Energy stocks were slammed Wednesday as U.S. oil prices plunged to their lowest levels since December 2021. The extent of the decline in West Texas Intermediate crude — down 5.5% to under $67 per barrel — seems overdone in an energy market that remains structurally undersupplied. However, we’re not ready to step in right here to try to catch a falling knife — recognizing concerns over whether fallout from global banking troubles will curtail economic growth. Lower energy costs, at the same time, help other sectors of the stock market. Bad for energy stocks For now, we’re holding onto our three oil exploration and production (E & P) stocks — Coterra Energy (CTRA), Devon Energy (DVN) and Pioneer Natural Resources (PXD) — because their breakeven levels are around $40 per barrel. They can still make money with WTI in the mid-$60s, not to mention they have some of the highest annual dividend yields in the market. The E & Ps are in the blast zone and lower commodity prices will cause producers to think twice about additional investments in production. So, directionally, the move in oilfield services giant Halliburton (HAL) makes sense as well, though we think the drop is overdone given the world does remain structurally undersupplied and needs Halliburton’s services to increase production to level more in line with long-term demand. WTI hit a session low of $65.65 per barrel around 1 p.m. ET. The big question is whether the federal government will make good on its signals to replenish the nation’s Strategic Petroleum Reserve (SPR) at WTI prices below $70 per barrel. Back in the summer, months after Russia invaded Ukraine, Washington tapped the SPR in an attempt to alleviate some of the pressure that sky-high prices at the gasoline pumps placed on consumers. As a result, the SPR has fallen to its lowest levels in decades. @CL.1 YTD mountain WTI performance YTD If the Biden administration were to start buying crude and create something of a floor in the market, that would serve to protect profits at our E & Ps. Any new production at more stabilized levels and/or money for crude and natural gas infrastructure that’s suffered from years of underinvestment would benefit oilfield services giant Halliburton. Good for other sectors While Wednesday’s action is obviously painful for our energy holdings, it highlights the need to maintain a diversified portfolio with exposure to many different sectors and end markets. In addition to lower energy prices being welcome news for the government, it’s a welcome development for companies outside of the energy complex and American consumers who drive two-thirds of U.S. economic activity. Energy is not exactly a consumer staple, but it’s certainly not something we can live without. Regardless of cost, consumers must still fill up their cars or heat their homes. In turn, higher energy costs eat into discretionary spending budgets. On the corporate side, energy oftentimes represents a large input cost. Take Club holding Amazon (AMZN), for example. In addition to the fuel used to get packages to your door on the e-commerce side of its business, the tech giant has previously cited elevated energy costs as a headwind to its Amazon Web Services (AWS) cloud margins. We saw a similar impact on Microsoft ‘s (MSFT) Azure cloud business. Consider a name like Club holding Procter & Gamble (PG). The company’s household products are things people have to use every day. We heard all year long in 2022 about freight and commodity costs impacting margins. As a result, P & G management raised prices. Now, with energy costs coming down, we would expect these input costs to subside a bit. Price hikes, however, will prove sticker than input costs, which should lead to some margin expansion for this best-in-class consumer staple. Bottom line So, what hurts our energy holdings, helps other sectors of the market and other parts of our portfolio. However, with problems at Credit Suisse (CS) dominating Wednesday’s headlines, that may not be much comfort. Everything is taking a hit. But, if we step back and think through what this move means for consumer demand and corporate margins in other sectors, we can be more constructive on Wednesday’s broad stock market decline and search for opportunities. Take a more fundamental view and target those names that stand to benefit from the decline in energy prices freeing up more discretionary income, such as off-price retailer TJX Companies (TJX), shares of which we just picked up earlier in the day. In the afternoon, we used dislocations in markets to buy more Caterpillar (CAT) shares for the second straight day. If we think through the way in which money can be allocated in a lower energy price world, we see reasons to be positive about the move. Even if it hurts a portion of our portfolio in the short term, our commitment to a diversified portfolio can help pick up the slack and help weather the storm. (Jim Cramer’s Charitable Trust is long CTRA, DVN, PXD, HAL, AMZN, MSFT, PG, TJX, CAT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Drilling rigs sit unused on a companies lot located in the Permian Basin area on March 13, 2022 in Odessa, Texas.
Joe Raedle | Getty Images News | Getty Images
Energy stocks were slammed Wednesday as U.S. oil prices plunged to their lowest levels since December 2021. The extent of the decline in West Texas Intermediate crude — down 5.5% to under $67 per barrel — seems overdone in an energy market that remains structurally undersupplied.
China’s Contemporary Amperex Technology Co., Limited (CATL) has unveiled its latest battery cell technologies, which charge as quickly as filling up a gas tank while potentially lowering costs without compromise.
