Oil prices fell nearly 2% Wednesday, retreating from seven-year highs following news of an unexpected build in U.S. crude stocks, Russia’s offer to pump more supply into Europe and the likelihood of a further release from the U.S. Strategic Petroleum Reserve.
Crude futures rose in morning trading, with WTI up 0.9% at $78.12/bbl and Brent down 0.9% at $81.81/bbl. Natural gas was 0.2% lower at $5.66/MMBtu.
Despite surging oil prices, U.S. shale production is expected to expand only modestly the next 18 months as drillers use improved cash flow to pay down debt rather than expand.
LNG spot prices in Asia skyrocketed 40% Wednesday to a record $56/MMBtu amid a worsening supply crunch ahead of the winter heating season.
U.K. wholesale gas futures surged 14.7% Wednesday to 3 pounds/therm, a record high.
A group of California lawmakers is pushing a bill that would ban offshore drilling in the state, a response to the recent 3,000-barrel spill off the coast of Orange County. The Coast Guard is investigating whether a container ship anchor might have snagged and bent the pipeline over the course of two days.
With global production of coal 5% below pre-pandemic levels, global supply shortages are causing prices for the fuel to soar.
Australia’s Newcastle thermal coal, a global benchmark, is trading at $202 per metric ton, three times higher than at the end of 2019.
The coal shortage in India is at crisis levels:
Coal generates roughly 40% of the world’s electricity:
Dow forecast a $3 billion increase in core annual earnings by 2030 while announcing plans to build a new net-zero-emissions facility in Canada to produce ethylene and other derivatives.
Our most recent list of force majeure and allocation announcements from suppliers is here.
Supply Chain
Semiconductor lead times in the auto industry grew five days to a record 21.7 weeks in September, the ninth consecutive monthly increase.
The U.S. is urging Singapore to loosen pandemic travel restrictions to maintain bilateral trade and investment activity critical to technology supply chains.
The U.S. Postal Service is moving forward with plans to extend delivery times for some first-class deliveries despite deepening concerns from lawmakers and other trade groups.
DHL Express opened an expanded international parcel hub at Paris’ Charles de Gaulle airport, an effort to support cross-border European trade amid a boom in e-commerce.
The International Chamber of Shipping unveiled new plans for measures that would help the industry reach net-zero CO2 emissions by 2050.
For a partial list of automotive disruptions caused by semiconductor and component shortages, clickhere.
Our Logistics team reports the following:
Bulk trucking capacity is very limited as demand is exceeding supply.
Dry van (full, partial and less-than-truckload) capacity is very limited as demand exceeds supply.
Port congestion continues to be very problematic, delaying deliveries of imported containers.
Due to port congestion and other factors, we are seeing inventory buildups at our sites near ports.
Domestic Markets
The U.S. averaged just over 100,000 new COVID-19 cases per day the past week, down 24% from two weeks ago and 40% from three weeks ago, while virus deaths dropped 12% to roughly 1,800 per day over the past two weeks.
The nation reported 111,503 COVID-19 infections and 2,556 virus fatalities Wednesday.
More than 353,000 COVID–19 deaths have been reported in the U.S. since Jan. 1, surpassing the number of virus fatalities for all of 2020.
Almost every state in the U.S. has reported at least 1,000 COVID-19 deaths since the start of the pandemic, with Wyoming becoming the most recent state to pass the grim milestone.
Los Angeles will require proof of COVID-19 vaccination for entry to restaurants, bars, shopping centers and other indoor venues starting Nov. 6, making the U.S.’s largest city the strictest in regard to COVID-19 rules.
A Colorado healthcare system will begin denying organ transplants to people unvaccinated against COVID-19, citing new data showing recipients face a high risk of dying from the virus if infected.
Children make up roughly 25% of active COVID-19 cases in Tennessee.
COVID-19 cases in Florida continue to drop, with the state’s seven-day average nearing 4,000 compared to summer highs above 30,000.
The FDA has begun assessing the possibility of mixing COVID-19 vaccines as the nation begins rolling out booster doses to a larger population.
The White House is investing $1 billion to expand the use of rapid at-home COVID-19 tests, with the goal of quadrupling usage by the end of the year.
Kaiser Permanente has roughly 2,200 employees on unpaid leave for not complying with the company’s COVID-19 vaccine mandate, down from nearly 5,000 employees who were suspended at the end of September.
Nearly 130,000 U.S. children lost a primary caregiver during the first 15 months of the pandemic, with the number of orphaned children expected to be much larger than previously estimated.
The labor market improved last week, with first-time jobless claims decreasing by 38,000 to 326,000, better than expected.
Several hotel chains are adding all-inclusive resorts to their property portfolios, as travelers increasingly look to stay in one place and limit their exposure to COVID-19 while vacationing.
GM announced ambitious plans to double revenue by 2030 as it further establishes itself in the electric- and autonomous-vehicle market, with the automaker’s entry-level electric SUV set to sell at $30,000, undercutting the cheapest version of Tesla’s Model 3 sedan.
Mercedes-Benz plans to add 300 jobs at an Alabama assembly plant by the end of the year as it prepares to build new electric SUVs.
California’s governor signed new recycling and waste-related bills Tuesday, including measures to limit the export of plastic scrap and to prohibit product packaging from having recyclability claims without state approval.
Google introduced a suite of new sustainability features Wednesday to a wide array of its core products, including eco-mapping on Google Maps and improved home thermostat settings.
International Markets
Global COVID-19 cases fell 9% week over week, the fourth consecutive weekly drop, led by a 43% decline in cases in Africa, according to the World Health Organization.
The U.K. reported 39,851 new COVID-19 infections Wednesday, the most in a month, along with 143 virus deaths.
New COVID-19 cases in Seoul rose above 2,000 for the second day in a row, worrying officials about a resurgence of the virus, despite South Korea being on pace to fully vaccinate 80% of its population by the end of the month.
Canada announced sweeping new COVID-19 vaccine mandates for all passengers over age 12 on air, rail and sea transport.
Russia reported 929 COVID-19 deaths Wednesday, the second record in as many days.
Singapore reported 3,577 new COVID-19 infections Wednesday, the most since the start of the pandemic.
COVID-19 cases in Japan have dropped to their lowest levels in nearly a year, with Tokyo reporting just 87 new infections Monday, down from more than 5,000 per day in August.
Strict pandemic restrictions will be further eased in Sydney, Australia, Monday after the city reached its goal of vaccinating 70% of its population against COVID-19. BHP, the world’s largest mining company, will require vaccinations for all employees and visitors to its sites in Australia.
New Zealand is looking to vaccinate upwards of 350,000 people per day next week in an accelerated effort to reopen its economy.
The International Monetary Fund expects global inflation to peak at 3.6% this fall before returning to pre-pandemic levels around 2% by mid-2022.
Mazda has introduced new manufacturing technologies aimed at cutting costs and lead times while supporting flexible production for electric vehicles at its Western Japan assembly plant.
BMW announced new investments in lithium startup Lilac Solutions, a bid to increase efficiencies in the production of the critical electric vehicle battery metal.
At M. Holland
M. Holland’s 3D Printing group offers a rapid response alternative for producing selected parts where resin availability is tight during prevailing force majeure. For more information, email our 3D Printing team.
Market Expertise: M. Holland offers a host of resources to clients, prospects and suppliers across nine strategic markets.
For all COVID-19 updates and notices, please refer to the M. Holland website.
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