Posts belonging to Category energy



Oil slumps 4% on U.S. crude build

Slowing demand fears

Oil prices tumbled 4% on Wednesday to their lowest settlements in nearly five months, weakened by another unexpected rise in U.S. crude stockpiles and by a dimming outlook for global oil demand. Brent crude futures fell $2.32, or 3.7%, to settle at $59.97 a barrel, the international benchmark’s lowest close since Jan. 28. U.S. West Texas Intermediate crude futures ended $2.13, or 4.0%, lower at $51.14 a barrel, its lowest settlement since Jan. 14.

The U.S. Energy Information Administration (EIA) reported domestic crude stockpiles rose unexpectedly for the second week in a row, climbing 2.2 million barrels last week after analysts had forecast a decrease of 481,000 barrels.

Elon Musk mulls mining venture for Tesla

Objective: produce electric car batteries

Tesla could go into the mining business in order to produce its batteries more quickly, Elon Musk has claimed.

The company is working on improving its battery production and technology, the chief executive said at the company’s annual shareholder meeting.

“We might get into the mining business, I don’t know. We’ll do whatever we can to make sure we can scale as fast as possible,” he said.

The California-based electric car company will also make a car which can drive 400 miles between charges.

https://finance.yahoo.com

Fiat Chrysler to pay Tesla hundreds of millions of euros

Fiat Chrysler tries to avoid fines for violating European Union emission rules

Italian-U.S. carmaker Fiat Chrysler Automobiles NV (FCA) has agreed to pay electric carmaker Tesla Inc hundreds of millions of euros to allow Tesla vehicles to be counted in its fleet to avoid fines for violating new European Union emission rules.

The step will let the Italian carmaker offset carbon dioxide emissions from its cars against Tesla’s, bringing down its average emissions of the greenhouse gas to a permissible level, according to the Financial Times, which was first to report the agreement.

https://www.reuters.com/

Oil falls after record U.S. shale output forecast

Shale production alone will hit a record 8.4 million barrels per day next month

Oil fell on Wednesday after the U.S. government said shale output would rise to a record next month, denting a rally that sent prices to their highest this year. Brent futures eased by 53 cents to trade at $65.92 a barrel by 1312 GMT, still within sight of Monday’s high for the year of $66.83. U.S. futures were at $55.77 a barrel, down 31 cents, having touched a 2019 peak of $56.39 earlier.

The U.S. Energy Information Administration said in a monthly report on Tuesday shale production alone will hit a record 8.4 million barrels per day next month, suggesting little chance of a near-term slowdown in overall U.S. crude output.

http://www.reuters.com

Tesla to buy energy tech company Maxwell Technologies

The deal represents a 55% premium over Maxwell’s closing stock price

Tesla plans to acquire energy technology company Maxwell Technologies for about $218 million, the company said Monday. Tesla will buy the company’s 45.9 million shares for $4.75 a share in an all-stock transaction. The deal represents a 55 percent premium over Maxwell’s closing stock price of $3.07 a share Friday and would value the company at around $218 million. 

Maxwell makes ultracapacitors, devices that can store and rapidly deliver surges of energy. Tesla CEO Elon Musk is a fan of the technology for electric cars. Musk has said in the past that the technology could be a more likely source of a breakthrough in electric vehicle technology than batteries. Musk even once said on Twitter that he had planned to conduct research on them at Stanford University.

http://cnbc.com

Bill Gates: U.S. leaders must embrace nuclear energy

U.S. built most of its reactors more than 30 years ago

Think your New Year’s resolution to hit the gym is daunting? Microsoft co-founder Bill Gates wants to change an entire nation’s energy policy in 2019.

On Saturday, the billionaire philanthropist released a letter detailing what he learned in 2018 and what he hopes to accomplish in 2019. One of his goals for the next year is to persuade U.S. leaders to “get into the game” of advanced nuclear energy — and the future of our environment could be riding on his success.

