Last Saturday at 10 a.m. CDT, Tropical Storm Barrybecame the first hurricane of the 2019 Atlantic hurricane season and the fourth hurricane to ever make landfall on the Louisiana coast in the month of July. The storm's initial landfall occurred when the center of circulation moved across Marsh Island, followed by its final landfall near Intracoastal City, located about 160 miles west of New Orleans.
The hurricane season for the Atlantic Region runs from June 1st until November 30th.The bodies of water included in the region are the Atlantic Ocean, Caribbean Sea and Gulf of Mexico. The National Oceanic and Atmospheric Administration have reported that, “In total, the season produced 15 named storms, including eight hurricanes of which two were “major” (Category 3, 4 or 5). An average season has 12 named storms, six hurricanes, and three major hurricanes. The two major hurricanes last year were Florence and Michael which caused significant damage to the southeastern United States.
The relationship between the economy and the trucking industry is closely intertwined. According to Reuters, “Trucking accounts for 70 percent of U.S. shipment tonnage, and is key to supplying the manufacturing, construction and retail sectors, all of which showed sluggishness in the first quarter. The most common factors for the decline include the U.S.-China trade war and weakness in the Farm Belt.” When the orders slow down, so do the miles driven by truck drivers across the United States, and that means less fuel being consumed and lower paychecks for drivers. However, the American Trucking Associations tonnage index is still at a healthy level at 117.4 compared to 2008-2012 during the Recession when levels were well below 90.
Iran is still under OPEC sanctions regarding oil exports with the six-month waivers to key Iranian customers expiring in May. According to an article online, “At least two tankers have ferried Iranian fuel oil to Asia in recent months despite U.S. sanctions against such shipments, according to a Reuters analysis of ship-tracking data and port information, as well as interviews with brokers and traders.” Due to the sanctions documents were clearly identified as forgeries, even stating that the petroleum on the vessels may have been from other countries.
As of 9:26 AM EST WTI was $57.46/barrel, RBOB $1.6175/gallon and ULSD $2.0372/gallon. The US oil rig count stands at 853 active rigs. The crack spread for April HO is $28.19 and gas is $16.88. Regarding crack spreads, “In layman’s terms, a crack spread is the differential between the price of the crude oil a refinery purchases and the value it sells the refined products for.