Climate Denial Crock of the Week

One of these things is connected to the other.

Proving once again that markets don’t have to make sense, oil prices are tanking on growing inventories, plus the news of supposed new supplies from the still-years-away-if-ever Willow Project, the recently-approved (but I will bet right now – doomed) drilling project in Alaska.
Meanwhile, EV sales booming and set to undermine global demand for oil. Obviously oil/gas prices are famously volatile and unpredictable. That’s the point. Assuming that prices will be high enough to make more arctic drilling profitable may not be a good bet. And we are not powerless to keep oil prices low.

So, stop wringing your hands over Biden’s best-case handling of a mostly-non issue, and get to work helping us site clean energy, working for more mass transit and walkable cities, and advancing electrification.

Yahoo Finance:

As fears over the banking system weigh on markets worldwide, the price of oil has come under significant pressure in recent days with WTI crude oil, the U.S. benchmark, falling below $67 on Wednesday, its lowest price since November 2021.

On Wednesday, WTI was off nearly 7% to trade as low as $66.47 a barrel. As recently as March 6, WTI traded hands north of $80. Brent crude oil, the international benchmark, traded as low as $72.60 a barrel on Wednesday.

This week’s collapse in oil prices comes as the latest data on oil stockpiles in the U.S. show a steady build in inventories amid what Capital Economics’ chief commodities economist Caroline Bain called “subdued domestic demand” in a note to clients on Wednesday.

Data from the American Petroleum Institute out Tuesday showed inventories rose for the 10th-straight week for the week ending March 10, while the Energy Information Administration’s weekly petroleum report out Wednesday showed a build in crude oil inventories last week, noting inventories are running 7% higher than the five year average.

Bain also pointed to the Biden administration’s decision on Monday to approve a massive drilling project in Alaska as a sign more supply could be coming onto a market already not facing a shortage of oil.

“The approval was for a pared-back project and it will still face legal challenges, but it is significant because President Biden has broken his campaign promise to ban all drilling on federal lands,” Bain wrote. “When fully operational at 180,000 [barrels per day], it would mean a 40% rise in Alaska’s oil output to around 620,000 bpd.”

Bloomberg:

In December 2022, the latest month for which figures are available, fully electric vehicles accounted for 7% of North America car production, according to data compiled by Bloomberg Intelligence. That’s an increase from 4.7% in December 2021, and up from 4% for the first half of 2022. Tesla led the pack by stamping out 52,300 vehicles in December, followed by Ford with an estimated 9,300 electric cars, trucks and vans. 

“We’re selling every one we can,” Ford Chief Financial Officer John Lawler said on a conference call last month.

Indeed, while American EV demand remains hard to pin down, it is likely far higher than supply. Some 26% of US drivers say they intendto buy an electric vehicle, according to the American Automobile Association. And if other countries are any guide, that is the precise share of new car sales in the US that could be fully electric by the end of 2025 — that is, if there are enough EVs to purchase. 

“What we’ve seen in the past year is a tremendous growth in what we call the mass market,” said Elizabeth Krear, vice president of the EV practice at JD Power. In October, for example, a JD Power survey found that more EV customers were considering a Chevy than a Tesla, Krear says. (Though Tesla regained its bragging rights after cutting prices in January.)

The year-end EV blitz suggests supply is gradually closing the gap with demand, and buying an electric car is likely to be less fraught for Americans in coming months. But US EV production is still very much in first gear. Ford plans to have its factories on pace to crank out 600,000 electric vehicles a year by the end of 2023; that would be a six-fold increase over its output in 2022. The automaker aims to push that pace to 2 million units by the end of 2026.