News and Updates

Truckers can affect highway bill outcome

Fri, 24 Feb 2012 21:01:00 GMT

With Congress heading home for a scheduled recess, OOIDA is urging truckers to keep the pressure on lawmakers to pass a multiyear transportation bill. OOIDA leadership says that if an authorization bill fails to pass soon, the status quo will continue to be the reality.

OOIDA Director of Legislative Affairs Ryan Bowley says a lot of groups oppose the bill, particularly the House version, and are pressuring lawmakers to vote it down.

The recess, which lasts from the completion of work on Friday, Feb. 17, through Feb. 27, gives truckers a chance to speak with lawmakers in their home districts. Many lawmakers take the opportunity to attend functions, host town hall meetings, and meet with constituents outside of the DC bubble.

OOIDA supports provisions on safe truck parking, driver training, broker bonds, cab crashworthiness and a study on how over-regulation affects small-businesses truckers. The Association also agrees with reforming the funding formula that currently diverts 20 percent of the Highway Trust Fund to mass transit and another 10 percent to enhancements like beautification and bike paths.

OOIDA members have already influenced the bill to this point by getting a provision removed from the bill that would have increased truck size and weight on interstate highways.

“There are a lot of positives for trucking in this bill,” Bowley said. “The bill is not perfect, but it’s important to keep the process moving forward.”

The House of Representatives is seeking a five-year, $260 billion transportation authorization, HR7, while the Senate has their sights on a two-year, $109 billion bill, S1813. The nuts and bolts of the bills are similar, Bowley says, but funding levels and revenue sources continue to be contentious.

Bowley says an ideal situation would be for both bills to pass so that a conference committee can hammer out the differences.

“If both bills move forward, at least it gets people to the table to work out differences,” Bowley said. “If one fails – specifically the House version, which is more controversial – they won’t even get to the table to make compromises.”

Current transportation programs funded by the Highway Trust Fund are set to expire in late March. Congress has extended the programs eight times since the transportation law known as SAFETEA-LU expired in September 2009.

Congress generated momentum for reforms in recent months, but lawmakers are faced with difficult choices, particularly in this presidential election year.

“If the bill doesn’t pass, I believe there would be no reform for at least another year in the highway program,” Bowley says.

“The consequence if this fails is the continuation of a status quo that nobody likes,” he continued. “You end up with things like they face in Pennsylvania – where instead of getting more money to fix deficient bridges they can only get money for historic covered bridges that nobody drives on. The status quo is unacceptable at this point.”

OOIDA can help locate contact information for lawmakers in their home districts and in DC. Call the Membership Department at 816-229-5791 for more information.

By David Tanner, Land Line Magazine associate editor

Freight Rail Industry Planning Record Investment in 2012

Fri, 24 Feb 2012 20:59:00 GMT

An increase in American exports is helping drive a record-level of new investment in freight rail, according to a news release by the Association of American Railroads.

A Chicago freight yard. Freight rail is planning a record level of investment in the coming year. Photo: Railway-Technology.com

The railroad industry is planning a $13 billion investment in the nation’s freight rail network in 2012. That would round out the biggest three-year period of investment in history, according to the organization.

The investment binge is brought on by a recovering US economy, a spokesman for the organization said. Much of the investment is in multi-modal facilities that will help facilitate truck to train transport. New investments will also expand service to the nation’s ports.

“Unlike trucks, barges or airlines, America’s freight railroads operate on infrastructure they own, build and maintain themselves so taxpayers don’t have to,” said Edward Hamberger, AAR president and CEO. “These investments help businesses get their goods to market more efficiently and affordably, so they too can innovate, invest and hire. That’s how freight rail spurs the American economy and supports jobs all across the country.”

Freight rail is expected to hire 15,000 workers this year. This includes replacing retiring workers as well as adding new employees.

A spokesman for the organization said some companies are shifting from trucking to freight rail, but there are a number of complicated factors that have contributed to increased demand. For example, whether companies choose freight rail over trucking depends a lot on the commodity being shipped, she said.

Significant rise in U.S. inbound ocean cargo

Fri, 24 Feb 2012 20:58:00 GMT

By Patrick Burnson, Executive Editor
February 13, 2012

According to a leading trade intelligence report, inbound ocean cargo calls increased at all top ten U.S. ports last month.

