GHY Tradelines

(Journal of Commerce)

Spot rates for tankers in the oil trade between the Caribbean, the Gulf and the northeastern U.S. have gained considerably in recent days, following the gasoline shortages caused by Hurricane Sandy.

Spot rates for oil tankers have increased to the neighborhood of $30,000 per day from $8,500 per day before the storm last week, according to Dahlman Rose, the New York-based investment bank. Read more here.
 

(Handy Shipping Guide)

Survey Predicts Future of Marine Fuels whilst Tariffs Increase

With container vessels and bulk freight carriers likely to be the big consumers of liquefied natural gas (LNG) as the new bunker fuel for maritime users in the coming decades, the findings of the latest study by Lloyds Register into the likely uptake of the technology by the global cargo shipping industry at first sight seem hardly surprising. Meanwhile the world’s largest box carrier has announced a freight rate increase between Asia and Europe.

Lloyds Register’s raison d’être means naturally that it has feet in both energy supply and ocean shipping camps, acting as it does to offer assurance to each sector and therefore in what is a unique and untested set of circumstances Lloyd’s felt it was necessary to construct a study model which allowed for flexibility according to the potential requirements of all possible stakeholders. The job was apportioned to Latifat Ajala, Lloyd’s Register’s Senior Market Analyst, who built a dynamic demand model for the study that was rigorously tested and validated with shipowners, ports and engine manufacturers and other vested interests. Read more here.
 

(Kyunghee Park – Bloomberg)

A.P. Maersk-Moeller A/S (MAERSKB)’s planned fleet of the world’s largest container vessels will be as groundbreaking for their shape as their size.

The 20 ships will be the first cargo-box carriers with rounded hulls rather than streamlined V-shaped ones, according to Daewoo Shipbuilding & Marine Engineering Co. (042660), which is developing the 18,000-container vessels. The change reflects a shift by operators away from designing ships to go as fast as possible to instead emphasizing fuel economy.

“These vessels will be the Prius of the seas,” said Lee Jae Won, an analyst at Tongyang Securities Inc. (003470) in Seoul, referring to Toyota Motor Corp.’s distinctively-shaped hybrid car. “They’re fuel efficient and environmentally friendly.”

[...] Combined with other technologies, the ships will use about 35 percent less fuel per box than vessels now used on Asia-Europe routes and produce around 50 percent less carbon emissions, according to Maersk. Read more here.
 

(Materials Management & Distribution)

The costs of the federal biodiesel mandate set to come into effect on July 1 this year outweigh the benefits by $2.4 billion over 25 years. This finding is part of a regulatory impact analysis published in the Canada Gazette.

The 4,500 member Canadian Trucking Alliance (CTA) says based on this fact the Government of Canada needs to re-think its approach to the national biodiesel mandate. The CTA wants the government to introduce measures to protect consumers of biodiesel from higher fuel prices, a loss of fuel efficiency and engine and warranty problems from sub-standard fuel. Read more here.

(Truck News)

The latest Canadian General Freight Index (CGFI) shows a continued softening in ground transportation rates.

The index indicated the cost of ground transportation for Canadian shippers dropped for the third consecutive month in December, in contrast to fuel surcharges, which continue to rise.

The CGFI Total Freight Cost Index dropped 1.6% in December compared to November while the Base Rate Index, which excludes fuel surcharges, declined 2.5%. The index remains 2.9% above its April low point and 1.5% higher than last year’s results for the same period. Read more here.

(RTT News/Forex Journal)

With the price of fuel imports to the U.S. showing another substantial increase in the month of December, the Labor Department released a report on Wednesday showing another notable increase in total import prices. The report also showed a moderate increase in total export prices.

The Labor Department said that import prices rose by 1.1% in December following a 1.5% increase in November. Compared to the same month a year ago, imports prices were up by 4.8%. A jump in the price of fuel imports contributed to the monthly increase in total import prices, with fuel import prices rising by 4.1%. This marks the third straight monthly increase in fuel import prices of more than 4%. Read more here.

(ABC News – The Associated Press)

Oil prices rising, promising to push gas pump prices higher as well

Oil resumed its march to $90 a barrel on Monday, promising to bring retail gasoline prices along for the ride.

