OPEC Extends Forecast for Decline in Global Oil Demand
The Organization of the Petroleum Exporting Countries (OPEC) expects the pandemic to reduce demand by 9.5 million barrels a day, forecasting a fall in demand of 9.5 percent from last year. The cartel also softened the amount by which it expects non-OPEC oil supply to fall this year—in part because of a recovery in U.S. output—as well as blunting its demand recovery forecast for next year. That was accompanied by a sharper forecast hit to the global economy: OPEC now expects a 4.1% contraction in activity.
OPEC repeatedly slashed its oil demand forecast as the coronavirus hammered the global economy during the spring, before muting its most doom-laden estimates during the summer. Monday’s cut marked the second straight month in which the cartel reduced its demand forecast, a signal of the growing concern about a second spike in Covid-19 cases and a stalling recovery in oil demand.
Freight Networks Overfilling; Financing for Suppliers; Waiting for Delivery
A sudden snapback in freight demand has distribution networks out of the U.S. West Coast bursting at the seams. The crush of imports is straining capacity at seaports and in supply chains heading inland, the WSJ Logistics Report’s Jennifer Smith writes, raising shipping prices for retailers and complicating efforts to replenish inventories following the coronavirus pandemic upheaval. Industry executives say the restocking is coming just as companies are also starting to line up goods for the coming holiday season. The surge marks a sharp turnaround from the downturn that hit freight markets in the spring and summer when truckers and railroads slimmed down operations in the face of weak demand. Intermodal demand off the West Coast is especially high. Union Pacific Corp. has even raised surcharges on some of rail lanes for spot-market shippers looking to get goods on board, a move that seemed unthinkable just a few months ago.
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With few signs of a strong surge in demand and a correction in the price of oil, it looks like OPEC+ eased output limits too soon and the price of oil is headed lower, analysts said.
Refiners are seeing margins weaken around the world on ample refined product supply and high crude stocks, while Saudi Arabia is cutting its official October crude selling prices in an attempt to incentivize crude buying, an analysis from S&P Global Platts showed September 8.
Some of the world’s biggest oil traders are getting ready for the possible resurgence of a coronavirus-induced glut of crude and fuels, snapping up giant tankers for months-long charters so that they can be ready to store excess barrels if necessary.
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COVID-19 has created challenges throughout the trucking industry, but it also has created opportunities, especially when it comes to fleets’ accounting processes.
Rep. Peter DeFazio, chairman of the U.S. House Transportation and Infrastructure Committee, recently called on the Inspector General of the National Archives and Records Administration to investigate reports regarding the alleged destruction of certain records at the U.S. Environmental Protection Agency.
Pent-up consumer demand from COVID-19 shutdowns continues to buoy spot freight rates, but a still-weak manufacturing sector has experts at FTR cautioning that things could turn downward again.
Ocean rates continue to surge on the Transpacific route. They are up more than 50 percent YoY from China and East Asia to the North American East Coast and have more than doubled (up 145 percent YoY) from China and East Asia to the North American West Coast, according to numbers from Freightos.
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Treasury Secretary Steven Mnuchin opened this month by saying that despite the stalemate over Covid-19 relief funding, the Trump administration and Congress could agree on one thing: a stimulus package was needed.
The U.S. economy has kept growing despite a summer spike in coronavirus cases and the end of massive federal aid, but millions of Americans are either being left out or in are danger of being left behind.
The layoffs and furloughs of more than 25 million U.S. workers have understandably fueled most of the nation’s anguish over the coronavirus recession. But that’s not the only economic setback for workers: Many companies are trimming employees’ hours or wages to reduce costs – either instead of, or in addition to, the job cuts.