OPEC Agrees to Deepen Production Cuts | Weekly News Update

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OPEC & Allies Agree to Deepen Production Cuts Through March 2020

The Organization of Petroleum Exporting Countries and its allies (OPEC+) agreed to deepen production cuts at their semi-annual meeting in Vienna, Austria on December 5th and 6th.  The cartel agreed to cut an additional 500,000 barrels of crude oil production per day from October 2018 output levels.  Based on average production levels through November 2019, OPEC+ fell about 180,000 barrels per day below the annual target. Saudi Arabia’s aggressiveness fueled this outcome and mitigated the lack of alignment from other key producers throughout the year, as did disrupted supply resulting from September’s attacks on Saudi oil fields.

Diesel spot market prices closed Thursday, December 5th between $0.005 and $0.01 per gallon higher than the prior day’s close, while WTI and Brent crude oil prices saw increases less than $0.50 per barrel following the agreement among OPEC nations to deepen cuts.  We expect wholesale diesel prices to increase just $0.01-$0.02 per gallon in the coming days.  This is evidence of the market’s lack of concern of supply pressure stemming from the OPEC+ decision.


Heavy-Duty Truck Orders Wane as Industrial Demand Declines

North American Class 8 heavy-duty truck orders dropped significantly in November, indicating a weak start for what is typically the busiest season for new equipment orders.  November preliminary orders data show trucking companies orders 17,300 Class 8 trucks, which is 39 percent down from last year and a 21 percent decrease from October of this year.  It represents the lowest order total in 4 years.  The lack of orders coming in is forcing manufacturers to scale back production and lay off workers until the demand returns.


Top Energy Stories

Reuters: Iran says 200,000 took to streets in anti-government protests

Iran gave a glimpse on Wednesday into the scale of what may have been the biggest anti-government protests in the 40-year history of the Islamic Republic, with an official saying 200,000 people had taken part and a lawmaker saying 7,000 were arrested.


IEEFA: Renewable generation in U.S. is set to surpass coal in 2021

Electricity generation from renewable energy will surpass coal on an annual basis beginning in 2021, according to IEEFA. “The data clearly shows that this is happening already, and that there is no longer any reason to hesitate: renewables are surpassing coal,” IEEFA wrote.

Advisor Pulse: OPEC & Allies Agree to Increase Production Cuts Through March 2020

The Organization of Petroleum Exporting Countries and its allies (OPEC+) agreed to deepen production cuts at their semi-annual meeting in Vienna, Austria on December 5th and 6th. The group plans to remove an additional 500,000 barrels of supply per day, increasing the aggregate quota to 1.7 million barrels per day from October 2018 output levels.


Top Freight Transportation Stories

WSJ: Commentary: Drone-Delivery Projects Must Look Beyond the Hype

Many demonstration and research projects around the world have shown the technology behind drone delivery can work. Only economic and regulatory reality—rather than hype fueled by the venture-capital world—will determine whether it is commercially viable.

Transport Topics: Schneider Launches Load-Booking Tool for Third Parties

Schneider launched an automated tool that enables third-party carriers to instantly book loads with the click of a button, the carrier said in a Nov. 26 news release.

WSJ: Heavy-Duty Truck Orders Wane as Industrial Demand Declines

Order books for heavy-duty truck manufacturers are thinning out as a weaker U.S. industrial economy pushes fleet operators to put the brakes on plans to expand freight-carrying capacity.


Top Economic Stories

Supply Chain Dive: Trump to bring back tariffs on Brazilian, Argentinian steel

The U.S. will reinstate 25% tariffs on imported Brazilian and Argentinian steel, President Donald Trump tweeted Monday morning. The President did not mention the aluminum tariffs enacted at the same time as the global steel tariffs being restored in his tweets.

WSJ: U.S. Stocks Slide After Trump Signals Further Delays to China Deal

The Dow Jones Industrial Average fell more than 400 points Tuesday after President Trump suggested a trade war with China could continue well into next year as he threatened new tariffs on several more countries.


WSJ: U.S. Hiring Strengthened in November, Fueling Expansion

The U.S. job market strengthened in November, as hiring jumped and unemployment returned to a half-century low, adding fuel to the economic expansion.

This weekly publication is designed to highlight relevant industry news to provide professionals in the transportation, supply chain, and energy sectors with up-to-date information in a rapidly changing marketplace. This update is purely a compilation of industry news and as such, does not necessarily reflect the opinion of Breakthrough. We do not warrant or guarantee accuracy or completeness of information. For additional information, please contact us at info@breakthroughfuel.com.

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