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Official cars are seen outside Grand Hotel Wien after a session of meeting of the Joint Comprehensive Plan of Action (JCPOA) on “Iran nuclear deal talks” in Vienna, Austria on May 01, 2021.
Askin Kiyagan | Anadolu Agency | Getty Images

A nuclear deal between the U.S. and Iran could send energy prices higher — even if it means more supply in the oil markets, according to Goldman Sachs’ head of energy research.

While it appears to be contradictory, a deal that brings Iranian barrels back to the market could actually see oil prices rise, said Damien Courvalin, who is also a senior commodity strategist at the bank.

Talks in Vienna are ongoing as Iran and six world powers — the U.S., China, Russia, France, U.K. and Germany — try to salvage the 2015 landmark deal. Officials say there’s been progress, but it remains unclear when negotiations could conclude and oil prices have been seesawing as a result.

A deal would lift sanctions on Iran and bring Tehran and Washington back to complying with the Joint Comprehensive Plan of Action (JCPOA). The U.S. unilaterally withdrew from the nuclear deal in 2018 and reimposed crippling sanctions on Iran which dealt a blow to the Islamic Republic’s oil exports.

If that announcement comes in the next few weeks, in our view, it actually starts that bullish repricing.
Damien Courvalin
head of energy research, Goldman Sachs

Courvalin explained his rationale. He pointed to how oil prices rose in April after OPEC+ said they would gradually raise output from May by adding back 350,000 barrels a day.

“An increase in production … is announced that is above anyone’s expectations — ours included. And yet prices rally, volatility comes down,” he said.

“Why? Because we lifted an uncertainty that was weighing on the market since last year,” he told CNBC’s “Squawk Box Asia” last week.

Investors wondered if OPEC would end up in a price war when it tried to increase production, but the oil cartel presented a “convincing path going forward,” Courvalin said.

“You could argue the same for Iran,” he added. Simply knowing will likely “lift some of that uncertainty.”

“If that announcement comes in the next few weeks, in our view, it actually starts that bullish repricing,” he said at that time.

Opposing views

Other analysts say an agreement could mean lower prices for oil, at least in the short term.

Morgan Stanley said in a research note that an increase in Iranian exports will probably cap Brent crude at $70 per barrel, and expects the international benchmark to trade between $65 and $70 per barrel for the second half of 2021.

Brent crude was lower by 0.13% at $71.22 on Friday in Asia, while U.S. crude futures were down 0.1% at $68.75.

“Our view is that the initial reaction to a potential deal will be a brief sell-off,” Tamas Varga, an analyst at PVM Oil Associates, told CNBC in an email.

Extra Iranian barrels would be a headwind if a deal materializes, according to Austin Pickle, investment strategy analyst at Wells Fargo Investment Institute.

But softer crude prices may only be temporary.

“We suspect accelerating demand and OPEC+’s disciplined supply response will support oil prices,” Pickle wrote in a note, referring to OPEC and its allies.

PVM Oil Associates expects Brent prices to reach $80 per barrel by the fourth quarter of 2021, Varga said.

He also said it will take time before Iran starts to export oil again, and global demand could have improved significantly by the time additional barrels reach the market.

Extra Iranian barrels should only delay price recovery but not throw it off course.
Tamas Varga
analyst, PVM Oil Associates

While the global economic recovery has been uneven — faster in the developed world, compared to the developing world — oil prices will rise more quickly when vaccine rollouts accelerate in Asia, he added.

“Extra Iranian barrels should only delay price recovery but not throw it off course,” Varga said.

S&P Global Platts Analytics has the view that there is room to accommodate Iranian and OPEC+ oil supply growth in the third quarter.

Toward year-end, however, energy prices could come under pressure as Iran exports and U.S. oil production increase, said Nareeka Ahir, a geopolitical analyst at S&P. She said Brent could fall to the mid or low $60s in late 2021 into 2022.

Supply may lag demand

Goldman Sachs sees Brent crude prices rising at a faster pace, and predicts the international benchmark could hit $80 by the third quarter of this year.

Courvalin noted that Asia’s oil demand has been revised lower due to new waves of the virus, and that has been been offset by upside surprises in the U.S. and Europe.

“It really paints a picture where, once vaccination rates progress sufficiently, you really see pent-up mobility get unleashed, and a significant increase in oil demand,” he said. “That’s … the root of the bullish view.”

He said supply will likely lag the pop in demand, and there will be “plenty of room” to absorb oil from Iran.

“In fact, if you told me Iran’s not coming back, our $80 dollar forecast is way too low relative to where the oil market is heading by 2022,” he added.

Concerns over an Iran deal and the pandemic may have “masked a fast-tightening oil market,” Courvalin said.

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Diesel? Gas? New Holland hybrid uses METHANE to charge its batteries

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Diesel? Gas? New Holland hybrid uses METHANE to charge its batteries

The latest hybrid telehandler from New Holland packs a range-extending combustion engine to boost its battery power during longer shifts – but it doesn’t run on gas or diesel. Instead, this farm-friendly machine is built to run on METHANE.

By collecting pig, cow, or poultry waste (poop), silage waste (corn husks and grass clippings), and food waste from composting and putting into a manure digester, farmers can generate valuable biogas – a renewable, low-carbon fuel that can be burned for heat, electricity, or used as fuel. And because large farming operations can produce huge amounts of biogas at an incredibly low cost compared to conventional grid and fuel costs, any machine that can run on biogas is going to have a real total cost of ownership (TCO) advantage.

Biogas generator


Manure digester, via Ag Marketing Resource Center.

CASE and New Holland (collectively, CNH) understands its customers’ desire to put that biogas to good use. They also understand that nothing is quite as efficient as battery-electric power, though; but big farms have weird duty cycles: 4-6 hour shifts most of the year, then critical, un-skippable, non-negotiable round-the-clock running during harvest.

