, to assure investors the OEM is on track to finish its manufacturing facility in Coolidge, Arizona. Nikola said it would complete phase 1 of construction by the end of 2021, with construction complete by mid-2023.
Knight-Swift plans to reduce its carbon emissions by half by 2035, according to a company news release Tuesday. The announcement is the latest sign that pressure from states, especially California, is having an influence on carriers. The California Air Resources Board passed its Advanced Clean Trucks regulation in June, introducing mandates for zero-emissions truck sales. But keeping up with the neighbors could be another factor. Carriers seem to be competing with each other on the deployment of electric trucks.
Top Economic Stories
The number of Americans seeking unemployment benefits declined last week to a still-high 837,000, evidence that the economy is struggling to sustain a tentative recovery that began this summer.
September’s manufacturing purchasing manager index, released on Thursday by the Institute for Supply Management, came in at 55.4. A level of 50 indicates growth, but economists were hoping for more. What the new number really means is the U.S. economy might need some more stimulus.
Big banks will kick off third-quarter earnings reports in earnest on October 3, helping to set the tone for the broader U.S. stock market, as businesses cope with the eighth month of the pandemic.