{"id":2793,"date":"2021-02-08T09:56:42","date_gmt":"2021-02-08T14:56:42","guid":{"rendered":"https:\/\/pflpetroleum.com\/reports\/?p=2793"},"modified":"2023-07-28T10:56:29","modified_gmt":"2023-07-28T14:56:29","slug":"pfl-railcar-report-2-8-2021","status":"publish","type":"post","link":"https:\/\/pflpetroleum.com\/reports\/pfl-railcar-report-2-8-2021\/","title":{"rendered":"PFL Railcar Report 2-8-2021"},"content":{"rendered":"\n
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\u201cOnly he who attempts the absurd is capable of achieving the impossible.\u201d<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/em>
\u2015 Miguel de Unamuno<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/em><\/p>\n<\/blockquote>\n\n\n\n

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COVID-19 <\/strong><\/h2>\n\n\n\n

The United States currently has 27,611,403 confirmed COVID-19 cases and 474,933 confirmed deaths.<\/u><\/strong><\/p>\n\n\n\n

US Jobless Claims<\/h3>\n\n\n\n

The number of Americans applying for unemployment benefits fell to 779,000 people last week. <\/u><\/strong>The job market ended 2020 with no momentum and gained only a small amount back to start 2021.<\/p>\n\n\n\n

The Bureau of Labor Statistics (BLS) announced on Friday of last week 49,000 net new jobs were created in January 2021.<\/u><\/strong> Estimates ranged from -200,000 to a gain of +400,000, underscoring the uncertainty the pandemic and state shutdowns have created. Job losses for December 2020 were revised from -140,000 last month to -227,000 this month.  January 2021\u2019s small job gains mean that, of the 22.4 million jobs lost in March and April 2020, 12.4 million have been recovered, leaving 9.9 million Americans still unemployed.<\/u><\/strong><\/p>\n\n\n\n

Manufacturing and construction jobs fell by 10,000 and 3,000, respectively, in January, in both cases their first declines in nine months. They were among the sectors hit relatively less hard by the pandemic, though their employment levels today are still well below where they were before the Covid-19 pandemic.<\/p>\n\n\n\n

Employment in leisure and hospitality followed a 536,000 loss in December with another 61,000 jobs lost in January 2021. Retail trade lost 38,000 jobs in January after gaining 135,000 in December. The healthcare industry lost 30,000 jobs in January, its first decline in nine months. Since February 2020, healthcare employment is down by 542,000. In January, temporary help employment rose by 81,000, while education employment rose by 119,000.<\/p>\n\n\n\n

The official unemployment rate fell to 6.3% in January from 6.7% in December,<\/u><\/strong> thanks to a combination of a lower number of officially unemployed (down to 10.1 million in January from 10.7 million in December) and a 400,000 decline in the official size of the labor force in January. The official size of the labor force often rises or falls by several hundred thousand from one month to the next.<\/p>\n\n\n\n

As of January 2021, 4.0 million Americans have been unemployed for more than six months.<\/u><\/strong><\/p>\n\n\n\n

Initial claims for unemployment benefits provide a useful weekly snapshot of the condition of the labor market. <\/u><\/strong>In January, they provided little reason for optimism. Only when they start coming down substantially will it become clear that the employment situation is recovering. This is a sign that layoffs keep coming as the economy struggles due primarily at this point to forced shutdowns.  See the chart below:<\/p>\n\n\n

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\"Weekly
Source: U.S. Department of Labor<\/figcaption><\/figure>\n<\/div>\n\n\n

Markets close strong Week over Week over 1.9 Trillion Stimulus Bill<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/h3>\n\n\n\n

The Dow closed higher on Friday of last week, up +92.38 (+0.30%) closing out the week at 31,148.24 <\/u><\/strong>points, up 1,165.62 points week over week.  The S&P 500 closed higher on Friday of last week, up +15.09 points (+0.39%) and closing out the week at 3,886.83 points<\/u><\/strong>, up 172.59 points week over week.   The Nasdaq also closed higher on Friday of last week, up +78.55 points (+0.57%) closing out the week at 13,856.30 <\/u><\/strong>points, up 785.61 points week over week.<\/p>\n\n\n\n

In overnight trading, DOW futures traded higher and are expected to open up this morning 19 <\/strong>points.<\/p>\n\n\n\n

Oil Markets Relatively Stable Week over Week<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/h3>\n\n\n\n

Oil prices hit its highest level in a year on Friday of last week, closing in on $60\/bbl, supported by economic revival hopes and supply curbs by producer group OPEC and its allies. Oil was also supported as U.S. stock markets hit record highs on signs of progress towards more economic stimulus, while a closely watched jobs report confirmed the labor market was stabilizing. WTI crude oil for March delivery rose +$0.62 to $56.85 a barrel Friday of last week up $4.35 per barrel week over week. Brent crude oil for April delivery rose +$0.50 to $59.34 a barrel Friday of last week up $4.30 per barrel week over week.<\/p>\n\n\n\n


U.S. commercial crude oil inventories decreased by 1.0 million barrels week over week. At 475.7 million barrels, U.S. crude oil inventories are 4% above the five-year average for this time of year. Total motor gasoline inventories increased by 4.5 million barrels last week and are 1% below the five-year average for this time of year. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories were virtually unchanged last week and are 8% above the five-year average for this time of year. Propane\/propylene inventories decreased by 1.6 million barrels last week and are 6% below the five-year average for this time of year. Total commercial petroleum inventories increased by 2.9 million barrels last week.<\/p>\n\n\n\n