Benchmark crude rose $1.13 to $88.91 per barrel in morning trading on the New York Mercantile Exchange. At the pump, the average price for a gallon of regular around the country added about half a cent at $2.98. That’s almost three cents higher than a week ago and 37 cents above a year ago. Read more here.

(Journal of Commerce Online – John D. Boyd)

Commission proposes 15-cent tax hike, cutting off aid for river locks

President Obama’s deficit cutting panel delivered plans for transportation policy that include a gradual 15-cent increase in federal fuel taxes to shore up the Highway Trust Fund and a proposal that the barge industry should pay all costs of the lock projects on the U.S. river system.

The bipartisan National Commission on Fiscal Responsibility and Reform said in a draft report that a comprehensive tax reform should include increases in the per-gallon gasoline tax starting in 2013.

Motor fuel taxes that go into the Highway Trust Fund include fees on diesel fuel used by the trucking industry, but the combined taxes are often described simply as gas taxes. The report said the proposed fuel tax hike would “dedicate funds toward fully funding the transportation trust funds and therefore eliminating the need for further general fund bailouts.” Read more here.

(Ken Thomas — Associated Press via MSNBC)

Plan is expected to seek about a 20 percent reduction in greenhouse gas emissions and fuel consumption

Future tractor-trailers, school buses, delivery vans, garbage trucks and heavy-duty pickup trucks must do better at the pump under first-ever fuel efficiency rules coming from the Obama administration.

The Environmental Protection Agency and the Transportation Department are moving ahead with a proposal for medium- and heavy-duty trucks, beginning with those sold in the 2014 model year and into the 2018 model year. Read more here.

pspan style=”FONT-FAMILY: ‘Verdana’, ‘sans-serif’; COLOR: black; FONT-SIZE: 8pt; mso-bidi-font-family: Arial”(International Freighting Weekly – Katerina Kerrr)?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” /o:p/o:p/span/ppemb style=”mso-bidi-font-weight: normal”span style=”FONT-STYLE: normal; FONT-FAMILY: ‘Verdana’, ‘sans-serif’; COLOR: black; FONT-SIZE: 10pt; mso-bidi-font-family: Arial; mso-bidi-font-style: italic”Some hauliers claim fuel hike singles them out over other modes, but others claim extra revenue will ease traffic bottlenecks/span/b/emb style=”mso-bidi-font-weight: normal”i style=”mso-bidi-font-style: normal”span style=”FONT-FAMILY: ‘Verdana’, ‘sans-serif’; COLOR: black; FONT-SIZE: 10pt; mso-bidi-font-family: Arial”o:p/o:p/span/i/b/ppspan style=”FONT-FAMILY: ‘Verdana’, ‘sans-serif’; COLOR: black; FONT-SIZE: 10pt; mso-bidi-font-family: Arial”Truckers in the US are facing higher diesel taxes. A Bill that would increase the tax on diesel used by hauliers by 12 cents to 36.4 cents per gallon has been criticised by the Owner Operator Independent Drivers Association (OOIDA), which claims saying it penalises truckers and fails to look at other modes such as rail. o:p/o:p/span/ppspan style=”FONT-FAMILY: ‘Verdana’, ‘sans-serif’; COLOR: black; FONT-SIZE: 10pt; mso-bidi-font-family: Arial”However, the American Trucking Association (ATA) has pledged its support for the Bill, which it said would “address critical freight transportation needs, focusing resources on the nation’s most important goods movement corridors”. Read more a href=”http://www.ifw-net.com/freightpubs/ifw/road/storm-breaks-over-plan-to-raise-taxes-on-diesel-for-us-truckers/20017814752.htm;jsessionid=818F768630E23C60A521C1A8F1051FAA.f11b1cefac76ad95c7627468fee9bde7e866d022″span style=”color:#0000ff;”here/span/a.o:p/o:p/span/p

