OPEC Delays Meeting Date, Volvo Pursues AI | Weekly News Update

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OPEC Confirms Meeting Date Amidst Continued Tension in the Middle East

The Organization of Petroleum Exporting Countries (OPEC) and its affiliated members finally reached a decision this week on the date of their next meeting, a discussion that has exposed a deepening rift between Iran and other members- including Saudi Arabia. Originally proposed for June 25-26, the semi-annual gathering will take place July 1-2, with July 1 dedicated to meetings between current OPEC members, followed by a meeting between non-OPEC states on July 2. One of the key topics of discussion at the meeting will be the duration of future supply cuts, which several sources have indicated will continue in upcoming months.

Iran, whose crude exports have been reduced to about 500,000 barrels per day as a result of continued US sanctions, has been critical of these decisions – particularly toward Saudi Arabia. Simmering tensions in the Persian Gulf have also continued; following another attack on two oil tankers in the Strait of Hormuz, another incident occurred last week in which Iran allegedly shot down a US-manned drone, arguing it violated Iranian airspace. Fears of this escalating conflict between Iran and the US led to upward movement on crude prices, with Brent and WTI both climbing more than $5.00 throughout last week.

Volvo Pursues Intuitive AI to Improve Safety

Volvo Trucks North America announced this week that it is developing new ways to leverage artificial intelligence to enhance truck drivers’ situational awareness, including reading the intention and awareness of potentially-vulnerable road users like motorists, cyclists, and pedestrians. To accurately predict these behaviors, sensors affixed to the vehicle will read physical cues, such as posture and eye contact of the road user, to predict their movements. Once a potential risk is identified, the system notifies the truck driver to respond appropriately.

Partnering with vehicle software provider Perceptive Automata and Dependable Highway Express, Volvo demonstrated the technology on one of their trucks in DHE’s headquarters of Ontario, California. This promises increased safety for both driver and road user in the future, particularly in urban areas.

In The News:

6/17

WSJ: Oil’s Slide Highlights Global-Growth Fears

Oil prices have remained soft this month despite rising geopolitical tensions and threats of supply disruptions, the latest sign that investors fear trade friction will hit global growth and sap demand for crude.

Platts: G20 Ministers Stress Need for Stronger Energy Security After Oil Tanker Attacks

The major escalation in risks to oil and gas shipments through the Strait of Hormuz dominated talks between ministers on the sidelines of the G20 energy meeting in Japan over the weekend, prompting the group to commit to finding ways to increase energy security for producing and consuming nations.

CCJ: Alabama To Mandate Human Trafficking Training in CDL Schools

Alabama is the latest state to pass legislation that will require its trucking schools to include curriculum to train drivers on how to recognize, prevent and report human trafficking.

WSJ: As China Tariffs Loom, Some U.S. Companies Say Buying American Isn’t an Option

American importers are struggling to find alternative suppliers for the goods they bring in from China. An analysis of federal import data shows China accounts for more than 90% of imports in 273 categories of the items targeted by new tariffs.

JOC: US Ag Exporters Under Low-Sulfur Fuel Pressure

Ag exporters urged to do due diligence on the increased costs involved in IMO low-sulfur fuel before they enter contract negotiations with carriers in the fall.

6/18

WSJ: Logistics Spending Jumped 11.4% on Strong Economic Growth

Rising logistics costs consumed a bigger share of U.S. corporate spending over the past year as companies rushed to take advantage of an improving U.S. economy, according to a new report.

Reuters: Canada Approves Expansion of Crude Oil Pipeline, Says Legal Challenges Likely

Canada as expected on Tuesday approved a hotly contested proposal to expand the crude oil pipeline it bought last year, providing hope for a depressed energy industry but angering environmental groups.

Argus Media: US Asks for Help to Protect Mideast Oil Shipping

The US expects other countries to back its efforts to protect the flow of oil from the Middle East against threats posed by Iran, US secretary of state Mike Pompeo said today.

FreightWaves: Outlook Lowered for Truckload and Intermodal Companies

As the second quarter 2019 earnings season approaches, the negative data and commentary centered on the lack of a seasonal increase in demand is forcing analysts to meaningfully lower earnings estimates and their outlook for the sector.

