OPEC & Allies Finalize Deal to Extend Oil-Output Cuts | Weekly News Update

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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.​


Top Energy Stories

WSJ: Saudi Arabia, Russia Inch Toward Deal on Post lockdown Oil Cuts

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.

REUTERS: LNG tanker may deliver gas to U.S. with European stockpiles near full

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.

WSJ: Oil Prices Rally With Traders Anticipating Supply Cuts

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.

REUTERS: Mexico cannot make additional oil output cuts, says president

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.


Top Freight Transportation Stories

TRANSTOPIC: Werner Enterprises Founder Retires From Role as Executive Chairman

Werner Enterprises founder Clarence L. Werner has stepped down from his role as executive chairman, the company announced June 2.

TRUCKNEWS: DTNA’s North American production resumes

Daimler Trucks North America has resumed production at all nine of its North American manufacturing operations.

TRANSDIVE: Navistar maintains US operations but has challenges with suppliers in Mexico

Navistar’s Q2 report indicates just how much the North American supply chain is dependent upon parts from Mexico. Navistar’s truck segment took the biggest hit in the report, with net sales falling $907 million to $1.4 billion. Company officials said this drop was partially because of lower Mexico volumes and a decrease in GM-branded units sold. Navistar’s parts segments were $443 million, a 23% decrease from Q2 2019.

HDT: Nikola Goes Public, Orders Equipment for Hydrogen Infrastructure

Electric-truck maker Nikola has officially merged with VectoIQ Acquisition Corp., becoming a Nasdaq publicly traded company, and announced plans to purchase equipment to create new hydrogen fueling infrastructure.


Top Economic Stories

WSJ: U.S. Unemployment Rate Fell to 13.3% in May

The U.S. jobless rate fell to 13.3% and employers added 2.5 million jobs in May, early signs the labor market is mending as the economy started to reopen following lockdowns related to the coronavirus pandemic.

THEHILL: Trump signs order removing environmental review of major projects

President Trump signed an executive order Thursday evening that would waive requirements under a suite of environmental laws, a move the administration says will boost the economy amid the coronavirus pandemic.

TRANSDIVE: $494B infrastructure bill calls for Congressional review before HOS final rule applies

House Democrats unveiled an infrastructure bill Wednesday that would authorize $494 billion in funding over five years. But the new bill, which includes language that specifically delays the implementation of the FMCSA’s final HOS rule, has been met with opposition from Republicans and mixed reviews from the trucking industry.


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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