“I like to listen. I have learned a great deal from listening carefully. Most people never listen”.
– Ernest Hemingway
Jobs Update
- Initial jobless claims for the week ending February 11th, 2023 came in at 196,000, down -1,000 people week-over-week.
- Continuing jobless claims came in at 1.669 million people, versus the adjusted number of 1.680 million people from the week prior, up 16,000 people week over week.
Stocks closed mixed on Friday of last week, but lower week over week
The DOW closed higher on Friday of last week, up 129.84 points (+0.39%), closing out the week at 33,826.69, down -419.24 points week over week. The S&P 500 closed lower on Friday of last week, down -11.32 points (-0.28%), and closed out the week at 4,079.09, down -58.2 points week over week. The NASDAQ closed lower on Friday of last week, down -68.56 points (-0.58%), and closed the week at 11,787.27, down -104.54 points week over week.
In overnight trading, DOW futures traded lower and are expected to open at 33,715 this morning down -151 points.
WTI closed lower on Friday of last week and lower week over week
WTI traded down -$0.97 per barrel (-1.24%) to close at $77.92 per barrel on Friday of last week, down $2.20 per barrel week over week. Brent traded down US$0.96 per barrel (-1.13%) on Friday of last week, to close at US$84.18 per barrel, down – $2.21 per barrel week over week.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 16.3 million barrels week over week. At 471.4 million barrels, U.S. crude oil inventories are 8% above the five-year average for this time of year.
Total motor gasoline inventories increased by 2.3 million barrels week over week and are 5% below the five-year average for this time of year.
Distillate fuel inventories decreased by 1.3 million barrels week over week and are 15% below the five-year average for this time of year.
Propane/propylene inventories decreased by 2.6 million barrels week over week and are 29% above the five-year average for this time of year.
Propane lost a penny per gallon week over week closing at 84 cents a gallon, down 39 cents per gallon year over year.
Overall, total commercial petroleum inventories increased by 19.2 million barrels during the week ending February 10th, 2023.
U.S. crude oil imports averaged 6.2 million barrels per day during the week ending February 10th, 2023, a decrease of 826,000 barrels per day week over week. Over the past four weeks, crude oil imports averaged 6.6 million barrels per day, 3.8% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) averaged 589,000 barrels per day, and distillate fuel imports averaged 221,000 barrels per day during the week ending February 10th, 2023.
U.S. crude oil exports averaged 3.146 million barrels per day for the week ending February 10th, 2023, a decrease of 246,000 barrels per day week over week. Over the past four weeks, crude oil exports averaged 3.561 million barrels per day.
U.S. crude oil refinery inputs averaged 15 million barrels per day during the week ending February 10, 2023, which was 383,000 barrels per day less week over week.
As of the writing of this report, WTI is poised to open at $76.66 up $0.36 per barrel from Monday’s close.
North American Rail Traffic
Week Ending February 15th, 2023.
Total North American weekly rail volumes were down (-4.86%) in week 6 compared with the same week last year. Total carloads for the week ending on February 15th were 354,785, down (-0.18%) compared with the same week in 2022, while weekly intermodal volume was 307,490, down (-9.74%) compared to the same week in 2022. 6 of the AAR’s 11 major traffic categories posted year-over-year decreases with the most significant increase coming from Nonmetallic Minerals (+8.67%). The largest decrease was from Forest Products (-10.35%).
In the east, CSX’s total volumes were up (+0.47%), with the largest decrease coming from Other (-9.34%) and the largest increase Coal (+36.56%). NS’s volumes were down (-3.27%), with the largest decrease coming from Petroleum and Petroleum Products (-10.01%) and the largest increase from Nonmetallic Minerals (+19.23%).
In the West, BN’s total volumes were down (-11.69%), with the largest decrease coming from Forest Products (-20%), and the largest increase coming from Motor Vehicles and Parts (+17.17%). UP’s total rail volumes were down (-3.40%) with the largest decrease coming from Other (-24.22%) and the largest increase coming from Petroleum and Petroleum Products (+14.84%).
In Canada, CN’s total rail volumes were down (-1.87%) with the largest decrease coming from Intermodal (-22.30%) and the largest increase coming from Metallic Ores and Minerals (+22.40%). CP’s total rail volumes were down (-15.78%) with the largest decrease coming from Other (-58.73%) and the largest increase coming from Metallic Ores and Minerals (+73.94%).
