OPEC Faces Pressure Before Production Cut Decision
Saudi Arabia pumped a record amount of crude oil in November as President Trump applies pressure on the country and the Organization of Petroleum Exporting Countries (OPEC) to lower prices. Earlier this month, President Trump supported Saudi Arabia after the killing of a journalist Khashoggi and has been a strong ally of Saudi Arabia. Saudi Arabia is faced with a tough decision. They can either advocate for a production cut to inflate prices, which would risk President Trump’s support. Otherwise they can keep production steady and jeopardize their heavily oil dependent economy.
OPEC is set to meet on December 6th to decide if the cartel will cut crude production or hold steady as prices are plummeting. Russia, the largest oil producer in the world, has not committed to supporting OPEC in production cuts yet as they do not need inflated oil prices to gain profit. Other OPEC nations are also putting pressure on Saudi Arabia in that if there was a cut, Saudi Arabia would take the brunt of the cuts. Saudi Arabia is already planning on cutting their crude production by 0.5 million barrels per day (mmbd) in December.
Run on Less Regional
The North American Council for Freight Efficiency (NACFE) is gaining progress to perform a second Run on Less. The first Run on Less was a seven heavy duty truck event that hauled real shipments across the country. The results achieved an average of 10.1 MPG during a 99 day timeframe. The next version of Run on Less will highlight regional applications and focusing on Class 8 trucks operating within 300 miles of a base location. As length of hauls get shorter, this is a good test to find the best of the best trucks and technology for regional shipments.
In Other News
Republican lawmakers Sunday criticized President Trump’s dismissal of the Central Intelligence Agency’s assessment that the Saudi crown prince ordered the killing of a dissident journalist last month and called on the administration to consider further action against the kingdom.
Saudi Arabia raised oil production to an all-time high in November, an industry source said on Monday, as U.S. President Donald Trump piled pressure on the kingdom to refrain from production cuts at an OPEC meeting next week. Also see, Saudi Daily Oil Output Surpasses Record 11 Million Barrels and World Oil: Saudi Output Reaches Record as Trump Presses for Cheaper Oil.
Ongoing pay increases would follow a year of multiple wage jumps that Klemp projects will culminate with driver pay increasing 11 to 11.5 percent overall by the end of this year, making 2018 the highest year for pay increases on record.
Volvo Trucks announced it has signed a “landmark” agreement in Norway with mining company Bronnoy Kalk AS that calls for the truck maker to haul commercial loads of quarried limestone across mine property using six fully autonomous heavy-duty trucks.
Plunging oil prices once again threaten to force American shale drillers to pull back on production, just as they were preparing to unleash a flood of crude. U.S. benchmark prices are rising Monday morning, recently at $51.91, but have tumbled more than 30% since October and closed Friday at their lowest level in more than a year.
Russia is taking steps to stimulate the production of low sulfur bunkers and ease the transition to the new IMO 2020 global sulfur cap for the country’s refiners.
France and Germany are teaming up to create a payments channel to keep European trade flowing with Iran, defying U.S. attempts to isolate Tehran. The steps by Europe’s most powerful countries are part of their campaign to salvage the 2015 Iran nuclear deal after Mr. Trump withdrew the U.S. in May.
The Trump administration is set to order refiners to use 15 billion gallons of conventional renewable fuels such as corn-based ethanol next year, resisting oil industry pressure to lower the mandate, according to three people familiar with the plans.
Transport and logistics provider XPO Logistics, Inc. (NYSE: XPO) said today it has launched last-mile tracking of heavy goods through “Google Search,” thus becoming the first transport company to offer last-mile visibility of heavy goods delivery status through the ubiquitous online search function.
The world’s largest pork producer is teaming up with a Virginia-based energy company to harness methane gas from thousands of malodorous hog lagoons to both heat homes and combat climate change. Food giant Smithfield Foods and Dominion Energy, a large electric and gas utility, have agreed to spend $125 million each over 10 years to cover hog lagoons in North Carolina, Virginia and Utah, capture methane gas and feed that into Dominion’s pipeline network, the companies said.
Promises from nations around the world to reduce greenhouse-gas emissions fall far short of what is necessary to avoid catastrophic climate change, according to a new United Nations report that urges more-ambitious commitments to curb global warming.
Energy Transfer LP and its Sunoco pipeline subsidiary have racked up more than 800 state and federal permit violations while racing to build two of the nation’s largest natural gas pipelines, according to a Reuters analysis of government data and regulatory records.
The Trump Administration has temporarily frozen a program meant to exempt small oil refineries in financial distress from the U.S. biofuels law, as it reviews the scoring system to evaluate applications, according to two sources familiar with the matter.
This past year has seen significant moves by a few big container lines to redefine and reposition themselves as end-to-end logistics providers. The principal motivation of Maersk and CMA CGM is self-apparent: to mitigate cyclicality, greater predictability of revenue, create value for customers and be compensated in kind, and defend against disruption by new forms of industry actors.
The Trump administration’s threatened shutdown of the U.S.-Mexico border could shift supply chains as companies that depend on the crossing to reach customers in California and nearby states look for ways to keep goods moving, trucking experts say.
Thor Trucks will be profitable from the start of production next year because of environmental subsidies available for electric trucks, co-founder Giordano Sordoni said at the 2018 Los Angeles Auto Show.
The International Maritime Organization’s more stringent bunker fuel requirements from 2020 will provide support for refineries, at least in the medium term, delegates at the World Refining Association conference in Cannes said Wednesday. The IMO will impose a global 0.5% cap on marine fuel sulfur emissions from 2020, from the current 3.5% global limit.
The North American Council for Freight Efficiency (NACFE) is in the early planning stages for a second Run on Less. The first was a seven-truck, cross-country long-haul fuel efficiency demonstration that achieved a cumulative average of 10.1 for 99 days last year. Also see, 2nd Run on Less to focus on regional trucking
Almost since Donald Trump moved into the White House, the Environmental Protection Agency and California Air Resources Board have been in a political war over the direction of U.S. environmental policy.
The National Retail Federation said the 2018 holiday shopping season is off to an excellent start, and the tight capacity of the trucking industry is not a factor so far as retailers have more than enough inventory in stock to carry them through the end of the year.
The operating margins of the top container lines in the third quarter after spending roughly one-fifth more on bunker fuel are blinking red lights in terms of carriers’ ability to recoup higher operating costs when the low-sulfur rule takes effect in a year.
Oil prices have plunged by about 25 percent in the last month while the cost of gasoline has tumbled to as little as $2 a gallon in several states. President Trump is pushing for even lower prices, calling it “a big Tax Cut for America and the World.”
Banks in November lowered their forecasts for oil prices in 2019 amid signs of rising global supply and a price rout in which crude has lost more than 30% since the start of October.
CSX CEO Jim Foote said he would not rule out a merger with another Class I railroad, like Union Pacific or Norfolk Southern to help the two railroads implement precision scheduled railroading (PSR).
Iran and other oil producers will press Saudi Arabia to bear the brunt of production cuts when OPEC meets next week, potentially undermining efforts to reverse the current oil-price slide, write the WSJ’s Benoit Faucon and Summer Said.
An Organization of the Petroleum Exporting Countries panel reviewing scenarios for the cartel’s meeting next week recommended cutting total output by 1.3 million barrels a day from October levels, officials familiar with the matter said Friday.