U.S. crude oil imports averaged 6.5 million barrels per day last week, increased by 1.4 million barrels per day from the previous week. Over the past four weeks, crude oil imports averaged 6.0 million barrels per day, 9.2% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 568,000 barrels per day, and distillate fuel imports averaged 518,000 barrels per day.<\/p>\n\n\n\n

Oil is higher in overnight trading and, as of the writing of this report, WTI is poised to open at 52.83, up 56 cents per barrel from Friday\u2019s close.<\/p>\n\n\n\n

Rig Count<\/h3>\n\n\n\n

North American rig count is up by 5 rigs week over week. The U.S. gained 8 rigs week over week. The U.S. currently has 392 active rigs (299 of which are oil rigs up four week-over-week and gas rigs were also up four rigs week over week to 92, and miscellaneous rigs unchanged at one rig). Canada\u2019s rig count was down by 3 rigs week over week and Canada\u2019s overall rig count is 171 active rigs. Year over year we are down 484 rigs collectively.<\/p>\n\n\n\n

North American Rig Count Summary<\/strong><\/h3>\n\n\n
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\"North
Source : Baker Hughes<\/figcaption><\/figure>\n<\/div>\n\n\n

North American Rail Traffic<\/h3>\n\n\n\n

Total North American rail volumes were up 0.7% year over year in week 4 <\/u><\/strong>(U.S. +2.1%, Canada -3.3%, Mexico -0.6%) resulting in year-to-date volumes that are up 4.9% year over year (U.S. +5.3%, Canada +5.6%, Mexico -3.7%). 4 of the AAR’s 11 major traffic categories posted year-over-year increases with the largest increases coming from intermodal (+4.7%) and grain (+38.4%). The largest decrease came from coal (-8.9%).<\/p>\n\n\n\n

In the East, CSX\u2019s total volumes were down 1.6%,<\/u><\/strong> with the largest decrease coming from motor vehicles & parts (-16.3%). The largest increase came from intermodal (+4.6%). NS\u2019s total volumes were up 1.8%,<\/u><\/strong> with the largest increase coming from intermodal (+7.9%). The largest decreases came from petroleum (-42.4%) and coal (-9.7%).<\/p>\n\n\n\n

In the West, BN\u2019s total volumes were up 0.7%,<\/u><\/strong> with the largest increases coming from intermodal (+8.8%) and grain (+44.7%). The largest decrease came from coal (-18.9%). UP\u2019s total volumes were up 0.3%,<\/u><\/strong> with the largest increases coming from intermodal (+5.9%) and grain (+50.4%). The largest decreases came from coal (-16.2%), stone sand & gravel (-27.4%), and petroleum (-19.8%).<\/p>\n\n\n\n

In Canada, CN\u2019s total volumes were down 2.9%,<\/u><\/strong> with the largest decreases coming from petroleum (-34.3%) and metallic ores (-13.6%). The largest increases came from grain (+65.0%) and intermodal (+2.6%). RTMs were up 1.4%. CP\u2019s total volumes were down 4.4%,<\/u><\/strong> with the largest decrease coming from intermodal (-12.9%). The largest increase came from chemicals (+16.5%). RTMs were down 1.7%.<\/p>\n\n\n\n

KCS\u2019s total volumes were up 2.4%,<\/u><\/strong> with the largest increases coming from petroleum (+19.9%) and intermodal (+3.8%).<\/p>\n\n\n\n

Source: Stephens<\/em><\/strong><\/p>\n\n\n\n

Things we are keeping an eye on<\/h3>\n\n\n\n

Railcars in Storage<\/h4>\n\n\n\n

We are watching Rail Cars in Storage \u2013 Rail cars in storage continue to decline month over month <\/u><\/strong>and now are below pre-Pandemic COVID-19 levels.  As of February 1, 2021, 396,867 freight cars \u2014 24.0% of the 1.656 million-unit North American rail freight car fleet are now in storage.  Please visit PFL\u2019s just released storage report for a detailed analysis of rail cars in storage across the country CLICK HERE<\/u><\/strong><\/a><\/p>\n\n\n

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\"North
Source: American Association of Rail Cars (AAR)<\/figcaption><\/figure>\n<\/div>\n\n\n

Several commodities continue to struggle, including coal; crushed stone, sand, and gravel; and petroleum products. All three have seen big year-over-year declines in recent months as energy-related markets continue to transform.<\/p>\n\n\n\n

Petroleum By Rail<\/strong><\/h4>\n\n\n\n

The four-week rolling average of petroleum carloads carried on the six largest North American railroads rose to 27,892 <\/strong>from 27,405 week over week.  Canadian volumes were mixed.  CP shipments rose by 2.2% and CN volumes were down by 8.7%.<\/u><\/strong>  U.S. rail road operators were mostly lower.  BN had the largest percentage loss, down by 15.9%.<\/u><\/strong><\/p>\n\n\n\n

We are watching this week some key economic indicators just released<\/u><\/strong><\/h4>\n\n\n\n