OPEC Production Falls Significantly on Saudi Output Cuts
The Organization of Petroleum Exporting Countries (OPEC) significantly reduced their crude oil production, according to the monthly report was released last week. The total production cuts equal 797,000 barrels per day (bpd), with Saudi Arabia again leading the charge with help from United Arab Emirates (UAE), Kuwait, and Angola. The four nations cut a total of 661,000 bpd with Saudi Arabia accounting for 350,000 bpd. The production cuts are apart of an agreement between OPEC and supporting countries including Russia to cut 1.2 million bpd. The OPEC nations agreed to cut 800,000 bpd from October production levels and the supporting countries agreed to the remaining 400,000 bpd. The production cuts have significantly drove price behavior since the beginning of 2019. In January, both West Texas Intermediate (WTI) and Brent crude benchmarks rose over $8 per barrel. Since then, prices rose to its highest price since November 2018.
Positive sentiment with the US-China trade negotiations are also boosting energy prices. Although US President Trump and Chinese President Xi are not meeting before the March 1 deadline, President Trump as announced he will extend the deadline if progress is made towards a broad outline of a successful trade deal.
Nikola Announces Plans for Electric Truck
Nikola, the OEM (Original Equipment Manufacturer) that is set to launch its flagship hydrogen fuel cell class 8 truck, has announced it will also be unveiling a fully battery electric truck to compete with Tesla and other battery electric OEMs. Despite announcing the class 8 battery electric truck, Nikola claims they are not shifting their focus away from hydrogen. The battery electric truck would offer shorter range and non-weight sensitive solutions. Nikola claims their hydrogen fuel cell truck will produce 50 to 1 sales compared to the battery electric truck and the cost to operate a hydrogen fuel cell truck will be cheaper in long haul situations, even with higher hydrogen costs.
In Other News
Its highly aspirational goals – which some contend are impractical and overly expensive – include moving the country toward “net-zero emissions” within a decade by electrifying the transportation sector.
Still more than two months away from an event the company has dubbed Nikola World – where the now-Arizona-based hydrogen fuel cell truck startup plans to debut its flagship Class 8 tractor – Nikola Motor Company tweeted Friday that a battery-powered unit would also be showcased. Also see, Nikola Motors announces all-electric version of the semi-truck as Tesla Semi changes the game.
Looking like a delegation of toasters from space, a generation of electrically powered, self-driving mail trucks will roll out of a suburban Detroit industrial park later this year. Their mission: Revolutionize mail and package delivery.
Nearly seven weeks into 2019, the contour of the US trucking landscape is becoming somewhat clearer. Truck capacity generally should be less tight this year than in 2018, but shippers shouldn’t expect another 2016, when excess capacity was the rule, rather than the exception.
When the Port of Virginia began a sweeping renovation of its major Norfolk International Terminals, some easy-to-miss line items on the $375 million agenda included boosting the site’s electric power stations several feet off the ground and adding data servers as far back from the water as possible.
SoftBank Group Corp.’s giant tech fund is investing almost $1 billion in a robotic-delivery vehicle startup, a hefty injection of capital that could help accelerate the race to put driverless vehicles on the road.
OPEC significantly reduced its crude-oil production in January, making good on its latest deal to curb output and rebalance an oversupplied market, the oil cartel said Tuesday.
China has been holding talks with Venezuela’s political opposition to safeguard its investments in the troubled Latin American nation, hedging its bets as pressure builds on Nicolás Maduro, the embattled leader for whom Beijing has been a vital ally.
Bob Wollenman, managing partner of Deluxe Truck Stop in St. Joseph, Missouri, is a single-unit independent truck stop operator who has rolled with the changing needs of drivers and trucking companies since he opened his doors in 1980.
OPEC said on Tuesday it had cut oil production steeply under a global supply deal, although it flagged headwinds confronting its efforts to prevent a glut this year including weaker demand and higher rival output.
Los Angeles will abandon a plan to replace three aging gas power plants along its coast with newer natural gas technology and will instead invest in renewable energy as it seeks to move away from fossil fuels, the city’s mayor said on Tuesday.
Norfolk Southern laid out its plan to implement precision scheduled railroading (PSR) Monday at an investor conference at the railroad’s new headquarters in Atlanta. The plan includes centralizing operations, reducing staff, running fewer, heavier, faster trains and optimizing the network in order to increase efficiency.
