Saudi Arabia Seeks Market Stabilization | Weekly News Update

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Saudi Arabia Calls for Market Stabilization

Despite an overall downward week for oil markets, Friday saw prices start to gain once more on news that Saudi Arabia is reaching out to other oil-producing nations in an attempt to stabilize prices. Earlier in the week, oil had continued to plummet as the US-China trade war faced the possibility of escalating into a currency war, and as the International Energy Agency (IEA) announced that oil demand growth has lowered to levels not seen since the 2008 financial crisis. Despite these problematic headwinds, following the news of Saudi Arabia’s plans Brent rose by 2 percent to $58.53 per barrel, and WTI rose by 3.7 percent to $54.50.

As the de-facto leader and largest oil-producing member of OPEC+, Saudi Arabia stated that it will be keeping exports below 7 million barrels per day in September, as well as allocate less crude volume than is demanded by its customers to stabilize prices. Additionally, state-run oil company Saudi Aramco will provide customers across all regions with 700,000 barrels fewer than requested. Currently cutting more than they are required to under the existing OPEC+ agreement, Saudi Arabia also reiterated the importance of OPEC+ meetings taking place in Abu Dhabi next month in evaluating the success of the group’s production-cutting strategy going forward.

Class 8 Truck Orders Fall to Lowest Level Since 2010

Despite a strong rebound in truck buying in 2018, orders for Class 8 trucks fell in July to their lowest level since 2010. According to FTR, a transportation research group, heavy-duty truck orders fell to 9,800 units in July, representing a decrease of over 82 percent from this time last year. In contrast, 52,000 new units were ordered in July and August of 2018.

While it is common for truck order figures to decline in summer months, this year’s trend offers a stark contrast to last year’s market, where trucking companies benefiting from a tight-capacity market had more funds available to invest in new vehicles. This year, however, indications of weakness in the manufacturing sector have reduced demand to move freight, and this dynamic may persist as global trade uncertainty between the US and China continues.

In Other News

8/5

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Platts: Could Flaring Hinder the US Oil Revolution?

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FreightWaves: Watchdog Agency Clears EPA’s Glider Truck Testing Practices

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8/6

WSJ: U.S. Expands Sanctions Against Venezuela Into an Embargo

The Trump administration imposed a total economic embargo against the government of Venezuela, a significant escalation of pressure against the regime of President Nicolás Maduro and countries including Russia and China that continue to support him, a senior administration official said.

Transport Topics: Battery-Powered Ships Next Up in Battle to Tackle Emissions

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FreightWaves: Self-Driving Truck Now Making Deliveries in Dallas

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Reuters: Saudi Energy Minister Expresses Concern Over Threats Targeting Freedom of Maritime Traffic

Saudi Arabia’s energy minister Khalid Al-Falih and U.S. Energy Secretary Rick Perry on Tuesday expressed concern over threats targeting freedom of maritime traffic, Al-Falih said in a tweet.

8/7

Reuters: U.S. Crude Stockpiles Unexpectedly Rise in Week

U.S. crude stocks rose last week, while gasoline and distillate inventories also rose, the Energy Information Administration said on Wednesday.

JOC: US Intermodal Savings Lowest in Five Years

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Transport Topics: Canadian Trucking Alliance Urges Provinces to Adopt ELDs

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Platts: European Refiners Cultivating A Taste for Nigeria’s Egina Crude

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8/8

Reuters: New U.S. Pipelines Poised to Start Price War for Shale Shippers

The operators of two new pipelines in West Texas shale fields are offering discounted prices to attract shippers accustomed to high fees to move oil to export hubs, according to the pipeline companies and federal filings.

Platts: US Oil Rig Count Hits 19-Month Low Amid Broad Drilling Slowdown

The number of active US oil drilling rigs edged down by 11 to 815 this week, the lowest since January 2018 and 100 lower than year-ago levels. The decline in oil drilling activity led the combined US oil and gas rig count down 11 to 1,022 last week, itself a 19-month low.

Argus Media: US Raises Tropical Storm Forecast

Shifting weather patterns have increased the chances for named storms in the US Gulf of Mexico as peak hurricane season arrives, according to federal meteorologists. A more active hurricane season could stir up more of the disruptions that backed up fuel exports and sent US Gulf coast benchmark medium, sour crude prices to a record premium to light sweet crude in late July.

CCJ: Unannounced Brake Inspection Spree Leads To 1,600 Trucks Placed Out of Service

The Commercial Vehicle Safety Alliance announced commercial vehicle inspectors conducted 10,358 inspections across the U.S. and Canada and sidelined 1,667 (16.1%) of those trucks.

NYT: U.S. Sanctions Turn Iran’s Oil Industry into Spy vs. Spy

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Reuters: Venezuela Begins Expansion of Crude Joint Venture with China

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8/9

WSJ: U.S.-China Trade Battle Is Crimping Global Oil Demand

Worries about the health of the economy and increasingly uncertain trade relations between the U.S. and China will put further pressure on global oil demand in 2019, the International Energy Agency said Friday.

Argus Media: IEA Cuts Oil Demand Growth Forecast

The IEA has cut its forecast for global oil demand growth in 2019-20, as the prospects of a resolution to the US-China trade dispute worsen and evidence of an economic slowdown mounts.

JOC: NY-NJ Makes First Delivery with Electric Drayage Truck

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CCJ: New Diesel Regs For Maritime Shippers Could Impact U.S. Truck Freight, Diesel Prices

Though IMO 2020 regulations don’t impact trucking fuel, which uses ultra-low-sulfur diesel, the tighter maritime regulations likely will alter the global diesel market and could put upward pressure on diesel prices as soon as the fourth quarter of this year.

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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