Posted on by Curtis Chandler Posted in Railcar Report

I said, “Somebody should do something about that.” Then I realized I am somebody.

— Lily Tomlin

Jobs Update

  • Initial jobless claims for the week ending September 17th, 2022 came in at 213,000, up 5,000 people week-over-week.
  • Continuing jobless claims came in at 1.379 million people, versus the adjusted number of 1.401 million people from the week prior, down -22,000 people week over week.

Stocks closed lower on Friday of last week and down week over week

The DOW closed lower on Friday of last week, down -486.27 points (-1.62%), closing out the week at 29,590.41, down -1,232.01 points week over week. The S&P 500 closed lower on Friday of last week, down -64.76 points (-1.72%), and closed out the week at 3,693.23, down -180.1 points week over week. The NASDAQ closed lower on Friday of last week, down -98.88 points (-1.784%), and closed the week at 10,867.93, down -580.47 points week over week.

Oil closed lower on Friday of last week and down week over week

West Texas Intermediate (WTI) closed down -$4.75 per barrel on Friday of last week, or -5.7%, to settle at $78.74, down -$6.37 per barrel week over week. Meanwhile, Brent Futures closed down -$4.31USD, or -4.8% to settle at $86.15USD per barrel, down -$5.20 per barrel week over week.

 U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.1 million barrels week over week. At 430.8 million barrels, U.S. crude oil inventories are 2% below the five-year average for this time of year.

Total motor gasoline inventories increased by 1.6 million barrels week over week and are 5% below the five-year average for this time of year.

Distillate fuel inventories increased by 1.2 million barrels week over week and are 18% below the five-year average for this time of year.

Propane/propylene inventories increased by 3.3 million barrels week over week and are 2% below the five-year average for this time of year.

Folks, we are going to talk a little about LPG’s and natural gas here and these are commodities we are watching closely. First of all, it does not look as though we are in a panic as it relates to propane storage. The chart speaks for itself (see above). We are almost at the five-year average, propane-wise, for this time of year and we are at this point heading into winter with more in storage than last year. Propane prices fell week over week a penny per gallon, but are down 24 cents per gallon year over year. If the trend continues on rising inventory levels – well prices will obviously go down and with the stock market sell-off of late, and with inflation over 8% people are prepared to conserve energy watching their pocketbooks.

On the natural gas side, we have seen a selling pressure and inventories rising further than expected last week. Prices are falling overseas.  According to Reuters, the average LNG price for November delivery into Northeast Asia was $42 per mmbtu, down $4 per mmbtu, (-8.7%) week over week. Europe seems well supplied as they have prepared for the worse. Still many factors to concern ourselves with however notably – weather and Russia both of which is anyone’s guess.

Overall, total commercial petroleum inventories increased by 9.2 million barrels week over week.

U.S. crude oil imports averaged 6.9 million barrels per day during the week ending September 16th, 2022, an increase of 1.2 million barrels per day week over week. Over the past four weeks, crude oil imports averaged 6.4 million barrels per day, 4.5% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) averaged 775,000 barrels per day, and distillate fuel imports averaged 107,000 barrels per day during the week ending September 16th, 2022.

U.S. crude oil refinery inputs averaged 16.4 million barrels per day during the week ending September 16, 2022, which was 333,000 barrels per day more than the previous week’s average.

As of the writing of this report, WTI is poised to open at $77.94, down -$0.80 per barrel from Friday’s close.

North American Rail Traffic

Week Ending September 17th, 2022.

Total North American weekly rail volumes were down (-1.54%) in week 37 compared with the same week last year. Total carloads for the week ending September 17th were 357,593, up (+3.28%) compared with the same week in 2021, while Weekly intermodal volume was 319,586, down( -6.43%) compared to 2021. 6 of the AAR’s 11 major traffic categories posted year-over-year increases with the most significant decrease coming from Other (-12.85%). The largest increase was from Motor Vehicles and Parts (+25.60%).

In the east, CSX’s total volumes were down (-0.67%), with the largest decrease coming from Other (-18.17%) and the largest increase from Motor Vehicles and Parts (+27.46%).  NS’s volumes were down (-3.6%), with the largest decrease coming from Chemicals (-13.43%) and the largest increases from Grain (+25.26%).