Analysts for Zepol Corporation noted that Los Angeles – the nation’s leading seaport – saw a 12.5 percent surge in container throughput. The Port of Seattle, which has been subject to recent cargo disruptions, also finished strong with a 19 percent increase of twenty-foot equivalent units (TEUs).

The port of Savannah, meanwhile, witnessed a “notable” increase of 26 percent.

Overall, U.S. import shipment volume for January, measured in TEUs, increased 13.4 percent from December, and rose 5.8 percent from January of 2011. The total number of inbound shipments also increased 12 percent from December and 6.4 percent from January of last year. The rise in January 2012 imports is similar to 2011’s data which also saw a significant increase in January from December of 8.5 percent.

Zepol analysts observed, however, that this trend was opposite in 2010 and 2009 which both fell in January from December numbers.

Other key statistics from this month’s update included the fact that TEU imports from China rose 20 percent in January from December, while Japanese imports dropped 11.7 percent. Total TEUs for Asia in January increased by 17 percent. Imports from Europe were also up 3 percent in January with significant rises from the countries of Spain and Turkey, which posted TEU increases of 12 percent and 34 percent respectively from December.

The overall rise in shipments was seen in every top carrier for January as well.

Maersk Line, which is shedding its chassis division, had a 17.5 percent growth from December. APL also had a large increase from the previous month of 22 percent, “a happy spike” compared to APL’s 13 percent drop from November to December. The Mediterranean Shipping Company saw a lull in November to December as well, but a 13.5 percent increase in January, which is the common trend for overall U.S. imports from 2011 to 2012.

LTL’s are feeling pressure from freight brokerages

Fri, 24 Feb 2012 20:58:00 GMT

By Jeff Berman, Group News Editor
February 24, 2012

While the less-than-truckload (LTL) marketplace pales compared to truckload in terms of market share, it remains an important sector on myriad fronts.

And with so many more active players than its truckload brethren, it also is marketplace that has more than its fair share of challenges, too. And one of these challenges is the pressure LTL’s are facing from truck brokerages, of which there are many.

I am not telling you anything you don’t already know in that regard. But I do hear from LTL carriers on a pretty regular basis that they are feeling the heat from the truck brokerage side.

Earlier today, an LTL sales executive told me that there is a significant influx of truck brokerage players that are active in the LTL market, which is reducing margins for carriers that are “struggling for pennies.” What’s more, the LTL executive said it is fair to estimate that brokers are selling 25 percent of total LTL loads today and that figure is rising.

The proliferation of brokerages on the LTL side, according to the executive, has more to do with a slow economy and overcapacity.

“The poor economy drives customers to see cheaper rates,” he said, “and overcapacity drives carriers to offer lower rates to fill capacity. Those two things together put the third party in the middle, and third parties are doing an effective job of making our money their money. We are allowing them to do that as a collective carrier group.”

When asked about the disparity between what an LTL carrier receives for a load compare to what a broker receives for a load, the executive said that publicly traded LTL carrier operating margins are in the low 100s range, while on the transactional side brokerages had margins that averaged 12 percent.

This, he said, gives an indication that carriers are more and more buying into broker’s cheap rates in order to get volume, with brokers subsequently marking those rates up to shippers.

“3PLs/brokerages get paid, because they bring these TMS (transportation management systems) in and consolidate the look of all the carriers—LTL and truckload alike—that a small shipper would use and it appears to be more efficient from for a shipper,” he said. “It may be, and that is an advantage they have over us as carriers, because we are such a fractured industry and that makes us vulnerable.”

A 3PL executive with an active trucking brokerage told the LTL executive that 50 percent of LTL company revenues that offers better margins to carriers, meaning that half of the business represents variable costs—or the costs of doing business.

The other half, of course, represents profits, much of which comes from smaller customers that often do not have contractual—or lower rates—than larger shippers with more freight to haul. Subsequently, this is a major driver in small shippers turning to brokers to find cheaper loads.

“What this indicates to me is that smaller shippers are targeting securing loads more through brokerages and more third parties are going to ‘commoditize’ LTL, and LTLs will really be working for third parties in the future, as opposed to being an independent industry as they are today,” said the LTL executive.

