Crude Oil and Diesel Markets Continue to Fall Amid Coronavirus Fears | Weekly News Update

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Crude Oil and Diesel Markets Continue to Fall Amid Coronavirus Fears

Crude oil and diesel markets have continued its significant drop due to heightened fears that the spread of the coronavirus could hamper demand in China—the world’s largest consumer of industrial commodities­—and throughout the rest of the world.  The epidemic has surpassed severe acute respiratory syndrome (SARS) in terms of confirmed cases and the World Health Organization declared the outbreak a global public health emergency.

At the time this was written, West Texas Intermediate (WTI) and Brent crude oil prices have dropped over $11 per barrel or 18.5 percent since January 6, 2020.  Wholesale diesel prices followed suit and dropped over 35¢ per gallon or 13 percent during the same timeframe.

 

UP to Resume Service on Nearly 60 Lanes it Cut in 2018

Union Pacific (UP) railway announced that they will reinstate 58 lanes that they stopped service on in 2018.  The lanes will go into effect on February 1, 2020, in coordination with CSX Transportation and Norfolk Southern (NS).  The lanes were originally cut in UP’s early stages of their precision scheduled railroading (PSR) strategy, known as Unified Plan 2020.  The company restoring the lanes could be a good indication of the company achieving the efficiencies and now is ready to expand their network and gain market share but keep the focus of their core strategy.  The routes that are returning are mainly in Ohio, —specifically Cincinnati, Cleveland, and Columbus—Philadelphia, and Baltimore.  The containers traveling through Chicago will still require a cross-town dray due to CSX’s policies.

 

Top Energy Stories

WSJ: Oil, Copper Drop on Coronavirus Fears

Crude-oil and copper prices slumped Monday amid heightened fears that the spread of the coronavirus could erode demand in China, the world’s largest consumer of industrial commodities.

Bloomberg: Saudi Push for Early OPEC+ Meeting Hits Russian Resistance

Saudi Arabia’s push to convene an emergency OPEC+ meeting next month, bringing forward a gathering scheduled for March, ran into resistance from its key oil-market ally, Russia.

 

Top Freight Transportation Stories

Reuters: House Democrats call for $760 billion in infrastructure spending over five years

U.S. House Democrats on Wednesday will unveil a proposed $760 billion infrastructure spending bill over five years that aims to rebuild sagging roads and bridges and reduce carbon pollution.

JOC: UP to resume service on nearly 60 lanes it cut in 2018

Union Pacific Railroad, which struggled with lackluster intermodal volume in 2019, will restart interline service Feb. 1 on nearly 60 lanes in coordination with CSX Transportation and Norfolk Southern Railway, the company said Monday.

JOC: China virus threatens US freight recovery

The US freight cycle may not have hit bottom yet, but it could be close, speakers at the SMC3 Jump Start 2020 Conference said Monday. Economic indicators point to a better second half of the year for US shippers and their transportation and logistics partners, but uncertainty persists, making forecasting an even more imprecise science than usual.

 

Top Economic Stories

WSJ: Federal Reserve Holds Benchmark Rate Steady

The Federal Reserve left its benchmark interest rate unchanged and reaffirmed its make-no-moves posture Wednesday.

WSJ: Coronavirus Tests Market’s Faith in Global Economy

Investors who began the year feeling largely sanguine about the stock market are struggling to make sense of whether a growing coronavirus outbreak could upend their bets on a global economic recovery.

Supply Chain Dive: Trump signs USMCA into law, Canada expected to follow suit

President Trump signed the U.S.-Mexico-Canada Agreement (USMCA) into law Wednesday. Mexico has already ratified the deal and the Canadian government is expected to follow suit in the coming weeks.

WSJ: U.S. Economy Heads Into 2020 With Steady Growth

The U.S. economy headed into 2020 on a solid footing, with growth settling back to the roughly 2% pace that has prevailed during the decade-old economic expansion.

 

This weekly publication is designed to highlight relevant industry news to provide professionals in the transportation, supply chain, and energy sectors with up-to-date information in a rapidly changing marketplace. This update is purely a compilation of industry news and as such, does not necessarily reflect the opinion of Breakthrough. We do not warrant or guarantee accuracy or completeness of information. For additional information, please contact us at info@breakthroughfuel.com.

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