Come this time next week, 2018 will be in the rear-view mirror and we will be looking ahead to what 2019 has to offer us. Before we officially close that book, let us look back at the roller coaster of a year that the oil markets has endured. A bit of a reminder that no one can really predict what is to come.
Among the never ending list of topics to debate throughout the world, one of the hottest topics might just be global warming. Pun intended!
After 15 months on December 20th, Shell has received the permits needed for its Falcon Ethane Pipeline to feed the new petrochemical plant in Beaver County from the Pennsylvania DEP. “With the state Department of Environmental Protection permits granted Thursday, construction on the line is expected to start next year. The pipeline will feed as much as 107,000 barrels of ethane per day to Shell’s $6 billion cracker plant in Potter Township.” Ethane is a natural gas liquid that is produced from Appalachia’s shale wells. The Shell plant is expected to manufacture plastics with power generated from fracking activities in Appalachia.
With 2018 coming to a close, US trucking companies are expecting to see freight volumes remain steady if not increase heading into 2019. One factor leading to a rise in truckload shipments can be linked to increased tariffs on Chinese goods by the US. The uptick in tariffs can be traced back September of 2018 when President Trump raised tariffs to 10% on 200 billion worth of imported Chinese products. This news immediately impacted and shifted peak shipping seasons on land and by sea in the US.
Earlier this week, oil and gas industry supporters lined the streets of Calgary outside of city hall in support of government action. The oil industry is costing the province of Alberta and Canada an estimated $80 million a day because of too much production and not enough pipeline. With the looming provincial and federal election, Premier Rachel Notley and Prime Minister Justin Trudeau are feeling the heat.
Oil prices fell more than 1% yesterday hitting 14 month lows after reports of an increase in U.S. inventories along with surging shale output.
As of December 18th, 2018 diesel fuel was at its lowest point since April of this year. The United States average price per gallon for on-road diesel is currently at $3.121.
With constant fluctuations in price, fleet owners are becoming much more conscious of their fueling spend. Some may shop around to find more cost effective supply options, while others are looking at newer technologies to increase fuel efficiencies. Most of us have seen smart phone applications for everything it seems, but now trucking companies are more regularly looking into newer apps as a fuel optimization solution. Two companies in particular are setting the standard for over the road truckers in this category.
The oil patch rallied today after starting off the day in the red as news hit this afternoon that Saudi Arabia will be targeting the United States with sharp oil export cuts in January.
The United States Department of the Interior announced a revision last week about an increase in the potential production in the Wolfcamp Shale and Bone Spring Formation. The announcement stated, two underground layers in the Delaware Basin in the Permian shale play of West Texas and New Mexico, contain 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas and 20 billion barrels of natural gas liquids. This represents the largest pool of oil and gas reserves anywhere in the United States. The Permian is already the driving force in production hitting an all-time high in November of 11.7 million barrels per day (bpd) as it is the biggest producer and boasts the quickest rate of production at 3.63 million bpd.