span style=”font-size:85%;”(Wall Street Journal – David Bird)/spanbr /span style=”font-size:85%;”/spanbr /The Organization of Petroleum Exporting Countries cut crude-oil output by nearly 1.3 million barrels a day in January in an attempt to tame the supply glut that is anchoring prices near $40 a barrel.br /br /But as the cartel tightened the taps, crude-oil inventories in the U.S. were increasing by 700,000 to 900,000 barrels a day. That growth rate, the most seen in the month of January in 85 years and the highest in any month since at least October 2002, is a setback to OPEC’s efforts.br /br /Crude oil is piling up as the global economic crisis has cut consumer demand for petroleum products such as gasoline and diesel fuel. The oversupply that is driving down near-term prices makes it profitable for refiners to amass crude-oil inventories.br /br /Rising inventories are a further blow to OPEC, which is reeling from the fall in global oil demand and prices. Crude-oil futures are down 72% from their record above $145 a barrel hit in July. Each barrel of oil that goes into storage in consumer countries weakens the cartel’s hold on the market and potentially prolongs the price skid.br /br /OPEC pledged to cut output by 4.2 million barrels a day in September. Since then, the group has cut production by a total 3.135 million barrels a day, indicating a compliance rate of 75%, a survey by Dow Jones Newswires estimates.br /br /Saudi Arabia, the world’s biggest oil exporter and OPEC member, cut output below its agreed level of 8.05 million barrels a day in January. Saudi output of 7.9 million barrels a day was the lowest since October 2002. Now, analysts said, the plunge, alongside oil’s inability to recover, will require deeper cuts by Saudi Arabia and OPEC to prop up the market. Read more a href=”http://online.wsj.com/article/SB123412288443461041.html?mod=googlenews_wsj”here/a.

span style=”font-size:85%;”(Washington Post – Steven Mufson)/spanbr /br /Facing its biggest test in a decade, the Organization of the Petroleum Exporting Countries is planning to make a major cut in oil output at a meeting in Oran, Algeria, tomorrow in an effort to stop the slide in oil prices, which have dropped by two-thirds since July.br /br /Confronted by sputtering world oil demand, the cartel is expected to make production cuts of about 2 million barrels a day to reduce the size of world inventories and to boost prices back up to the $75-a-barrel level that Saudi King Abdullah has called reasonable. It will be the group’s fourth meeting in four months as it tries to adjust to the weakening world economy.br /br /“They are going to cut and they are going to cut big,” said Roger Diwan, a partner at PFC Energy, a Washington consulting firm. Even after substantial OPEC output cuts earlier in the fall, world oil inventories “are building much faster than people thought,” Diwan added. Oil stocks are big enough to cover 57 days of supplies, up from the five-year average of 52 days.br /br /Reaching the $75-a-barrel price target could be a tough task, however. U.S. oil demand has been weaker than any time since the economic slowdown that followed the Sept. 11, 2001, attacks on the World Trade Center and Pentagon. Even though retail gasoline prices have plunged to a nationwide average of $1.66 a gallon for regular, cash-strapped motorists continue to use less fuel than they did a year ago. The Energy Information Administration is forecasting a 3.4% drop in motor fuel use for 2008, and a bigger drop in oil-based motor fuel after taking rising ethanol use into account. Click a href=”http://www.washingtonpost.com/wp-dyn/content/article/2008/12/15/AR2008121502982.html?hpid=moreheadlines” target=”_blank”here/a for the complete article.

span style=”font-size:85%;”(Carter Group — ScotiaMcLeod)/spanbr /br /With Europe, Asia and Japan assumed to be in a synchronized recession for the first time in 60 years, the forecasts for demand of crude oil are literally changing by the minute. These revisions though are entirely focussed on the next year and not the next decade. The myopic view of traders and speculators being what it is, the entire global energy market is being deeply discounted. Wholesale gasoline prices in New York have collapsed by 60% from early September’s record setting prices. Crude oil is less than half of what it was in July and energy stocks as a group have roughly taken the same kind of dramatic haircut.br /br /Given the precipitous drop in prices and the ongoing challenges facing corporate borrowers, we can’t help but wonder how many of the expansion and exploration projects currently in the works will soon be shelved as oil companies adopt a more cautious approach to planned expenditures. These days the markets are swiftly punishing large corporations that follow-thru with takeovers or expensive projects on the books (witness the flogging of Teck Cominco’s shares recently). The expected return on any big oil company’s infrastructure investment looks remarkably different with $60/barrel oil rather than $100/barrel oil. Using Steven Forbes $35/barrel estimate, most infrastructure investments would seem guaranteed money-losers.br /br /Although you wouldn’t know it by looking at this week’s market prices for crude oil, the global energy supply crunch has not gone away. This is an important factor for any investor willing to look beyond the next 12 months. The International Energy Agency was doing its best to deliver a wake-up call during this week’s World Energy Outlook from London, but it doesn’t seem to be finding much luck with getting policy makers to listen (or care).

