March Advisor Preview | Transpiration of OPEC Cuts and Canada Carbon Pricing

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March 2019 Advisor Preview | Transpiration of OPEC Cuts and Canada Carbon Pricing

January’s upward price behavior differed from the bearish energy market trends experienced in the fourth quarter of 2018. This trajectory continued in February, though a multitude of market developments emerged that will surely make 2019 a dynamic year for transportation fuel prices.

In this edition of the Breakthrough Advisor, the Applied Knowledge Team provides transparency into these emerging developments, offering a comprehensive pulse on the volatile energy landscape that will likely persist in the year ahead. In total, these insights reinforce the value of the market knowledge Breakthrough provides shippers, while focusing on each element’s impact on the price of energy used to move goods to market.

US Production Growth and OPEC Production Cuts

Now two months into 2019, the OPEC+ production cuts are beginning to gain momentum, removing significant crude oil supply from the world market. Saudi Arabia has absorbed the lion’s share of the aggregate reductions, with other participants contributing to the campaign to bring supply and demand closer to balance. Russia and other producers have taken a more conservative approach to compliance, but will likely reduce near-term production further, as the OPEC+ group looks to keep prices buoyed and combat downside price drivers in the market.

What is the magnitude of OPEC+ production cuts and what do these market dynamics mean for diesel? How will steady production gains in the United States and the demand implications of an economic slowdown combat the market’s upside risks? Gain insight into how the crude oil environment transpired in February, in addition to how other market fundamentals, global economics, and the overhanging risk environment influenced diesel prices in this month’s edition of the Breakthrough Advisor.

Canada Carbon Pricing

Global efforts revolving around sustainability and climate policy have come full circle. Part of these initiatives entail carbon-intensive fossil fuels – such as diesel – and proactive strategies to control their greenhouse gas emissions. Canada has been at the forefront of such climate initiatives, with carbon taxation on diesel fuel already beginning to influence diesel prices in various provinces. However, a national mandate is set to take hold in the beginning of April, with direct diesel cost implications in the Canadian fuel market.

What are the direct costs associated with the impending carbon legislation north of the US border? Could this be a precursor for similar carbon cost mechanisms on a global scale? Find out in the March edition of the Breakthrough Advisor.

This edition of the advisor publication presents a detailed analysis of the energy market’s recent trends and data-driven insights concerning your transportation supply chain. If interested, you can gain further details into evolving market dynamics and most pressing news by signing up for the Breakthrough Advisor Brief or contacting the Applied Knowledge Team directly.

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