What’s Next for Oil Prices After Last Week’s Tumble?

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?”

The Road Ahead for Diesel Engines

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”

A Wet Winter Out West Points To A Big Spring for Hydroelectric Power

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”

Where Heating Fuel Prices Go From Here

With much of the U.S. feeling the effects of cold and snowy weather, now seems like an appropriate time to check in on heating fuel supplies and hazard some guesses about where fuel prices go from here. Many residential and business customers caught a break on heating costs last winter, with historically mild temperatures in many places. But the situation looks a bit different now that the calendar reads 2017.

Sizing Up Heating Fuel Stockpiles

Any analysis of winter heating costs has to start with how much natural gas, propane and heating oil is on hand to meet the season’s heating needs. And for the most part, those stocks of stored fuel look ample. Continue reading “Where Heating Fuel Prices Go From Here”

Previewing Donald Trump’s Energy and Environmental Policies

It’s safe to say that under President Donald Trump’s administration, a lot is going to change for energy and environmental policies after eight years of President Barack Obama. Trump’s early choices for Cabinet heads – an oil company executive at the State Department, a pro-drilling former Texas governor for the Department of Energy, an outspoken critic of Obama-era climate regulations to head the Environmental Protection Agency – strongly hint at a shift toward more development of natural resources and less-restrictive environmental rules. But what exactly will be changing, especially at the beginning of the Trump administration?

Walking Back Obama Priorities

Admittedly, I don’t have a direct line to Trump Tower, so I can’t ask the Donald himself what sorts of new policies we should expect when he takes office next month. But I have been speaking with folks who know his advisers, or represent influential business groups, or understand the industries most likely to be affected. Here are the highlights of their comments. Continue reading “Previewing Donald Trump’s Energy and Environmental Policies”

Will Trump Bring Better Days for Coal?

One of Donald Trump’s clearest campaign promises was to revive the beleaguered U.S. coal industry and bring back the thousands of mining jobs that have been lost in recent years. Trump pinned the blame for coal’s woes on the Obama administration’s pending climate change regulations, which would discourage burning coal to generate electricity. Trump isn’t in office yet, and his environmental policies are still taking shape. But the coal industry is already enjoying a bit of a comeback.

Natural Gas: Fueling a Coal Comeback

“Coal hit bottom in the spring of this year,” says Andrew Moore, managing editor of Platts Coal Trader at S&P Global Platts. Back then, coal consumption had plummeted and coal’s share of U.S. electricity generation had fallen to its lowest point on record. (It was around that time that we first spoke with Moore, who predicted that 2016 could mark the low point for the coal business.) Continue reading “Will Trump Bring Better Days for Coal?”

Previewing OPEC’s Latest Confab

All eyes in the oil market are on OPEC’s upcoming meeting. But whether the cartel finally makes good on its long-awaited promise to cut production or not, we counsel taking a longer view on prices.

Production Cuts: Are We There Yet?

The Organization of the Petroleum Exporting Countries has been disappointing oil bulls for two years now. In fact, it was just about two years ago, when the group shocked markets by publicly opting not to cut production despite weak crude prices, that oil’s rout began in earnest. Traders seemed flummoxed that OPEC was abandoning its long-standing role as the unofficial regulator of global oil supply at a time when U.S. crude output was soaring and the world was awash in excess oil. Continue reading “Previewing OPEC’s Latest Confab”

Signs of an Oil and Gas Comeback

You don’t have to be in the oil and gas business to know that the last two years have been brutal. The sell-off in oil markets that began in 2014 saw the price of crude fall from about $100 per barrel to a low of $26 last winter, before a modest rebound to $44 now. At the same time, natural gas prices fell to their lowest level since 1999 during the unusually warm winter of 2015-2016. As a result, dozens of companies have filed for bankruptcy, tens of thousands of workers have lost energy-related jobs, and manufacturers that make drilling equipment and related gear have seen their sales slump.

But there are finally signs of better days ahead. No, the energy industry isn’t going to suddenly return to the boom times it enjoyed up until 2014. But the worst appears to be over.

Continue reading “Signs of an Oil and Gas Comeback”

Can Crude Oil Prices Keep Rallying?

A tentative deal by OPEC to reduce its oil production sparked an early autumn rally in crude oil prices. But now, with rumblings of internal dissent within OPEC, that rally has stalled. Can the oil market recover its recent momentum? Or should oil bulls prepare for yet another downturn?

OPEC to the Rescue?

Oil prices were climbing swiftly this spring after bottoming out at about $26 per barrel in the depths of winter. Benchmark West Texas Intermediate had just crested the psychologically important $50-per-barrel level in late June when British voters shocked the world by opting to depart from the European Union. The ensuing upheaval in financial markets knocked WTI back down to $40 per barrel, halting the rally in its tracks.

Continue reading “Can Crude Oil Prices Keep Rallying?”