MH Daily Bulletin: March 30

News relevant to the plastics industry:

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Supply

• Oil fell 0.5% Wednesday as markets weighed competing signals for supply tightness.
• In mid-morning trading today, WTI futures were up 0.2% at $73.13/bbl, Brent was down nominally at $78.26/bbl, and U.S. natural gas was down 2.3% at $2.13/MMBtu.
• U.S. crude stocks fell by 7.5 million barrels last week, the biggest drop in four months, according to the Energy Information Administration. Inventories are about 6% above their five-year average for this time of year.

• U.S. oil and gas activity stalled in the first quarter as production gains slowed and the outlook among drillers turned negative, according to a survey by the Dallas Fed.
• Recent banking turmoil in the U.S. is putting major new LNG projects at risk, analysts say.
• U.S. natural gas production grew 4% last year, with three regions accounting for about 60% of all output:

• Oil companies offered a combined $264 million for drilling rights in federal waters in the Gulf of Mexico Wednesday, the region’s first auction in more than a year.
• Benchmark natural gas prices in Europe rose for a third day Wednesday as strikes in France reduce the country’s supply.
• Norway’s DNO ASA, which pumps about a quarter of Kurdistan’s crude exports, began idling its oil fields in the region after Iraq shut down a critical pipeline in a dispute with Turkey.
• Rosneft, Russia’s largest oil firm, signed a new supply deal with Indian Oil Corporation that will significantly boost Russia’s crude deliveries to the country.
• Chinese oil and gas giant CNOOC reported record profit of $20.6 billion last year, almost double the 2021 level.
• Unseasonably warm weather and plummeting natural gas prices have tanked coal prices, with Central Appalachian coal down 57% from the beginning of the year. Renewables surpassed coal for the first time ever last year as a source for power generation. 
• Spanish oil firm Repsol is investing $217 million into a domestic plant that will convert cooking oil into sustainable aviation fuel.

Supply Chain

• A BNSF train carrying ethanol derailed near Raymond, Minnesota, today, sparking a fire and forcing the evacuation of nearby residents. 
• Supply chain snags may be easing for retail-focused industries but remain stubbornly persistent in important sectors such as autos, machinery, defense and construction, experts say.
• Local governments in areas across the U.S. have used regulations to push back against local warehouse development, citing traffic and other quality-of-life issues.
• An index of U.S. trucking volumes dipped sharply to 41.3 in February, down from 51.6 in January.
• Amazon is starting to warn online buyers of “frequently returned” items in a bid to reduce mounting returns.
• Canadian National railway finalized plans to build a multimodal transload facility in Calgary, Alberta, aimed at trans-Pacific trade.
• The growing orderbook for methanol-capable ships signals growing acceptance of the fuel in the maritime sector.
• The Mexican administration’s proposed tightening of rules for approving new mines is drawing ire from industry leaders.
• Cargill’s decision to further step back from the Russian grain market this July is stoking concerns among traders about global supplies.
• A U.S. House of Representatives subcommittee is mulling whether to lift decades-old antitrust exemptions enjoyed by ocean shipping companies.
• Shares of Intel surged Wednesday after the firm said new products for the lucrative server market would come sooner than expected.
• In the latest news from the auto industry:
  • Reports suggest fewer electric vehicles will get full or partial U.S. tax credits when the Treasury Department releases its long-awaited guidance on sourcing requirements tomorrow.
  • Some automakers are experimenting with putting solar panels on the roofs of their vehicles, helping augment electric power.
  • The vast majority of investment in self-driving technology in recent years has gone to passenger cars rather than truck and delivery vehicles.

Domestic Markets

• Initial jobless claims rose modestly to 198,000 last week but remained near record lows, indicating a robust employment market.
• U.S. imports fell 2.3% in February even as retail inventories jumped 0.8%.
• U.S. retail sales are expected to grow at a slower pace this year as consumers react to fears of a recession, according to the National Retail Federation.
• The White House is expected to propose tougher rules on midsize banks this week after regional lenders Silicon Valley Bank (SVB) and Signature Bank failed.
• The nation’s 25 largest banks saw an inflow of $120 billion in the week following the SVB collapse, while the rest of the banking industry saw outflows of a record $108 billion.
• Ratings agency Moody’s expects the U.S. credit profile to see only limited impacts from recent turmoil in the banking sector.
• U.S. pending home sales rose 0.8% in February, the third straight monthly increase to the highest level since last August.

• U.S. mortgage refinancings climbed to a six-month high last week, fueled by several weeks of falling borrowing costs.
• New mortgage applications were also 2.9% higher, the fourth week of increases:

• A court ruled that spouses of foreign workers with H-1B visas may also work in the U.S., a win for tech firms.
• Several big U.S. firms are scaling back investments in the online-only “metaverse” world amid weak demand and poor returns for the technology.
• Walt Disney laid off more than 300 Beijing employees this week, adding to the 7,000 jobs cuts it had already planned to make.
• Electronic Arts will lay off about 6% of its workforce and reduce office space, becoming the first major video-game maker to announce job cuts.
• United Airlines reached a preliminary contract agreement with over 30,000 ground workers, pushing the airline’s shares up Wednesday.
• ICU Medical, a U.S. medical device-maker, teamed up with a private equity firm to challenge GE Healthcare in its pursuit of a potential $8-$9 billion deal to purchase two businesses from Medtronic.
• Snack food companies are encountering formidable obstacles in developing environmentally friendly alternatives to plastic snack bags, from costs to preservative qualities to aesthetics.

International Markets

• Russia’s retail sales fell 7.8% in February, while industrial output dipped 1.8%, both signs of a slowing economy. The country’s corporate profits also fell 21.3% in January, new data shows.
• The EU plans to launch a project with nine member states to identify gaps in the bloc’s sanctions against Russia and improve coordination of penalty enforcement, officials said.
• Melting ice in Antarctica is dramatically slowing water flow through the world’s oceans, new research shows, a pattern that could severely hurt the global climate.

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