Oil derrick pumps operate at the Inglewood Oil Field in Culver City, California, on Sunday, July 11, 2021.
Kyle Grillot | Bloomberg | Getty Images
LONDON — The International Energy Agency on Tuesday warned that world oil markets are likely to remain volatile following a breakdown in talks between OPEC members and their non-OPEC allies, creating a no-win situation.
In its latest monthly oil market report, the IEA said energy market participants were closely monitoring the prospect of a deepening supply deficit if a deal was not reached by the Organization of the Petroleum Exporting Countries and its oil-producing allies, a group known as OPEC+.
“Oil markets are likely to remain volatile until there is clarity on OPEC+ production policy. And volatility does not help ensure orderly and secure energy transitions — nor is it in the interest of either producers or consumers,” the IEA said.
OPEC+ abandoned talks last week that would have boosted oil supply. Most delegates tentatively agreed to increase oil production by around 400,000 barrels per day in monthly installments from August until the remaining supply cuts were unwound. This was likely to extend supply cuts through to the end of 2022.
The UAE rejected these plans, however, insisting on a higher baseline from which cuts are calculated to better reflect its increased capacity.
It means no agreement has been reached on a possible increase in crude production beyond the end of July, leaving oil markets in a state of limbo just as global fuel demand recovers from the ongoing coronavirus crisis.
OPEC+, which is dominated by Middle East crude producers, agreed to implement massive crude production cuts last year in an effort to support oil prices when the coronavirus pandemic coincided with a historic fuel demand shock.
The energy alliance has since met monthly to try to decide on the next phase of production policy.
OPEC+ has not made progress in resolving the dispute between OPEC kingpin Saudi Arabia and the UAE, Reuters reported on Tuesday, citing unnamed OPEC+ sources. It makes the prospect of another policy meeting this week less likely.
Oil prices
The IEA said it expects global oil demand to rise by 5.4 million barrels per day this year and by a further 3 million barrels in 2022, largely unchanged from last month’s forecast.
Meanwhile, the “remote” possibility of a market share battle between producers is hanging over energy markets, the IEA said, warning that higher fuel prices and rising inflation could damage a fragile economic recovery.
The uncertainty over the potential global impact of the highly transmissible Covid-19 delta variant was also likely to temper market sentiment in the coming months, the group said.
International benchmark Brent crude futures traded at $75.57 a barrel on Tuesday morning, up 0.5% for the session, while U.S. West Texas Intermediate futures stood at $74.51, around 0.6% higher.
“While prices at these levels could increase the pace of electrification of the transport sector and help accelerate energy transitions, they could also put a drag on the economic recovery, particularly in emerging and developing countries,” the IEA said.
Oil prices rallied more than 45% in the first half of the year, supported by the rollout of Covid vaccines, a gradual easing of lockdown measures and record production cuts from OPEC+.
“Although bullish sentiment has been somewhat tempered recently, oil prices are still comfortably holding above $70/bbl. Whether this remains so depends wholly on the next move by the OPEC+ alliance,” Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note.
“The longer the standoff continues the harder it will be to resolve the situation,” he added.
This week on Electrek’s Wheel-E podcast, we discuss the most popular news stories from the world of electric bikes and other nontraditional electric vehicles. This time, that includes Tern’s NYC e-bike delivery fleet surpasses 1 million miles, the CPSC has a stark warning about Rad’s e-bike batteries, what parents should know if their kid wants a Sur Ron e-moto, JackRabbit MG Doble review, Strutt’s EV1 electric mobility chair, and more.
The Wheel-E podcast returns every two weeks on Electrek’s YouTube channel, Facebook, Linkedin, and Twitter.
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The Port of Houston took a big step towards electrifying its operations this week, when the stevedores at Houston Terminal deployed the first new SANY electric reach stacker at the major seaside port – and it won’t be the last.
With the purchase of the new SANY electric reach stacker from local equipment dealer, Equipment Depot, Houston Terminal has begun to do its part to help keep the air and water around America’s busy seaports pollution-free.
“In this market, there’s a shift towards sustainable equipment,” explains Greg Schertz, Sr. National Account Executive at Equipment Depot — a national equipment supplier that sells and services to roughly 85% of US sea ports. “Electric equipment is a growing trend, and it has become more than a conversation point. Actual machines are going into service and are proving their capability.”
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Equipment Depot is quick to point out that the national move towards electrification isn’t about regulations. “The bigger picture is that the world has become more of a global market,” says Chad Larson, VP of Heavy Trucks and Port Equipment at Equipment Depot. “(And) in the port industry, there are many relationships and parent companies with ties into Europe and other parts of the world where zero carbon initiatives are more progressive than the US.”
Robert Marshall, General Manager of Houston Terminal, echoes Schertz’ sentiment, “Electric equipment has a much easier, much simpler maintenance program, because basically you’re just maintaining tires.”
SANY electric reach stacker
50t reach stacker; via SANY.
At its launch in August, SANY said its new 50t reach stacker would be available with a 512 kWh swappable battery pack. That pack isn’t just huge, it’s compatible with the brand’s other electric equipment assets, and can support both DC fast charging when swapping isn’t practical and the grid itself by “plugging in” to the company’s BESS modules when not needed.
Houston Terminal bought the SANY unit with help from a Texas Emissions Reduction Plan (TERP) Grant, part of TERP’s Seaport and Rail Yard Areas Emissions Reduction (SPRY) Program to replace older drayage trucks and equipment at seaports and rail yards. Houston Terminal intends to apply for another TERP grant to buy a second reach stacker in 2026.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
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The mining equipment experts at Sandvik have been developing next-generation electric equipment options for years – largely on their own. Now, with a €500 million capital injection from the EIB, the company is ready to get serious about its next-generation machinery.
The European Investment Bank (EIB) is the lending arm of the European Union (EU), and its core mission is to strengthen the global competitiveness, technological innovations, and sustainability initiatives of European companies like Sandvik by providing affordable financing for R&D projects conducted on the continent.
“We have a strong strategic focus on developing solutions that strengthen our technology leadership, and that enhances productivity, safety and sustainability for our customers,” explains Stefan Widing, President and CEO of Sandvik. “The EIB financing supports our R&D initiatives and provides flexibility to our overall funding strategy.”
The €500 million loan has a seven-year term, and will support Sandvik’s efforts to develop new advanced, productive, safe, and (above all) sustainable heavy equipment solutions across the company’s business lines.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
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