A driver pumps gas at a Sunoco gas station in Washington, DC, US, on Tuesday, Nov. 28, 2023.
Al Drago | Bloomberg | Getty Images
Oil prices are on pace to close out the year about 10% lower as bearish sentiment has taken over due to worries that the market is oversupplied from record production outside OPEC.
The West Texas Intermediate contract for February gained 10 cents, or 0.14%, to trade at $71.87 to barrel on Friday. The Brent contract for March rose 12 cents, or 0.16%, to trade at $77.27.
But U.S. crude and the global benchmark were headed for the first annual decline since 2020 despite ongoing geopolitical risk in the Middle East due to the devastating war in Gaza.
Oil prices rose nearly 3% on Tuesday on worries that militant attacks on shipping in the Red Sea would disrupt global trade and crude supplies. However, WTI is down 10.45% for the year, and Brent has lost 9.9%.
While fears of escalation in the Middle East have triggered brief spikes in crude prices, traders are primarily focused on the supply and demand balance.
Record U.S. production
The U.S. is producing crude at a record pace, pumping an estimated 13.3 million barrels per day last week. Output is also at a record in Brazil and Guyana. The historic production outside OPEC has collided with an economic slowdown in major economies, above all China.
OPEC and its allies, meanwhile, have promised to cut production by 2.2 million barrels per day in the first quarter of 2024, but traders apparently have little confidence that the bloc’s policy will bring the market into balance.
Oil production outside OPEC, above all in the U.S., is expected to more than cover demand growth in 2024, according to the International Energy Agency. Global oil demand growth is expect to fall by half to 1.1 mbd next year, while output outside OPEC is expected grow by 1.2 mbd.
Profound impact on oil
The shift in crude supply from the Middle East to the U.S. and other Atlantic countries is “profoundly impacting the global oil trade,” the IEA said in its December outlook.
The U.S. was responsible for two-thirds of the growth in supply outside OPEC this year. This is challenging efforts by producers in the Middle East to defend their market share and lift oil prices, according to the IEA.
OPEC seems to have little room to maneuver, with production cuts falling on deaf ears. Brazil has agreed to ally itself with the bloc, but it is not clear what that means for markets.
Occidental CEO Vicki Hollub told CNBC in December that U.S. production this year has reached levels that surprised even her. She had a message of caution for the industry.
“It would be prudent of U.S. producers to be careful in terms of putting too much supply in the market,” Hollub said.
The Occidental CEO and Morgan Stanley do see U.S. crude prices bouncing back next year with a barrel of WTI averaging about $80. Wells Fargo has a lower forecast with WTI averaging $71.50 a barrel next year.
Mideast escalation threat
While the market is focused on the supply and demand picture, Helima Croft of RBC Capital Markets told investors to watch developments in the Middle East closely.
“Anything that brings more direct confrontation with Iran and the United States is what you have to watch,” Croft said Friday on CNBC’s “Squawk Box.”
Three U.S. troops were injured Monday in a drone attack in Iraq carried out by Iran-backed militants. President Joe Biden then ordered retaliatory strikes on militia sites. And attacks by Iran-backed militants in Yemen on vessels in the Red Sea caused global shipping companies to reroute some traffic from the Suez Canal around the Cape of Good Hope in Africa.
The situation is also escalating on Israel’s northern border with Lebanon. Israel Defense Minister Yoav Gallant said Tuesday that his country is facing a “multiarena war” from seven areas: Gaza, the West Bank, Iran, Iraq, Lebanon, Syria and Yemen.
“If you look at the situation in the Middle East, I think it is far too soon to write off the risks there,” RBC’s Croft said.
Mercedes released a look at the powertrain technology of its upcoming electric CLA, and it includes tons of neat EV tech and some interesting options for battery technology and what looks to be the most flexible charging system we’ve seen yet.
We’ve already learned a fair amount about the CLA after first seeing the concept last year, and Mercedes released a few new specifics today regarding its powertrain.
In keeping with previous information we knew, the CLA is targeting extremely high efficiency of 12kWh/100km, which translates to just 193Wh/mi or 5.2mi/kWh. That’s more efficient than anything else on the road today – with Lucid’s Air Pure reaching 200Wh/mi, or 5mi/kWh. And just less than what Tesla is claiming the Cybercab will be capable of, at 5.5kWh/mi.
This is thanks to Mercedes’ new compact EDU 2.0 electric motor, which is part of its new Mercedes Modular Architecture (MMA) which will underpin its upcoming electric vehicles. The drive motor will be 200kW on the rear axle, though all-wheel drive models will be available with an additional 80kW unit on the front axle. A two-speed transmission will ensure efficiency at high speeds and low.
For more efficiency in cold weather, the CLA will use an air-to-air heat pump which is able to capture heat from the motor, battery, and ambient air to heat the cabin. While batteries and motors don’t make nearly as much waste heat as inefficient ICE engines, it’s still good to be able to channel heat to wherever you need it.
Mercedes says that the CLA will come equipped with a choice of two different batteries, each with different chemistries.
The larger 85kWh model will be capable of an unnecessarily-high 750km (466mi) of WLTP range – though WLTP numbers are always higher than EPA numbers, so expect something in the high-300s in EPA parlance. This battery will add silicon oxide to the anode for higher energy density, a technology that has been pioneered by Sila Nanotechnologies, a company which Mercedes is a lead investor in.
The smaller battery will be 58kWh, and will use lithium iron phosphate (LFP) chemistry. LFP is a cheaper but lower energy density technology, with higher long-term durability and simpler sourcing of minerals (it uses no cobalt, whereas Mercedes says cobalt has been “reduced” in the larger batteries). However, LFP generally has slower fast charging and cold weather performance.
