Folks hitting the road for July 4th this year won’t have much to complain about at the gas pump. The day before the holiday, AAA reports that regular unleaded averages a mere $2.23 per gallon nationwide: The lowest price for early July since 2005. (Of course, that nationwide average includes some sharp regional variations. Californians are paying roughly $2.94 per gallon of regular. In South Carolina, the statewide norm is $1.90.) It’s hard to believe that just three years ago, the nationwide average price was $3.68 per gallon.
Of course, drivers can thank the oil market for those savings. The world has been awash in excess crude for more than two years now, and oil prices have plunged during that time. Even with OPEC limiting its oil exports to shrink the supply glut, prices have remained stubbornly low. Benchmark West Texas Intermediate showed some signs of rallying this spring, but topped out at about $53 per barrel in April before retreating below $50 again. In fact, WTI technically entered a bear market when it closed at $42.53 on June 21, marking a 20% decline from its April peak. (A small rebound has taken crude back to about $46.50.) Continue reading “Do Oil Prices Have Room To Fall Further?”
Now that President Trump has withdrawn the U.S. from the international climate agreement that seeks to limit future greenhouse gas emissions, it’s worth asking a few questions. What exactly did President Obama commit the U.S. to in Paris in 2015? How significant are U.S. emissions relative to the rest of the world’s? And what are U.S. emission levels likely to be now that Washington has left the pact? (President Trump has left open the possibility of rejoining the Paris accord later, but under what terms is unclear.)
Of course, whether to participate in the Paris deal is largely a political question of public policy, and one that arouses strong feelings. I won’t wade into the arguments surrounding Trump’s decision. But energy consumption is really the issue. And that’s a topic where some objective, apolitical analysis is possible. Continue reading “Trump Pulls the U.S. Out of Paris Climate Accord”
I recently teamed up with my colleague Jeff Kosnett to discuss developments in the energy sector, and how they translate into opportunities for investors. Below is a summary of our discussion. At the end of this article is a link to a recording of the conversation, which is free to Kiplinger Alerts subscribers.
Where are oil prices headed?
Markets have been volatile over the last few decades, which is a scary prospect for investors. Continue reading “Big Picture Trends for the Energy Industry and How Investors Can Profit”
In case you missed yesterday’s webinar on investing in the energy industry, you can now play the recorded program at your convenience. Continue reading “Your Complimentary Webinar”
President Trump’s recent executive order reversing some of his predecessor’s environmental policies has drawn cheers from affected industries and jeers from environmentalists. I take no position on the political debate Trump’s move has set off. But it is possible to map out some of the likely impacts his executive order will have on the energy industry.
Trump the candidate derided President Obama’s regulations that would clamp down on the coal industry and promised to bring back lost coal mining jobs by undoing those regs. In late March, Trump the president signed an executive order seeking to do just that. “My administration is putting an end to the war on coal,” he declared.
So what exactly does Trump’s executive order do? Continue reading “A Renaissance for Coal? Or Just a Reprieve?”
Gasoline prices are behaving themselves right now. But if you’re planning a spring or summer road trip, you should budget for higher prices at the pump. Continue reading “Gasoline Prices To Trend Higher This Spring”
For much of 2017, oil markets had seemed abnormally calm. Sure, prices gyrated up and down every trading day. But the moves were never very substantial. Between Jan. 18 and last Wednesday, benchmark West Texas Intermediate crude never closed lower than $51.08 per barrel, and never higher than $54.45 per barrel. Then, in a span of a few days last week, WTI dropped to about $48 per barrel.
What happened? And what happens next? Continue reading “What’s Next for Oil Prices After Last Week’s Tumble?”
Labor shortages are starting to weigh on businesses in many industries across the U.S., as this week’s Kiplinger Letter documents. (Click here to get the first page of this week’s Letter.) A recent survey of small businesses found that 30% of them have had to increase pay during the last three to six months to find or retain enough workers. That’s the highest level since 2001. About half of small businesses say they can’t get enough qualified job applicants. And the shortages span the pay scale across different industries: Everyone from carpenters to cooks to computer programmers.
One business that is no stranger to the problem: Trucking. Fleet owners have been grappling with a dearth of qualified, licensed truck drivers for years. Veteran drivers are reaching retirement age without enough young recruits joining the industry to take their places. That forces fleets to pony up higher salaries, bigger bonuses and richer benefits to attract or retain drivers. And since labor is the industry’s biggest cost, the competition for drivers points to rising freight rates for shippers this year. Continue reading “A Shortage of Truckers Will Drive Up Freight Rates”
In the waning days of President Obama’s second term, the Environmental Protection Agency issued a “notice of violation” to automaker Fiat Chrysler Automobiles that certain vehicles the company has sold don’t comply with the Clean Air Act. The specific charge: Pickup trucks and SUVs powered by the company’s diesel V-6 engine produce too much nitrous oxide, and the automaker used software to conceal the violation during emissions testing. The echoes of Volkswagen’s costly diesel emissions scandal were unmistakable. So, is it déjà vu all over again for diesel in America?
Some government regulators certainly seem to think so. Mary Nichols, the chair of the California Air Resources Board, said in a statement that “once again, a major automaker made the business decision to skirt the rules and got caught.” (CARB and EPA work together to test vehicles for emissions compliance and enforce air quality standards.) Considering that VW’s attempt to cheat on emissions rules by programming its diesel cars to run cleaner during lab testing has cost the automaker about $20 billion in various penalties, you can imagine why FCA’s stock price tanked after the news broke.
But is this the same situation exactly? Continue reading “The Road Ahead for Diesel Engines”
One little-noticed consequence of the heavy rain and snow falling on California and other Western states this winter: A potential boom in hydroelectric power generation this spring.
Hydropower doesn’t get much attention in the U.S. these days. Unlike wind and solar power, which are growing rapidly, there hasn’t been a flurry of new-dam construction in recent years. Unlike natural gas, the supply of which has soared thanks to hydraulic fracturing and horizontal drilling, no technology revolution has transformed the hydropower industry lately. And unlike coal, which has been at the center of heated political and environmental disputes, fights involving hydropower rarely make national headlines because they tend to involve individual dams. Continue reading “A Wet Winter Out West Points To A Big Spring for Hydroelectric Power”