OPEC Production Amid Escalating Coronavirus | Weekly News Update

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Potential OPEC Production Cut Amid Escalating Coronavirus

The Organization of Petroleum Exporting Countries (OPEC) met last week to discuss if the cartel should implement a temporary production cut due to the coronavirus causing hampered demand and crude oil to stock up.  The OPEC Joint Technical Committee recommended the group cut an additional 600,000 barrels per day (bpd).  However, Russia—the second-largest oil producer in the world—has been against the cuts.  They believe the group should wait to see if the coronavirus is contained and reassess the situation at the scheduled meeting in March.

At the time this was written, West Texas Intermediate (WTI) and Brent crude oil prices have recovered slightly but remained in a bear market.  WTI dropped nearly $13 per barrel or 20 percent since January 6, 2020, and Brent decreased over $14 per barrel or 21 percent over the same timeframe.  Wholesale diesel prices followed suit and dropped over 33¢ per gallon or 12 percent.

 

Sweeping Labor Bill Would Limit Independent Contractor Use Nationwide

The U.S. House of Representatives backed a bill that would make it tougher for truckers to operate as independent contractors rather than employees.  This bill mimics California’s AB5 that is currently held up in court.  If it were to be passed, all workers would be classified as an employee unless they can meet a three-part test used to define if a contractor is independent or not.  The worker needs to prove that they are “free from the control and direction” of the employer and that they perform a service that is “outside the usual course of the business of the employer.”  The bill is expected to not move forward as the Republican-backed Senate is against the bill.

 

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WSJ: Oil Prices Slide into Bear Market on Coronavirus Concern

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Bloomberg: OPEC Expects Russia to Respond in Days to Oil Output Cut Plan

The OPEC Joint Technical Committee (JTC) met last week and recommended the group cut production by another 600,000 bpd in response to the coronavirus. Russia hesitated and asked for more time to consider deeper cuts. Moscow could make a decision in the coming days but the discord was a setback for Saudi Arabia. The continued disagreement could delay the scheduling of the ministerial meeting, which had been projected to take place this week.

WSJ: U.S. Plans to Renew Sanctions Waiver on Iraq’s Imports of Iranian Power

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HDT: Sweeping Labor Bill Would Limit Independent Contractor Use Nationwide

Business and trucking interests are criticizing a union-backed labor bill passed by the U.S. House of Representatives. Among other things, the bill would rewrite how independent contractors are defined along the same lines as the controversial new AB5 law in California, which would upend trucking’s longstanding use of owner-operators.

HDT: Nikola to Build Tre Electric Truck for Europe in Germany

Nikola Motor Company has disclosed how it will produce its forthcoming Tre model in Europe. On February 6, Italy-based CNH Industrial’s Iveco and FPT business units together with Nikola announced future Nikola Tre production will take place at an Iveco plant in Ulm, Germany.

Top Economic Stories

WSJ: Coronavirus Closes China to the World, Straining Global Economy

Uncertainty over the virus—which has infected more than 17,000 people— has disrupted worldwide trade and supply chains, depressing asset prices, and forced multinational businesses to make hard decisions with limited information.

WSJ: U.S. Economy Added 225,000 Jobs in January

Employers added 225,000 jobs in January and the jobless rate was 3.6%, signs that the U.S. labor market is positioned to fuel economic growth in 2020.

WSJ: China to Cut Tariffs on $75 Billion of U.S. Goods

China said it would slash tariffs on $75 billion of U.S. imports in half as part of its efforts to implement a recently signed trade agreement with Washington.

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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