Oil derrick pumps operate at the Inglewood Oil Field in Culver City, California, on Sunday, July 11, 2021.
Kyle Grillot | Bloomberg | Getty Images
International oil benchmark Brent crude advanced for a sixth straight session on Tuesday, jumping above $80 per barrel for the first time since October 2018 as demand rebounds and supply remains tight.
West Texas Intermediate crude futures, the U.S. oil benchmark, also rose for a sixth straight day, advancing about 1% to a more than two-month high of $76.28 per barrel. Both contracts are coming off five straight weeks of gains, and each is up more than 50% for 2021.
“A persistent supply deficit is leading to an ever tighter oil market, with OECD inventories likely to end the year at the lowest level of demand cover in decades,” analysts at Barclays wrote Tuesday in a note to clients. The firm hiked its 2022 targets for WTI and Brent to $74 and $77 per barrel, respectively.
Brent last traded 0.77% higher at $80.14 per barrel, and Goldman Sachs envisions the contract hitting $90 by the end of the year as demand continues to recover. The firm hiked its target on Sunday to $90 after previously forecasting Brent at $80 by the end of the year.
In April 2020 as the pandemic sapped worldwide demand for petroleum products, briefly sending WTI plunging into negative territory, producers implemented historic output cuts. OPEC and its allies removed nearly 10 million barrels per day from the market, and while the group has slowly opened the taps, the members are still holding back production.
A similar story played out in the U.S. Wells were shut-in and producers have been slow to kick up output. Instead, they’ve focused on shoring up balance sheets, paying down debt and returning money to shareholders.
Demand has since recovered amid the widescale rollout of the vaccine, all while supply remains constrained. This is especially true after years of under-investment in the sector.
Oil is also getting a boost amid the eye-popping rally in natural gas prices, which could prompt utilities to switch from gas to oil.
Natural gas futures jumped more than 9% on Tuesday to $6.26 per million British thermal units, the highest level in at least 7.5 years. The contract is now up more than 40% for September with inventory below historical levels heading into the winter.
“Global natural gas markets are very tight now, with inventories much below normal in both Europe and U.S.,” said Ed Morse, global head of commodities at Citi. “Thus, prices should continue to stay at current elevated levels globally in the upcoming winter, with the potential for further price spikes triggered by much colder-than-normal weather, unless winter weather turns out to be mild.”
The energy sector is by far the best S&P 500 group for September, up more than 10%. The second-best sector is financials, which is up just 1%.
EnBW He Dreiht offshore wind farm (Photographer: Rolf Otzipka)
Germany’s largest offshore wind farm hit a big milestone: The first turbine at EnBW’s He Dreiht project has produced its first kilowatt-hour of electricity and sent it into the grid.
More turbines are expected to come online over the coming weeks. European energy provider EnBW has already installed 27 of the wind farm’s 64 turbines, all of which are scheduled to be commissioned by summer 2026.
Peter Heydecker, EnBW board member for Sustainable Generation Infrastructure, described the November 25 milestone as a “significant moment for EnBW.” With 960 megawatts (MW) of total capacity, He Dreiht is now Germany’s largest offshore wind farm.
Vestas supplied the 15 MW turbines, marking their world debut. Nils de Baar, president of Vestas Northern and Central Europe, said the giant turbine’s technology sets a new standard for offshore wind. “Its efficiency and performance enable a significant increase in energy yield per turbine.”
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Just one rotation of the 15 MW turbine’s rotor can power the equivalent of four households for a day. The hub stands 142 meters (466 feet) tall, and the rotor’s 236-meter (774-foot) diameter sweeps a 43,742-square-meter (10.8-acre) area — roughly the size of six football fields. To put the scale into perspective, EnBW’s first offshore project, Baltic 1 in 2010, used 2.3 MW turbines.
EnBW wrapped up the wind farm’s internal cabling in August. Those lines connect all the turbines and feed into a converter platform operated by transmission system operator TenneT. That’s where the power is collected, converted from AC to DC, and sent to shore through two high-voltage DC cables.
Once complete, He Dreiht will generate enough electricity to power about 1.1 million households. The project is being built without state funding and sits roughly 85 kilometers (53 miles) northwest of Borkum and 110 kilometers (68 miles) west of Heligoland. EnBW’s offshore office in Hamburg is coordinating the build.
A partner group made up of Allianz Capital Partners, AIP, and Norges Bank Investment Management owns 49.9% of the project. Total investment comes in at around €2.4 billion.
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The Yangwang U8L is among the most expensive Chinese vehicles, starting at about $180,000. To prove it’s built for just about anything, BYD dropped a 2-ton tree on it, three times, and the ultra-luxury pretty much brushed it off.
BYD drops a tree on its ultra-luxury SUV during testing
BYD launched the Yangwang U8L in September, a long-wheelbase version of the U8 off-road SUV. The U8 was first introduced in September 2023 as the first vehicle from BYD’s ultra-luxury sub-brand, Yangwang.
Yangwang is a new energy vehicle (NEV) brand that sells high-end plug-in hybrids (PHEVs) and 100% battery electric (BEV) vehicles as BYD expands into new segments.
The U8L is Yangwang’s fourth vehicle, following the U8, U9, and U7. It’s available in China with a quad-motor extended-range electric vehicle (EREV) system, delivering a CLTC range of 200 km (124 miles) on battery power alone.
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A 2.0-liter turbocharged gasoline engine serves as a generator, delivering a combined CLTC range of 1,160 km (720 miles).
Measuring 5,400 mm in length, 2,049 mm in width, and 1,921 mm in height, the Yangwang U8L is even bigger than the Rolls-Royce Cullinan and Range Rover Long Wheelbase.
BYD’s ultra-luxury SUV is priced from 1.28 million yuan ($180,000), making it one of the most expensive models from a Chinese brand.
It may look pretty, but the Yangwang U8L is built for far more than just good looks. Like the U8, the long-wheelbase version is equipped with advanced features such as emergency float mode, which allows it to float on water for up to 30 minutes, tank turns, crab walking, and more.
To prove its durability, BYD engineers put the luxury SUV through the paces, dropping a massive 2-ton tree on it, not once, but three times.
During the final drop, the company said the maximum impact energy reached 50.4 kJ, or about 37,200 lb-ft. After three consecutive drops, the Yangwang U8L barely even got a scratch. The body structure remained intact, the door still opened, the columns didn’t bend, and the vehicle could even drive like normal.
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Former reality TV contestant Sean Duffy. Photo by Gage Skidmore
The White House will formally announce its planned hike in US fuel costs by $23 billion tomorrow, according to Reuters.
Since the beginning of this year, the occupants of the White House have been on a mission to raise costs for Americans.
This mission has encompassed many different moves, most notably through unwise tariffs.
But another effort has focused on changing policy in a way that will raise fuel costs for Americans, adding to already-high energy prices.
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The specific rollback tomorrow focuses on a rule passed under President Biden which would save Americans $23 billion in fuel costs by requiring higher fuel economy from auto manufacturers. By making cars use less fuel on average, Americans would not only save money on fuel, but reduce fuel demand which means that prices would go down overall.
The effort to roll back this rule was initially announced on the first day that Sean Duffy started squatting in the head office of the Department of Transportation. Duffy notably earned his transportation expertise by being a contestant on Road Rules: All Stars, a reality TV travel game show.
Then in June, Duffy formally reinterpreted the Corporate Average Fuel Economy (CAFE) standard, claiming falsely that his department does not have authority to regulate fuel economy.
Republicans in Congress even got into effort to raise your fuel costs, as part of their ~$4 trillion giveaway to wealthy elites included a measure to make CAFE rules irrelevant by setting penalties for violating them to $0. In addition, it eliminated a number of other energy efficiency and domestic advanced manufacturing incentives.
Duffy’s department then told automakers that they would not face any fines retroactively to 2022, which saved the automakers (mostly Stellantis) a few hundred million dollars and cost American consumers billions in fuel costs.
Tomorrow, Duffy is expected to make an announcement formally changing CAFE rules, lowering the required fuel economy for 2022-2031 model year vehicles, even despite all of the other changes in trying to make the rules unenforceable. The theory behind this would be to make it harder to later enforce the rules, and to allow automakers to get off with more pollution, and to increase fuel demand and fuel prices for longer until a real government returns to power and starts doing its job to regulate pollution.
We don’t know the specifics yet of what exactly the announcement will entail, but given the general trend of recent announcements, it will likely be a full rollback of the improvements to the rule made by President Biden.
Tomorrow’s announcement is expected to be attended by executives from the Big Three American automakers – GM, Ford, and Stellantis (formerly Chrysler).
Their presence on stage suggests that their prior commitments to energy efficiency and electrification were not serious, as they are now joining in an effort to increase your fuel costs, just to save themselves a few engineering dollars on having to provide something other than the disgusting, deadly land yachts that are a blight on the nation’s roads and are murdering pedestrians at a 50-year high.
Tomorrow’s announcement is just one many efforts currently being undertaken by executive departments to try to raise your fuel costs.
One of the largest is the EPA’s attempt to delete the “Endangerment Finding,” the government’s recognition of the scientific fact that climate change is dangerous to humans. The EPA is undertaking this effort so that it can then eliminate other rules intended to reduce pollution, with the goal of making you more beholden to fossil fuels.
Even the Energy Department’s own numbers, signed off on by oil shill Chris Wright, say that changes sought by the White House will increase gas prices by $.76/gal.
Like most other governmental changes, today’s change will likely go up for public comment, as required by the Administrative Procedures Act. We’ll let you know when they do.
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