This current situation makes for a very interesting dynamic in that when looking at various utilities and services that have been deregulated—like airlines—and the fallout, with many airlines either leaving the industry or going bankrupt.

Our conversation changed course a bit when I noted that it seems apparent that LTLs have much better pricing power now than they did back in 2009, when many chased volume in exchange for lower rates—a strategy that was not viewed as a success and saw many shippers turning to brokerages in search of even lower rates. And I asked if this made for an exasperating situation for LTL carriers.

Here is his answer: “Yes. It was because our industry has no response to it, and we are sitting there watching it happen before our eyes. It was like watching a river overflow and not being able to do anything about it.”

And while using truck brokerages appeals to shippers’ high-level executives, LTL carriers tend to deal more with traffic managers and people in similar positions whose bonuses and evaluations are based to a degree on discounts.

Brokerages, he said, are rolling out TMS and audit pay features in conjunction with low rates, which appeals to shippers. This, in turn, leaves carriers defenseless to an extent, as they don’t have things like TMS which pulls all modes together, and they also have to remain separate as an industry for many reasons, with antitrust being the biggest, according to the LTL executive.

“We cannot talk pricing together with other LTLs but you have brokers using other brokers about pricing when they find a customer that can fit the carrier program and can save money,” he said. “Brokers selling down to other brokers is happening all the time. And when you Google ‘cheap LTL rates’ it opens up a whole different world for LTL.”

Diesel prices head up 1.7 cents, says EIA

Fri, 24 Feb 2012 20:57:00 GMT

Following a nearly 9 cent bump during the week of February 13, the price per gallon of diesel headed up 1.7 cents this week to $3.96 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

This is the fourth straight week and the sixth time in the last seven weeks prices have gone up. And over the past seven weeks prices have gone up a cumulative 17.7 cents, which was preceded by a cumulative 22.7 decline over the previous six weeks.

On an annual basis, the price per gallon is up 38.7 cents. This is down sharply from comparisons in the mid-80s range just a few months ago. And while prices have largely been trending down prior to this recent increase, shippers have maintained that they are forecasting for steady fuel increases in their supply chain and transportation budgets should diesel prices continue to hover near or at the $4 per gallon mark.

The EIA recently reported that in its Short-Term Energy Outlook the 2012 average for diesel is up six cents from January at $3.91 per gallon, with 2013 pegged at $3.99. The 2011 average was $3.84.

As LM has reported, shippers continue to take steps to minimize the impact of fluctuating fuel costs. Over the years, they have maintained that this is imperative as higher diesel prices have the potential to hinder growth and increase operating costs, which will, in turn, force them to raise rates and offset the increased prices to consumers.

The price per barrel of oil was at $106.36 on the New York Mercantile Exchange earlier today, which remains in line with prices in recent weeks fluctuating around the $100 per barrel mark.

The Associated Press reported that oil prices continue to rise amid concern that conflict over Iran’s nuclear program could lead to global crude supply disruptions.

New Ban on Commercial Drivers Using Cell Phones

Wed, 11 Jan 2012 16:53:00 GMT

Those driving commercial vehicles have new rules to follow.

The Federal Motor Carrier Safety Administration says if you're driving a commercial vehicle, you're not allowed to use your cell.

A new Federal ban is making it illegal for those handling commercial vehicles, like 18-wheelers, to use a cell phone while on the road.Cell phones, most of us have got em' and we're probably all a little guilty of using them when we're driving.

"I think it's a good idea," says truck driver Houston Rouse.

Some truck drivers, like Houston Rouse says he's okay with the recent ban.

"I think the law is a good thing," says Rouse.

After all the ban still allows for drivers to answer, initiate or even end phone calls, they just have to use a hands-free headset.

Rouse bought this new headset not too long ago.

"You just push this button and it picks up the call or ends it," says Rouse, as he points to his headset.

"We're supposed to be professional drivers," says Kim Downing.

But some drivers are wondering why the ban is just for commercial drivers.

Trucker driver Kim Downing prides herself as a safe driver and she says she's seen many people driving their personal carscarelessly while on the phone.

"There should be a rule for everyone, we all share the road, they endanger our lives just like we endanger there's," says Downing.

