PFL Petroleum Railcar Report August 23rd, 2021


Russell Sharp <russsharp21@...>
 

Eastern friends and fellow members, lots of information below ⬇️! Rail wise BNSF appears to be the winner this time.


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From: PFL Petroleum <team@...>
Date: August 23, 2021 at 6:39:34 AM CDT
To: russsharp21@...
Subject: PFL Petroleum Railcar Report August 23rd, 2021
Reply-To: PFL Petroleum <team@...>



Railcar Report

August 23rd, 2021

“Men make history and not the other way around. In periods where there is no leadership, society stands still. Progress occurs when courageous, skillful leaders seize the opportunity to change things for the better.”
—Harry S. Truman

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Jobs Update

Weekly jobless claims are down week over week, but remain elevated

  • Initial jobless claims for the week ended August 14 came in at 348,000 down 29,000 people week over week which was below analysts’ expectations.
  • Continuing claims came in at 2.82 million, down by 46,000 people week over week.
  • The total of those collecting benefits under all programs fell to 11.74 million, a decline of 311,787 for the week ending July 31. A year ago, the total number of people under all programs was 28.7 million people, so we are down 16.96 million people year over year and it seems that there are jobs everywhere!

 Stocks closed higher on Friday of last week but down week over week

The Dow closed higher on Friday of last week, up +225.96 points (+.65%) closing out the week at 35,120.08, down -395.30 points week over week.  The S&P 500 closed higher on Friday of last week, up +35.87 points (+0.81%) and closing out the week at 4,441.67, down -23.33 points week over week.   The Nasdaq closed higher on Friday of last week, up +172.88 points (+1.19%) and closing out the week at 14,714.66, down -168.24 points week over week. 

In overnight trading, DOW futures traded higher and are expected to open up this morning 118 points.
 

Oil posts biggest week of losses in nine months as Delta variant spreads  

Another rough week for oil, folks.  Oil prices fell 2.2% lower on Friday, on continued COVID concerns. West Texas Intermediate (WTI) for September delivery fell $1.37 a barrel to settle at $62.32 a barrel on Friday of last week, down $6.12 a barrel week over week.  Brent crude oil settled down $1.27 a barrel on Friday of last week closing at $65.18 a barrel, down $5.41 a barrel week over week. 

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.2 million barrels week over week. At 435.5 million barrels, U.S. crude oil inventories are 6% below the five year average for this time of year.

 Source Data: EIA – PFL Analytics

Total motor gasoline inventories increased by 700,000 barrels week over week and are 3% below the five year average for this time of year. Finished gasoline inventories increased while blending components inventories decreased for the week ending August 13th.
Source Data: EIA – PFL Analytics
 
Distillate fuel inventories decreased by 2.7 million barrels week over week and are 8% below the five year average for this time of year. 
Source Data: EIA – PFL Analytics

Propane/propylene inventories increased by 1.4 million barrels week over week and are 18% below the five-year average for this time of year.

Source Data: EIA – PFL Analytics

Demand for propane both abroad and here domestically for petrochemical use as well as other end users needs are making it difficult to build inventories.  U.S. exports of propane last month averaged 1.3 million barrels per day, up 300,000 barrels a day year over year.  From the supply side, the Texas February freeze did not help either as power outages affected many gas processing plants.  The market is still in short term backwardation making it more advantageous to sell now and buy later.  At PFL we are seeing demand to load railcars now for positioning to key markets for the upcoming crop drying season (expected to be weak this year as dryer conditions and early harvest is taking shape) and winter heating season.  Some plays are spec while others just to fulfill existing contracts – for loaded LPG storage opportunities please call PFL.   In the meantime, propane prices remain well above the five-year average. See Chart below:

Source Data: EIA – PFL Analytics

U.S. crude oil imports averaged 6.4 million barrels per day for the week ending August 13th, down by 46,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.4 million barrels per day, 14.1% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) for the week ending August 13th averaged 743,000 barrels per day, and distillate fuel imports averaged 142,000 barrels per day.

Source Data: EIA – PFL Analytics

U.S. crude oil refinery inputs averaged 16.0 million barrels per day during the week ending August 13, 2021 which was 191,000 barrels per day less than the previous week’s average. Refineries operated at 92.2% of their operational capacity last week. Gasoline production increased last week, averaging 10.0 million barrels per day. Distillate fuel production decreased last week, averaging 4.8 million barrels per day.