(Brent Jang — Globe amp; Mail)br /br /span style=”font-size:130%;”bZoom Cargo operations grounded./bbr //spanbr /Zoom Airlines said Thursday that it has halted flights and grounded its planes, leaving hundreds of passengers stranded and tempers flaring at airports.br /br /“We deeply regret the fact that we have been forced to cease all Zoom operations. It is a tragic day for our passengers and more than 600 staff,” Zoom co-founders Hugh and John Boyle said in a statement. “We are desperately sorry for the inconvenience that this will cause passengers and those who have booked flights.”br /br /The Ottawa-based carrier took down its website Thursday afternoon, preventing consumers from making online bookings. Earlier in the day, a Zoom sales agent said bookings were still being accepted in the morning, despite dozens of travellers being stranded on various flights.br /br /“We have done everything we can to support the airline and left no stone unturned to secure a refinancing package that would have kept our aircraft flying. Even as late as yesterday we had secured a new investment package but the actions of creditors meant we could not continue flying,” the Boyle Brothers said. a href=”http://www.reportonbusiness.com/servlet/story/RTGAM.20080828.wzoom0828/BNStory/Business/home”Read the complete article/a. Announcement from Zoom Air a href=”http://www.flyzoom.com/index.cfm?fuseaction=pubDsp.dspHome”here/a.

span style=”font-size:85%;”(CBC News)/spanbr /br /While Canadians complain about the soaring price of gasoline at the pumps, an oil industry spokesman says people in this country actually have it pretty good.br /br /Peter Boag, testifying before a parliamentary committee on Tuesday, told MPs that fuel prices are lower in Canada than they are in every other Western country, except the United States.br /br /And the fact that Canadian gas prices jump up and down from day to day is actually a good sign, he said.br /br /“We do understand Canadians’ frustration with fuel price volatility in particular, but at the same time in our view that’s the best evidence of a well-functioning, competitive market,” said Boag, president of the Canadian Petroleum Product Institute.br /br /His association represents Canadian fuel companies like Petro-Canada, Shell, Ultramar, Chevron, Husky and Imperial Oil.br /br /“In our view, Canadians are well-served by a competitive marketplace and today they still pay the second-lowest price for fuel in the Western world,” he added.br /br /He was one of three petroleum industry experts testifying before the Subcommittee on Oil and Gas and Other Energy Prices. The committee is investigating the reasons behind the high prices of fuel in the country.

span style=”font-size:85%;”(Transport Weekly)/spanbr /br /bMore recent easing of prices likely to bring down surcharges beginning in October; shipping lines hold firm on floating bunker contract terms. /bbr /br /Container lines in the Transpacific Stabilization Agreement (TSA) have confirmed that their floating bunker fuel surcharge, adjusted monthly according to a formula that tracks world fuel prices at key loading locations, will spike to a record level effective September 1. The higher surcharge reflects record fuel prices that topped $767 per ton in mid-July, up from $500 at the beginning of 2008 and $296 at the beginning of 2007.br /br /Responding to questions that have been raised as to why the bunker charge is increasing at a time when fuel prices have been falling, N.Y.K. Line vice president and TSA revenue policy committee member Bill Payne emphasized that each month’s surcharge reflects average fuel prices during a reporting period 30-60 days earlier. This is done to comply with U.S. law requiring a minimum 30 days’ advance notice to the market in the event a particular rate or surcharge is to be raised. “Carriers pay the higher fuel costs out of pocket as those costs rise, cushioning the impact on shippers, and then must pass them through after the fact,” Payne said. “The good news with a floating formula is that, as prices fall, customers will start to see savings 30 to 60 days out.”br /br /The TSA surcharge is posted by the carrier group as a guideline for the market, but service contracts with customers – including bunker surcharge terms – are addressed individually by the lines. APL senior vice president Bob Sappio, also an RPC committee member, noted that while carriers and shippers have made significant progress in agreeing on a floating fuel surcharge, much more work remains. “If people think the high price of fuel is temporary they are mistaken”, Sappio said. “The transpacific trade is simply not sustainable as it is presently constituted; carriers must recover a greater percentage of actual dollars spent on fuel.”

span style=”font-size:85%;”(James Mennie — The Gazette)/spanbr /br /High gasoline prices were supposed to force Canadians to change their travel habits, and statistics made public this week suggest we are spending less on fuel.br /br /But at U.S. Customs and Border Protection, the impression is that while a road trip to the United States might cost Canadians more than last year, it’s a price we’re prepared to pay.br /br /”There hasn’t been any significant increase or decrease in the traffic that’s been coming across the border,” U.S. Customs spokesperson Ted Woo said. “Weekend traffic is busier and Mondays and Tuesdays it might lighten up.br /br /”But whether it’s a small (crossing) like Derby Line (in Vermont) or elsewhere, there’s been no real change.”br /br /Woo’s comments follow a report by Statistics Canada this week that shows even though the price of gasoline increased by 8.8 per cent from April to May, revenues from sales at the pump rose by only 2.4 per cent. That gap represents a nearly six-per-cent drop in the amount of fuel sold, some analysts have calculated.br /br /That apparent frugality with fuel, however, might be manifested in the choices Canadians make about how to get to work, rather than where they vacation. a href=”http://www.canada.com/montrealgazette/news/story.html?id=6f72c652-cf16-470d-b390-8fb318c20bde”Read the complete article/a.

object width=”425″ height=”344″param name=”movie” value=”http://www.youtube.com/v/WqX0ou9ZI3wamp;hl=enamp;fs=1″/paramparam name=”allowFullScreen” value=”true”/paramembed src=”http://www.youtube.com/v/WqX0ou9ZI3wamp;hl=enamp;fs=1″ type=”application/x-shockwave-flash” allowfullscreen=”true” width=”425″ height=”344″/embed/objectbr /br /span style=”font-size:85%;”(CNN)/spanbr /br /Under the backdrop of a deteriorating economic picture, President Bush said Tuesday he is taking action to help people with falling home values and high gas prices.br /br /Bush highlighted plans to stabilize the mortgage lenders Fannie Mae (a href=”http://money.cnn.com/quote/quote.html?symb=FNMamp;source=story_quote_link”FNM/a, a href=”http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/2434.html?source=story_f500_link”Fortune 500/a) and Freddie Mac (a href=”http://money.cnn.com/quote/quote.html?symb=FREamp;source=story_quote_link”FRE/a, a href=”http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/3018.html?source=story_f500_link”Fortune 500/a) and lift the ban on offshore oil drilling as two steps his administration is taking to address some of the nation’s economic ills.br /br /On the gas price front, Bush reiterated his call for more drilling off the East and West Coasts and in Alaska.br /br /“The only thing standing between these vast resources and the American people is action from Congress,” he said. “The sooner Congress lifts the ban, the sooner we can get these resources from the ocean floor to the refineries to the gas pump.”br /br /There were two bans restricting drilling off most of the U.S. coast – one from the President and one from Congress.br /br /On Monday Bush lifted the executive ban, putting pressure on the Democratic-controlled Congress to do the same.br /br /So far, the Democrats have resisted calls for more drilling, arguing the amount of oil it would bring to market would have little effect on prices, and the nation’s efforts would be better spent developing alternatives to oil and focusing on conservation. Complete article a href=”http://money.cnn.com/2008/07/15/news/economy/bush_economy/?postversion=2008071514″here/a, and more on lifting of the offshore drilling ban a href=”http://www.marketwatch.com/news/story/bush-lifts-executive-ban-offshore/story.aspx?guid=%7B11A84451-D6F5-428E-95CE-44DE805540AD%7Damp;dist=msr_51″here/a.

