“Cultivate the habit of being grateful for every good thing that comes to you, and to give thanks continuously. And because all things have contributed to your advancement, you should include all things in your gratitude.”
– Ralph Waldo Emerson
COVID 19
The United States currently has 18,267,579 confirmed COVID 19 cases and 324,869 confirmed deaths.
US Jobless Claims
The U.S. Labor Department stated on Thursday of last week that U.S. workers filed an additional 885,000 initial jobless claims. The number of first-time filers for unemployment benefits were higher than the 818,000 expected. This increase in initial claims reflects the rising filings in California and Illinois, two states where governments have imposed restrictive lockdowns in the wake of the latest COVID-19 surge. That, paired with cooler weather, has led to additional job losses and growing risks for the economy in the coming months before the widespread vaccine distribution. Continuing claims were up to 5.51 million, this figure approximates the number of people receiving state unemployment benefits, but doesn’t include the millions of people who have already exhausted those benefits or are receiving assistance through federal pandemic jobless aid programs.
Markets up Week over Week across the Board
The Dow closed lower on Friday, down -124.32 points (-0.41%) closing out the week at 30,179.05 points up 132.68 points week over week. The S&P 500 closed lower on Friday, down 13.07 points (-0.35%) closing out the week at 3,709.41 points, up 45.95 points week over week. The Nasdaq Composite closed lower as well on Friday of last week, down 9.11 points (-0.07%) closing out the week at 12,755.64 points, up 397.77 points week over week.
In overnight trading, DOW futures traded lower and are expected to open down this morning roughly 400 points.
Oil gains for seventh straight week ending the week strong
Oil rose for a seventh straight week, buoyed by continued optimism over Covid-19 vaccine progress leading some to think that demand will increase in the not so distant future. In addition to Pfizer’s drug being approved by the FDA on December 12 the U.S. added Moderna to its arsenal on Friday of last week in the fight against COVID-19 approving the drug for emergency use. Much needed doses of the vaccine are set to arrive here in the U.S. today. Early results of large, still unfinished studies, show both vaccines appear safe although Moderna’s is easier to handle since it doesn’t need to be stored at ultra-frozen temperatures. Other factors driving the crude oil market last week include a weaker U.S. Dollar and talks in regards to a relief package. Senate Majority Leader, Mitch McConnell, noted last week the he is “even more optimistic now” that an agreement is near. He was right as Congress reached an agreement on a $900 billion stimulus package late Sunday afternoon that would send immediate aid to Americans and businesses. West Texas Intermediate (WTI) for January delivery rose 74 cents, or 1.5 per cent, to settle at US$49.10/bbl, extending this week’s rally to over five percent. Brent for February settlement gained 76 cents to US$52.26/bbl. Both benchmarks closed at their highest since late February.
According to the EIA, U.S. commercial crude oil inventories decreased by 3.1 million barrels from the previous week. At 500.1 million barrels, U.S. crude oil inventories are 10% above the five year average for this time of year. Total motor gasoline inventories increased by 1.0 million barrels last week and are 4% above the five year average for this time of year. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories increased by 0.2 million barrels last week and are 11% above the five year average for this time of year. Propane/propylene inventories decreased by 3.7 million barrels last week and are 3% above the five year average for this time of year.
U.S. crude oil imports averaged 5.4 million barrels per day last week, a decrease of 1.1 million barrels per day week over week. Over the past four weeks, crude oil imports averaged 5.6 million barrels per day, 12.1% less than the same four-week period last year.
Oil is lower in overnight trading and WTI is poised to open at $46.27, down $1.87 cents per barrel from Friday’s close.
North American Rail Traffic
Total North American rail volumes were up 4.5% year over year in week 50 (U.S. +4.9%, Canada +6.8%, Mexico -8.9%), resulting in quarter to date volumes that are up 3.0% and year to date volumes that are down 7.2% (U.S. -7.8%, Canada -4.5%, Mexico -9.8%). 6 of the AAR’s 11 major traffic categories posted year over year increases with the largest increases coming from intermodal (+9.0%) and grain (+27.7%). The largest decreases came from coal (-10.0%) and petroleum (-18.3%).
In the East
CSX’s total volumes were up 4.1%, with the largest increase coming from intermodal (+10.6%). NS’s total volumes were up 2.0%, with the largest increase coming from intermodal (+7.3%). The largest decreases came from coal (-19.1%) and petroleum (-45.7%).
