OPEC Output Rises for First Time Since 2019 Cuts | Weekly News Update

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OPEC Output Rises for First Time Since Start of 2019 Cuts

The Organization of Petroleum Exporting Countries (OPEC) increased their production in August for the first time since the start of the year.  This is when the cartel implemented its most recent agreement of production cuts.  Nigeria and Saudi Arabia increased production by 200,000 barrels per day (bpd).  While Saudi Arabia increased production, they are still far below their original pledge.  Nigeria on the other hand has not made any of its required cuts and reached production levels of 1.95 mmbd, the highest since early 2016.  Russia – part of the OPEC+ group – also increased production and is currently 104,000 bpd above its limit. 

 Class 8 Truck Makers Apply the Brakes

The heavy-duty truck manufacturers are continuing to feel the heat of the decelerating US manufacturing sector.  The surge in trucks coming onto the market late last year and the start of 2019 paired with slowing freight demand has created a glut in the freight market.  ACT Research estimates that trucking companies have added roughly 6 percent more capacity this year.  With that said, estimated truck orders for August increased slightly from July, but dropped 80 percent year-over-year.  Estimates for sales have not yet come out but have remained strong in recent months.  If fleets ramped up cancellations this past month, we could see a drop off in trucks coming into the market as well. 

In Other News

9/2

WSJ: Truck Makers Apply the Brakes

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Bloomberg: OPEC Output Rises for First Time Since Start of 2019 Cuts

OPEC’s crude production rose last month, the first increase since the group and its allies started a new round of output cutbacks at the start of the year to shore up a weak global market.

WSJ: Trump Administration Goes Ahead with New Tariffs on Chinese Products

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9/3

HDT: Truck Fleet Earnings Are Lagging the Overall Economy

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Reuters: Oil prices rise over 4% on positive economic data from China

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9/4

JOC: UP nixes plan to fine trucks for missed appointments

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WSJ: Ethanol Industry Reels as Trade Dispute and Policy Changes Cut Demand

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9/5

WSJ: Fed Lines Up Another Quarter-Point Rate Cut

Federal Reserve officials are gearing up to reduce interest rates at their next policy meeting in two weeks, most likely by a quarter-percentage point, as the trade war between the U.S. and China darkens the global economic outlook.

WSJ: China and the U.S. Will Hold High-Level Trade Talks in Early October

Chinese and American officials plan to hold trade talks in Washington in early October, a new attempt to tame a trade war that is rippling through the global economy and hurting business investment and confidence.

HDT: August Truck Orders Show Modest Monthly Increase

Early reports on Class 8 truck orders for the month of August show a modest increase compared to July, but as manufacturers open up slots for 2020, it seems that fleets are in no hurry to fill them.

9/6

WSJ: Weakened Hurricane Dorian Makes Landfall on North Carolina Coast

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WSJ: U.S. Employers Added 130,000 Nonfarm Payrolls in August

Employers added to payrolls at a steady pace and unemployment stayed historically low in August, suggesting the U.S. economy held firm during a month when a deepening global slowdown and faltering manufacturing activity stoked fears of a sharp U.S. slowdown.

JOC: Pivotal Q4 ahead for US truckload sector

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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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