On charging: the “premium” battery will have an 800V configuration capable of up to 320kW charging speeds. Mercedes says this can add 300km (186mi) of range in 10 minutes, and also says that the car will have a broad charging curve, which means you’ll get high charge rates even if the battery isn’t close to empty. It didn’t specify if the smaller LFP battery will have the same charge rate.
This high charging rate allowed Mercedes to set a record traveling 3,717km (2,309mi) in 24 hours at the Nardo test track in Italy in a pre-production CLA. That’s an average travel rate of 96mph – including time spent charging.
We also learned something about Mercedes’ NACS adoption plans. While just about everyone has committed to transitioning cars to NACS, it has taken longer than expected (largely due to Tesla’s chaotic CEO firing the whole supercharger team for little reason), and few cars have native NACS inlets yet. Some brands can already charge at Superchargers with adapters, but Mercedes is still on Tesla’s “coming soon” page.
As a result of delays in onbaording automakers, some seem to have pulled back on their plans, pushing NACS ports to later model years. But Mercedes has a new and unique solution – it will just put both CCS and NACS ports on the CLA, right on top of each other.
Mercedes says “in the future, new entry-level models will be capable of bidirectional charging,” but isn’t clear whether this model will be capable of that.
Electrek’s Take
While this is short of a full release of specs, we’re excited by what we see here. Mercedes seems to confirm that they’re meeting the efficiency goals they set out, and we like that they’re offering a variety of options and taking advantage of some newer EV tech like 800V charging infrastructure.
The inclusion of both NACS and CCS is very interesting, again offering options to owners during the transition. That seems to be the big message from Mercedes here – we’re not going to just pick one tool, we’re going to use all of them.
But pricing and availability are obviously big questions, as is design.
The concept looks fantastic, but concepts always change on their way into production. The shape of the camouflaged test vehicle is very different – but looks to have some shrouding on the front and back to hide its shape, so we’ll have to wait until we see this thing unveiled for more.
And as for pricing – Mercedes says the CLA will be an “entry-level” car, but who knows what that means anymore these days. The base ICE CLA starts at around $44k currently, so lets see if they can hit that number.
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Daimler Truck North America has helped alcohol distributor Reyes Beverage Group deploy fully 29 zero-emission Freightliner eCascadia Class 8 electric semi trucks in its California delivery fleet.
Reyes Beverage Group (RGB) plans to deploy the first twenty Freightliner electric semi trucks at its Golden Brands – East Bay and Harbor Distributing – Huntington Beach warehouses, marking the first phase in the company’s transition to a fully zero emission truck fleet by 2039. An additional nine eCascadia Class 8 HDEVs are scheduled for delivery to RBG’s Gate City Beverage – San Bernardino warehouse before the end of 2024.
RBG’s decision to adopt the Freightliner eCascadia builds on its recent transition to renewable diesel and its ongoing idle-time reduction program. These electric vehicles (EVs) “go electric” will contribute significantly toward the company’s stated goal of reducing its carbon emissions 60 percent by 2030. These 2 trucks will save some 98,000 gallons of diesel fuel annually, and avoid putting nearly 700 metric tons of carbon dioxide and other harmful emissions into California’s air each year.
“We are excited to be among the first in our industry to adopt these electric vehicles,” explains Tom Reyes, President of RBG West. “This is a significant step toward our sustainability goals and ensuring compliance with state regulation as we transition our fleet to EV.”
Freightliner’s eCascadia electric semi trucks offer a number of battery and drive axle configurations with ranges between 155 and 230 miles, depending on the truck specification, to perfectly match customers’ needs without compromising on performance and load capacity. RBG’s Freightliner eCascadia tractors will rely on electric charging stations installed at each facility, allowing them to recharge to 80% capacity in as little as 90 minutes for RGB’s trucks, which feature a typical driving range of 220 miles as equipped.
The Windsor, Ontario utility says it’s driving towards a more sustainable future after adding a dozen new electric vehicles to its fleet – including a state-of-the-art, 55-foot Terex electric bucket truck.
Based on a Class 7 (33,000 lb. GVWR) International eMV Series BEV, the Terex EV takes the eMV’s 291 kWh battery and adds the Terex Optima 55-foot aerial device and HyPower SmartPTO system to create a fully electrified utility service vehicle that can do anything its diesel counterparts can do while offering better, safer working conditions for utility crews.
“We’ve got 12 EVs,” said Gary Rossi, president and CEO, Enwin Utilities. That number represents fully 10% of the utility’s entire vehicle fleet. “Our centerpiece is our electric 55-feet bucket truck. It’s very quiet,” continues Rossi. “So (the truck) allows us, our crews, to communicate better. It’s not as loud in the community when they’re doing repairs in someone’s backyard.”
That notion is echoed by Terex, itself. The company says its HyPower SmartPTO (power take off), which replaces a mechanical PTO, avoids a loud idling engine while reducing workers’ exposure to toxic exhaust fumes.
“It’s all about building Windsor’s future and literally plugging into the battery factory down the road that is being constructed and showing that Windsor is a leader on this front,” says Drew Dilkens, Mayor of Windsor. “I don’t own an internal combustion engine vehicle,” adds Mayor Wilkins. “I only own two electric cars. My wife and I, we made the change starting in 2019 and I can’t see myself ever going back.”
CTV News Windsor
Enwin says its commitment to clean energy extends beyond its vehicle fleet. The company recently unveiled a massive MW solar rooftop net metering facility at its Rhodes Drive headquarters with over 3,000 solar panels. The site, one of Canada’s largest solar installations, generates enough clean electricity to power 300 homes annually.