In the West
BN’s total volumes were up 5.9%, with the largest increases coming from intermodal (+13.5%) and grain (+35.9%). The largest decreases came from coal (-13.0%) and petroleum (-31.2%). UP’s total volumes were up 0.3%, with the largest increases coming from intermodal (+7.5%) and grain (+41.7%). The largest decrease came from coal (-18.4%).
In Canada
CN’s total volumes were up 3.9% with the largest increases coming from intermodal (+8.2%) and metallic ores (+29.2%). The largest decreases came from petroleum (-24.0%) and motor vehicles & parts (-20.1%). RTMs were up 2.7%. CP’s total volumes were up 8.2%, with the largest increases coming from intermodal (+10.5%) and grain (+30.5%). The largest decrease came from petroleum (-20.6%). RTMs were up 5.9%.
Kansas City Southern
KCS’s total volumes were down 4.2%, with the largest decreases coming from intermodal (-5.5%). The largest increase came from petroleum (+20.7%).
Source: Stephens
Rig Count
North America rig count is down by 1 Rig week over week. The U.S. gained 8 rigs week over week. The U.S. currently has 346 active rigs with oil rigs up five to 263, gas rigs up two to 81, and miscellaneous rigs up one to two. The U.S. rig count is down 467 rigs from last year’s count of 813, with oil rigs down 422, gas rigs down 44 and miscellaneous rigs down one. Canada’s rig count was down by 9 rigs week over week erasing last week’s gains and Canada’s overall rig count is 102 active rigs. Year over year we are down 514 rigs collectively.
North American Rig Count Summary
Things we are keeping an eye on
- Rail Car Scrapping – PFL was sited in Argus Petroleum Transportation publication on Friday of last week as scrap prices soared nearly $100 per gross tons in certain markets across the country. PFL is looking to buy railcars on a delivered basis for $300 a gross ton in key markets. In addition to receiving a higher value for your railcars, there are federal incentives being considered by congress that provides for a new tax credit for replacing or upgrading certain railcars. It may be a time to consider mobile scrapping for those cars that are expensive to move or cannot move – please call PFL for further details 239-390-2885 as it relates to cars being delivered for scrap or PFL coming on site.
- Petroleum By Rail – The four week rolling average of petroleum carloads by rail on North America’s railroads rose to 25,779 from 25,032 the prior week their highest level since April 2020. Canadian volumes were mixed week over week – CP shipments were up 13.5% and CN’s volumes were down by 2.3%. In the U.S., the UP had the largest percentage increase of 14.7% while the BN had the largest percentage decrease dropping 10%.
- Dakota Access Pipeline (DAPL)- A hearing took place this past Friday as it relates to keeping the pipeline operational while it awaits its environmental review. The Standing Rock Sioux Tribe wants the 750,000 barrel a day pipeline shut down and if successful will reap havoc on the State of North Dakota and its producers. Could be a possible tailwind for crude by rail. Stay tuned to PFL, as we are monitoring the situation closely but currently have nothing to report as of the writing of this report.
- Trans Mountain Expansion Work Temporarily on Hold – As Canada’s producers await much needed pipeline take away capacity the Trans Mountain expansion was put on hold last week until January of 2021. A series of safety concerns including one fatality led to the shutdown of work. “A safety stand down will provide an opportunity for Trans Mountain to engage with its employees, contractors and their workers to “review, reset and refocus” its efforts, and those of its contractors and their workers said Ian Anderson, president and chief executive officer, in a news release issued Thursday of last week. “Over the past two months, we have seen safety incidents at our worksites that are unacceptable to Trans Mountain.” The project is 20% complete and construction is expected to resume on January 4th 2021. When the Trans Mountain expansion is finished (twinning of an existing pipeline) the project is expected to boost the pipeline’s capacity from 300,000 barrels per day to 890,000 barrels per day. Trans Mountain said Thursday it remains committed to “the safe, timely and efficient completion” of the project. The pipeline currently moves the equivalent of 441 Tank cars per day the expansion would move the equivalent of an additional volume equal to 867 rail cars per day a headwind for crude by rail.
Trans Mountain Expansion Project
Pipelines in Canada are currently congested. Enbridge told shippers that for January delivery it would reject 44% of all nominations at its heavy crude lines in Kerrobert Saskatchewan up from 32% in December. Basis has started to widen in Alberta with WCS CCI for February delivery settling on Friday at US$14.53 below the WTI-CMA. The implied value was $34.83. On Thursday it settled at U.S. $14.60 below the WTI-CMA for February delivery. The implied value was US$34.07/bbl. Now that plant turn around activity is complete expect basis to continue to widen a tail wind for crude by rail as differentials may start to make sense once again.
