We are exhibiting during MAPP’s Benchmarking & Best Practices Conference in Indianapolis on Oct. 5-7! If you’re planning to attend, don’t forget to stop by M. Holland’s booth and tune in for our session featuring Debbie Prenatt, Market Manager, Sustainability. Click here to read more.
Supply
Oil rose less than a percent Monday as worries of tight supplies won out in a day of volatile trading.
In mid-morning trading today, WTI futures were down 2.2% at $83.89/bbl, Brent was down 1.4% at $90.72/bbl, and U.S. natural gas was down 0.4% at $7.72/MMBtu.
The U.S. Energy Department will release up to 10 million more barrels of oil from the Strategic Petroleum Reserve for November delivery.
The average U.S. gasoline price fell 3.9 cents the past week to $3.64 a gallon on Monday, marking the longest downward streak — 14 weeks — since 2015. Still, U.S. road travel is down as gas prices remain well above year-ago levels.
OPEC+ fell short of its production target by 3.6 million bpd in August, larger than July’s underproduction of 2.9 million bpd.
The UAE’s national oil company is accelerating its plan to boost production to 5 million bpd, moving its target date from 2030 to 2025.
Oil and gas permitting in the U.S. eased in August compared with July but remained 27% higher than in August 2021.
Three nuclear plants supplied about 10% of California’s electricity last year:
More oil news related to the war in Europe:
On Monday, European natural gas prices fell 8.8% to their lowest level in two months as nations intensify efforts to source LNG and plan new measures to conserve energy this winter.
German buyers on Monday reserved capacity to receive Russia gas via the idle Nord Stream 1 pipeline, although no gas ended up flowing.
Russian oil exports are set to plunge by 2.4 million bpd next year after the EU’s embargo takes effect this December, analysts say.
Germany’s Isar 2 nuclear plant in Bavaria will shut down in October for unexpected repairs, adding to the nation’s energy crunch.
Gas storage sites in Germany, now 90% full, will only be able to cover two and a half months of consumption this winter if Russia completely suspends deliveries, analysts say.
Supply Chain
In the latest natural disaster news:
Hurricane Fiona churned north Monday evening after bringing torrential rain and powerful winds to the Dominican Republic. The entirety of Puerto Rico remains without power and 60% is without water in the wake of the storm, which has strengthened to a level 3 hurricane.
A magnitude 7.6 earthquake struck southwestern Mexico on Monday and was felt in Mexico City, less than an hour after a public commemoration of the devastating earthquakes in 1985 and 2017.
Typhoon Nanmadol, one of the biggest storms to hit Japan in years, brought high winds and record rainfall to the country’s western region Monday, causing transport disruptions and forcing manufacturers to suspend operations.
Shipping officials fear labor talks between tens of thousands of West Coast dockworkers and their employers could take months to resolve, raising the chance of smaller work disputes that could escalate into major disruption.
The Cass Freight Index, a measure of monthly freight activity in North America, rose 6.6% from July to August for the highest reading since May 2018.
The Port of Savannah handled 575,513 TEUs in August, its busiest month on record and up 18.5% from last year.
Spot market rates for bulk shipping’s largest vessels shot up 45% in a single day last week on impacts from bad weather in the North China Sea.
The head of the Port of Long Beach, which together with its sibling Port of Los Angeles handles 40% of U.S. container imports from Asia, sees demand cooling after two consecutive months of lower container traffic.
Europe-based companies could be forced to prioritize production of key products and stockpile goods under a new proposal that would give the EU emergency powers to tackle supply chain crises, a response to bottlenecks caused by the pandemic and Russia’s invasion of Ukraine.
China’s state-owned Cosco Shipping plans to spend $4.9 billion to add 32 container ships in a renewed quest to become the world’s biggest container line.
Big ocean shippers are turning to the once shunned market of airfreight as ongoing supply snarls make the expensive but reliable mode of transport more attractive. Airfreight shipping grew 21% from 2020 to 2021 and will likely grow another 4.4% this year.
Major U.S. shippers that overinvested during the pandemic may have delivery capacity that is 18 million packages per day higher than demand this holiday season, consultants say.
Italy’s Iveco unveiled a prototype of a hydrogen-powered large van it developed with Hyundai, the first tangible outcome of a recently announced partnership between the two automakers.
The two-year Treasury yield approached 4% yesterday and the 10-year hit 3.5%, the highest levels in over a decade, reflecting investor pessimism about the economy.
Confidence among U.S. single-family homebuilders fell for the ninth straight month, the longest decline on record, as rising mortgage rates and high material prices weigh on sales to first-time buyers.
Meanwhile, mortgage refinancings have fallen 75% from their peak in the first quarter of 2021:
Opendoor Technologies, a pioneer of data-driven home-flipping known as iBuying, lost money on 42% of its transactions in August, reminiscent of the pricing problems that doomed Zillow Group’s iBuying business last year.
A U.S. judge on Monday denied the Justice Department’s bid to stop UnitedHealth Group from buying Change Healthcare in an $8 billion deal that rose antitrust concerns with regulators.
American Express is hiring around 1,500 people for technology roles, shrugging off fears of an economic slowdown that has prompted other banks to cut jobs in recent months.
Marriott International is banking on a new $600 million high-rise headquarters in Washington, D.C., to entice workers back to the office after two years spent working mostly from home.
U.S. traffic-crash fatalities fell 4.9% in the second quarter after seven straight quarterly increases that started in the summer of 2020.
The world’s central bank umbrella body, the Switzerland-based Bank for International Settlements, urged major economies to forge ahead with interest-rate hikes despite growing risks of recession. Interest-rate hikes are likely to come from the U.S. Federal Reserve, Bank of England and Swiss National Bank this week, while Japan is expected to remain one of the world’s last holdouts in negative-rate territory.
Norway’s central bank is poised to raise its benchmark interest rate again this month by 50 basis points, bringing rates to the highest level in a decade.
Japan’s annual inflation rate quickened to 3% in August, the fastest pace in eight years.
Japan plans to spend $24.31 billion of its budget reserves to continue its response to COVID-19 and cope with ongoing price hikes.
The IMF tentatively agreed to a $44 billion extended fund facility for Argentina that should unlock nearly $4 billion for the embattled South American country to build reserves and tamp down spiraling inflation.
The price of bread rose by almost 20% in the EU last month as Russia’s invasion of Ukraine choked off Eastern Europe’s normally plentiful supplies.
The EU plans to raise its Paris Agreement targets to tackle climate change beyond the 55% reduction from 1990 levels it already pledged to meet by 2030.
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