Saudi Arabia To Increase Oil Production | Weekly News Update

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Saudi Arabia To Increase Oil Production

Geopolitical risk to global oil production and supply has encouraged Saudi Arabia to increase its production. In fact, Saudi Arabia already increased production in May by about 100,000 barrels. Saudi Arabia has since announced its intention to increase production by a similar amount in June, ahead of the June 22 OPEC meeting.

The growing risk of sanctions reducing the amount of Iranian oil available to world markets, and the chance of Venezuela’s production grinding to a complete halt were among the foremost contributors to OPEC’s leader changing its mind. In effect, Saudi Arabia ramping up its oil production will reduce some of the upward price pressure it has strived to create in its current production agreement among OPEC and its allies. The remaining questions to be answered regard how much Saudi Arabia, OPEC and its allies will allow production to increase, and for how long? The June 22 meeting should offer more clarity on both accounts.

Shell’s Starship and Freightliner’s Cascadia Show Off Specs

Shell Company announced the results of the Starship Initiative demonstration run, a six-day, 2,410-mile trip along Interstate 10 from San Diego, CA to Jacksonville, FL. While the Starship’s fuel economy averaged 8.94 mpg, it achieved a freight ton efficiency average of 178.4 ton-miles per gallon, a 248 percent improvement over the on-highway Class 8 industry average of 72 ton-mpg.

Megan Pino, the Shell Rotella global brand manager and Starship Initiative team leader, stated the Starship is among the solutions required to navigate the coming energy transition. “This is one idea, and it is a good material example of what we can do today in order to realize some of these efficiencies and CO2 reduction improvements while still looking toward the future at any of the number of different technologies that are going to be needed down the road,” Pino said.

Another class 8 electric truck was revealed this past week, too. Daimler Trucks’ Freightliner brand revealed two new all-electric trucks that will be put into use for testing later this year. Freightliner has the goal of putting the eCascadia Class 8 tractor and eM2 medium-duty truck into production in 2021. The Freightliner eCascadia has a gross combined weight rating (GCWR) of 80,000 pounds and delivers 730 horsepower. Its 550-kilowatt-hour battery pack is expected to offer a driving range of 250 miles per charge and can be recharged up to 80 percent (that’s about 200 miles) in 90 minutes’ time. It is intended for regional distribution. The eM2, meanwhile, has a GCWR of 26,000 pounds, a range of 230 miles, 480 hp, and can be 80-percent recharged in just 60 minutes. It is aimed at local, shorter-distance delivery and “last-mile” logistics.

In Other News

6/4

WSJ: The Next Threat to Oil Prices: China

Oil prices have had a spectacular run, rising by nearly 50% since last July, thanks to a potent mix of OPEC discipline, geopolitical risk and strong demand. The rally has moderated in the past couple of weeks, thanks to concerns OPEC’s resolve on supply cuts is weakening just as U.S. oil production is showing renewed signs of vigor. What investors may not appreciate is that demand growth is also poised to slow in the world’s largest net oil importer last year, China.

WSJ: Banks Sharply Raise Oil-Price Forecast on Geopolitical Risks

Banks raised their forecasts for oil prices for the eighth month in a row in May, amid escalating geopolitical risks to supply in Iran and Venezuela.

6/5

Reuters: Trump administration biofuels deal delayed indefinitely

The Trump administration has indefinitely delayed a proposed overhaul of U.S. biofuels policy aimed at reducing costs for the oil industry, under pressure from corn state lawmakers who worry the move would undermine demand for ethanol, according to two sources familiar with the matter.

WSJ: Truck Orders Soaring on Growing Freight Demand

The market for new heavy-duty trucks is growing at a nearly unprecedented pace this year as fleet owners and big-rig manufacturers race to keep up with accelerating U.S. freight demand.

American Shipper: U.S. Xpress Launches IPO

U.S. Xpress Enterprises Inc. announced the launch of its initial public offering (IPO) of 18,056,000 shares of its Class A common stock. The IPO price is expected to be between $18 and $20 per share, the truckload carrier said in a filing Monday with the Securities and Exchange Commission.

6/6

CCJ: Shell releases Starship freight ton efficiency results from cross-country test run

Shell Company announced the results of the Starship Initiative demonstration run, a six-day, 2,410-mile trip along Interstate 10 from San Diego, CA to Jacksonville, FL. While the Starship’s fuel economy averaged 8.94 mpg, it achieved a freight ton efficiency average of 178.4 ton-miles per gallon, a 248 percent improvement over the on-highway Class 8 industry average of 72 ton-mpg.

EIA: Distillate Fuel Oil was the Most Exported U.S. Petroleum Product During 2017

Distillate fuel continued to be the most exported U.S. petroleum product in 2017, averaging 1.4 million barrels per day (b/d) of gross exports. U.S. distillate exports went to 79 different destinations in 2017, particularly to markets in Central America, South America, and Europe. The proximity of U.S. Gulf Coast refineries to Mexico and to Central and South America combined with high demand in these regions led to higher U.S. distillate exports to these locations.

Bloomberg: Shale Country Is Out of Workers and Dangling 100% Pay Hikes

In the country’s busiest oil patch, where the rig count has climbed by nearly one third in the past year, drillers, service providers and trucking companies have been poaching in all corners, recruiting everyone from police officers to grocery clerks.

Transport Topics: Daimler Announces Automated Truck Research Center in Portland

Daimler Trucks announced it is establishing an Automated Truck Research and Development Center here at its North American headquarters to test and validate automated driving technologies.

6/7

CNET: Daimler Reveals Two Electric Freightliner Trucks

Daimler Trucks’ Freightliner brand revealed two new all-electric trucks that will be put into use for testing later this year. Freightliner has the goal of putting the eCascadia Class 8 tractor and eM2 medium-duty truck into production in 2021. The Freightliner eCascadia has a gross combined weight rating (GCWR) of 80,000 pounds and delivers 730 horsepower. Its 550-kilowatt-hour battery pack is expected to offer a driving range of 250 miles per charge and can be recharged up to 80 percent (that’s about 200 miles) in 90 minutes’ time. It is intended for regional distribution. The eM2, meanwhile, has a GCWR of 26,000 pounds, a range of 230 miles, 480 hp, and can be 80-percent recharged in just 60 minutes. It is aimed at local, shorter-distance delivery and “last-mile” logistics.

6/8

WSJ: Saudis Start to Ramp Up Oil Output, Ahead of OPEC Meeting

Saudi Arabia has started boosting oil production, say Saudi oil officials, moving ahead of a June 22 meeting of OPEC during which big producers said they would consider loosening the taps. Kingdom began producing 100,000 barrels a day more last month and plans to raise output again by at least that much, in shift from earlier plan

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®Fuel. 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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