U.S. crude oil moved slightly higher to $82 a barrel on Tuesday on optimism that weak manufacturing data could accelerate interest rate cuts.
U.S. manufacturing activity hit a four month low of 49.9 in March, according to the S&P Global Flash U.S. Composite PMI. A reading below 50 indicates that activity is contracting.
Oil prices turned higher on the data as traders see slowing manufacturing activity as support for the Federal Reserve cutting interest rates this year. Lower borrowing costs typically stimulate the economy and thereby crude demand.
Here are the latest energy prices:
West Texas Intermediate June contract: $82.19 a barrel, up 28 cents, or 0.34%. U.S. crude oil is up more than 14% this year.
Brent June contract: $87.18 a barrel, up 18 cents, or 0.17%. The global benchmark is up about 13% this year.
RBOB Gasoline May contract: $2.68 a gallon, up 0.02%. Gasoline futures are up about 28% this year.
Natural Gas May contract: $1.77 per thousand cubic feet, down 0.78%. Natural gas is down 29% this year.
Phil Flynn, senior market analyst at the Price Futures Group, said renewed hopes for rate cuts are “giving oil a new sense of life here, especially after it’s already sold off quite a bit.”
The move higher comes after WTI hit a session low of $80.89 a barrel earlier in the morning, the lowest level since late March. U.S. oil prices also briefly dipped below the 50-day moving average of $81.22 a barrel for the first time since early February.
U.S. oil prices are still more than $5 below this year’s high of $87.62, when traders bid up prices on fears of a war between Iran and Israel. Those concerns have largely dissipated as Iran and Israel have signaled they are not interested in a wider war after trading tit-for-tat strikes earlier this month.
WTI Vs. Brent
Iran sanctions ‘a farce’
The oil market has also largely brushed off the threat of additional sanctions against Iranian oil.
The House of Representatives passed legislation over the weekend that would broaden sanctions against Iran’s oil exports to include foreign ports, vessels and refineries that knowingly process crude from the Islamic Republic. The Senate could vote on the bill as soon as this week.
Under terms of the legislation, President Joe Biden would implement sanctions within 180 days of the bill’s passage, but has the authority to waive penalties if he determines it is in the national security interests of the U.S.
Oil Prices, Energy News and Analysis
“This bill significantly increases sanctions on Iran, it increases the enforcement mechanisms,” Helima Croft, commodities strategist with RBC Capital Markets, told CNBC’s “Squawk Box” on Monday.
The White House will face a “tough choice” this summer on whether to impose the sanctions or issue waivers due to concerns about a tight oil market, Croft said. The sanctions, if fully implemented, could contribute to higher prices at the pump.
“Biden’s not going to pull the trigger ahead of the election because he can’t afford to have gasoline prices go up before for the election,” Flynn said. “It’s kind of a farce.”
The Biden administration is very concerned about high oil prices ahead of the 2024 election, said Amrita Sen, founder and director of research at Energy Aspects.
“It’s a U.S. election year, and the U.S. is going to do absolutely anything in its power to make sure prices don’t go up,” Sen told CNBC’s “Crude Realities” on Tuesday.
Tesla (TSLA) has introduced a new direct discount for the Model Y in China as the latest of a series of incentives to boost demand during this critical end-of-quarter push.
The automaker regularly offers discounts at the end of every quarter, but the incentives to boost demand have been the most wide-ranging ever this quarter.
Over the last month, we have been documenting the many sale incentives and discounts that Tesla has put in place to ensure it creates the demand for a record quarter.
Tesla aims to deliver a record number of more than 515,000 vehicles in Q4 in order for its sales not to be down for the whole year. That’s ~30,000 more vehicles than Tesla’s last record quarter, which was Q4 2023.
And everywhere, Tesla is heavily subsidizing loans with lower interest rates. That has been the main incentive in China, Tesla’s biggest market, until now.
Tesla’s New Discount in China
Today, Tesla announced that it is offering a ¥10,000, the equivalent of $1,380 USD, discount on the final payment for new Model Y vehicles:
The new discount can be combined with Tesla’s subsidized 0% interest financing, which has been Tesla’s main incentive in China all year.
Electrek’s Take
Based on insurance data, Tesla is tracking ahead of last year’s deliveries in China, but it is going to need to beat its last record by a significant margin to make sure not to be down for the whole year.
Model Y is Tesla’s most popular vehicle, but Tesla is also going against the expectation of the design refresh coming early next year, which can negatively affect demand.
This discount is likely to combat that and maintain Tesla’s current good momentum in China.
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We now have more details on the massive recall, which just keeps growing. Hyundai and now Kia are recalling more than 208,000 electric vehicles in Canada and the US to fix a problem with the loss of driving power, which can increase the risk of a crash.
For the second time this year, the automakers are recalling huge swathes of EVs and other “electrified” vehicles in North America, citing concerns about a loss of driving power, the National Highway Traffic Safety Administration (NHTSA) said on Friday.
In the US, Hyundai is recalling 145,235 EVs, including the 2022 through 2024 Ioniq 5, the 2023 through 2025 Ioniq 6, GV60 and GV70, and the 2023 and 2024 G80. In Canada, Hyundai is recalling 34,529 vehicles that were produced between March and November of this year, according to Automotive News Canada.
As for Kia, the recall includes close to 63,000 Kia EV 6 vehicles from 2022 through 2024 in the US, but the company has yet to offer details on its Canada recall.
It looks like the issue stems from “the integrated charging control units in these vehicles, which may become damaged and fail to charge the 12-volt battery. This malfunction could lead to a complete loss of drive power, posing safety risks for drivers,” the NHTSA stated.
Back in March, Hyundai, Kia, and Genesis issued a similar recall for 147,110 electric vehicles – that recall centered, again, around damaged integrated charging control units failing to charge the battery.
The South Korea automaker has said that all owners of affected vehicles will be notified by letter mail on the next steps to take. This will involve bringing your vehicle to one of the company’s dealers to inspect and replace the charging unit and its fuse if necessary, along with performing a software update for the charging units.
Importantly, no crashes, injuries, fatalities, or fires due to this issue have been reported in the US or Canada, Hyundai reported.
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A group of Tesla vehicles spotted under covers at the automaker’s test track at the Fremont factory is raising some questions.
Tesla has a very small test track on the ground of its first factory, Tesla Fremont, in California.
Now and again, people fly drones over the factory and catch glimpses of new cars being tested. Youtuber ‘Met God in Wilderness’ is one of those drone pilots who regularly fly over the factory and while he didn’t catch vehicle being tested, he did catch some curious vehicles under covers next to the track:
The vehicles are all covered, and therefore, it’s hard to tell exactly what they are, but the different shapes are intriguing and raise some questions.
It looks like three, maybe four, different kinds of vehicles:
We know that Tesla is working on three new specific vehicles: a Model Y design refresh, and two new cheaper models based on Model 3 and Model Y.
All three vehicles are expected to be unveiled early next year.
Electrek’s Take
At the risk of stating the obvious, getting much information from vehicles hidden under cover can be hard. It’s even possible that some of those have shape camouflage, which is sometimes used by automakers – although I don’t remember Tesla ever using that.
So here are my best guesses. Take them for what they are: guesses.
The most interesting ones to me are the first two on the left in the picture above. The last vehicle on the left looks like it could be a smaller Model 3.: