MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for December 1st

Updated at 5:00 PM ET 

HEADLINES:

—  USAC Buys J-W Power for $860M to Boost Gas Compression

— IATA: Global Air Passenger Demand Up 6.6% in October

— Analysis: U.S. Diesel Inventories Set To Remain Tight

— ISM: U.S. Manufacturing PMI Drops to 48.2 in Nov

NEWS:

USAC Buys J-W Power for $860M to Boost Gas Compression

USA Compression Partners (USAC) announced Monday (12/1) that it was acquiring J-W Power Company for approximately $860 million to boost by more than 20% the volume of natural gas compression that it provides to the market.

Natural gas typically does not have enough pressure to travel hundreds of miles through pipelines or to be processed efficiently, and services like USAC and J-W Power squeeze the gas to high pressures, allowing it to move reliably through the midstream network that includes gathering lines, processing plants and transmission pipelines.

The acquisition will add over 800,000 active horsepower to USAC’s fleet size, creating a combined operational capacity of roughly 4.4 million horsepower, the company said in a statement.

The combined entity will provide gas compression services across major U.S. gas basins and regions, including the Permian, Northeast and Rocky Mountains.

IATA: Global Air Passenger Demand Up 6.6% in October

Global air passenger demand rose year-on-year in October amid capacity increases by airlines, latest data from the International Air Traffic Association (IATA) shows, against an indicated drop in U.S. jet fuel consumption.

International air travel demand rose 8.5% in October while domestic demand grew 3.4%, both year-on-year, resulting in a net gain of 6.6% in global passenger demand, IATA said in the data released November 28.

“Of particular note is the 4.5% international traffic growth for carriers based in North America which comes after several months of basically flat performance,” Willie Walsh, IATA’s director general said in remarks accompanying the data.

U.S. airlines’ fuel usage was, meanwhile, indicated to be 7.5% lower year-on-year, with the Energy Information Administration (EIA) reporting jet fuel inventories at 41.7 million bbl at end-October this year versus 38.8 million bbl at end-October last year.

While EIA data also showed implied jet fuel demand to be 3% higher between September and October this year, based on products supplied to market, it was still markedly lower than the 8.8% growth between September and October last year.

Analysts said the difference between high passenger demand and lower implied jet fuel consumption growth can be attributed to the increasing adoption of newer, more fuel-efficient aircraft in commercial fleets that allow higher loads amid less fuel burning.

Walsh said the higher air travel trend was expected to continue through the year, with seat capacity on international airlines scheduled to expand 3.6% in November and 4.7% in December, compared with the same months of 2024.

Analysis: U.S. Diesel Inventories Set To Remain Tight

This year, distillate fuel oil demand has continuously outperformed 2024 levels. According to U.S. Energy Information Administration data, distillate fuel oil supplied ran some 110,000 bpd ahead of year-ago levels in the first nine months of 2025. Last year, however, also saw the lowest distillate fuel oil demand in 16 years, as an unusually warm start to the year dented heating oil demand in the Northeast and a prolonged lull in freight and industrial activity weighed on diesel consumption. Contrasted to longer-term averages, diesel and heating oil demand shined less brightly than a year-on-year comparison would suggest.

In the first half of 2025, distillate fuel oil supplied averaged 3.931 million bpd, up 4.1% from last year, but lower than in the comparable time periods since and including 2021, when fuel demand was still reeling from a global pandemic. Demand in the first half of this year trailed 2023 levels by 1.1% and 2022 levels by 4% and was 0.4% below the three-year average.

Rise and Fall of Renewables

Petroleum diesel demand has been fighting an uphill battle against a rapidly growing renewables market. According to EIA data, renewable diesel production grew by 22.6% year-on-year in 2024, and the production of other biofuels, a category which includes renewable heating oil, expanded by 10.7%. This trend, however, saw a reversal this year. Renewable diesel consumption peaked in July 2024 at an all-time high 291,000 bpd and has since plummeted, averaging just shy of 163,000 bpd in July 2025, down more than 44% on the year. Biodiesel consumption and production have similarly plummeted this year. In August, consumption averaged 58,000 bpd, less than half of the pace in August 2024.

