Oil Prices: Brent And Crude Log Their Longest-Winning Rally, What Is Next?
Naeem Aslam, Forbes, February 10, 2021
Oil prices have rallied sharply higher this year. Brent oil is up 20% year-to-date (YTD), while Crude has advanced 17% YTD. A large number of these gains are on the back of tight oil supply by OPEC, especially from Saudi Arabia and Russia, and improving oil demand as economic growth marches towards new normality. However, we are still not out of the woods, and it seems like headline oil prices could be overdone. It is likely that a correction may be coming for oil prices.
Brent oil prices are on track to record their biggest winning streak since February last year—seven consecutive days of gains. Since November last year, when the price fell to $37.36, Brent’s price is up more than 62%. Similarly, Crude oil is also up nearly 74% from its November low of $33.64.
Dem Sen. Manchin asks Biden to reverse Keystone XL rejection
Matthew Daly, Associated Press, February 9, 2021
In one of his first acts as new chairman of the Senate Energy Committee, Democratic Sen. Joe Manchin on Tuesday urged President Joe Biden to reconsider his executive order revoking a presidential permit for the long-delayed Keystone XL oil pipeline, siding with Republican critics who say Biden’s action will cost thousands of high-paying jobs.
Manchin, of West Virginia, has yet to lead a hearing since being named chair last week, but he spoke out on the pipeline controversy that has spanned four presidencies. In a letter to Biden, Manchin said Keystone XL and other pipelines “continue to be the safest mode to transport our oil and natural gas resources, and they support thousands of high-paying, American union jobs.″
His comments signal the tricky relationship the White House is likely to have with Manchin, a moderate who has urged Biden to act in a bipartisan manner on COVID-19 relief and other issues, including climate change. Manchin leads a committee that is crucial to Biden’s efforts to address climate change but has expressed skepticism about some of the actions advocates say are needed to reduce harmful greenhouse gas emissions that contribute to global warming.
Manchin, a longtime coal industry defender who once shot a copy of a climate-change bill for a campaign ad, has worked to improve relations with environmentalists. He says he supports “responsible” effort to address climate change but has urged Biden to consider the effects of his actions on energy-producing states such as West Virginia.
Breaking with his party, Manchin questioned Biden’s action to rejoin the global Paris climate agreement, in which more than 100 countries have pledged to achieve net zero carbon emissions by the middle of the century.
MEANWHILE, VOTERS ARE FAIRLY SPLIT ON THE DECISION: Biden’s cancelation of Keystone XL is among his least popular executive orders so far, although more people agree with the decision than not.
A poll released today from Morning Consult and Politico found 42% of voters support Biden’s move to revoke the Keystone XL permit, while 38% oppose it and 20% don’t know.
Tesla deployed more EV battery materials than its four closest competitors combined in 2020
Mining.Com, February 10, 2021
A report by market researcher Adamas Intelligence states that Tesla deployed more passenger EV battery capacity and battery materials, namely lithium, nickel and graphite, than its four closest competitors combined in 2020.
According to Adamas, Elon Musk’s company also outsold all other plugin electric vehicle makers globally.
Russian Energy Stocks Get Boost From Biden’s Green Push
Aine Quinn, Bloomberg Green, February 8, 2021
U.S. President Joe Biden’s push to slash carbon emissions may inadvertently give a short-term boost to energy companies in one of the world’s biggest polluters.
Investors are betting that Russian oil giants such as Lukoil PJSC, Rosneft PJSC and Tatneft PJSC will rally as they mop up market share from rivals in the U.S. and other countries seeking to switch to clean energy. An index of Russian energy stocks has returned 8% in dollar terms so far this year as crude prices rallied, compared with 2% for European oil and gas companies.
“Governments will likely limit global companies’ capacities to drill and extract resources,” said Eduard Kharin, who helps oversee $1 billion of assets at Alfa Capital Asset Management in Moscow. “The global majors are entering a new market, a new industry where there are a lot of unknowns, and the return on capital is unclear.”
Russia is the world’s fourth-biggest carbon emitter, but unlike other major polluters, the government doesn’t have a plan to transition away from fossil fuels. Instead, its state-owned energy companies benefit from some of the world’s lowest production costs and tax breaks, making them well placed to gain in the short term.
From the Washington Examiner, Daily on Energy:
SWAYING BIDEN ON MINING CRITICAL MINERALS: The mining industry is aiming to convince President Biden that expanding production of critical minerals such as lithium, cobalt, graphite, and rare earth elements is a necessary step to meet aggressive climate targets.
The National Mining Association has already been engaging with Biden’s team on ways to support domestic critical minerals development and has plans to meet with members of the administration next week, said Rich Nolan, the trade group’s CEO.
The group says Biden’s goals to increase adoption of renewable power and electric cars are inextricably linked with ensuring a domestic supply of the minerals needed to make electric vehicle batteries, solar panels, and other clean energy technology.
“Made in America must include mined in America,” Nolan told Abby in an interview, referencing Biden’s “buy American” executive order and his pledge to ramp up domestic manufacturing of electric cars.
Hopeful signs: Nolan said he’s seeing indications the Biden team is paying close attention to critical minerals and the risks associated with not building up domestic supply.
For example, Jennifer Granholm, Biden’s nominee to lead the Energy Department, said in her confirmation hearing there are methods to mine critical minerals “in a way that respects the environment,” and she backed the agency’s role in supporting their production.
“We don’t want to be under the thumb of China or other countries that corner the market on minerals,” Granholm said.
The Energy Department is also leaving in place guidance issued by the Trump administration in December that clarified projects involving the “production, manufacture, recycling, processing, recovery, or reuse” of critical minerals could apply for the agency’s loan guarantee program.
The guidance didn’t change the rules for the loan program (instead clarifying which types of critical minerals projects could apply), but Trump officials at the time said the agency would give special consideration to critical minerals projects.
“The recognition by the Department of Energy that these projects are a priority of the U.S. government and that the capital market should join in investing in these types of operations issued a signal to the market,” Nolan said of the guidance. “That can attract additional capital and create more high-paid American jobs.”