Saud Arabia’s Oil Gamble Pays Off With $95 Brent (30 September 2023): By Irina Slav - When back in July Saudi Arabia announced voluntary additional oil production cuts, traders brushed them off. Prices did not move. Everyone was preoccupied with demand in China and the U.S. Three months later, things look very different. The Saudis and Russians announced a three-month extension to their combined cuts. Forecasters turned their attention toward supply. As it turns out, supply was already tight due to strong demand, which only aggravated the imbalance. If only someone could have seen this coming. Only many could see this coming. First, both Saudi Arabia and Russia needed higher oil prices. Second, unlike previous times when OPEC+ cut production to boost prices, the risk of U.S. shale responding with a surge in production was low. U.S. shale is enjoying its new, more disciplined approach to production growth and taking it slowly rather than rushing to add rigs every time WTI goes up by a dollar. ... (Source: Oil Price)
The Utility-Scale Energy Storage Market Is Booming Again (26 September 2017): By Alex Kimani - "For batteries to play the ultimate backup system, we're so far away from that it's not funny. To really make the vision that we like to get to, a highly decarbonized electric system, you're going to have to have batteries deployed in many orders of magnitude beyond what we have now." This grim reality was exposed by Jim Robb, President and CEO of the North American Electric Reliability Corp (NERC), in 2021 shortly after the infamous Texas power grid failure as he lamented the country’s limited power backup system. Robb’s observation came at a time when large-scale energy storage was just taking off following a nearly 90% decline in prices of lithium-ion batteries over the past decade. Unfortunately, the sector suffered a massive blow after Covid-19 triggered huge supply chain disruptions leading to hundreds of clean energy projects being canceled or delayed. Thankfully, the crisis appears to be finally over: a new report by Wood Mackenzie and the American Clean Power Association (ACP) has revealed that U.S. grid-scale energy storage hit a new record in the second quarter of 2023. The U.S. energy storage market added 5,597 megawatt hours (MWh) in Q2 2023, a quarterly record and good for 172% Y/Y growth. California saw the lion’s share of installations at 738 megawatts (MW). ... (Source: Oil Price)
Copper Prices Stuck As Stockpiles Skyrocket (26 September 2023): By Metal Miner - Via Metal Miner - The Copper Monthly Metals Index (MMI) moved sideways from August to September, dropping just 1.36%. Copper prices continue to trade sideways within a tight range. Amid a lack of bullish or bearish momentum, prices have failed to establish a breakout. Following a 3.34% decline throughout August, prices slid merely 0.53% during the first three weeks of September. As copper prices remain trapped within an increasingly narrow range, rising LME inventories offer no support. Indeed, LME inventories have more than tripled since mid-July and now sit at their highest level since May 2022. This is a clear sign that current demand remains lackluster. Inventories appeared to bottom out on July 13 at 54,225 metric tons. This preceded considerable increases in the ensuing months to where they currently stand at 162,900 metric tons. The rise seemed to pick up during September, as inventories jumped by over 60,000 tons throughout the first three weeks. ... (Source: Oil Price)
Investment Shortfall Threatens Europe’s Green Transition (24 September 2023): By Felicity Bradstock - An advisor to President Biden is the latest to call on the U.K. and Europe to follow in the footsteps of the U.S. and increase their investment in green technology. The U.K. and the rest of Europe have been repeatedly criticised over the last year for failing to launch far-reaching climate legislation to back up their aims for a green transition. After the passing of the Inflation Reduction Act (IRA), the most ambitious U.S. climate policy to date, everyone was expecting the U.K. and Europe to announce something similar, but funding for decarbonisation remains limited due to the lack of comprehensive climate policy. This month, following a tour of several European countries, Heather Boushey, a member of the White House Council of Economic Advisers, called on governments around the world, including that of the U.K., to increase their green investments. She used the U.S. as a success story, suggesting that the public funding provided through the IRA has encouraged private companies to invest heavily in decarbonisation, green energy, and related technologies, thereby driving down inflation. ... (Source: Oil Price)
UK Backtracks On Key Green Policies (23 September 2023): By Tsvetana Paraskova - The UK government announced this week a new approach to achieving the net-zero 2050 target, softening some of the key policies as the cost-of-living crisis is at its worst in a generation and a general election is looming next year. Prime Minister Rishi Sunak delayed a ban on gasoline and diesel cars by five years and scrapped policies to force homeowners to make expensive energy efficiency upgrades. The UK’s target to achieve net-zero emissions by 2050 remains intact, but not at “unacceptable costs” for families, Sunak said in a speech at Downing Street on Wednesday. While the 2050 net-zero target stays, some intermediate targets, and some policies were either delayed or scrapped as UK residents (and voters) are trying to cope with a cost-of-living crisis with food and energy prices soaring while Sunak’s Conservative Party is trailing Labour in the polls by some 20 percentage points. ... (Source: Oil Price)