In the west, BN’s total volumes were down (-5.67%), with the largest decrease coming from Metallic ores and Minerals (-28.17%), and the largest increase coming from Motor Vehicles and Parts (+20.58%). UP’s total rail volumes were up (+3.69%) with the largest decrease coming from Other (-21.53%) and the largest increase coming from Motor Vehicles and Parts (+45.86%).

In Canada, CN’s total rail volumes were down (-2.79%) with the largest decrease coming from Grain  (-12.85%)  and the largest increase coming from Other (+49.16%). CP’s total rail volumes were up 4.46% with the largest decrease coming from Metallic Ores and Metals (+37.21%) and the largest increase coming from Motor Vehicles and Parts (+46.51%).

KCS’s total rail volumes were up (+4.92%) with the largest increase coming from Motor Vehicles and Parts (+68.05%) and largest decrease coming from Forest Products (-20.01%).

Source Data: AAR – PFL Analytics

Rig Count

North American rig count was up 5 rigs week over week. U.S. rig count was up 1 rig week-over-week and up by 243 rigs year over year. The U.S. currently has 764 active rigs. Canada’s rig count was up 4 rigs week-over-week, and up by 537 rigs year-over-year. Canada’s overall rig count is 215 active rigs.  Overall, year over year, we are up 296 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 23,093  from 23,180 which was a loss of 87 railcars week-over-week. This was the eighth week-over-week decline after a five-week run of increases. Canadian volumes were mixed, CP’s shipments rose by +10.5% and CN’s volumes were down -1.2% week over week.  U.S. shipments were mostly higher.  The CSX had the largest percentage increase, up by +7.7%, and the BN was the sole loser down by -6.8%

We are eyeing Crude by Rail Out of Canada

The Canadian Energy Regulator (“CER”) updated its monthly crude by rail numbers on September 21, 2022. For July 2022, Canada exported 155,269 barrels per day by rail (down by 17,965 barrels per day month over month) the third month-over-month decrease after three months of steady increases. Crude by rail out of Alberta has been popular of late for raw Bitumen (no diluent added), as it can be shipped as a non-hazmat product resulting in lower shipping costs that are competitive with pipelines. We were hoping to see month-over-month increases, but with continued competition from the U.S. government releasing heavy crude from the SPR it is difficult to get a handle on the fundamentals – let’s see what happens after November.  Crude by rail is also popular for off-spec products that can be blended here in the United States and in areas where there is no pipeline access.  Before crude by rail out of Canada can come back in a meaningful way, supply needs to exceed pipeline capacity and we need to see a much wider basis for a sustained period of time (or at least predictable).  We have seen wider basis numbers that have worked albeit very briefly not allowing traders to lock in meaningful margins.

Also working against crude by rail at this time is Enbridge appropriations only amounted to 2% for October delivery after a busy September trade cycle.

WCS versus WTI closed out the trading day on Friday of last week at –US$22.35 per barrel, with an implied value of $58.41 per barrel in Edmonton. Getting down there folks!

We are watching the Weather

As of 5 a.m. EDT this morning, hurricane Ian had sustained winds of up to 75 mph and was moving northwest at 14 mph. Hurricane-force winds extended up to 15 miles from the storm’s center, while tropical-storm-force winds extended outward up to 90 miles.  It looks as though Ian is going to skirt production in the gulf so we are good supply-wise.  The projectile now has the hurricane hitting Florida’s panhandle as a category 1, with the possibility of a category 2 hurricane.  See below:

Source AcuWeather – PFL Analytics

We are watching the Industry Headcount

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

PFL is seeking:

  • 5, 20K unlined tanks needed in Texas for 2 years BNSF – more needed by year end
  • 100-200, 340W Pressure cars for a 12 month term for propane. Can take in various locations, needed ASAP
  • 30-50, Asphalt cars needed in Wisconsin on the CN for 6 months.  Dirty to Dirty.
  • 10-15, 25.5K-27k Gallon pressure cars for various commodities 5-8 year term
  • 20-25, CPC 1232 28.3K C/I Tank Cars for Feedstock in the Midwest off the CN for 6 months. Dirty to Dirty. Needed September/October.
  • 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
  • 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:

  • 50, 30K 117Js Last in Diesel.  Free move on the UP or BN. Can return Dirty
  • 120, 30K 117Rs Last in Diesel.  Free move on the UP or BN. Can return Dirty
  • 25 117Rs 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. 
  • 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 263 and 268 multiple locations negotiable
  • 300W 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.

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

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CAT Type Capacity GRL QTY LOC Class Prev. Use Clean Offer Note