Autonomous trucking firm TuSimple has raised $95 million to expand its fleet of self-driving big rigs and fund joint product development with truck manufacturers and equipment makers, the company said Wednesday.
Lower diesel prices for truck stop owners and their trucking customers could hinge on the ability of Congress and President Donald Trump to hash out a deal by Friday’s deadline on a new spending bill.
The US Department of Agriculture has encouraged environmental regulators to waive enforcement of laws blocking the summer sale of ethanol blends above 10pc if a rule is not in place by 1 June, the department’s deputy secretary said today.
The combination of US financial sanctions and protests in Venezuela are putting pressure on sitting president Nicolas Maduro’s circle “that will eventually bring about an end to Maduro’s reign of terror,” State Department special envoy Elliott Abrams said today. But he declined to say when the US expects Maduro to step down and pave way for National Assembly speaker Juan Guaido — whom the US and more than 50 other countries recognize as acting president — to take over.
The global oil market will struggle this year to absorb fast-growing crude supply from outside OPEC, even with the group’s production cuts and U.S. sanctions on Venezuela and Iran, the International Energy Agency said in a report on Wednesday.
Cents per mile remains the dominant form of pay in the for-hire truckload sector, but its dominance is not as strong as it once was as fleets embrace alternative pay models that take cyclicality out of driver pay.
Volatile energy prices are holding down overall inflation in the U.S. economy, but underlying price growth remains steady. The consumer-price index, which measures what Americans pay for goods and services such as washing machines and haircuts, remained the same in January for the third month in a row, the Labor Department said Wednesday. Inflation was up 1.6% from the prior year, the smallest year-over-year gain since the middle of 2017.
Maersk, the largest container ship and supply vessel operator in the world, is continuing its preparations to meet new low sulfur fuel regulations. Maersk has opted out of fitting scrubbers to most of its fleet, meaning that it needs to secure low sulfur fuel supplies globally for its vessels to comply with the new regulation. As a result, Maersk has embarked on a series of strategic agreements with fuel storage and supply companies that will ensure its fleet is able to operate legally after the January 2020 implementation of IMO 2020.
The European Union has convened a wide-ranging industrial group to work on promoting the euro and fighting the monopoly of the U.S. dollar in oil and commodities trading, reflecting broader tensions with Washington over trade and sanctions.
Greg Orr isn’t buying the doom and gloom scenario for the US truckload market that some analysts and fellow truckers warn of as volume growth shows signs of decelerating. For one, his customers haven’t stopped asking for trucks. “We’re seeing a little bit of a lull, but that’s typical,” in the first quarter, said Orr, the president of truckload carrier CFI and since December executive vice-president for US truckload at Canadian trucking and logistics operator TFI International.
BNSF plans to spend the largest amount since 2015 on expansion and efficiency projects, with the railroad’s major intermodal lanes seeing much of that investment. The largest Class 1 railroad by track mileage, BNSF said its capital spending in 2019 would reach $3.57 billion, an 8 percent increase over last year and the largest amount of the major North American railroads.
Congress is preparing to again take up legislation on autonomous vehicles (AVs) after it failed to pass regulations during the last session.
The US truckload market has found its new “balance” after a chaotic year, but balanced doesn’t mean cheaper. “We’ve still got an inflationary environment in the trucking business,” Bob Biesterfeld, chief operating officer and soon-to-be CEO of third-party logistics operator C.H. Robinson Worldwide, told JOC.com in a Thursday interview. “Costs are going up, there’s still a shortage of drivers.”
Despite plummeting truck orders and an expected sharp dip in spot market rates, freight demand should remain healthy in 2019, according to analysts from FTR. Though a recent plunge in Class 8 truck orders has caused concern among some about a potential trucking downturn, the drop is simply a return to normal monthly order activity, says Avery Vise, vice president of trucking for FTR.
The trucking industry experienced almost 1.2 billion hours of delay in 2016 because of traffic congestion on the National Highway System, according to a 2018 report from ATRI. “This delay is the equivalent of 425,533 commercial truck drivers, sitting idle for an entire working year…it is estimated that the additional operational costs incurred by the trucking industry due to traffic congestion were $74.5 billion,” the report said.
The potential March meeting between the two leaders is particularly significant because President Trump has said that he and Xi will work out the final deal themselves. Trump tweeted on January 31, “No final deal will be made until my friend President Xi, and I, meet in the near future.”