Source Data: EIA – PFL Analytics


Oil is up in overnight trading and, as of the writing of this report, WTI is poised to open at $64.04, up $1.90 per barrel from Friday’s close. 
 

North American Rail Traffic

Total North American rail volumes were up 0.6% year over year in week 32 (U.S. +0.9%, Canada +2.6%, Mexico -10.7%) resulting in quarter to date volumes that are up 2.2% year over year and year to date volumes that are up 10.3% year over year (U.S. +11.6%, Canada +6.9%, Mexico +6.5%). 6 of the AAR’s 11 major traffic categories posted year over year increases with the largest increases coming from coal (+17.2%) and metallic ores & metals (+22.4%). The largest decreases came from grain (-20.2%) and intermodal (-1.5%).

In the East, CSX’s total volumes were up 1.5%, and the largest increases came from coal (+21.2%) and intermodal (+1.9%). The largest decrease came from motor vehicles & parts (-23.6%). NS’s total volumes were up 0.5%, with the largest increases from coal (+18.0%), metals & products (+40.2%) and petroleum (+75.0%). The largest decrease came from intermodal (-6.4%).

In the West, BN’s total volumes were up 5.3%, with the largest increases coming from intermodal (+4.6%) and coal (+15.1%). The largest decrease came from grain (-17.7%). UP’s total volumes were down 1.0%, with the largest decrease coming from intermodal (-8.4%). The largest increases came from chemicals (+13.2%) and coal (+9.9%).

In Canada, CN’s total volumes were up 4.0%, with the largest increases coming from coal (+80.5%), metallic ores (+24.2%) and intermodal (+4.2%). The largest decreases came from motor vehicles & parts (-41.5%) and grain (-31.3%). RTMs were up 2.6%. CP’s total volumes were up 3.0%, with the largest increases coming from intermodal (+18.0%), petroleum (+91.1%) and coal (+40.3%). The largest decrease came from grain (-46.8%). RTMs were down 5.5%.

KCS’s total volumes were down 8.4%, with the largest decrease coming from intermodal (-16.6%) and the largest increase coming from coal (+66.7%).

Source: Stephens
 

Rig Count

North American rig count is down by 5 rigs week over week.  The U.S. rig count was up by 3 rigs week over week and up by 249 rigs year over year. The U.S. currently has 503 active rigs. Canada’s rig count was down by 8 rigs week over week, and up by 100 rigs year over year and Canada’s overall rig count is 156 active rigs.  Overall, year over year we are up 349 rigs collectively.  International rig count for July just came in and was down 7 rigs month over month, but up 8 rigs year over year. 
 

North American Rig Count Summary

Source Data: Baker-Hughes - PFL Analytics

Things we are keeping an eye on

 

  1. The Surface Transportation Board (STB) recently released July headcount data for U.S. rail. For the industry as a whole, July headcount was down 1.3% year over year.   June headcount that was down 0.2% year over year. On a sequential basis, industry headcount decreased 0.2% versus the 5-year July average of flat sequentially.  Specifically, the year over year change in headcount was mixed with NS seeing the most significant decline (-7.9%) and KCS seeing the most significant increase (+9.4%).   Looking ahead, it is expected industry headcount to remain flat to slightly up on a sequential basis in the near term.
  2. New railcar orders looking good - New railcar orders improved to 9,500 units in the second quarter of 2021(versus 6,200 in the first quarter of 2021) and the backlog increased 8% sequentially to 37,500 units. Overall, orders improved and are now around replacement levels, despite increased prices for new railcars cause by commodity price increases with steel being the main driving force. While the pace of rail volume growth has recently slowed, railcar utilization rates continue to improve and railcar scrap prices remain high (Call PFL today for your rail car scrapping needs).   It is a favorable environment for the rail car lessor presently we are seeing demand for virtually every car type except tank cars - there are literally thousands of coiled and insolated cars available and it will take some to go through that inventory.  New rail car orders should continue to build.
  3. Petroleum by Rail – The four-week rolling average of petroleum carloads carried on the six largest North American railroads rose to 24,980 from 24,684, a gain of 296 rail cars week over week. Canadian volumes were lower - CN shipments were down 6.2% and CP shipments were down by 6.4%.  U.S. volumes were mostly higher with the NS having the largest percentage increase up 10.7% while CSX had the largest percentage decrease- down by 9.8%.
  4. AITX (formally ARI) buys the Andersons Rail leasing business for $550 Million.  The purchase will expand AITX’s fleet to almost 60,000 cars.  The Andersons will retain all of their shops as they were not included in the purchase and will concentrate on its core agricultural business including Ethanol production.
  5. Watching Global Container Freight Index – Folks, costs are getting out of control and demand does not seem to be subsiding – great for intermodal traffic which continue to be robust but these costs are going to be passed on at some point.  The Global Freight Index is now up 468% year over year.  The notion that inflation is temporary as the Fed contests, we don’t think so – a lot of costs have yet to be passed onto the consumer.  See Chart Below:
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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 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