That need to run 24 hour shifts limits the appeal of pure electric machines, and has led to companies like ZQUIP developing power-agnostic modules that swap-out, power tool-style, to keep the machines going. With its new methane hybrid, New Holland is going a more recognizable EREV and hybrid route.

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“With this prototype, New Holland shows its continuous commitment to the ‘Clean Energy Leader‘ strategy, building on our leadership in alternative fuel machines,” says Marco Gerbi, New Holland T4 and T5 tractor, loader and telehandler product management. “Our aim is to help our customers boost farm productivity and profitability by broadening our range of alternative fuel machines that do not compromise efficiency or productivity yet help to minimize agriculture’s carbon footprint.”

Primarily driven by a 70 kWh lithium-ion battery, the telehandler uses a methane-fueled version of Fiat Powertrain’s four-cylinder F28 engine as a range-extending backup whenever jobs demand more uptime. On the energy stored in the battery alone, New Holland says the machine can handle a full day’s worth of typical farm work — roughly a “350-day duty cycle,” and it can recharge from the grid, a biogas generator, or even rooftop (barntop?) solar.

It’s still just a prototype, but New Holland claims the hybrid setup cuts fuel use by up to 70% compared to a conventional diesel telehandler while delivering 30% better performance and uptime for its operators.

No word yet on availability and pricing.


SOURCE | IMAGES: CNH, via Equipment World.


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Black Friday Green Deals Hub: e-bikes, EVs, power stations, tools, appliances, more

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Black Friday Green Deals Hub: e-bikes, EVs, power stations, tools, appliances, more

Stay up to date with the latest content by subscribing to Electrek on Google News.

You’re reading Electrek— experts who break news about Tesla, electric vehicles, and green energy, day after day. Be sure to check out our homepage for all the latest news, and follow Electrek on Twitter, Facebook, and LinkedIn to stay in the loop. Don’t know where to start? Check out our YouTube channel for the latest reviews.

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Elon Musk’s Boring Company has work crew in Nashville walk off job over unpaid bills and safety

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Elon Musk’s Boring Company has work crew in Nashville walk off job over unpaid bills and safety

The Boring Company, Elon Musk’s tunneling startup, is reportedly facing significant issues with its new project in Nashville, Tennessee. A key subcontractor has walked off the job, alleging that the company has failed to pay for work completed on the “Music City Loop,” claiming they have received only 5% of what they are owed.

We have been following The Boring Company’s expansion efforts closely.

After the relative success of the Las Vegas Loop and several projects that failed to materialize, it looked like the company was winding down until a new proposal in Nashville gained some momentum.

However, a new report from the Nashville Banner indicates that the project is hitting a major wall.

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Shane Trucking and Excavating, a local contractor hired to handle preliminary work for the tunnel project, pulled its workers off the site this Monday. William Shane, the owner of the company, told the Banner that The Boring Company has “ghosted” them and failed to pay invoices totaling in the six figures.

According to Shane, the payment terms were initially set for every 15 days, then unilaterally switched to 60 days. Now, he claims it has been over 120 days since they broke ground, and his company has received only a fraction of the payment due.

“We were really skeptical from the beginning, and then since then, things pretty much just went downhill,” Shane said.

The contractor was reportedly responsible for preparing the launch pad for “Prufrock,” The Boring Company’s proprietary tunnel boring machine (TBM). We previously reported on Prufrock’s capabilities, with the company claiming it can dig tunnels significantly faster than conventional machines, supposedly porpoising directly from the surface to avoid digging expensive launch pits.

If the launch pad isn’t finished because the excavator wasn’t paid, Prufrock isn’t digging anywhere.

This isn’t the first time we’ve heard of payment issues involving Musk-led companies. Tesla has been known to not pay its bills, leading to small companies going bankrupt.

As The Boring Company was stiffing Shane on the bills, the company tried to poach workers from its own contractor and lied about it:

“One of their head guys texts two of my welders, offering them a job for $45 an hour from his work phone,” Shane described, noting that the same TBC employee denied sending the texts when confronted with screenshots. “That’s actually a breach of contract.”

On top of the missed payments, Shane alleges serious safety concerns. They made several official complaints to OSHA:

“Where we’re digging, we’re so far down, there should be concrete and different structures like that to hold the slope back from falling on you while you’re working. Where most people use concrete, they currently have — I’m not even kidding — they currently have wood. They had us install wood 2x12s.” 

The Boring Company Vice President David Buss blamed missed payments on “invoicing errors” in a statement to the Banner:

“It does look like we had some invoicing errors on that. It was, you know, unfortunately, too common of a thing, but I assured them that we are going to make sure that invoices are wired tomorrow.”

He also said that he would look into the poaching allegations, but added that he is not aware of any OSHA complaints.

The “Music City Loop” was pitched as a solution to connect downtown Nashville to the airport, a route that is notoriously congested.

The Boring Company claims it can complete the project without public money, but there are some obvious issues with its financing.

Electrek’s Take

I’ve been willing to give them the benefit of the doubt on the “Loop” concept. While it falls short of the original “autonomous pods” vision or the “Hyperloop” speed dreams, the system in Las Vegas does work to move people, even if it is just Teslas in tunnels driven by humans.

There’s just no evidence that it would be more efficient than any other public transit system.

When Musk launched The Boring Company’s first test tunnel in LA, I asked him if he had any simulations showing his “loop” system to be more efficient. He said that they were working on that. That was 7 years ago.

Therefore, while The Boring Company appears to have achieved marginal improvements in tunnel boring, mainly when it comes to smaller tunnels; it has yet to show clear evidence that its Loop system is a better solution than any other public transit system.

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