Winter Weather and Freight

Amid the downturn in petroleum diesel alternatives, the U.S. experienced normal temperatures after two back-to-back years of unusually warm winter seasons, lifting distillate fuel oil demand up 4.5% year-on-year in the first quarter of 2025. Importers stocking up ahead of the implementation of tariffs provided further tailwind to demand in the second quarter, when demand outperformed the three-year average. Distillate demand has since softened, slipping below even 2024 levels in August, but up 2.2% year-on-year in September, the last month with available monthly EIA data.

What’s ahead

DTN’s Weather forecast predicts a slightly colder-than-average 2025-2026 winter, which would boost heating oil demand in the Northeast. The EIA in its Winter Fuels Outlook, in contrast, expects national average heating oil consumption to decrease 4% from last winter, citing the trend of homes transitioning to other heating sources.

U.S. GDP growth, meanwhile, which in the second quarter has outperformed estimates as retail spending surprised to the upside, is predicted to have slowed in the second half of the year. While industrial activity is likely to remain stagnant, growth in real disposable personal income may still boost overall freight activity.

Given these factors, petroleum diesel and heating oil demand next quarter is likely to come in close to the average rate observed in the first three months of this year, and may, depending on the weather, even run slightly ahead.

Distillate fuel oil inventories were well below historical averages this year. Globally tight supply, which is pulling diesel barrels to the export market, solid domestic demand and waning refinery capacity in the U.S. are likely to keep inventories depressed next year, and are set to bolster prices despite softening crude oil prices. The middle of the barrel is likely to continue to be the most profitable part for refiners.

ISM: U.S. Manufacturing PMI Drops to 48.2 in Nov

A key U.S. purchasing managers index released on Monday (12/1) showed a reading that dropped from last month and remained below a core marker that separated expansion from contraction – the ninth straight month for such a trend. 

The Manufacturing Purchasing Managers Index of the Institute for Supply Management stood at 48.2 in November, down from 48.7 recorded in October. It was the second monthly drop in a row, and marked the ninth consecutive month that the reading was below the 50-point mark that separates the positive and negative constituencies for the index.

This is not the first extended period of contraction in U.S. manufacturing PMI. Prior to a two-month expansion between January and February this year, the index saw 26 straight months of weakness.

The latest decline in U.S. manufacturing activity was attributed, in part, to pullbacks in supplier deliveries, new orders and employment. While the Production Index rose in November, the New Orders and Employment indices each fell 2 percentage points month-on-month.

“Decreases in two of the four demand indicators (Backlog of Orders and New Orders) overwhelmed the gains posted by the New Export Orders and Customers’ Inventories indexes,” said Susan Spence, chair of the ISM Manufacturing Business Survey Committee.

Spence also noted that the Customers’ Inventories Index had contracted at a slower rate. “A ‘too low’ status for the Customers’ Inventories Index is usually considered positive for future production,” she added.

A breakdown of the data showed growth reported by four manufacturing industries in November. Petroleum and coal products were among eleven manufacturing industries surveyed that reported a contraction.

In November, the production index rose 3.2 points to 51.4, up from 48.2 the prior month, while the backlog of orders index eased to 44.0, 3.9 points lower than reported in October.

The contraction in new export orders slowed, with the associated index rising 1.7 points to 46.2 in November.

The customers’ inventories index remained in “too low” territory, rising 0.8 points to 44.7, according to the report.

The contraction in employment sped up, with the index dropping 2 percentage points to 44.

November’s prices index increased at a faster rate, registering 58.5 points, up 0.5 points from last month’s reading of 58.

Contraction in the imports index slowed down, improving 1.7 points to 46.2 in November.

Following the release of the data, crude oil futures continued to climb, with the front-month NYMEX West Texas Intermediate futures contract rising $1.06 to $59.62 bbl. The U.S. dollar index remained little changed near 99.155 points against a basket of foreign currencies, down 0.258 points on the day.