OPEC, Allies Finalize Deal to Extend Oil-Output Cuts
OPEC and its allies finalized an extension of their record oil-production curbs through July, delegates said, after Iraq and Nigeria agreed to slightly deeper cuts to compensate for their failure to adhere to recent agreements.
In the aftermath of a demand-draining coronavirus pandemic and a devastating price rout, the 23-nation alliance of the Organization of the Petroleum Exporting Countries and its allies is moving cautiously to rebalance a global oil market in the early stages of recovery. Led by Saudi Arabia and Russia—and prodded from afar by the Trump administration—the group agreed in April to cut output by 9.7 million barrels a day.
The new pact calls for collective cuts of 9.6 million daily barrels until the end of next month as it excludes Mexico, which refuses to continue the effort.
Kansas City Southern attempts to get pandemic cuts to ‘stick’
Kansas City Southern will reduce its management staff by roughly 7%, representing 100 to 150 employees, in the second half of 2020, COO Jeffrey Songer said Tuesday at the UBS Global Industrials and Transportation Conference.
A top priority for the railroad throughout the pandemic has been “right-sizing resources to volume,” Songer said. Employees, both corporate and operations staff, have been a large part of this effort. In the month of May, U.S. freight volume was down 19% while U.S. crew starts were down 30% compared to the first-quarter monthly average, indicating the railroad has reduced staffing at a faster rate than freight volume.
The end of May was likely the bottom of the volume dip brought on by pandemic, Songer said. He added the down volumes have accelerated some of the PSR benefits for the railroad. Train velocity was up 26% and dwell was down 9% year-over-year in the first quarter. “The intent is that a lot of these things and changes are going to stick,” Songer said.
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An alliance of oil-producing nations led by Saudi Arabia and Russia is close to a deal that would extend their collective production cuts through Sept. 1, as the world emerges from pandemic-induced lockdowns, delegates said.
A ship carrying liquefied natural gas from Nigeria is in the middle of the Atlantic Ocean and heading northwest and may drop its cargo in the United States.
Oil prices rose Tuesday, continuing a recent rebound with analysts anticipating that crude producers led by Saudi Arabia and Russia will extend supply curbs in response to the energy industry’s crisis.
Mexico is not in a position to make additional oil output cuts beyond those agreed at the April meeting of the OPEC+ group of oil-producing countries, President Andres Manuel Lopez Obrador said on Friday.
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Daimler Trucks North America has resumed production at all nine of its North American manufacturing operations.
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