Drivers who are caught multiple times using their cell phones improperly could face losing their license.

Commercial drivers can be fined up to $2,750 for using a "hand held" cell phone while driving.

Steven McCormack, 'Human Balloon,' Injured By Compressed Air

Wed, 25 May 2011 20:01:00 GMT

WELLINGTON, New Zealand — A New Zealand truck driver said he blew up like a balloon when he fell onto the fitting of a compressed air hose that pierced his buttock and forced air into his body at 100 pounds a square inch.

Steven McCormack was standing on his truck's foot plate Saturday when he slipped and fell, breaking a compressed air hose off an air reservoir that powered the truck's brakes. He fell hard onto the brass fitting, which pierced his left buttock and started pumping air into his body. "I felt the air rush into my body and I felt like it was going to explode from my foot," he told local media from his hospital bed in the town of Whakatane, on North Island's east coast. "I was blowing up like a football," he said. "I had no choice but just to lay there, blowing up like a balloon." McCormack's workmates heard his screams and ran to him, quickly releasing a safety valve to stop the air flow, said Robbie Petersen, co-owner of the trucking company. He was rushed to the hospital with terrible swelling and fluid in one lung. Doctors said the air had separated fat from muscle in McCormack's body, but had not entered his bloodstream. McCormack, 48, said his skin felt "like a pork roast" – crackling on the outside but soft underneath.

Mississippi port closed to shipping traffic

Tue, 17 May 2011 21:18:00 GMT

LOS ANGELES (MarketWatch) — A section of the Mississippi River has been closed indefinitely due to high waters, hindering commercial traffic along the critical waterway, Coast Guard officials said Tuesday.

A 15-mile stretch of the river near Natchez, Miss., has been closed, said Coast Guard Petty Officer Bill Colclough. The National Weather Service says the river has risen to a flood-stage level of 62.8 feet. “It’ll be closed until further notice,” Colclough said. The New Orleans Times-Picayune said on its website Tuesday that the river is expected to crest Saturday at 63 feet in Natchez, five feet above a record set there in 1937. It could take several weeks for water levels to return to normal. Natchez is well north of where deep-draft ships are allowed on the Mississippi; those vessels are allowed only as far as Baton Rouge. But bulk cargo traffic is expected to be severely affected by the move. Some cargo normally loaded off deep-draft, oceangoing ships and onto barges for transport further up river may be halted. Conversely, barge traffic headed for Baton Rouge and points south may not be able to get to destinations in time for off-loading to larger ships. The closure is expected to put a severe crimp in the operations at the Port of South Louisiana, just up river from New Orleans, the largest in the Western Hemisphere in tonnage handled. The port receives 55,000 barges each year as well as 4,000 oceangoing vessels, according to its Web site. While other ports such as New Orleans handle mostly container traffic that is loaded onto rail cars and trucks, the Port of South Louisiana deals primarily in break bulk and dry bulk — usually the cargo handled on barges that travel further up the Mississippi. Port of South Louisiana officials could not be reached for immediate comment. At the Port of New Orleans, officials say they have been told that spillways diverting water from the Mississippi should keep water levels at a flood-stage level of 17 feet. “New Orleans is already cresting,” said Chris Bonura, port spokesman. New Orleans shipping traffic affected by the barge shutdown at Natchez should be minimal, Bonura said. A total of 35% of its ships deal in break-bulk cargo such as steel or forest products. He said an unknown portion of that comes to the port through barges. If the shutdown is short-term, many shippers going in and out of that port could probably work around it, Bonura said. They could offload whatever cargo is needed for what is called “hotshot” deliveries and send it by rail or truck. “As long as it’s a short-term closure, that’s something you could work around with that kind of strategy,” Bonura said. Meanwhile the strategy to open nearly all the gates of the Bonnet Carre Spillway just upstream of New Orleans, along with portions of the Morganza Spillway north of Baton Rouge, seems to be working, reports say. Fifteen of the 125 gates at Morganza have been opened, sending water south into the Atchafalaya Basin toward the Gulf of Mexico, the Times-Picayune said. The number of opened floodgates has remained steady since Monday, but is expected to double at some point. Louisiana Gov. Bobby Jindal was quoted by the paper as saying the water shooting down the basin is moving more slowly than expected, speculating that some of it was being absorbed into the earth. Russ Britt is the Los Angeles bureau chief for MarketWatch.