Transport Topics: FHWA Announces Funding Opportunity for Transportation Technology Grants

The Federal Highway Administration recently announced the availability of $60 million in grant funding for states and cities pursuing projects that involve transportation technologies.

WSJ: Saudis Push to Renew OPEC’s Oil-Export Curbs, Despite Tanker Attacks

Saudi Arabia is cutting its oil output and is asking other producers for restraint in production, according to officials in the group, as signs of slowing global demand for crude outweigh threats of war and worries about supply disruptions in the Middle East.

WSJ: Logistics Spending Jumped 11.4% on Strong Economic Growth

Rising logistics costs consumed a bigger share of U.S. corporate spending over the past year as companies rushed to take advantage of an improving U.S. economy, according to a new report.

6/19

WSJ: Suspected Iranian Oil Caught in Sanctions Trap

Italy’s oil giant Eni has rejected a cargo of suspected Iranian crude, as energy companies grapple with sophisticated techniques used by Iran to evade U.S. sanctions.

Reuters: U.S. Oil Stockpiles Fall Across the Board, Crude More Than Expected

U.S. oil stockpiles fell across the board last week, with crude inventories dropping more than expected and refined products posting surprise drawdowns due to a rise in refining and crude exports, and drop in crude production, the Energy Information Administration said on Wednesday.

FreightWaves: U.S. Rail Volumes Are Still Falling

U.S. rail volumes trended downward again for the week ending June 15, with weekly volumes falling over 5 percent and year-to-date volumes declining nearly 3 percent, according to the latest data from the Association of American Railroads.

Platts: OPEC Sets July 1-2 As Date for Its Next Meeting

OPEC and its allies have fixed the date of their upcoming meetings in Vienna for July 1-2, ending a protracted scheduling spat that the organization’s president had said was keeping the oil market on edge.

Transport Topics: Data Shows More Truckers Than Ever, Experts Say Driver Shortage Still an Issue

While U.S. Census Bureau data shows the number of truckers at an all-time high, industry experts contend a driver shortage remains an issue.

6/20

WSJ: Iran Downs U.S. Military Drone Amid Rising Tensions

Iran shot down a U.S. military drone Thursday, U.S. and Iranian officials said, the latest in an escalating series of incidents across the Middle East that has stoked fears of a wider military conflict.

Market Watch: Iran’s downing of U.S. drone keeps Strait of Hormuz in spotlight

The Strait of Hormuz, the world’s most sensitive oil-transportation choke point, remains in focus, after U.S. and Iranian officials on Thursday said Iran shot down a U.S. military drone near the waterway.

FreightWaves: Ports Criticize Double-Tax Hurdle for U.S. Domestic Shipping

A tax that the United States charges shippers on the value of their cargo upon entering U.S. ports needs to be altered if the domestic maritime industry is going to better compete with trucks and trains, according to second-tier ports.

WSJ: Middle East Clashes Send Oil Sharply Higher

Oil prices climbed sharply Thursday as tensions in the Middle East continued to increase and the dollar fell, extending a period of high volatility for crude.

Transport Topics: More Shipping Through the Mississippi: The Push for Inland Port Development

Development and projected growth of inland ports, particularly in the Midwest, is increasingly critical to the nation’s supply chain.

6/21

WSJ: Investors Unload Pemex Bonds on Rating Fears

The Mexican state-owned energy company is on the verge of being downgraded to below investment grade by two major ratings firms. Its bonds are showing signs of forced selling by funds with limits on owning junk debt.

Argus Media: Fuel Crisis Weighs on Upstream Operations

Venezuela’s severe motor fuel deficit is starting to weigh on the country’s crude production, as oil workers struggle to reach their jobs, and oil equipment and supplies fail to reach oil fields.

Platts: RBOB Surges Following Explosion at PES Philadelphia Refinery

YMEX RBOB futures rose sharply Friday following an explosion and subsequent fire overnight at Philadelphia Energy Solutions’ 335,000 b/d refinery in Pennsylvania.

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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