Nuclear energy is produced by splitting the nucleus of an atom (fission) or combining the nuclei of two atoms (fusion). Nuclear fission reactors already meet 20 percent of the U.S.’s electricity needs. But while fission doesn’t produce greenhouse gas emissions, the technology is currently less than ideal — the U.S. built most of its reactors more than 30 years ago, and they require plutonium, which isn’t exactly easily accessible. The process also produces unwanted byproducts, some of which are radioactive.

Researchers have yet to figure out a way to produce stable nuclear fusion, but they’re getting closer. If — or, hopefully, when — they do succeed, we’ll have a near-limitless source of clean energy that we can create from hydrogen, which is far more accessible than plutonium, and the only byproduct would be a small amount of helium.

https://futurism.com/

Asian stocks retreat

U.S. political tumult adds to growth worry

Asian stock markets retreated again on Wednesday, extending a rout that began last week as U.S. political uncertainty exacerbated worries over slowing global economic growth.

Investors were unnerved by the U.S. federal government partial shutdown and President Donald Trump’s hostile stance toward the Federal Reserve chairman. U.S. Treasury Secretary Steven Mnuchin had also raised market concerns by convening a crisis group amid the pullback in stocks.

S&P 500 emini futures were last down 0.6 percent, pointing toward a lower start for Wall Street when the U.S. market reopens after Christmas Day, when many of the world’s financial markets were shut.

http://reuters.com

Nasdaq flirts with a bear market; Oil in free fall

Dow sinks below 23,000

The Dow dropped 464 points, or 2%, on Thursday. The index closed below 23,000 for the first time since October 2017. The Nasdaq lost 1.6% and only narrowly avoided closing in its first bear market since the Great Recession. The S&P 500 declined 1.6%.

And US oil prices are in free fall, ending below $46 a barrel for the first time since August 2017.
http://cnn.com

All Venezuelan Oil Will Be Sold In Petro Cryptocurrency

Experts see El Petro as nothing but a scam 

Venezuela’s President Nicolas Maduro said on state television that Venezuela would put in place in 2019 a program to sell all its oil production in the Petro cryptocurrency, which the leader is touting as the first state-backed oil-backed digital currency.

Gradually, Venezuela will sell all its oil production in Petro, Maduro said during a visit to Russia. For 2019, Venezuela will have a timetable to sell all its oil production in the cryptocurrency, its president said. In this way, Venezuela will free itself from the currency used by Washington “to create economic pain” to other countries, and to “persecute countries, as it does with Venezuela, Cuba, Iran, and Russia”, Maduro said.

El Petro, however, is seen by analysts and experts as nothing but a scam and another effort by Venezuela to skirt sanctions and mask the inability to overhaul the ailing domestic economy.

http://www.oilprice.com

 

Oil prices collapsed

Supply Glut Fears Return

Oil prices collapsed on Tuesday for the second time in a week. During midday trading, WTI fell below $55 per barrel and Brent dropped below $65 per barrel. Both benchmarks are off more than $20 per barrel from their October highs. “Oil prices are under pressure in the face of ample supply, falling stock markets and an increasingly gloomy economic outlook,” Commerzbank said on Tuesday.
Tuesday also saw a plunge in global equities, which is dragging down all sorts of different sectors, including oil prices. “I think you’re going to see a risk-off type of market,” Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors LLC, told Bloomberg. “It wouldn’t be surprising to see new lows being printed on oil” if crude stocks rise sharply. U.S. crude oil inventories likely rose by 3.5 million barrels last week, a sign that the surplus continues to build. In fact, concerns about a supply glut are growing by the day. The IEA said in its November Oil Market Report that the global surplus could average 0.7 million barrels per day (mb/d) in the fourth quarter.