Longevity Of $100 Oil Comes Down To Who’s Right About The Saudis (20 September 2023): By Alex Kimani - Commodity analysts at Dutch multinational banking and financial services company ING Bank have said the oil price rally still has room to run, and have forecast that Brent crude will break above $100 per barrel in the near-term assuming OPEC+ doesn't budge with its supply cuts. Like many other oil experts, ING says the markets have tightened considerably due to production cuts by Saudi Arabia and Russia, and see the current deficit of more than 2MMbbls/d persisting through the fourth quarter of the current year. Their latest thesis buttresses their earlier bullish forecast they had issued at the beginning of the year wherein they predicted tightening in the market from the second quarter through to the end of the year. ... (Source: Oil Price)
Energy Security Trumps ESG Agenda For Big Oil (19 September 2023): By Tsvetana Paraskova - The world’s largest international oil and gas majors have changed their tune on medium to long-term strategies since the Russian invasion of Ukraine and the energy crisis last year. All European majors continue to target net-zero emissions by 2050, but some of the biggest, including BP and Shell, have scaled back promises to cut back oil and gas production and have signaled they would be there to provide the world with fossil fuel energy as long as it needs it. Considering that the world still depends on fossil fuels for more than 80% of its primary energy consumption, it’s not outrageous – from a business perspective – for companies with core oil and gas business to double down on continued extraction of oil and gas. They are hard pressed to reward shareholders in a cyclical industry with frequent booms and busts. But this decade Big Oil has also been hard pressed by the ESG movement from investors to commit to reducing emissions faster, including Scope 3 emissions from the products they sell. ... (Source: Oil Price)
New BRICS Members Boost Bloc's Global Energy Influence (19 September 2023): By Felicity Bradstock - BRICS is a group of major emerging economies, originally including Brazil, Russia, India and China, which was termed in 2001 by then Goldman Sachs chief economist Jim O'Neill in a research paper outlining the potential growth of these powers. The bloc was informally founded in 2009, and initiated by Russia, to counter the dominant role of the United States and Western allies in the contemporary world order. It has yet to be formalised, however, heads of state and government meet on an annual basis. South Africa joined the group in 2010 when an S was added to the acronym to make it BRICS. Together, the member states account for over 40 percent of the world’s population and a quarter of the global economy. The group generally focuses on geopolitics, economic cooperation and multilateral trade and development, and operates by consensus. Since its formation, BRICS says that over 40 countries have shown interest in joining, including Iran, Saudi Arabia, United Arab Emirates, Argentina, Algeria, Bolivia, Indonesia, Egypt, Ethiopia, Cuba, the Democratic Republic of Congo, Comoros, Gabon, and Kazakhstan. Over a dozen countries participated in the “Friends of BRICS” talks in Cape Town in June, demonstrating their interest in shifting the world order and enhancing their position within it. Following the Covid pandemic, the global world order was criticised by several state powers, as Western countries were seen to be hoarding vaccines. ... (Source: Oil Price)
A New Energy Era: Wind And Solar Outpace Hydropower (18 September 2023): By Robert Rapier - Over the past decade, the global growth rate of renewable energy trounced every other energy source. During that period, modern renewables (excluding hydropower and geothermal) grew exponentially, at an average annual rate of 12.6%. Renewables were the only energy category that grew globally at double digits over the past decade. For perspective, in 2010 the world consumed 10.6 exajoules of renewable energy. In 2022, that reached 45.2 exajoules. The 5.2 exajoule increase in renewable consumption in 2022 was a record increase for one year, and it set a new all-time high for renewable energy consumption in a year. ... (Source: Oil Price)
U.S. Renewables Capacity To Soar With The Inflation Reduction Act (16 September 2023): By Tsvetana Paraskova - The Inflation Reduction Act (IRA) is spurring a land rush for development sites and giving impetus to clean energy equipment manufacturing in the United States, which could see annual renewable capacity additions triple to 110 gigawatts (GW) in ten years, according to Wood Mackenzie. Despite supply-chain and tariff challenges unrelated to the IRA and despite the fact that developers are still waiting for clarity on some of the IRA provisions, the benefits of the landmark climate law have started to manifest themselves, clean energy associations say. “There are still challenges that remain, but overall, low-cost renewables present a major opportunity for investment, and we project annual capacity additions in 10 years to nearly triple what they are now,” Chris Seiple, Vice Chairman of Wood Mackenzie’s Power & Renewables group, said at the RE+ conference in Las Vegas this week, as carried by Electrek. ... (Source: Oil Price)