PFL is seeking:

30 25.5’s or greater food grade veg oil cars for 6-12 months
• 90-100 28.3K C/I Tank Cars needed for Biodiesel in the Midwest for 1 Year.
• 50 6500+ cuft Mill Gon or Open Top Hopper for wood chips in the Southeast for 5 Years.
• 25 bulkhead flats 286 any class one for up to 5 years Negotiable
• 10 open top hoppers 2400 C FT in Texas needed for stone on the UP 3-5 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 needed in the Midwest.
• 15-25 20K 23.5K cars for Oct Slurry needed in the South for 1 Year


PFL is offering:

• 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 – Selection is Dwindling. Call Today!
• 200 Clean C/I 25.5K 117J in Texas. Brand New Cars!
• 34 Clean C/I 25.5K CPC 1232’s located in PA.
• 100 117Rs dirty last in Gasoline in Texas for lease Negotiable
• 20 117R 30K plus tanks for ethanol in Wisconsin off the CN Negotiable
• 90 117Rs 30K located in Alberta CN or CP Refined Products Dirty – negotiable
• 37 BRAND NEW 5161 Sugar Hoppers in Arkansas UP – negotiable
• 99 340W Pressure Cars various locations Butane and Propane dirty negotiable
• 100 73 ft 286 GRL riser less deck, center part for sale,
• 19 auto-max II automobile carrier racks – tri-49 for sale – negotiable
• 10 food grade stainless steel cars
• 20 20K Stainless cars in 3 locations in the south – negotiable
• 30 CPC 1232 25.5K C/I Pennsylvania NS clean negotiable
• 100-150 29K C/I 117J cars for lease. Dirty in Bakken crude and can be returned dirty.
• 100 29K C/I 1232 cars for lease. Dirty in Heavy Crude and can be returned dirty.
• 100 117Rs 29K clean last used in crude Washington State – price negotiable sale or lease
• 21 111s 29K tanks last in alcohol dirty on the CN in Wisconsin for lease price negotiable
• 100 111s of various volumes and locations last in fuel oil dirty price negotiable
• Various Hoppers for sale and lease 3000-5800 CF 263 and 286 multiple locations negotiable
• 45 Boxcars 60ft Plate F’s Located in Tenn CSX – Lease Negotiable
• 28 20K Veg oil cars for lease in Arkansas – Negotiable
• 100 3200 Covered Hoppers for sale price negotiable
• 100 Center beam Flats with risers 73ft in SD and Iowa for sale negotiable

Call PFL today to discuss your needs, 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 offer 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 Field Services is First Verified qualified – to find out more information on First Verified safety verification please visit https://www.firstverify.com/ .  Call PFL today to trouble shoot return on lease scenarios, cleaning, maintenance, repair and the market in general.  We will through this process identify your needs – we are here to help and have the capability and know how to do so!  A phone call doesn’t cost you anything, so reach out to us today.
 
Please see below some of PFL Field Service’s equipment that it utilizes in its cleaning fleet

Pressure Washers

PFL Field Services LLC has been actively cleaning cars nationwide.  PFL uses a boiler unit to steam crude oil cars (tank cars) - for more information on PFL equipment and process please call us today.  PFL Field Services will clean, inspect, and provide maintenance for ALL CAR TYPES including full gasket change outs and railcar repairs on a mobile basis with a PFL Guarantee. We added UT testing to our venue of expanding services. Call us today for a competitive quote and to book a time!  

Mobile Boiler

PFL currently has Transloaders available for immediate delivery. The Transloaders in question can be used for petroleum products such as gasoline, jet fuel and crude oil. For specs and pictures please visit www.pflpetroleum.com 

We have been busy with all sorts of subleases, trouble shooting for return on lease programs which activity has increased dramatically.  Call PFL today for the latest and greatest!
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1865 Veterans Park Drive Suite # 303,
Naples Fl, 34109

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