The New Bear Market In Oil

U.S. shale production is skyrocketing

WTI dipped below $60 per barrel in early trading on Friday, the lowest price level in nearly a year. With prices down more than 20 percent from the October peak, WTI is now officially in a bear market.
Many of the factors that conspired to push oil prices up in recent months have all seemed to reverse course at exactly the same time.
First, U.S. shale production is skyrocketing. The EIA reported an unbelievable increase of 400,000 bpd in U.S. oil production in the first week of November, pushing output up to 11.6 million barrels per day (mb/d). The agency rounds off weekly estimates to the nearest hundred thousand barrels, somewhat obscuring the trajectory of growth, but the huge increase is notable by any standard.

Aramco listing plan halted

Oil giant disbands advisors

Saudi Arabia has called off both the domestic and international stock listing of state oil giant Aramco, billed as the biggest such deal in history, four senior industry sources said on Wednesday. The financial advisors working on the proposed listing have been disbanded, as Saudi Arabia shifts its attention to a proposed acquisition of a “strategic stake” in local petrochemicals maker Saudi Basic Industries Corp 2010.SE, two of the sources said.
“The decision to call off the IPO was taken some time ago, but no-one can disclose this, so statements are gradually going that way – first delay then calling off,” a Saudi source familiar with the IPO plans said. Saudi Arabia’s energy minister denied that Aramco’s initial public offering would be called off, in a statement issued early on Thursday.
“The government remains committed to the initial public offering of Saudi Aramco, in accordance with the appropriate circumstances and appropriate time chosen by the Government,” Energy Minister Khalid al-Falih said in the statement.
https://www.reuters.com

Trump Is Fracturing OPEC

Trump tweets

Trump’s tweet over the weekend that Saudi Arabia agreed to add 2 million barrels per day (mb/d) of supply confused the oil markets, pushing prices down a bit on Monday. Most analysts dismissed the statement, concluding that Trump was confused when the Saudis told him they have 2 mb/d of spare capacity, and not that they had planned to bring that capacity online.
A few days on from that episode, however, it actually doesn’t look that black and white.
Indeed, Trump’s tweet suggests that he very much believes that 2 mb/d of Saudi supply is coming online, and despite the attempt by the Saudis to clarify, by stating that they have surplus capacity waiting to be used in the event of a pinch, the statement was interpreted in different ways by the oil market.
https://www.oilprice.com/

Morgan Stanley hikes oil price forecast to $85

Trump targets Iranian barrels

Oil prices will rise more than previously expected in the second half of 2018, as the Trump administration aims to wipe out Iranian crude exports by November, Morgan Stanley forecasts.
The tougher-than-anticipated U.S. policy means Iran’s production could fall by 1.1 million barrels per day (bpd) at a time of high oil demand. The bank also sees output declining more than it previously forecast in Libya and Angola, leaving the oil market undersupplied by about 600,000 bpd in the second half.
As a result, Morgan Stanley said it now believes international benchmark Brent crude will average $85 a barrel over the next six months. That’s $7.50 higher than its previous estimate.
https://www.cnbc.com/

The shipping industry is back

Indicator of the health of the global economy

90 percent of today’s global trade is carried by ship. The importance of shipping is why it’s one of the most useful indicators of the health of the global economy… And, more recently, the state of China’s economy – the largest consumer of a range of commodities, including iron ore, coal, copper, and zinc, and the largest importer of oil.
The Baltic Dry Index (BDI) tracks the price of shipping raw materials such as metals, grains and fossil fuels by sea. It takes into account the day-to-day changes in shipping rates for the three major carrier sizes: Capesize, Panamax and Supramax.
Shipping companies committed a classic boom/bust cycle mistake back in 2011. At the height of the commodity boom, they ordered a huge number of cargo ships. Global shipping capacity continued to expand by approximately a net 2.5 percent rate each and every year. Meanwhile, according to the World Bank, global trade of goods and services has declined by 7 percent from 2011 to 2016, as commodity prices collapsed.
https://www.businessinsider.com/