Why Oil Could Top $100 In Q4 2023 (13 September 2023): By Alex Kimani - Oil prices have soared to a 10-month high on Wednesday, with a surprise build in U.S. crude inventories failing to dampen expectations of tight supplies for the rest of the year. Front-month November Brent crude closed +1.5% at $92.06/bbl, its best settlement since November 16 while U.S. front-month Nymex crude for October delivery settled +1.8% to $88.84/bbl, its highest closing price since November 11, 2022. WTI and Brent have now gained 10.7% and 7.1% YTD, respectively. The latest weekly data by the International Energy Agency (IEA) showed that U.S. crude inventories rose by 4 million barrels to 420.6 million barrels, a large increase compared to expectations by a Reuters poll for a 1.9 million-barrel drop. The Paris-based energy watchdog has revised down its demand growth forecast by 600,000 bpd. ... (Source: Oil Price)
Cost-Effective Chromium: The Next Big Thing In Green Energy? (13 September 2023): By Brian Westenhaus - University of Basel chemists have succeeded in replacing the rare elements osmium and ruthenium with a significantly cheaper metal. In terms of their properties, the new materials are very similar to those used in the past. Expensive noble metals often play a vital role in illuminating screens or converting solar energy into fuels. We’re familiar with the chromium material from everyday applications such as chromium steel in the kitchen or chrome-plated motorcycles. Soon, however, the element may also be found in the screens of ubiquitous mobile phones or used to convert solar energy. Researchers led by Professor Oliver Wenger from the Department of Chemistry at the University of Basel have developed chromium compounds that can replace the noble metals osmium and ruthenium – two elements that are almost as rare as gold or platinum – in luminescent materials and catalysts. ... (Source: Oil Price)
At What Level Will Saudi Arabia And Russia Stop Pushing Oil Prices Higher? (11 September 2023): By Simon Watkins - The decisions last week by Saudi Arabia to continue its 1 million barrel per day (bpd) production cut to the end of this year and by Russia to extend its 300,000 barrels per day export cut for the same period conspired to push oil prices to their highest level since last November. This in turn has added to the inflationary pressure threatening the economic health of the U.S. and many countries allied to it. The question for these net oil importers (and gas importers too, given that historically 70 percent of gas prices have been comprised of the price of oil) is at what level the two leaders of OPEC+ will halt their efforts to keep pushing prices higher? The first part of this equation revolves around the necessity or not of higher prices to keep these two economies afloat, or whether it is simply greed at work, or a geopolitical power play, or any combination thereof. ... (Source: Oil Price)
Offshore Wind Can Be Boon Or Bust, Depending On Where You Are (11 September 2023): By Alex Kimani - No energy companies have so far submitted bids in the UK’s 5GW offshore wind auction, with the government coming under fire for ignoring warnings that the offer on the table was too low to reflect soaring costs. This comes as a significant blow to Rishi Sunak’s plans to meet climate targets and lower energy bills and also makes it harder for the government to achieve its goal of reaching 50 GW of offshore wind by 2030. The price of the UK's offshore wind power has fallen steeply in recent decades. The government set a maximum price of £44 a MW hour for the latest auction, which developers deemed too low due to soaring construction costs, owing to rising inflation and higher borrowing costs. ... (Source: Oil Price)
Orsted Threatens To Abandon U.S. Offshore Wind Projects (9 September 2023): By ZeroHedge - The world's largest offshore wind farm developer is preparing to walk away from US projects unless the Biden administration guarantees more support, Bloomberg reported. "We are still upholding a real option to walk away," Orsted CEO Mads Nipper told Bloomberg in an interview in London on Tuesday. Nipper continued, "But right now, we are still working towards a final investment decision on projects in America." The Biden administration has touted offshore wind farms as an essential component of decarbonizing America's grid, but soaring inflation costs have undermined the sector's growth and left many projects dead in the water. ... (Source: Oil Price)