KCS’s total rail volumes were up (1.83%) with the largest decrease coming from Nonmetallic Minerals (-30.82%) and the largest increase coming from Grain (+33.51%).
Source Data: AAR – PFL Analytics
Rig Count
North American rig count was down by -3 rigs week over week. U.S. rig count was down -1 rig week-over-week and up by +115 rigs year over year. The U.S. currently has 760 active rigs. Canada’s rig count was down by -2 rigs week-over-week and up by 28 rigs year-over-year. Canada’s overall rig count is 248 active rigs. Overall, year over year, we are up +143 rigs collectively.
North American Rig Count Summary
A few things we are keeping an eye on
We are watching Petroleum Carloads
The four-week rolling average of petroleum carloads carried on the six largest North American railroads fell to 26,020 from 26,176, which was a loss of -156 railcars week-over-week. Canadian volumes were mixed; CP’s shipments decreased by -1.7% week over week, and CN’s volumes were up by +10.8% week over week. U.S. shipments were also mixed. The UP had the largest percentage increase up by +7.8% and the BN was down by -5.4%.
N.S. Can Still Fix PR Communications in East Palestine
If you ask us, the N.S. missed it in a big way on the East Palestine derailment. Thank goodness the President and CEO were there over the weekend but didn’t take control of the incident. This is going to go down in history as one of the worst public relations communications with victims in rail in a long time. We aren’t saying it is N.S.’s fault by any stretch of the imagination, but here is what they should have done on day one:
1) The President and CEO should have flown to East Palestine the moment that residents were told it was ok to return to their homes.
2) He should have set up distribution centers to hand out food and water to anybody in the area that wanted it.
3) He should have gone door to door and spoken to anybody that would listen to him and he should have seen what he could have done to help with immediate, dire needs.
We all know that did not happen – the N.S. did not do this and FEMA turned its back initially on the situation. The result – an angry community and an angry America. The fallout of not handling public relations in an aggressive manner from the onset could result in a disaster for the N.S. and the industry itself. The N.S. can turn this around very quickly if not there is going to be a tremendous amount of finger-pointing and potential new regulations – we see it coming, folks. When things like this happen you have to get in front of it – it is that simple. It’s incredible that no one with any authority was delivering water to these people – the Salvation Army is doing it and PFL even donated $10,000 for the delivery of water and food to the people via the Salvation Army and urge our readers to do whatever they can do to help! We don’t want the railroads to be government-owned, I would think, and that is where we could be headed. On Oct. 5, 2022, RWU adopted a resolution calling for public ownership of railroad infrastructure, which is operated for the public benefit. The grassroots organization brings together members from all 12 rail unions but has no official power to negotiate with employers or the government. Last I checked all railroads were publically owned except for the B.N., but there is a movement to own them all “We the people” – to PFL this does not seem the way to go! The government does not manage business well
More Tax Credits Headed our Way for New Rail Cars Conversions
U.S. Rep. Darin LaHood (R-Ill.) has reintroduced the Freight RAILCAR Act. This bipartisan legislation, supported by the Railway Supply Institute (RSI), would provide a “time-limited tax credit” for the purchase of new railcars or modification of existing cars to help offset the costs associated with taking older equipment out of service.
The 2023 version of the bill (H.R. 838), like the 2022 version, “offers a time-limited 10% tax credit [unlike the original bill’s 50% tax credit] for new railcars or the modification of existing railcars to offset the costs of either replacing two existing railcars with a new railcar that would improve fuel efficiency or capacity by at least 8%, modernizing an existing railcar to improve fuel efficiency or capacity by at least 8%, or upgrading a car to DOT-117 tank car specifications. Interesting stuff – we are excited about this at PFL.
Europe and Natgas – We are bullish on Natgas Prices here in the U.S.
Here in the U.S., a rout in natural gas prices will hurt first-quarter earnings and cash flows at gas producers as hedges – the industry’s version of price insurance – were inadequate to offset the selloff in the market resulting in expected losses. Natgas closed at $2.275 per MMBTU on Friday of last week on continued rising inventory levels.
