Trucking Industry is gigantic & dynamic, and that goes way beyond USA borders. But what happens thousands of miles away, can impact America’s Trucking & Oil Industries greatly, both negatively and positively. Geopolitical events, large markets, and oil companies are all blended together in the fast-paced movement of news that sometimes seems to flash by one after the other. As fuel will continue to be a vital part of tracking movement, these 3 intriguing and impactful fuel & oil reports that happened recently will reveal some of the biggest news flashes that you might have missed.
Table of contents:
Mexico’s Growing Fuel Demand
IMO 2020 Impact On Diesel Prices
Saudi Restores Oil Production Capacity After Attacks
1. Mexico’s Growing Fuel Demand
Mexico made some news reports quite recently in the dynamic world and industry of USA Trucking which was caused by its strongly growing fuel demand.
As even state-owned oil companies such as Petroleos Mexicanos struggle to meet Mexico’s consumption needs, the US exporters are more and more relying on the trucking industry to get fuel delivered into Mexico as their gasoline production and infrastructure is facing hard times. From declining refinery output to private companies being forced to shut down due to lack of supply and beyond, reasons come out strong and diverse.
According to EIA, in the result of such events, the imports of U.S. crude and oil products have increased every year since 2014, reaching as high as 1,377 thousand barrels a day in November 2017!
Transporting fuel by truck is a small but growing piece of the trucking business.
2. IMO 2020 Impact On Diesel Prices
Most of the talks that surround IMO 2020 has been circling around the fact that nothing major has happened in the oil markets so far. But as refineries come off their heavy maintenance season it is common to see price movements.
One of the signs of IMO 2020 preparation is the five-year high vacuum Gasoil price relative to Brent. And the high vacuum gas oil is a key element not only in making low sulfur oil but gasoline and diesel as well, which brings the assumption that when IMO 2020 starts, the prices of high vacuum gas oil will go up.
With many other factors lingering in as well, the irony is that America’s diesel consumers could be impacted by IMO 2020 even when the USA is not a significant bunkering port. But diesel, like all other petroleum products, is a global market and once winds of change blow through the bunker market, that could swing the entire fuel supply chain.
3. Saudi Restores Oil Production Capacity After Attacks
In the aftermath of the attacks on Saudi oil, which was hard to miss on the news, the U.S. Trucking Industry average retail gasoline price sky-rocketed by more than 10 cents per gallon. And between September 16 and September 23—the largest weekly increase in gas prices took place since early September 2017, when Hurricane Harvey’s impact caused gas prices to jump by 28 cents/gallon in one week.
The event of this magnitude was expected to increase the U.S. prices at the pump. Especially considering the fact that on the first full day of trading after the attacks on Saudi oil infrastructure swept away 5 percent of global oil supply while Brent Crude prices jumped by $7.17 a barrel from the previous trading day.
But, despite all of this, Saudi Arabia has been surprisingly early and efficient to restore its oil production capacity to pre-attack levels, which stretches to 11.3 million barrels per day.
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