Oil prices could ‘very easily’ top $100 a barrel, says former U.S. energy secretary

Published

3 years ago

July 12, 2021

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Flames burn off at an oil processing facility in Saudi Aramco’s oilfield in the Rub’ Al-Khali desert in Shaybah, Saudi Arabia, in October 2018.

Simon Dawson | Bloomberg | Getty Images

Oil prices could “very easily” hit $100 a barrel in the aftermath of the failed OPEC+ talks, former U.S. Energy Secretary Dan Brouillette told CNBC on Tuesday.

“You could very easily see oil hitting $100 a barrel — potentially even higher,” he told CNBC’s Hadley Gamble.

On the flip side, it’s “equally possible” that prices could collapse too.

“If there isn’t any agreement on production, and countries tend to go off and do their own thing, or do their own production, you could have a collapse of oil prices,” said Brouillette, who U.S. energy secretary from 2019 to 2021.

OPEC and its allies, referred to collectively as OPEC+, twice failed to reach a deal on oil output last week. On Monday, another attempt to resume talks broke down, and discussions were put off indefinitely.

The energy alliance, which includes Russia, had sought to increase supply by 400,000 barrels per day from August to December 2021 and proposed extending the duration of cuts until the end of 2022. Last year, to cope with lower demand due to the pandemic, OPEC+ agreed to curb output by almost 10 million barrels per day from May 2020 to the end of April 2022.

I think countries recognize that $100 barrel oil would not be in (their) interest.

Dan Yergin

vice chairman, IHS Markit

The United Arab Emirates had indicated that, while it was supportive of the proposal to increase supply, it objected to the terms of the extension.

Prices soared to three-year highs following the collapse of those talks on Monday. On Tuesday during Asia trading, they surged even higher. U.S. crude pushed past $76 per barrel and international benchmark Brent was higher than $77 per barrel.

Oil prices topping $100 would destroy demand, warned oil expert Dan Yergin, who said that it would not be in the interest of countries.

“I think countries recognize that $100 barrel oil would not be in (their) interest,” Yergin, the vice chairman of IHS Markit, told CNBC’s Street Signs Asia on Tuesday. “You would see governments pour more incentives into electric cars, and see the impact on demand.”

‘Striking’ that UAE and Saudi are on divergent paths

OPEC+ is led by Saudi Arabia, a close ally of the UAE. But the breakdown of those talks, and UAE’s objection to the terms, reflect a rare public disagreement between the allies.

The discord between Saudi Arabia and the UAE has been “striking,” Brouillette and Yergin both said.

“I find it striking that the UAE has stepped away from Saudi Arabia, a longtime ally within OPEC and OPEC+,” Brouillette said.

Yergin, too, said the contention between both countries was striking, given that both countries until recently had “pretty much marched in lockstep.”

“I think that one side or the other is gonna have to give in … there’s going to have to be … a lot of, as they say, horse trading, to get to a deal and keep it together,” he told CNBC on Tuesday.

While they are on divergent paths in this matter, both actually have similar goals and require revenue from oil production for new investments, Brouillette pointed out.

Environment

Lunatic hero builds electric kart with nearly 700 lb-ft of mind-bending TQ [video]

Published

14 hours ago

September 8, 2024

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Lunatic hero builds electric kart with nearly 700 lb-ft of mind-bending TQ [video]

The mad scientists over at Critical have taken a high-torque electric motor from an obscure motorcycle brand, stuffed it into a go-kart chassis, and created a life-altering wheelie machine that is truly and completely bonkers.

Critical is a YouTube channel and Instagram that does all sorts of crazy powersports stuff, and this latest build has to be one of their craziest yet.

“I’v [sic] taken apart a STARK VARG electric Motocross (80 Horsepowers, 938 Nm Torque) and placed the power train in a Go Kart,” reads Critical‘s video description – and, if you’ve ever spent real time in a proper racing kart, you already know how crazy/awesome that sounds.

Our own Micah Toll covered the STARK VARG donor vehicle back in 2021, calling the bikes revolutionary, “with specs that crush gas bikes.” And, while STARK hasn’t made much noise since, its massively powerful electric motors (at least) proved not to be vaporware! But, while the motor is interesting and the video is fun in a Song of the Sausage Creature kind of way, the kart’s not the real story here.

There’s a bigger story here than a 700 lb-ft kart, though (938 Nm = 691 lb-ft). And it’s playing out over at Dodge, come to think of it. And at drag strips all over America. Heck, even the Hemi faithful and the hillclimbers and the import tuner scenesters understands what’s coming – and that’s this: if you want to go fast, really, truly, pants-s**ttingly fast, you need to start taking electric power seriously.

That’s more than enough opining from me, though. Click play on that video up there, and revel in the smoke-free madness.

SOURCE | IMAGES: Critical, via Ride Apart.

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Environment

Many ‘doubted the vision’: Saudi investment minister touts ‘green shoring’ on path to diversification

Published

14 hours ago

September 8, 2024

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Many 'doubted the vision': Saudi investment minister touts 'green shoring' on path to diversification

Khalid Al-Falih, Saudi Arabia’s investment minister, during the Bloomberg New Economy Forum in Singapore, on Wednesday, Nov. 8, 2023.

Bloomberg | Bloomberg | Getty Images

Saudi Minister of Investment Khalid al-Falih pushed back against skepticism over the country’s economic diversification plan, as Riyadh touts “green shoring” investment opportunities to woo foreign financing.

“There was many people who doubted the vision, the ambition, how broad and deep and comprehensive it is, and whether the development of a country like KSA who is so dependent for so many decades on a commodity business like oil would be able to do what we are aspiring to do with Vision 2030,” al-Falih told CNBC’s Steve Sedgwick on Saturday at the Ambrosetti Forum in Cernobbio, Italy.