Producers starting the year with fewer hedges than historically will have to sell more gas at the market rate of these lower levels and that may force some companies to reduce drilling and put off completing wells. This will untimely lead to lower production (tighter supply) and rising prices. Another factor for a bullish stance on Natgas – is a colder winter next year and Freeport’s 2bcf a day facility coming back online in full force – (expected this quarter). From a demand side, we should see electricity producers switch from coal to natgas where we can. Railcar types that will be affected are pressure cars and coal cars,
Europe has looked to the United States for more Natgas. Europe’s growing need for liquefied natural gas will boost competition with Asia for LNG over the next two years as supply remains limited, according to Steve Hill Vice President of Energy for Shell Energy Marketing in comments made by him last week.
European countries, including the U.K., imported 121 million tonnes of LNG last year, up 60% from 2021, to cope with cuts to Russian piped supplies
Analysts expect China’s LNG demand to rebound to between 70-72 million tonnes in 2023, short of 2021’s record levels, as LNG prices are set to remain relatively high and as lingering effects of the pandemic curb demand.
Total global LNG trade reached 397 million tons in 2022. Industry forecasts expect demand to jump to 700 million tons by 2040, Shell said, adding that a supply-demand gap is expected to emerge by the late 2020s.
We have been extremely busy at PFL with return-on-lease programs involving rail car storage instead of returning cars to a shop. A quick turnaround is what we all want and need. Railcar storage in general has been extremely active. Please call PFL now at 239-390-2885 if you are looking for rail car storage, want to troubleshoot a return on lease scenario, or have storage availability. Whether you are a car owner, lessor or lessee, or even a class 1 that wants to help out a customer we are here to “help you help your customer!”
Leasing and Subleasing has been brisk as economic activity picks up. Inquiries have continued to be brisk and strong Call PFL Today for all your rail car needs 239-390-2885
Lease Bids
• 25-50, 25.5K 117J Tanks needed off of NS CSX in NorthEast for 5 Years. Cars are needed for use in Asphalt/Heavy Fuel Oil service.
• 10-20, 20-25 CPC 1232 or 117J tanks needed off of UP CN in Illinois for 3-5 years. Cars are needed for use in Liquid feed service.
• 100-150, 4000CF Covered Hoppers needed off of UP BN in Texas for Purchase or 5 years. Cars are needed for use in Aggregate service.
• 25, 30K 117Rs or Js Tanks needed off of UP or BN in Texas for 1-2 Years. Cars are needed for use in Diesel service.
• 25, 340W Pressure Tanks needed off of UP or BN in Texas for 1-2 Years. Cars are needed for use in Propane service.
• 25, 30K 117Rs or Js Tanks needed off of Any Class One in Midwest for 2-3 years. Cars are needed for use in Ethanol service.
• 10, any capacity Stainless Steel Tanks needed off of any class 1 in Canada for 5-10 years. Cars are needed for use in Alcohol service.
• 50-100, 25.5K CPC1232 or 117J Tanks needed off of Any in any location for 5 Years. Cars are needed for use in Veg Oil service. Unlined
• 30-50, 30K 117 Tanks needed off of any class 1 in Northeast or Midwest for 1 Year. Cars are needed for use in C5 service. Must have Magrods
• 10-12, 340W Pressure Tanks needed off of UP in Utah to Cali for 1 year. Cars are needed for use in propane service. Needs them in April 2023
• 100-300, 31.8k CPC1232 or 117J Tanks needed off of various class 1s in Canada/US for 1-3 years. Cars are needed for use in Crude service. Various needs in the market to move crude immediately
• 100 , 340W Pressure Tanks needed off of various class 1s in various locations for 6 months to a year. Cars are needed for use in Propane service. Immediate need
• 100-200, 25.5K-28.3K 117J Tanks needed off of CN or CP in Edmonton for 3-6 Months. Cars are needed for use in Crude service. Dirty to Dirty.
• 10-20, 340W Pressure Tanks needed off of CN or CP in Canada for 6 months to 1 year. Cars are needed for use in Propylene service. Immediate
• 25, 20.5K CPC1232 or 117J Tanks needed off of BNSF or UP in the west for 1-3 years. Cars are needed for use in magnesium chloride service. SDS onhand
• 5, 23.5K CPC1232 Tanks needed off of CSX in West Virginia for 2 years plus. Cars are needed for use in Polyacrylamide service. Unlined
• 10-100, 20K CPC1232 or 117J Tanks needed off of BNSF, CN or UP in the south or midwest for 5 years. Cars are needed for use in Urea Ammonium Nitrate service. CN Miss, BN Oklahoma, UP LA and Iowa- Must be lined
• 10, 50-60 footers Plate F Boxcars needed off of CN and UP or BNSF in Texas in Tennesse & Houston for 1 year. Cars are needed for use in Barium Sulfate service. Requires double door boxcars.
• Up to 60, 5150cf Covered Hoppers needed off of CN, CSX, NS in the east or midwest for 3 years. Cars are needed for use in Fertilizer service. 3-4 hatch gravity dumps
• 30, 5200cf Covered Hoppers needed off of UP in Colorado for 1-3 years. Cars are needed for use in Silica service. Call for details
• 40, 2400cf Gondolas needed off of various class 1s in Indiana for 6 Months. Cars are needed for use in Rock service. Call for details
• 20-30, 14k Any Tanks needed off of BNSF, UP in Texas for 1-3 Years. Cars are needed for use in HCl service. Call for details
• 50-100, 25.5K CPC1232 or 117J Tanks needed off of UP or BN in any location for 3-5 Years. Cars are needed for use in Heavy Fuel Oil service.
• 225, 5250cf-5800cf Covered Hoppers needed off of CSX, NS in the southeast for 5 years. Cars are needed for use in Plastic service. Call for details
Sales Bids
• 10, 25.5K 117, DOT-111, CPC 1232 Tanks needed off of UP or BN in Texas. Cars are needed for use in Veg Oil service. Coiled and insulated
• 5, 3200 Covered Hoppers needed off of UP or BN in Texas.
• 2-4, 28K Tanks needed off of BNSF Preferred in Minnesota. Cars are needed for use in Biodiesel service. Coiled and insulated
• 100, Plate F Boxcars needed off of BN or UP in Texas.
• 20, 2770 Mill Gondolas needed off of CSX in the northeast. Cars are needed for use in non-haz soil service. 52-60 ft
• 8, Hoppers needed off of various class 1s in various locations. Cars are needed for use in Plastic Pellet service.
• 10, 4000 Hoppers needed off of CSX in the northeast. Cars are needed for use in scrap metal service. Open top hopper
• 20-30, 3000 – 3300 PDs Hoppers needed off of BN or UP preferred in any location, but prefers the west. Cars are needed for use in Cement service. C612
• 20, 17K Tanks needed off of various class 1s in various locations. Cars are needed for use in corn syrup service.
• 100, 15.7K Tanks needed off of CSX or NS in the east. Cars are needed for use in Molton Sulfer service.
Lease Offers
• 100-200, 31.8, 1232` Tanks located off of BN in Chicago. Cars are clean Sale or Lease
• 70, 25.5K, 117J Tanks located off of UP in Texas. Cars are clean Call for information
• 100-200, 31.8K, CPC1232 Tanks located off of various class 1s in Texas. Cars were last used in Gas. Call for information
• 100-200, 31.8K, CPC1232 Tanks located off of various class 1s in Texas. Cars were last used in Diesel. Call for information
• 150, 30K, DOT111 Tanks located off of various class 1s in various locations. Cars were last used in Ethanol. Call for information
Sales Offers
• 100, 28.3K, 117J Tanks located off of various class 1s in multiple locations. Clean
• 100, 30K, DOT 111 Tanks located off of various class 1s in multiple locations. Clean
• 100-200, 31.8K, CPC 1232` Tanks located off of BN in Chicago. Sale or Lease
Call PFL today to discuss your needs and our availability and market reach. Whether you are looking to lease cars, lease out cars, buy cars or sell cars call PFL today at 239-390-2885
PFL offers turn-key solutions to maximize your profitability. Our goal is to provide a win/win scenario for all and we can handle virtually all of your railcar needs. Whether it’s loaded storage, empty storage, subleasing or leasing excess cars, filling orders for cars wanted, mobile railcar cleaning, blasting, mobile railcar repair, or scrapping at strategic partner sites, PFL will do its best to assist you. PFL also assists fleets and lessors with leases and sales and offers Total Fleet Evaluation Services. We will analyze your current leases, storage, and company objectives to draw up a plan of action. We will save Lessor and Lessee the headache and aggravation of navigating through this rapidly changing landscape.
PFL IS READY TO CLEAN CARS TODAY ON A MOBILE BASIS WE ARE CURRENTLY IN EAST TEXAS
Live Railcar Markets
| CAT | Type | Capacity | GRL | QTY | LOC | Class | Prev. Use | Clean | Offer | Note |
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