OPEC Crude Oil Output
Several stories regarding OPEC and supporting countries were in the news last week. On Monday, Iran’s Vice President Eshaq Jahangiri announced that they will allow private companies to export crude oil, and they urge OPEC members to uphold agreements. This was largely to counter U.S. sanctions. To follow this announcement, Iran’s President Hassan Rouhani threatened shipments from neighboring countries if the U.S. proceeds with its goal of forcing all countries to stop buying Iranian oil. In the past, Iran threatened to block the Strait of Hormuz. Roughly 19 million barrels per day (mmbd) of oil is transported through the Strait of Hormuz which is considered the largest choke-point in the world.
In response to lowering output from sanctions on Iran and Venezuela, and the shortages of other countries including Canada and Libya, the U.S. and President Trump are asking Saudi Arabia and other supporting countries to increase production to lower crude oil prices. President Trump tweeted saying he talked with Saudi Arabia and they agreed to increase production by 2mmbd. It was later reported that Saudi Arabia never agreed – Saudi Arabia confirmed that they can increase production by 2mmbd if needed, but never confirmed that they would. This was after President Trump accused OPEC of propping up prices.
June truck orders hit record high
Class 8 truck orders exceeded 42,000 units in June. This is 140% above last year and the highest June order total on record. Four of the last six months exceeded 40,000 trucks this year. With such high demand, Original Equipment Manufacturers (OEMs) are struggling to get enough parts and are hitting a bottleneck. The Backlogs-to-build ratio is up to 9.6 months at the end of May. That would mean the trucks ordered in June may not be delivered until 2019. The high demand for trucks is directly related to the high demand of moving goods to market in a strengthening economy.
To accompany the high demand for class 8 trucks, the Federal Motor Carrier Safety Administration (FMCSA) is proposing a plan to host a pilot program to allow military veterans under-21 to drive class 8 trucks across state lines. Currently, drivers under the age of 21 are only allowed to drive within state lines in select states. If the pilot program is successful, it could open a door to allow all drivers under 21 to cross state lines. The pilot will consist of 50 different fleets and 200 drivers from ages 18-20. They will compare data to drivers 21-24 and report the findings to the FMCSA.
In Other News
Iran will allow private companies to export crude oil, part of a strategy to counter U.S. sanctions, and is urging fellow OPEC members, including regional rival Saudi Arabia, not to break output agreements, state media and officials said on Sunday.
President Donald Trump’s request for more Saudi Arabian oil put a spotlight on growing U.S. unease about how quickly the crude sector has switched from glut to deficit, but a boost in Middle East production may not be enough to stem the price rallies that have hit consumers.
BP has entered into an agreement to purchase Chargemaster, a major electric vehicle (EV) charging company in the U.K. According to BP, Chargemaster operates the U.K.’s largest public network of EV charging points. It also designs, builds, sells and maintains EV charging units for a range of locations, including for home charging.
Thanks to legislation recently signed by Gov. Gina Raimondo, D-R.I., natural gas trucks driving in Rhode Island will be able to operate with a total gross weight of up to 82,000 lbs.
Russian oil companies are priming the pumps to significantly boost crude output this summer, taking on an unusually important role in a global effort to keep prices in check. Alongside Saudi Arabia, Russia is one of just a few countries that can quickly ramp up production, a capability that could help a group of big producers
President Hassan Rouhani appeared on Tuesday to threaten to disrupt oil shipments from neighboring countries if Washington presses ahead with its goal of forcing all countries to stop buying Iranian oil.
Cummins Inc. announced it is acquiring Silicon Valley-based Efficient Drivetrains Inc., which designs and produces hybrid and fully-electric power solutions for commercial markets.
U.S. President Donald Trump again accused the Organization of the Petroleum Exporting Countries of driving gasoline prices higher on Wednesday and urged the oil producer group to do more.
North American Class 8 truck orders topped 41,800 units last month according to FTR, 140 percent above last year and the highest June order total on record. Heavy truck orders have exceeded 40,000 units in four of the six months this year. Also see, Heavy Demand for Big Rigs
The Federal Motor Carrier Safety Administration will accept comments from the public and trucking industry stakeholders over the next 60 days for a proposed pilot program that would allow military-trained, under-21 CDL holders to drive across state lines