CALIFORNIA BILL WOULD LABEL PORT TRUCKERS AS EMPLOYEES

Tue, 17 May 2011 21:08:00 GMT

California’s Assembly could vote as early as May 12 on legislation to require truckers working ports to be classified as employees.

If the Assembly passes that bill, AB 950, it will go to the Senate to repeat the legislative process. Democrat Assembly Speaker John Perez sponsored the bill, which would, in effect, ban owner-operators from working state ports. The assembly’s labor and employment committee voted 5-1 to pass the measure on May 4. The assembly’s analysis of the bill noted that many organizations have voiced opinions on the bill, with trucking and business organizations opposing it and labor organizations backing it. The California Trucking Association called the legislation “the first step to eliminating independent owner-operators throughout the trucking industry,” it wrote. “Today, it is the ports. Tomorrow it will be agriculture, construction, and over the road.” Bill supporters say truck owners cannot afford to upgrade and maintain their vehicles to California standards and that the bill would result in owner-operators having health insurance through trucking company employers. In 2005, the California Legislature approved a bill, sponsored by the Teamsters Public Affairs Council. It would have utilized the state doctrine of federal anti-trust law to authorize port owner-operator drivers to organize collectively. Gov. Arnold Schwarzenegger vetoed the bill because he said it could violate federal anti-trust law.

Oil settles lower on weak economic data

Tue, 17 May 2011 21:05:00 GMT

NEW YORK — Oil fell again Tuesday after disappointing reports on factory production and new home construction raised more concerns about the U.S. economic recovery and future demand.

