Oil dips on rise in U.S. coronavirus cases, set for weekly fall
Oil prices settled lower on Friday as new coronavirus cases spiked in the United States and China, and on growing concerns about rising U.S. output ticking up while crude stockpiles sat at record highs.
The market experienced upward pressure earlier in the trading day Friday due to optimism over rising road traffic which boosted fuel demand. However, those gains were erased due to fears that spiking COVID-19 infections in large gasoline consuming states could stall demand recovery. Cases have risen sharply in California, Texas, and Florida.
The rise in cases could undermine the steady increase in refining output, with U.S. refiners now operating at nearly 75 percent of their capacity.
CARB Approves Its Electric Truck Regulation
California environmental regulators approved a measure that within a few years will require truck manufacturers to transition a percentage of their sales in the state from diesel trucks to electric zero-emission vehicles.
In a unanimous vote, California Air Resources Board members on June 25 approved the state’s Advanced Clean Trucks Regulation, mandating, among other things, that 5% of all Class 7 and Class 8 trucks sold be electric beginning in 2024. Under the plan, the percentage of medium and heavy electric trucks sold would increase each year, topping out at 40% annually from 2032 and beyond.
The industry responded with mixed feelings regarding the regulation. The American Trucking Association asked CARB to recognize and direct its staff to evaluate how changes in economic conditions have changed with the “still unfolding COVID-19 pandemic” and “associated economic crises unlike anything our state and nation have faced in history”.
Top Energy Stories
Maersk’s majority shareholder, the A.P. Møller Foundation, has donated $60 million in start-up funding for a not-for-profit research center tasked with finding shipping’s sustainable fuel of the future.
Global equities sank and perceived safe-haven assets like U.S. Treasuries and gold gained on Friday as investors weighed hopes that Europe will continue to rebound from the coronavirus pandemic’s economic damage against concerns over a record surge in new COVID-19 infections in the United States.
Chesapeake Energy Corp. filed for bankruptcy protection Sunday as an oil- and gas-price rout stoked by the coronavirus pandemic proved to be the final blow for a shale-drilling pioneer long hamstrung by debt.
Top Freight Transportation Stories
Mitsui OSK Lines, Japan’s largest ship owner, is cutting its fleet by 5% over the next three years on expectations of a deep decline in trade volumes as a result of the coronavirus pandemic.
As states and localities ease shopping restrictions, and as the Fourth of July approaches, demand for dry van capacity has stimulated the spot truckload market for the week ending June 22, DAT reported on Wednesday. Spot van rates and refrigerated rates are rising, according to DAT, which operates the largest load board. And in perhaps a telling sign of a coming capacity crunch, available trucks on DAT’s network fell 3.5% from the week earlier.
While the outlook for the balance of 2020 remains difficult to nail down, Hapag-Lloyd is starting to see “encouraging signs” of recovery in the container shipping market, CEO Rolf Habben Jansen said Wednesday.
The California Air Resources Board (CARB) unanimously passed its Advanced Clean Trucks (ACT) Regulation, following a public hearing Thursday. “By 2045, every new truck sold in California will be zero-emission,” CARB said in a news release
Nine West Coast utilities and two agencies representing 24 municipal utilities have proposed electric-charging stations for trucks every 50 miles along Interstate 5 and connecting highways, according to their report issued through the West Coast Clean Transit Corridor Initiative.
Top Economic Stories
The economic ruin is overshadowing the implementation of the United States-Mexico-Canada Agreement, or USMCA, which will replace the 1994 North American Free Trade Agreement July 1. “This should be a wonderful moment for North America,” said Patrick Ottensmeyer, president and CEO of Kansas City Southern Railway (KCS). “We’ve removed a cloud of uncertainty.”
Economists at the International Monetary Fund now say the global economy will contract even more sharply than they expected in estimates released in April, which called for the steepest recession since the Great Depression.
The historic euro zone economic downturn eased again this month as swathes of businesses reopened after closures to stem the spread of the coronavirus, but a V-shaped recovery may be unlikely, a set of closely-watched surveys showed on Tuesday.