PFL Railcar Report 8-15-2022

“A successful man is one who can lay a firm foundation with the bricks others have thrown at him.”

– David Brinkley

Jobs Update

• Initial jobless claims for the week ending August 6th, 2022 came in at 262,000,  up 14,000 people week-over-week.

• Continuing claims came in at 1.428 million people, versus the adjusted number of 1.42 million people from the week prior, up 8,000 people week over week.

Stocks closed higher on Friday of last week and up week over week

The DOW closed higher on Friday of last week,up 424.38 points (+1.27%), closing out the week at 33,761.06, up 957.58 points week over week. The S&P 500 closed higher on Friday of last week, up 72.88 (+1.73%) and closed out the week at 4,280.15, up 134.96 points week over week. The NASDAQ closed higher on Friday of last week, up 267.27 points (+2.11%) and closed the week at 13047.19  points, up 389.63 points week over week.

Oil closed lower on Friday of last week, but higher week over week

 On Friday of last week, WTI for September delivery fell $2.25 to settle at $92.09/bbl, up $3.08 week over week. Brent for October settlement fell $1.45 cents to settle at $98.15/bbl, up $3.23 week over week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 5.5 million barrels from the previous week. At 432.0 million barrels, U.S. crude oil inventories are 5% below the five-year average for this time of year.

Total motor gasoline inventories decreased by 5.0 million barrels week over week and are 6% below the five-year average for this time of year.

Distillate fuel inventories increased by 2.2 million barrels week over week and are 24% below the five-year average for this time of year.  

Propane/propylene inventories increased by 2.1 million barrels week over week and are 10% below the five-year average for this time of year.

Propane prices closed at $1.10 a gallon, down 4 cents per gallon week over week and up a mere penny per gallon year over year.

Overall, total commercial petroleum inventories increased by 13.0 million barrels week over week.

U.S. crude oil imports averaged 6.2 million barrels per day during the week ending August 5th, 2022, decreased by 1.2 million barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.5 million barrels per day, 0.9% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components)  averaged 595,000 barrels per day, and distillate fuel imports averaged 204,000 barrels per day for the week ending August 5th 2022.

U.S. crude oil refinery inputs averaged 16.6 million barrels per day during the week ending August 5, 2022, which was 728,000 barrels per day more than the previous week’s average.

As of the writing of this report, WTI is poised to open at $88.42, down -$0.59 per barrel from Friday’s close.

North American Rail Traffic

Week Ending August 6th, 2022.

Total North American weekly rail volumes were down -0.7% in week 32 compared with the same week last year. Total carloads for the week ending August 6th were 327,633, down -0.8% compared with the same week in 2021, while Weekly intermodal volume was 354,967, down -5% compared to 2021. 7 of the AAR’s 11 major traffic categories posted year-over-year declines with the most significant decrease coming from Grain (-12.4%). The largest increase was from Coal  (+4.5%) and Nonmetallic Minerals (+4.2%).

In the east, CSX’s total volumes were down -2.69%, with the largest decrease coming from Petroleum and Petroleum Products (-13.04%) and the largest increase from Farm and Food Product (+5.44%).  Norfolk Southern’s total volumes were down 3.89%, with the largest decrease coming from Petroleum and Petroleum Products (-18.27%) and the largest increases from Grain (+14.36%) and Forest Products (+14.04).

In the west, BN’s total volumes were down -5.22%, with the largest decrease coming from Other (-41.51%), the largest increase coming from Grain (+18.95%) UP’s total rail volumes were up 4.87% with the largest decrease coming from Petroleum and Petroleum Products (-16.09%) and the largest increase coming from Coal (+44.74%) and Other (+32.56%).

In Canada CN’s total rail volumes were up -0.18% with the largest decrease coming from Chemicals  (-17.74%) and Coal (-16.96%)  and the largest increase coming from Grain (+125.44%).  CP’s total rail volumes were down -16.40% with the largest decrease coming from Other (-51.03%) and Petroleum and Petroleum Products (-48.21%) and the largest increase came from Farm and Food Products (+13.63%).

KCS’s total rail volumes were up 7.02% with the largest increases coming from Forest Products (+21.60%) and Coal (+20.69%) and the largest decrease coming from Petroleum and Petroleum Products (-11.89%).

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 263 rigs year over year. The U.S. currently has 763 active rigs. Canada’s rig count was down by -2 rigs week-over-week, and up by 37 rigs year-over-year. Canada’s overall rig count is 201 active rigs.  Overall, year over year, we are up 300 rigs collectively.

North American Rig Count Summary

A few things we are keeping an eye on:

We are eyeing Petroleum Carloads

The four-week rolling average of petroleum carloads carried on the six largest North American railroads fell to 24,390 from 24,521 which was a loss of 131 railcars week-over-week. This was the second week-over-week decline after a five-week run of increases. Canadian volumes were mixed. CP’s shipments were up by 11.4% and CN’s volumes were down by 5.4%.  U.S. shipments were also mixed.  The CSX had the largest percentage increase, up by 8.7% and NS had the largest percentage decrease down by 2.7%.

