What a year it’s been!

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.

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PA Approves the Falcon Pipeline

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.”[1]  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. 

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Transportation Trends and Forecast for 2019

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.

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Pipeline Politics Up North

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.

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Quiet In the House

Oil markets were up early, then flat and currently trending slightly down in trading Monday morning after comments from the United Arab Emirates energy minister suggested that the global oil market was “correcting” and he “expected everyone” to reduce oil supply under the agreement reached earlier this month in Vienna.  Details of that agreement calls for OPEC and its allies to reduce output by 1.2 million barrels per day starting in January 2019.  In addition to the OPEC decision, the Canadian province of Alberta mandated a production cut of 8.7% or 325,000 bpd due to limited pipeline capacity in that region.  Additional price support was also coming from the latest U.S. rig count data which showed drillers reduced rigs in the week ending December 14 to 873 which was the lowest it’s been since mid-October.  “This, when combined with Saudi Arabia is to cut exports to the United States to draw down inventory builds should provide a short term base despite global slowdown fears, which continue to resonate” said one analyst based in Singapore.  Without major headlines today some notable things to watch this week are:

 

 

 

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Training Drivers for Fuel Efficiency

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.

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