CATL has quickly become the world’s largest battery manufacturer by a wide margin. It is one of, if not the biggest, force for advancing electric transportation.
A big part of CATL’s success is due to its advancements in lithium-iron phosphate battery cells, also known as LFP. LFP cells are cheaper than nickel-rich batteries, but they used to have much lower energy density.
The Chinese battery manufacturers managed to close the gap somewhat while maintaining lower costs, resulting in LFP cells becoming popular for entry-level EVs.
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Now, CATL is looking to do the same with sodium-ion batteries.
Like LFP cells, sodium-ion battery cells have the potential to be cheaper than more common Li-ion cells, but they also offer potential for superior performance, particularly in terms of faster charging and longer lifecycles.
CATL has unveiled today Naxtra, its new sodium-ion battery cells, and it claimed some truly impressive specs.
The new cell reportedly achieves an energy density of 175 Wh per kg (385 Wh per lb), on par with the higher-end of LFP battery cells.
The new cells also offer potential for significant safety improvements.
CATL shared several intense stress tests, including drilling into a cell and even cutting it in half without any thermal event:
The next-gen sodium cells could help further lower the cost of electric vehicles without compromising performance, and while increasing safety.
On top of the new Naxtra cell, CATL has also unveiled its next-gen Shenxing LFP battery cells.
Its charge rate is truly impressive. CATL shared several examples of cars charging at around 1,000 kW and maintaining over 500 kW at over 50% state of charge:
The new cell is being described as capable of adding 300 miles (482 km) of range in about 5 minutes – depending on the EV model.
That’s virtually as quick as filling up a tank of gas.
CATL says that the Shenxing will be in 67 electric vehicle models by the end of the year.
New York State has announced an extra $30 million for point-of-sale rebates to lease or buy more than 60 new EV models.
The rebates are available to consumers through New York’s Drive Clean Rebate program, which offers a point-of-sale rebate off the manufacturer’s suggested retail price (MSRP) of an EV at participating car dealerships in New York State.
The rebate is available in all 62 counties, with the highest rebate of $2,000 available for EVs with a greater-than-200-mile range. (For a 40- to 199-mile range, the rebate is $1,000.) The New York State Energy Research and Development Authority (NYSERDA) runs the program.
NYSERDA President and CEO Doreen M. Harris said, “Converting to EVs reduces the total cost of vehicle ownership through lower fuel and vehicle maintenance costs, and NYSERDA is proud to help provide New Yorkers with more purchasing power through these rebates.”
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The Drive Clean Rebate program has issued over 190,000 rebates to consumers since 2017, contributing to the more than 280,000 EVs on the road in New York State.
NYSERDA also boosted its EV charging incentives. Through the Charge Ready NY 2.0 program, the state is boosting the cash available for Level 2 charger installations at apartment buildings, workplaces, and hotels from $2,000 to $3,000 per port. And if the chargers go into disadvantaged communities, that amount jumps to $4,000 per port.
New York has racked up over 17,000 public EV chargers, making it second only to California for charger count. On top of that, there are more than 4,000 semi-public stations tucked into workplaces and multifamily buildings across the state.
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LTL carrier ArcBest Freight (ABF) announced plans to add five new Orange EV electric terminal tractors to its existing ZEV fleet, bringing its total deployment of these battery electric HDEVs to 14 … with even more to come.
LTL stands for “Less than Truck Load,” and basically means that, since whatever you’re shipping won’t take up a full container, you can share the costs of shipping with other customers with goods going the same way. You save a little more money and the shipper makes a little more money, making it a rare win-win scenario in the shipping space. And that’s important, because LTL containers amount to a massive 15% of total US shipping.
ABF has been putting Orange EV yard dogs to work in their LTL traffic terminals since their initial deployment of four trucks in June 2022. The company added five more a few years later, and just purchased five more — further underscoring their confidence in the benefits of transitioning their fleet to electric power.
“The Orange EV terminal trucks meet our operational requirements and expectations for safe, reliable, and affordable service and performance,” explains Matthew Godfrey, ABF Freight president. “We’re committed to responsible environmental management, and our investment in EVs aligns with our continuous efforts to enhance efficiency while maintaining exceptional service standards.”
Over at The Heavy Equipment Podcast, we had a chance to talk to Orange EV founder Kurt Neutgens ahead of last year’s ACT Expo for clean trucking. On the show (embedded, above), Kurt explained how his experience at Ford helped inform his design ideology, and that the Orange EV was designed to be cost competitive with diesel options, even without subsidies.
Give it a listen, then let us know what you think of the big yard dogs in the comments.