Bits and Pieces

Folks, last week there were no serious disasters to report that would have affected rail or rail traffic.  We think everyone is going numb to all the bad news out there!   Here are a few highlights from last week and what we at PFL were watching:

• Scrap prices came off $30 a gross ton for August – the market is still robust and quite a few cars are getting scrapped;
• President Trump’s home got raided Monday of last week by the FBI;
• President Biden to sign the Inflation Reduction Act after much-needed vacation into law this week and on September 6^th will hold a celebration at the White House in honor of the historic legislation, Biden tweeted;
• RINS and renewables had a very busy up week – Ethanol, on Friday of last week, closed out the day and the week at $2.58 per gallon, up 3 per gallon day over day and up 14 cents per gallon week over week. D6 RINS closed out the week and the day at $1.68 per RIN, up 2 and ½ cents per RIN day over day and up 5 cents per RIN week over week. Meanwhile, D4 RINS closed out the day and the week at $1.82 per RIN, flat day over day but up 5 cents per RIN week over week. California LCFS credits in a muted session closed at $95 per MT, flat day over day but up $7 per MT week over week.
• Hurricane season has been quiet this year but Texas got blessed with a depression over the weekend; and received some much need rain, we are now entering the most active period of hurricane season and are watching for new developments that may affect rail traffic;
• On Thursday of last week, the International Energy Agency (IEA) raised its oil demand growth forecast for 2022 as soaring Natgas prices drive some consumers to switch to oil.  Natgas are now at $8.75 per MMBTU – with Freeport expected to come on line (2 BCF per day of market) and already low U.S. inventories prices are expected to rise;
•  For our engineers out there New Delhi announced a significant achievement with the inauguration of the world’s highest single arch rail bridge.

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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

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PFL is seeking:

• 5, 20K unlined tanks needed in Texas for 2 years BNSF – more needed by year end
• 100, 340W Pressure cars for a 6 month term for propane. Can take in various locations, needed ASAP
• 50, 340W Pressure cars needed for Winter lease starting in October for Propane. Can take in Texas. 
• 50, 30K 117J needed in Texas or Louisiana for condensate. 6 month term, Dirty to Dirty. Can take last in Crude. 
• 100 Coiled and insulated cars for Crude.  Needed in Canada for 6 months. Dirty to Dirty
• 50 117Js with magrods in the east – 10 for immediate trip lease – 40 for longer term
• 50 6350 covered hoppers in the midwest with most class ones for up to 5 years for DDG
• Up to 40 5500 Covered Gons 286 unlined CSX/NS preferred but will consider other
• 4 Lined tanks for glycerin to run from Arkansas to Georgia 1-3 years
• 30 boxcars on UP or CP for 3 years to run from TX to Edmonton – negotiable
• 6-10 Open top 4200 gons for hauling scrap NS in Ohio for 1-3 years
• 100, 2480 CU-FT Ag Gons needed in Texas off of the UP for 1-3 Years.
• 50, 117J 30K+ Tank cars are needed in several locations. Can take in various locations off various Class 1’s. Can have prior Ethanol heel or Gasoline heel
• Various Hoppers 286 GRL 4200-7000 CU FT in several locations negotiable
• 300 5800 Covered hoppers needed for plastic – 5-year lease – negotiable
• 50, 5800cuft or larger Covered Hopper for use in DDG needed in the Midwest for 3-4 years. Immediate need.
• 10-20 Covered hopper grain cars in the midwest 5200-5500 2-3 years
• 100 Moulton Sulfur cars for purchase – any location – negotiable
• 50 Ag Gons 2500-2800cuft 286k GRL in the east for 5 years negotiable
• 100 15K Tanks 286 for Molten Sulfur in the Northeast CSX/NS for 6 months negotiable
• 100, 5800 Covered Hoppers 286 can be West or East for Plastic 3-5 years
• 70, 117R or J needed for Ethanol for 3 years.  Can take in the South.
• 50, 6500+ cu-ft Mill Gon or Open Top Hopper for wood chips in the Southeast for 5 Years.
• 20, 19,000 Gal Stainless cars in Louisiana UP for nitric acid 1-3 years – Oct negotiable
• 10, 6,300CF or greater covered hoppers are needed in the Midwest.

PFL is offering:

• 25 31Rs for sublease dirty to dirty service BN/UP – negotiable
• 25, 31.8K CPC 1232 last in Crude in New Mexico.  Dirty to Dirty. 
• 200 Clean C/I 25.5K 117J in Texas. Brand New Cars!
• 150 DOT 111s last in ethanol in the Midwest with free move.  Available in September.
• Up to 500 sand cars for sale or lease at various locations and class ones – Great Price!
• 150 117R’s 31.8 clean for lease in Texas KCS – for sale or lease – negotiable
• 31.8K Tank Cars last in Diesel. Dirty to dirty in Texas
• 200 117Js 29K in the Midwest. Lined and brand new- lease negotiable
• 100 117Rs dirty last in Gasoline in Texas for lease Negotiable
• Various Hoppers for lease 3000-6250 CF 263 and 268 multiple locations negotiable
• 61, 117Js in the Midwest.  Last in Bakken. Dirty to Dirty service. 
• 340W pressure cars located in various locations. 
• 200 117Js 29K OK and TX Clean and brand new – Lined- lease negotiable
• Various tank cars for lease with dirty to dirty service including, nitric acid, gasoline, diesel, crude oil, Lease terms negotiable, clean service also available in various tanks and locations including Rs 111s, and Js.

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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

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Live Railcar Markets