Crude Oil’s Largest Drop in 2019
Oil this week posted its largest weekly drop of 2019, with both Brent and WTI benchmarks experiencing net declines between 3 and 6 percent. This was motivated in part by economic concerns surrounding U.S. China trade relations, which led to softened global economic growth and demand predictions. Adding momentum to this downward trajectory, reports of large U.S. crude inventories overrode fears of supply constraints arising from continued tension in the Middle East.
Despite climbing more than 1 percent on Friday, crude prices experienced declines of more than 3 percent, while diesel prices decreased by nearly 15 cents over the previous week.
As neither side of the tariff dispute has indicated hope for a deal yet, energy prices could see additional downward pressure motivated by economic uncertainty in the short term. Coupling these downward market-moving dynamics with continued concerns over supply constraints and geopolitical risk, however, continues to keep oil supply and demand in a tight balance that can lead to quick increases or decreases in price.
U.S. Postal Service Starts Testing Self-Driving Trucks
The U.S. Postal Service began testing self-driving trucks this week on a more than 1,000-mile mail run between Phoenix and Dallas, following other key market players who are moving into the trucking automation space. For two weeks, this program will use rigs supplied by autonomous trucking firm, TuSimple.
The 22-hour trip that will be tested runs between several Postal Service distribution centers, and typically requires a two-driver team to comply with federal driving regulations. In addition to reducing operating costs and minimizing stress on drivers, this program aims to discover new ways to cut fuel expenses, improve truck safety, and operate fleets more efficiently in the future.
In Other News
Intermodal trucking company J.B. Hunt Transport Services received a non-vessel-operating common carrier (NVOCC) license from the Federal Maritime Commission (FMC), a decision that gives the transport operator more options to import equipment from China.
Oil prices on Monday rose to multi-week highs before easing later in the session as OPEC indicated it was likely to maintain production cuts that have helped boost prices this year, while escalating Middle East tensions provided further support.
Mexico’s Amoca Yaxche blocks, in offshore Tabasco state and the Agua Dulce blocks in southern onshore Veracruz state, are at the center of Pemex’s first exploration efforts under President Andres Manuel Lopez Obrador.
The self-driving truck startup completed a series of road tests, with a driver behind the wheel, on a section of the Lee Roy Selmon Expressway near Tampa, Florida, during the week of May 13.
A parking brake issue has prompted Paccar to recall more than 1,800 Kenworth tractors, while an electrical system issue resulted in a recall of more than 5,000 vocational Peterbilt trucks, according to National Highway Traffic Safety Administration documents.
The U.S. Postal Service is testing self-driving trucks on a more than 1,000-mile mail run between Phoenix and Dallas, the post office’s first use of the technology for long hauls.
Major retailers Amazon.com and Walmart plan to begin insourcing more of their transportation needs, with both meeting with Class I railroads to discuss direct contracts without the use of an intermediary.
Low-sulfur fuel oil (LSFO) cargo swaps in northwest Europe yesterday traded at their widest premium to high-sulfur fuel oil (HSFO) barge swaps since July 2014. Values were close to recent 0.5pc sulfur trade levels, potentially signaling a pricing shift ahead of the implementation of the sulfur cap on shipping emissions.
The guidance includes sections on the impact of fuel and machinery systems resulting from new fuel blends or fuel types, as well as clarifications on control mechanisms and a standard reporting format for non-availability of fuel oil.
Two tractor-trailers powered by hydrogen electric fuel cells will hit the highways of Alberta in a pilot program to test the viability of doing heavy-hauls over long distances in the western Canadian province.
President Trump said he wouldn’t work with Democrats while investigations of him continue and abruptly ended a meeting with the party’s leaders Wednesday, casting fresh doubt on a divided Washington’s ability to complete big-ticket legislation in the next 18 months.
For APM Terminals, the part of global shipping company A.P. Moller-Maersk A/S that runs the Los Angeles terminal, the future of cargo handling looks like the future of driving: electric motors replacing gasoline engines, autonomous software replacing human workers.
Pemex plans to implement its aggressive upstream program rapidly and expects to begin producing oil from 12 new fields before the end of the year after discovering three fields so far in 2019, the CEO of the state-owned company said.
Chinese companies looking to sign long-term agreements to buy crude oil from U.S. oil exporters have virtually disappeared, the chief executive of Enterprise Products Partners LP said on Tuesday.
Companies looking to move some production from China to other Asian countries to avoid mounting U.S. tariffs on Chinese imports face significant bumps in the road including poor infrastructure, shipping delays, and increased costs.
Venezuela has increased oil supplies to ally Cuba in May four-fold as US sanctions severely limit exports to other countries, PDVSA documents show. The PDVSA documents also cited high inventories of natural gasoline and light virgin naphtha at Venezuela’s El Palito and Jose terminals because of the sanctions.
The IMO’s head of air pollution and energy efficiency, Edmund Hughes, told S&P Global Platts’ Bunker Fuel Conference in Amsterdam that there were discussions over a possible ECA in the Mediterranean for nitrous oxide (NOx) and sulphur emissions.
The US National Oceanic and Atmospheric Administration predicts four to eight hurricanes will develop during this year’s Atlantic hurricane season, including two to four major storms with winds above 111 mph.
Since last Saturday, the Storm Prediction Center (SPC), a part of the National Weather Service (NWS), received 143 tornado reports, as well as several hundred reports of hail and wind damage. These reports were all from the same eight states – Arkansas, Illinois, Iowa, Kansas, Louisiana, Missouri, Oklahoma and Texas.
Two agencies within the U.S. Department of Transportation are seeking public input on removing regulatory barriers to allow the integration of autonomous vehicles onto public roads.
Sagging prices and mixed economic signals are casting a cloud over the U.S. freight market as bad weather and trade concerns bog down the spring shipping season.
Shippers may need to be proactive in negotiating different terms into their contracts, in order to protect themselves when no chassis are available for final delivery.
The Federal Motor Carrier Safety Administration announced Thursday it has extended an emergency declaration for 16 states in the Plains and Midwest due to historic flooding across the region.
Russia and Belarus agreed a plan on Friday to pump tainted oil out of Belarus’ pipeline system back to Russia, a document signed by Belarusian and Russian officials showed. The two countries also agreed for up to an additional 200,000 tonnes of crude oil to be sent to the Naftan oil refinery in Belarus in June.
Texas is considering whether to impose additional registration fees on electric and hybrid vehicles, following nearly half the states that assess higher fees on battery-powered vehicles to compensate for lost gasoline taxes used to maintain roads and highways.