OPEC Meeting in Vienna Ends in Bitter Dissent
Since early 2016, the Organization of Petroleum Exporting Countries or the OPEC alliance has repeatedly cut production to support oil prices in the face of surging supplies from countries outside the alliance, specifically the United States. However, with now more than three years of limited production the group is increasingly ceding market share while prices have never reached a sustainable level of $80 per barrel (the target price point for Saudi Arabia). After the conclusion of last week’s meeting in Vienna the market is now worried about a price war between some of the biggest oil producers in the world.
Instead of seeing production cuts, Russia and Saudi Arabia are likely to significantly hike their respective outputs considering the conclusion of last week’s meeting. Over the weekend Saudi Arabia, the de facto leader of OPEC, stated that they plan on boosting crude-oil production between 10 million and 11 million barrels per day. This news sent West Texas Intermediate (WTI) futures down a stunning 25.2% to $30.81 per barrel during off-hour trading over the weekend. An additional plunge to the oil market would likely add to anxieties causing a longer spell of weakness and volatility across global markets.
TuSimple Expands Autonomous Trucking Program With UPS
Autonomous truck driving unicorn, TuSimple, plans to expand its pilot with UPS. TuSimple and UPS have been working together moving freight between Phoenix and Tucson, Arizona. The companies will add 10 trips between Phoenix, Arizona and El Paso, Texas. The trips are run as Level 4 autonomy. Although the truck can run at Level 5, the legislation requires a human to be present in case of an emergency. TuSimple believes that its technology can reduce shipping costs by 30 percent, mainly from removing the driver, but the technology is already showing efficiencies with the driver present. The autonomous truck uses roughly 10 percent less fuel than a human-driven truck. Furthermore, the autonomous driver can see farther ahead than a human driver, which allows the truck to anticipate and avoid slow-moving traffic.
Relatedly, Waymo—the self-driving business unit of Alphabet—received outside funding for the first time ever, totaling $2.25 billion. Waymo CEO John Krafcik was quoted, “We’ve always approached our mission as a team sport, collaborating with our OEM and supplier partners, our operations partners, and the communities we serve to build and deploy the world’s most experienced driver.” Waymo is expanding the team with additional funding and partners with experience to push this across the finish line
Top Energy Stories
A three-year pact between OPEC and Russia ended in acrimony on Friday after Moscow refused to support deeper oil cuts to cope with the outbreak of coronavirus and OPEC responded by removing all limits on its own production.
- Oil slammed as investors flee after Russia rejects steep OPEC cut
- What is OPEC? | An Overview and Implications on Crude Oil
Europe’s top oil and gas companies, which account for roughly 7% of global crude consumption, have committed themselves to greenhouse gas emission reduction targets which vary in scope, timelines and detail, making them hard for investors to compare. Graphic: European oil companies – share of global consumption
Warren Buffett’s investment company Berkshire Hathaway has decided not to invest $4 billion in a liquefied natural gas (LNG) plant by the Saguenay port.
Top Freight Transportation Stories
The coronavirus epidemic is upending the carefully calibrated logistics of global shipping, as plunging exports from China disrupt the trade of American goods, especially farm products such as fruit and meat destined for Asia.
The barricades — sparked by the western tribe of Wet’suwet’ens protest of the Coastal GasLink pipeline that expanded to involve non-indigenous demonstrators blockading CN lines in the eastern portion of the country — showed just how quickly the Canadian container supply chain could be crippled.
XPO Logistics plans to transform its less-than-truckload (LTL) business through a major infusion of technology spending, once it completes the sale or spin-off of other parts of its $17 billion transportation and logistics conglomerate.
There’s widespread consensus in the automotive industry that Level 5 autonomy — in which driverless vehicles can operate in any environment with no human involvement — won’t be feasible any time soon from a technological and regulatory standpoint.
- Self-driving vehicle company Waymo announces first outside investment: $2.25 billion
- Fleet Forward: Penske, Waymo Share Vision for Future of Autonomous Trucking
Top Economic Stories
The Federal Reserve cut its benchmark rate by a half percentage point on Tuesday morning, delivering a booster shot to stem potential economic disruptions from the spreading coronavirus epidemic with its first between-meeting move since the financial crisis.
Global economic growth will slow sharply this year as governments attempt to contain the coronavirus epidemic, although the scale of the setback is highly uncertain, the Organization for Economic Cooperation and Development said Monday.
U.S. employers maintained a robust pace of hiring in February, giving the economy a strong boost heading into the coronavirus outbreak, which has stoked fears of a recession and prompted an emergency interest rate cut from the Federal Reserve.