The dollar fell against other currencies as well, which helped crude regain some losses.
Benchmark crude for June delivery lost 47 cents to settle at $96.91 per barrel on the New York Mercantile Exchange. It dropped as low as $95.02 at one point in the session.
The price of oil has fallen over 14 percent from a high of $113.52 on May 2.
The Federal Reserve said factory production fell 0.4 percent in April, the first decline in 10 months. A key reason was a drop in auto manufacturing after the Japan earthquake and tsunami led to a parts shortage. Industrial production has risen nearly 11.5 percent since hitting a recession-low in June 2009 but is still below its pre-recession peak in September 2007.
"If your industrial production is down, it means you're not creating as much. It means the overall economic situation isn't that good, meaning that demand for goods probably isn't going to be as strong, including crude oil," Telvent DTN analyst Darin Newsom said. "It's just another bearish economic indicator that we aren't fully on the road to recovery yet."
Meanwhile the Commerce Department reported that new home construction fell 10.6 percent last month from March. Much of the decline occurred because apartment and condominium construction plummeted. The seasonally adjusted rate fell to 523,000 homes per year, which is less than half the 1.2 million homes per year that economists consider a sign of a healthy market.
The dollar initially got a boost from Europe's debt woes, particularly worries that more will have to be done to rescue the Greek economy. Since commodities like oil are priced in dollars, a weaker dollar makes them more of a bargain for buyers who use foreign currencies, so the price falls. Oil got back some of its losses as the dollar weakened later in the day.
Investors also are concerned about China's efforts to slow its economy and keep inflation under control. China is the world's second biggest oil consumer behind the U.S., and traders are concerned about diminishing demand.
"The rationale for justifying $100 oil is taking on water," oil analyst Stephen Schork said.
The good news for drivers is that lower oil prices mean lower prices at the pump. The national average for regular gasoline was $3.944 a gallon (almost a dollar a gallon) on Tuesday. That's about 4 cents less than on Friday but 11.7 cents more than a month ago, according to AAA, Wright Express and the Oil Price Information Service.
NEW YORK — Oil fell again Tuesday after disappointing reports on factory production and new home construction raised more concerns about the U.S. economic recovery and future demand. The dollar fell against other currencies as well, which helped crude regain some losses.
Benchmark crude for June delivery lost 47 cents to settle at $96.91 per barrel on the New York Mercantile Exchange. It dropped as low as $95.02 at one point in the session.
The price of oil has fallen over 14 percent from a high of $113.52 on May 2.
The Federal Reserve said factory production fell 0.4 percent in April, the first decline in 10 months. A key reason was a drop in auto manufacturing after the Japan earthquake and tsunami led to a parts shortage. Industrial production has risen nearly 11.5 percent since hitting a recession-low in June 2009 but is still below its pre-recession peak in September 2007.
"If your industrial production is down, it means you're not creating as much. It means the overall economic situation isn't that good, meaning that demand for goods probably isn't going to be as strong, including crude oil," Telvent DTN analyst Darin Newsom said. "It's just another bearish economic indicator that we aren't fully on the road to recovery yet."
Meanwhile the Commerce Department reported that new home construction fell 10.6 percent last month from March. Much of the decline occurred because apartment and condominium construction plummeted. The seasonally adjusted rate fell to 523,000 homes per year, which is less than half the 1.2 million homes per year that economists consider a sign of a healthy market.
The dollar initially got a boost from Europe's debt woes, particularly worries that more will have to be done to rescue the Greek economy. Since commodities like oil are priced in dollars, a weaker dollar makes them more of a bargain for buyers who use foreign currencies, so the price falls. Oil got back some of its losses as the dollar weakened later in the day.
Investors also are concerned about China's efforts to slow its economy and keep inflation under control. China is the world's second biggest oil consumer behind the U.S., and traders are concerned about diminishing demand.
"The rationale for justifying $100 oil is taking on water," oil analyst Stephen Schork said.
The good news for drivers is that lower oil prices mean lower prices at the pump. The national average for regular gasoline was $3.944 a gallon (almost a dollar a gallon) on Tuesday. That's about 4 cents less than on Friday but 11.7 cents more than a month ago, according to AAA, Wright Express and the Oil Price Information Service.
NEW YORK — Oil fell again Tuesday after disappointing reports on factory production and new home construction raised more concerns about the U.S. economic recovery and future demand. The dollar fell against other currencies as well, which helped crude regain some losses.
Benchmark crude for June delivery lost 47 cents to settle at $96.91 per barrel on the New York Mercantile Exchange. It dropped as low as $95.02 at one point in the session.
The price of oil has fallen over 14 percent from a high of $113.52 on May 2.
The Federal Reserve said factory production fell 0.4 percent in April, the first decline in 10 months. A key reason was a drop in auto manufacturing after the Japan earthquake and tsunami led to a parts shortage. Industrial production has risen nearly 11.5 percent since hitting a recession-low in June 2009 but is still below its pre-recession peak in September 2007.
"If your industrial production is down, it means you're not creating as much. It means the overall economic situation isn't that good, meaning that demand for goods probably isn't going to be as strong, including crude oil," Telvent DTN analyst Darin Newsom said. "It's just another bearish economic indicator that we aren't fully on the road to recovery yet."
Meanwhile the Commerce Department reported that new home construction fell 10.6 percent last month from March. Much of the decline occurred because apartment and condominium construction plummeted. The seasonally adjusted rate fell to 523,000 homes per year, which is less than half the 1.2 million homes per year that economists consider a sign of a healthy market.
The dollar initially got a boost from Europe's debt woes, particularly worries that more will have to be done to rescue the Greek economy. Since commodities like oil are priced in dollars, a weaker dollar makes them more of a bargain for buyers who use foreign currencies, so the price falls. Oil got back some of its losses as the dollar weakened later in the day.
Investors also are concerned about China's efforts to slow its economy and keep inflation under control. China is the world's second biggest oil consumer behind the U.S., and traders are concerned about diminishing demand.
"The rationale for justifying $100 oil is taking on water," oil analyst Stephen Schork said.
The good news for drivers is that lower oil prices mean lower prices at the pump. The national average for regular gasoline was $3.944 a gallon (almost a dollar a gallon) on Tuesday. That's about 4 cents less than on Friday but 11.7 cents more than a month ago, according to AAA, Wright Express and the Oil Price Information Service.