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 trouble shoot 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!”
Railcar Markets
A sign of things getting better – leasing activity and inquiries have continued to be strong
PFL is seeking:
- 50 Veg Oil Cars for 3-5 Years
- 100 117R 30K Tank Cars for the use of Gas and Diesel into Mexico
- 5400-5800 CUFT Covered Hoppers for use of Grain for 3-5 Years
- 200 31.8K CPC 1232 for the use of Condensate in the Northeast for 1-3 Years
- 100 31.8K CPC 1232 for the use of Gas and Diesel into Mexico
- 340W’s LPG pressure cars for various locations and lease terms,
- 50-90 263 or 286 GRL needed for corn syrup for purchase
- 50-60 Sulfuric acid cars 13.6 for purchase
- 40-50 molten Sulfur Cars 13.8 for purchase
- 15 500W tanks for CO2 use for lease 6-12 months
- 10 23-25.5 for glycerin 6-12 months UP or CN MO to WY
- 10 CPC 1232 needed in Montreal 25.5 on the CN dirty to dirty negotiable
- 12 CPC 1232 needed in Georgia 25.5 on the CSX dirty to dirty negotiable
- 75 340W Dirty to Dirty last LPG – Needed in Canada UP April 2021 negotiable
- 30 5400-5800 286 Hoppers needed in Texas off the BN for grain 2 years negotiable
- 5100 CU FT plus hoppers needed in the Midwest off the BN or UP negotiable
PFL is offering:
- Various tank cars for lease with dirty to dirty service including, nitric acid, gasoline, diesel, crude oil, Lease terms negotiable,
- 50 CPC 1232 cars in Texas clean last petroleum lease negotiable
- Short and long term opportunities available clean cars are available 1-5 years scattered across the country. Various last commodities. Leases on 117Js and 117Rs, dirty to dirty for sublease,
- 450 117Js 28.3 C/I for sale or lease in Texas
- 50 CPC 1232 28.3 tanks clean last veg oil various locations negotiable
- 200 CPC 1232 Compliant 25.5’s C/I for sale or lease
- 100 65 ft. bulkhead flat cars, for sale or lease
- 200 30K tankers cleaned and ready for service, for sale or lease,
- 100 5650 PD hoppers brand new 65 ft, lease only, available in 30 days,
- 218 73 ft 286 GRL riserless deck, center part for sale,
- 28 auto-max II automobile carrier racks – tri-level for sale,
- 100 65’ 100 ton log cars for lease, various locations,
- 10 food grade 14.3 tanks lined for phosphoric acid for sale in Louisiana,
- 49 60’ Box cars 286 EOL refurbished in Tenn.,
- 132 286 GRL DOT111s coiled and insulated 29K Gal for sale
- 20 low sided gondolas for lease in NJ 2743 cu ft,
- 100 34.2 Gallon Dot 111 for lease great for Ethanol or Alcohol
- 20 food grade stainless steel cars
- 50-80 117J or Rs 28K BN, UP, CN, Diesel dirty multiple locations negotiable
- 100 CPC1232 28.3 gal in Montana crude dirty BNSF negotiable
- 30 111A 30K clean Texas BNSF last ethanol negotiable
- 30 CPC 1232 25.5K Pennsylvania NS clean negotiable
- 10 CPC 1232 23.5 K W Michigan Calcium Chloride dirty negotiable
- 175 117R s or Js 30K Diesel or gasoline dirty to dirty Texas lease negotiable
- 50 300 series Pressure cars
- 100 CPC1232 28K Crude dirty to dirty CN Alberta lease negotiable
- 40 GP 20K in Southeast CSX clean last soap negotiable
- 140 117R 30.3 Dirty Ethanol located east and Midwest, lease negotiable
- 25 117J 25.5 New Texas UP and BN lease negotiable
- 110 2494 CU FT Gondolas for sales or lease 286 GRL in Montana UP negotiable
- PFL has a number of steel and aluminum hoppers for various commodities for sale, Sand cars, box cars, coal cars and hoppers including sugar covered hoppers and plastic pellet cars, are also available for sale or lease in various locations.
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 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 scraping 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
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