One of the largest economies in the Middle East and a key U.S. ally in the region, Saudi Arabia has been shoring up investments in a bid to materialize Crown Prince Mohammed bin Salman’s Vision 2030 economic diversification program, which spans 14 giga-projects, including the Neom industrial complex.

Under this initiative, Riyadh seeks to pivot away from its historical dependence on oil revenues — which the International Monetary Fund now sees rising until 2026, before starting to descend — and hopes to draw financial flows in the domestic economy exceeding $3 trillion, as well as push foreign domestic investment to $100 billion a year by 2030.

The Saudi minister on Saturday said that, eight years into manifesting Vision 2030, the kingdom is now “more committed, more determined” to the program and has already implemented or is about to complete 87% of its targets. Critics of the plan have previously questioned whether Riyadh will successfully deliver on its goals by its stated deadline.

In recent years, the kingdom has been attempting to liberalize its market and improve its business environment with reforms to its investment and labor laws — but has also formulated less popular requirements for companies to set up their regional headquarters in Saudi Arabia to access government contracts.

The number of foreign investment licenses issued in Saudi Arabia nearly doubled in 2023, the IMF noted, with government data pointing to a 5.6% annual increase in net flows of foreign direct investment in the first quarter.

Concerns have nevertheless lingered over the potential uncertainty and unpredictability of the kingdom’s legal framework and its dispute resolution system for foreign investment. Al-Falih insisted that Saudi Arabia boasts predictability, as well as domestic political and economic stability.

Watch CNBC's full interview with Saudi Investment Minister Khalid Al Falih

‘Green shoring’

The Saudi investment minister said that part of Riyadh’s offering to foreign investors is the Saudi-coined initiative of “green shoring,” which seeks to decarbonize supply chains in areas with renewable energy resources.

“Green shoring is basically saying you need to do more of the high energy processing [and] manufacturing value add in areas where the materials, as well as the energy, are [located],” al-Falih said, adding that Saudi Arabia has the logistics, capital and infrastructure to achieve this.

Under Vision 2030, the world’s largest oil exporter aims to achieve net-zero emissions by 2060. Along with its neighbor, the United Arab Emirates — which hosted the 2023 gathering of the annual U.N. Conference of the Parties — Riyadh has been a high-profile presence at climate summits, but has still drawn questions over its commitment to decarbonization.

Riyadh — along with other members of the Organization of the Petroleum Exporting Countries oil alliance — has repeatedly called for the simultaneous use of hydrocarbons and green resources in order to avoid energy shortages throughout the global transition to net-zero emissions.

Some climate activists have also criticized Saudi Arabia’s promotion of solutions like carbon capture and storage (CCS) technologies as a smokescreen to push ahead with its lucrative oil business.

As part of “green shoring,” Saudi Arabia sets out to “address global supply chain resilience issues” and “build a new global economy that is certainly moving more electric, as we bring the copper, as we bring the lithium, the cobalt, the other critical materials, rare earth metals, as we address semiconductor shortages, green fertilizers, green chemicals,” al-Falih stressed.

Environment

Volvo CE opens new facility to support production of electric wheel loaders

Published

14 hours ago

September 8, 2024

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Volvo CE opens new facility to support production of electric wheel loaders

Volvo Opens New Facility for Electric Wheel Loaders

The construction industry’s shift takes another step forward as Volvo CE inaugurates a new, state-of-the-art manufacturing facility to support the production of electric wheel loaders at its plant in Arvika, Sweden.

The new facility is the latest expansion for the Arvika site, which already manufactures medium and large wheel loaders. The new facility measuring approx. 1,500 sq. m (over 16,000 sq. ft.), and was built in less than a year, following an investment of SEK 65 million ($6.3 million) in 2023.

The expansion is technically an after flow facility, where nearly finished loaders comes off the regular assembly line for completion and testing. This allows Volvo to free up areas inside its existing factory and more readily enable the production of electric wheel loaders alongside more conventional, ICE-powered units.

“This new facility is an inspiration for a future built on sustainable solutions,” explains Melker Jernberg, Head of Volvo CE. “We are proud to be at the forefront of industry change with large-scale investments, not just here in Arvika but around the globe, that support a transformation towards electrification. Together, we are moving closer towards fossil-free machines.”

Volvo is calling the new expansion a first step in electrification for the site, but notes that it’s part of a wider transformation strategy to reduce the company’s internal climate footprint by 350 tons of CO₂ through a variety of emission reduction efforts already in progress.

“Action on climate change is nothing new to us here in Arvika, but it is incredibly exciting to see our vision come to life with these new facilities,” says Mikael Liljestrand, General Manager at Arvika. “We now have the framework in place to drive electrification and expand our growing global portfolio of electric wheel loaders. This will have a positive impact on our industry and society as a whole, but it is also a personal journey for each of us here in Arvika who are playing a significant role in building a more sustainable future.”

Electrek’s Take

Prince Carl Philip and Princess Sofia visit the new facility; via Volvo CE.

The improved Volvo production site was given the royal welcome with a visit by Prince Carl Philip, a member of the Swedish royal family, and Duke of Värmland, where the site is located – and remembering that Sweden still has a royal family always trips me out a bit.

That said, one of the biggest obstacles to broader fleet electrification remains availability of electrified assets. A fleet like PITT Ohio that wants to order 100 electric Volvo Trucks might have to wait eighteen months or more, when a comparable diesel order may take six months to fill. The same is true on the equipment side.

More production, and more availability, will mean more fleets giving electric solutions a shot – and that’s what we need.

SOURCE | IMAGES: Volvo CE, via Construction Equipment.

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