Goldman Sachs Raises Global Demand Estimate on Oil as Demand Improves
Goldman Sachs stated that the risk of a sharp pull-back in oil prices has decreased as the rebalancing of the crude market gathers pace. As the oil markets have been aided by a gradual lifting of coronavirus lockdowns and a faster-than-expected fall in output.
The Wall-Street bank raised its May global demand estimate by 1.4 million barrels per day (bpd), but still sees a decline of 16 million bpd from pre-COVID levels. However, in a note dated May 13 the bank stated that recovering demand and lower output would push the global oil market into deficit in June.
Goldman expects oil prices to have limited upside in the coming months, citing a big inventory overhang and the ability for shut-in production in North America to restart if prices rally further.
FMCSA Publishes Final HOS Rule
The Federal Motor Carrier Safety Administration published its long-awaited final rule on changes to hours-of-service regulations to increase flexibility for truck drivers.
The final rule will allow more flexibility for the 30-minute rest break rule by requiring a break after eight hours of consecutive driving and allowing the break to be satisfied by a driver using “on-duty, not driving” status, rather than “off-duty” status.
The rule also will modify the split sleeper berth exception to allow drivers to divide their required 10 hours off duty into two periods: an 8/2 split or a 7/3 split. Neither period would count against the driver’s 14-hour driving window. Additionally, the rule modifies the adverse driving conditions exception by extending by two hours the maximum window during which driving is permitted.
The final revision involves changing the short-haul exception available to certain drivers by lengthening the drivers’ maximum on-duty period from 12 to 14 hours and extending the distance limit within which the driver may operate from 100 air miles to 150 air miles.
Top Energy Stories
U.S. refiners expected the spread of coronavirus to kill demand for gasoline and jet fuel, so they rushed to produce more diesel – but now they are sitting with a glut of that product, too.
Fieldwood Energy LLC, an offshore oil driller that operates in the Gulf of Mexico, is preparing for its second stint in bankruptcy in two years after succumbing to plunging energy demand due to the coronavirus pandemic, according to people familiar with the matter.
Oil prices rose on Friday, with U.S. crude jumping more than 6% to its highest since March on signs that demand was picking up, with China reporting increased refinery runs and rounding out a week of bullish news on the supply front.
Iraq, OPEC’s second-largest oil producer, has cut 650,000 b/d from it southern fields to comply with OPEC+ cuts of 1.061 million b/d agreed for May and June, an official from state-owned Basra Oil Co told state-run Iraqi News Agency on Wednesday.
Top Freight Transportation Stories
YRC Worldwide Inc., one of the largest U.S. trucking companies, is trying to shore up its troubled finances even as coronavirus lockdowns carve off its trucking business.
The FMCSA has extended its COVID-19 emergency declaration, which grants some HOS exemptions, through June 14, the agency said Wednesday.
A.P. Moeller-Maersk A/S expects container volumes to fall up to 25% this quarter and plans to cancel dozens of sailings as the Danish shipping giant copes with sliding demand in consumer and industrial markets from the coronavirus pandemic lockdowns.
Top Economic Stories
House Democrats release their latest coronavirus relief bill as they try to blunt the pandemic’s effects on the economy. The chamber plans to vote on the legislation, which includes relief for state and local governments, direct payments, and hazard pay for essential workers, on Friday. However, Republican representatives are unlikely to approve the package in the Senate.
The global novel coronavirus crisis continues to batter the U.S. labor market, with millions more Americans, including white-collar workers, filing for unemployment benefits last week as the hit from the pandemic spills over into a broader swath of the economy.
Mexico’s auto, construction and mining sectors have been cleared to restart operations beginning Monday, a decision that comes just a day after the government reported record deaths from the coronavirus.
Investors are bracing for more turbulence in U.S. stocks, as some states prepare to reopen their economies, and global trade tensions rise.