Oil refiners worldwide struggle with weak demand, inventory glut
Global oil refiners reeling from months of lackluster demand and an abundance of inventories are cutting fuel production into the autumn because the recovery in demand from the impact of coronavirus has stalled, according to executives, refinery workers, and industry analysts.
U.S. fuel demand has fallen 13 percent year-on-year, according to the U.S. Energy Information Administration. Autumn is typically when use of heating oil and diesel rises, but with more than 179 million barrels in storage, nearly a record, refiners have no incentive to keep units running.
The Paris-based International Energy Agency cut its forecast for global oil demand for 2020 for the second time in two months last week due to the faltering recovery. The energy watchdog forecast global consumption of petroleum and liquid fuels will average 91.7 million barrels per day (bpd) for all of 2020, a reduction in its previous forecast of 200,000 bpd and down 8.4 million bpd from 2019’s 100.1 million bpd level.
Trucking revenues fall 17 percent as pandemic damage sets in, Census Bureau says
Trucking revenues were down 17.2 percent in Q2, compared to the same quarter in 2019, according to a Friday report by the U.S. Census Bureau. The bureau estimated that trucking brought in $59.8 billion in revenue in Q2, down from $72.2 billion in Q2 2019. On a wider scale, transportation and warehousing revenue dropped 31 percent year-over-year.
The shape economic rebound will take is uncertain, with some federal officials hoping for a strong V-shaped recovery. On Friday, the Federal Reserve Bank of St. Louis forecast GDP growth of 20.2 percent in Q3, after a plunge of 32.9 percent in Q2, according to the Bureau of Economic Analysis. Both figures are on an annualized basis.
Top Energy Stories
The economic hit from the coronavirus pandemic will hurt global energy demand harder and for longer than previously feared, the Organization of the Petroleum Exporting Countries said Monday.
More than 30 percent of US Gulf of Mexico offshore oil and 25 percent of natural gas output remained offline September 17 after Hurricane Sally made landfall the day prior, according to the US Bureau of Safety and Environmental Enforcement.
Oil fell on Friday, paring its biggest weekly gain since June, as Libyan military commander Khalifa Haftar said he will allow crude production and exports to resume.
Top Freight Transportation Stories
Trucking revenues were down 17.2 percent in Q2, compared to the same quarter in 2019, according to a Friday report by the U.S. Census Bureau. The bureau estimated that trucking brought in $59.8 billion in revenue in Q2, down from $72.2 billion in Q2 2019. On a wider scale, transportation and warehousing revenue dropped 31 percent YoY.
Freight volumes should remain sustained through year’s end as Americans continue to spend on retail goods — so far the underpinning of the economy’s, and trucking’s, recovery since the steep downturn in April and May caused by the COVID-19 pandemic and state shutdown orders.
ACT Research’s spot leading indicator, derived from survey data, indicates rates will be up by about 30% YoY over the next few months, Vice President and Senior Analyst Tim Denoyer said during a company webinar Tuesday.
The U.S. Department of Transportation’s Federal Motor Carrier Safety Administrator (FMCSA) will be launching a new panel to its Motor Carrier Safety Advisory Committee (MCSAC) comprised of commercial motor vehicle (CMV) drivers which will provide direct feedback to FMCSA on important issues facing the industry.
Maersk Line has stopped accepting empty containers at the UK hub of Felixstowe as a surge in peak season volume and reduced productivity at the port leads to mounting congestion. In an advisory to customers Friday, the carrier warned of “vessel diversions” resulting from issues at the UK’s busiest container port but did not provide additional details regarding the diversions. Maersk was not immediately available to comment.
Top Economic Stories
Investment between the United States and China tumbled to a nine-year low in the first half of 2020, hit by bilateral tensions that could see more Chinese companies come under pressure to divest U.S. operations, a research report said.
The University of Michigan said the preliminary reading of its U.S. consumer sentiment index in September was 78.9, up from 74.1 in the prior month.
House Speaker Nancy Pelosi said she’s willing to negotiate on some Democratic priorities for a stimulus package to include aid for industries such as airlines and restaurants that are continuing to struggle amid the coronavirus pandemic.
It’s a scary time for millions of Americans as Congress is still unable to reach a compromise on a stimulus package that could include another round of direct payments and more unemployment benefits.
First American Financial Corporation, a leading global provider of title insurance, settlement services, and risk solutions for real estate transactions, today released First American’s proprietary Potential Home Sales Model for the month of August 2020.