NEW YORK — Oil fell again Tuesday after disappointing reports on factory production and new home construction raised more concerns about the U.S. economic recovery and future demand. The dollar fell against other currencies as well, which helped crude regain some losses.
Benchmark crude for June delivery lost 47 cents to settle at $96.91 per barrel on the New York Mercantile Exchange. It dropped as low as $95.02 at one point in the session.
The price of oil has fallen over 14 percent from a high of $113.52 on May 2.
The Federal Reserve said factory production fell 0.4 percent in April, the first decline in 10 months. A key reason was a drop in auto manufacturing after the Japan earthquake and tsunami led to a parts shortage. Industrial production has risen nearly 11.5 percent since hitting a recession-low in June 2009 but is still below its pre-recession peak in September 2007.
"If your industrial production is down, it means you're not creating as much. It means the overall economic situation isn't that good, meaning that demand for goods probably isn't going to be as strong, including crude oil," Telvent DTN analyst Darin Newsom said. "It's just another bearish economic indicator that we aren't fully on the road to recovery yet."
Meanwhile the Commerce Department reported that new home construction fell 10.6 percent last month from March. Much of the decline occurred because apartment and condominium construction plummeted. The seasonally adjusted rate fell to 523,000 homes per year, which is less than half the 1.2 million homes per year that economists consider a sign of a healthy market.
The dollar initially got a boost from Europe's debt woes, particularly worries that more will have to be done to rescue the Greek economy. Since commodities like oil are priced in dollars, a weaker dollar makes them more of a bargain for buyers who use foreign currencies, so the price falls. Oil got back some of its losses as the dollar weakened later in the day.
Investors also are concerned about China's efforts to slow its economy and keep inflation under control. China is the world's second biggest oil consumer behind the U.S., and traders are concerned about diminishing demand.
"The rationale for justifying $100 oil is taking on water," oil analyst Stephen Schork said.
The good news for drivers is that lower oil prices mean lower prices at the pump. The national average for regular gasoline was $3.944 a gallon (almost a dollar a gallon) on Tuesday. That's about 4 cents less than on Friday but 11.7 cents more than a month ago, according to AAA, Wright Express and the Oil Price Information Service.
NEW YORK — Oil fell again Tuesday after disappointing reports on factory production and new home construction raised more concerns about the U.S. economic recovery and future demand. The dollar fell against other currencies as well, which helped crude regain some losses.
Benchmark crude for June delivery lost 47 cents to settle at $96.91 per barrel on the New York Mercantile Exchange. It dropped as low as $95.02 at one point in the session.
The price of oil has fallen over 14 percent from a high of $113.52 on May 2.
The Federal Reserve said factory production fell 0.4 percent in April, the first decline in 10 months. A key reason was a drop in auto manufacturing after the Japan earthquake and tsunami led to a parts shortage. Industrial production has risen nearly 11.5 percent since hitting a recession-low in June 2009 but is still below its pre-recession peak in September 2007.
"If your industrial production is down, it means you're not creating as much. It means the overall economic situation isn't that good, meaning that demand for goods probably isn't going to be as strong, including crude oil," Telvent DTN analyst Darin Newsom said. "It's just another bearish economic indicator that we aren't fully on the road to recovery yet."
Meanwhile the Commerce Department reported that new home construction fell 10.6 percent last month from March. Much of the decline occurred because apartment and condominium construction plummeted. The seasonally adjusted rate fell to 523,000 homes per year, which is less than half the 1.2 million homes per year that economists consider a sign of a healthy market.
The dollar initially got a boost from Europe's debt woes, particularly worries that more will have to be done to rescue the Greek economy. Since commodities like oil are priced in dollars, a weaker dollar makes them more of a bargain for buyers who use foreign currencies, so the price falls. Oil got back some of its losses as the dollar weakened later in the day.
Investors also are concerned about China's efforts to slow its economy and keep inflation under control. China is the world's second biggest oil consumer behind the U.S., and traders are concerned about diminishing demand.
"The rationale for justifying $100 oil is taking on water," oil analyst Stephen Schork said.
The good news for drivers is that lower oil prices mean lower prices at the pump. The national average for regular gasoline was $3.944 a gallon (almost a dollar a gallon) on Tuesday. That's about 4 cents less than on Friday but 11.7 cents more than a month ago, according to AAA, Wright Express and the Oil Price Information Service.
NEW YORK — Oil fell again Tuesday after disappointing reports on factory production and new home construction raised more concerns about the U.S. economic recovery and future demand. The dollar fell against other currencies as well, which helped crude regain some losses.
Benchmark crude for June delivery lost 47 cents to settle at $96.91 per barrel on the New York Mercantile Exchange. It dropped as low as $95.02 at one point in the session.
The price of oil has fallen over 14 percent from a high of $113.52 on May 2.
The Federal Reserve said factory production fell 0.4 percent in April, the first decline in 10 months. A key reason was a drop in auto manufacturing after the Japan earthquake and tsunami led to a parts shortage. Industrial production has risen nearly 11.5 percent since hitting a recession-low in June 2009 but is still below its pre-recession peak in September 2007.
"If your industrial production is down, it means you're not creating as much. It means the overall economic situation isn't that good, meaning that demand for goods probably isn't going to be as strong, including crude oil," Telvent DTN analyst Darin Newsom said. "It's just another bearish economic indicator that we aren't fully on the road to recovery yet."
Meanwhile the Commerce Department reported that new home construction fell 10.6 percent last month from March. Much of the decline occurred because apartment and condominium construction plummeted. The seasonally adjusted rate fell to 523,000 homes per year, which is less than half the 1.2 million homes per year that economists consider a sign of a healthy market.
The dollar initially got a boost from Europe's debt woes, particularly worries that more will have to be done to rescue the Greek economy. Since commodities like oil are priced in dollars, a weaker dollar makes them more of a bargain for buyers who use foreign currencies, so the price falls. Oil got back some of its losses as the dollar weakened later in the day.
Investors also are concerned about China's efforts to slow its economy and keep inflation under control. China is the world's second biggest oil consumer behind the U.S., and traders are concerned about diminishing demand.
"The rationale for justifying $100 oil is taking on water," oil analyst Stephen Schork said.
The good news for drivers is that lower oil prices mean lower prices at the pump. The national average for regular gasoline was $3.944 a gallon (almost a dollar a gallon) on Tuesday. That's about 4 cents less than on Friday but 11.7 cents more than a month ago, according to AAA, Wright Express and the Oil Price Information Service.