span style=”font-size:85%;”(Oilweek – The Canadian Press)/spanbr /br /Soaring oil prices have started to deliver more pain than gain for the Canadian economy, which has profited from the country’s energy exports, says a new report.br /br /While it is true that oil exports have, in the words of Bank of Canada governor Mark Carney, made “Canada wealthier as a nation,” people are paying a price in terms of higher gasoline, electricity and heating charges, says Douglas Porter, deputy chief economist with the Bank of Montreal.br /br /Porter said fuel prices have risen so much that energy is now consuming a record seven per cent of Canadian household spending and “looks poised to continue heading higher.”br /br /But the big loser is Canadian industry, which is being hammered both from higher production costs and from the slowdown in the world and U.S. economies struggling to cope with the high fuel costs.br /br /The auto sector has been particularly impacted, slicing U.S. auto sales to the lowest level since the recession of the early 1990s.br /br /Since Canada produces twice as many vehicles per capita than the U.S. and most head south, lower demand in America disproportionately hurts the Canadian sector, says Porter. He estimated Canada has lost 30,000 auto jobs from its peak, most in Ontario.br /br /“The received wisdom in recent years is that the Canadian economy benefits on net from higher oil prices, given the country’s status as a significant and growing net energy exporter,” he writes in a three-page report.br /br /“There is a strong case to be made that the surge in oil prices crossed the tipping point this spring from providing some economic ballast for the domestic economy to acting as a heavy anchor.”br /br /According to the analysis, the “tipping point” came when world oil prices hit the US$120-130 range and kept heading higher, destroying the illusion that the soaring prices were a temporary phenomenon.br /br /“That’s when we saw U.S. auto sales really crumble,” he said. a href=”http://www.oilweek.com/news.asp?ID=17306″Read the complete article/a.

span style=”font-size:85%;”(CTV News)/spanbr /br /Canadians are more likely than Americans to think NAFTA has been bad for their country, while the economy and the soaring cost of fuel have become top issues on both sides of the border, according to a new poll.br /br /The bi-national survey was conducted by The Strategic Counsel for CTV and The Globe and Mail, and involved interviews with 1,000 people in Canada and 1,000 in the U.S.br /br /Among Canadians, 44 per cent thought the North American Free Trade Agreement was bad for Canada, while 43 per cent thought the opposite. The results suggest the debate over NAFTA is far from over, 14 years after the deal came into effect. br /br /“I think it’s a sleeper issue,” Peter Donolo, a partner in The Strategic Counsel, told CTV.ca. “I think that neither one of the two major parties wants to exploit it, or is in a position to exploit it. The question is whether it could ignite the moribund political standing of the NDP.”br /br /NAFTA became a central issue in the U.S. Democratic nomination race, with both Barack Obama and Hillary Clinton suggesting they would be willing to renegotiate the trade deal.br /br /However, Americans seemed more favourable to NAFTA, with 46 per cent saying it was good for the United States and 36 per cent saying it was bad.br /br /On both sides of the border, the economy was a major concern.br /br /Among Canadians, unemployment issues and the economy was tied with gas prices as the number one issue, at 18 per cent. The environment was just behind at 16 per cent.br /br /Here are the top issues with a percentage-point change from a Jan. 10-13 poll in brackets:br /br /• Economic issues: 18 per cent (+6)br /• Gas prices: 18 per cent (+15)br /• Environmental issues: 16 per cent (-6)br /• Health care: 11 per cent (-1)br /• Social/Moral issues: 9 per cent (N/A)br /• Foreign policy issues: 6 per cent (-2)br /br /Less than a year ago, gas prices had barely registered at 3 per cent, while the environment had been the top issue at 22 per cent.br /br /“The economy has been growing as an issue of concern for Canadians,” said Donolo. We’ve seen gas prices throughout the summer as a big issue, and we’ve seen a number of car plant closings.” a href=”http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20080627/poll_us_canada_070627/20080627?hub=TopStories”Read more/a.