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