Europe And The U.S. Gear Up For A Geothermal Boom (7 September 2023): By Alex Kimani - With the global transition to clean energy in full swing, traditional renewable energy sources such as solar and wind have, unsurprisingly, been hogging the limelight. Unfortunately, one powerful renewable energy source has been conspicuously missing in the conversation: Geothermal energy. Despite its many obvious benefits, geothermal energy--which taps the heat within the earth’s crust--is criminally underutilized in the United States. In 2019, the U.S. generated ~18,300 GWh from geothermal sources. While that appears impressive at first glance, here’s the kicker: that figure works out to just 0.4% of U.S. power generation. The figures are not much better for Europe, with just 1.5GW of the continent’s 209 GW electricity capacity being geothermal. Only about 800 geothermal wells are drilled globally each year compared to more than 100K oil wells. Geothermal energy has two primary applications: electricity generation and heating/cooling. ... (Source: Oil Price)
MIT Unveils Next-Gen Carbon Capture Technology (6 September 2023): By Brian Westenhaus - Currently when CO2 is trapped before it escapes into the atmosphere, the process requires a large amount of energy and equipment. Now MIT researchers have designed a capture system using an electrochemical cell that can easily grab and release CO2. The device operates at room temperature and requires less energy than conventional, amine-based carbon-capture systems. The researchers reported in ACS Central Science that the design is a capture system using an electrochemical cell that can easily grab and release CO2. The device operates at room temperature and requires less energy than conventional, amine-based carbon-capture systems. Many industries are turning to electrification to help curb carbon emissions, but this technique isn’t feasible for all sectors. For example, CO2 is a natural byproduct of cement manufacture, and thus a major contributor to emissions on its own. Excess gas can be trapped with carbon-capture technologies, which typically rely on amines to help “scrub” the pollutant by chemically bonding to it. But this also requires lots of energy, heat and industrial equipment – which can burn even more fossil fuels in the process. Carbon capture could itself be electrified by using electrochemical cells, and these devices could be powered by renewable energy sources. ... (Source: Oil Price)
Energy Price Uncertainty Looms Over British Households (5 September 2023): By City A.M - With Parliament back, both parties need to focus on what’s going to matter to voters in the next months: housing and energy prices will be top issues, together with questions on net zero, writes Elena Siniscalco. After what seemed like an endless summer recess, Parliament is back on this week, with a distinctive back-to-school feeling. Some MPs look a bit disoriented, like they need some help to remember what’s going to matter in the upcoming months. People are dead worried about housing, whether they’re young renters, families with mortgages or households pushed into temporary accommodation by the skyrocketing cost of rent. For young renters – an influential group of voters, which has historically leaned towards Labour and that the Tories always want to win over – things look pretty bleak. In London, the average rent went up to over £2,500 in April, according to Rightmove. People in the capital are spending on average 40 per cent of their household income on rent. ... (Source: Oil Price)
Saudi Arabia Could Snub The U.S., Pick China To Build Its First Nuclear Plant (4 September 2023): By Alex Kimani - Last year the Emirates Nuclear Energy Corporation (ENEC) announced the commissioning of the country’s first-ever nuclear power plant--the first ever for an Arab nation. The 1,400-megawatt nuclear plant became the single largest electricity generator in the UAE since reaching 100% power in early December, and is now providing "constant, reliable and sustainable electricity around the clock. And now, Saudi Arabia harbors the same ambitions as its OPEC peer. However, unlike the UAE, Saudi Arabia might turn to China to design and build its first ever nuclear plant amid frustration over the United States’ strict stipulations for supporting Riyadh’s quest. The Saudis are indeed already headed in that direction: reports have emerged that China National Nuclear Corporation (CNNC), a state-owned firm, has proposed the construction of Saudi Arabia’s first nuclear plant near the border with Qatar and the United Arab Emirates. ... (Source: Oil Price)
Natural Gas Stands To Win As Offshore Wind Takes A Hit (3 September 2023): By Cyril Widdershoven - While the total number of offshore wind projects, both existing and projected, continues to surge, the sector now grapples with typical economic and financial challenges. In recent weeks, offshore wind companies have sounded alarms about escalating product costs, manufacturing expenses, and price volatility, all of which are poised to significantly impact their ongoing and future endeavors. A striking financial upset in recent days came from the Scandinavian offshore wind behemoth, Orsted, which witnessed its stock market value plummet by over 25%, attributed to elevated global cost estimates and potential financial liability issues in the USA. In filings submitted to the New York state regulatory authority, other prominent offshore wind developers, such as Norway's energy major Equinor and British oil major BP, have officially requested a staggering 54% increase in the price of electricity generated at three planned offshore wind farms. ... (Source: Oil Price)