NEW YORK — Oil fell again Tuesday after disappointing reports on factory production and new home construction raised more concerns about the U.S. economic recovery and future demand. The dollar fell against other currencies as well, which helped crude regain some losses.

Benchmark crude for June delivery lost 47 cents to settle at $96.91 per barrel on the New York Mercantile Exchange. It dropped as low as $95.02 at one point in the session.

The price of oil has fallen over 14 percent from a high of $113.52 on May 2.

The Federal Reserve said factory production fell 0.4 percent in April, the first decline in 10 months. A key reason was a drop in auto manufacturing after the Japan earthquake and tsunami led to a parts shortage. Industrial production has risen nearly 11.5 percent since hitting a recession-low in June 2009 but is still below its pre-recession peak in September 2007.

"If your industrial production is down, it means you're not creating as much. It means the overall economic situation isn't that good, meaning that demand for goods probably isn't going to be as strong, including crude oil," Telvent DTN analyst Darin Newsom said. "It's just another bearish economic indicator that we aren't fully on the road to recovery yet."

Meanwhile the Commerce Department reported that new home construction fell 10.6 percent last month from March. Much of the decline occurred because apartment and condominium construction plummeted. The seasonally adjusted rate fell to 523,000 homes per year, which is less than half the 1.2 million homes per year that economists consider a sign of a healthy market.

The dollar initially got a boost from Europe's debt woes, particularly worries that more will have to be done to rescue the Greek economy. Since commodities like oil are priced in dollars, a weaker dollar makes them more of a bargain for buyers who use foreign currencies, so the price falls. Oil got back some of its losses as the dollar weakened later in the day.

Investors also are concerned about China's efforts to slow its economy and keep inflation under control. China is the world's second biggest oil consumer behind the U.S., and traders are concerned about diminishing demand.

"The rationale for justifying $100 oil is taking on water," oil analyst Stephen Schork said.

The good news for drivers is that lower oil prices mean lower prices at the pump. The national average for regular gasoline was $3.944 a gallon (almost a dollar a gallon) on Tuesday. That's about 4 cents less than on Friday but 11.7 cents more than a month ago, according to AAA, Wright Express and the Oil Price Information Service.