NO BOOST FOR OIL PRICES FROM FED DECISION: Oil prices closed lower despite a decision by the Federal Reserve to implement a larger half-percentage point rate cut.
Stocks initially got a boost from the rate cut, which was larger than many traders were expecting – a cut of just a quarter-percentage point (also referred to as 25 basis points) is typical.
“A 50 basis point cut is slightly supportive of the oil market since it translates into a weaker dollar and stronger prices for dollar denominated commodities,” Andy Lipow, president of Lipow Oil Associates, told CNBC.
Brent crude was down 0.07% to $73.65 per barrel.
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EXPANDING EV CHARGER TAX CREDITS: The Biden administration released a new proposal today to expand the number of electric vehicle chargers eligible for tax credits across the country.
The details: The proposal, issued by the Department of the Treasury and IRS, would clarify that the tax credits can apply to individual charging ports and not just charging stations, meaning businesses can claim the credits several times if they have a charger that can power multiple vehicles at the same time.
The tax credits were first introduced through the Inflation Reduction Act, saving eligible businesses and people 30% off the cost of installing necessary charging stations for their EVs. Individuals are able to claim up to $1,000, while businesses can receive a credit of $100,000.
Some background: The proposal comes as the administration has sought to increase incentives for people to choose EVs over gas and diesel-powered vehicles in an attempt to lower carbon emissions. However, many drivers have remained hesitant to make the switch to electric due to a shortage of public charging hubs. With over an estimated 3 million EVs on the roads, there are only around 192,000 publicly available charging stations. The White House has said it aims to have 500,000 by 2030 but has seen slow progress since early 2023.
Read more here.
GM EXPANDS ELECTRIC VEHICLE CHARGING ACCESS VIA TESLA: For drivers of electric vehicles made by General Motors, charging their car or truck in public is getting a whole lot easier. The Detroit-based car manufacturer announced today that its customers will now have access to over 17,800 Tesla charging stations nationwide.
The details: GM EV owners will be able to use the Tesla Supercharger network through a GM approved NACS DC adapter that will be priced at around $225. Purchases can be made through the GM vehicle brand mobile app. This app can also then be used to find any available Tesla charging stations and check their status, as well as start and pay for a charge.
Many motorists in the United States have been hesitant to switch to electric due to a lack of access to charging stations. This is particularly seen in cities or urban areas where many EV owners are unable to access a charging hub at home.
Key Quote: “GM’s ongoing efforts to help accelerate the expansion of public charging infrastructure is an integral part of our commitment to an all-electric future,” Wade Sheffer, vice president of GM Energy, said in a statement.
The move now makes more than 231,800 charging stations available to GM EV owners. Currently, only U.S. customers will be able to purchase the adapter. However, it is expected to be launched in Canada later this year.
OIL STOCKPILES HIT YEAR LOW: The Energy Information Administration revealed today that U.S. crude oil inventories recently hit their lowest levels in a year, according to the Wall Street Journal.
The details: Last week, crude stockpiles excluding the Strategic Petroleum Reserve had dropped by around 1.6 million barrels, hitting 417.5 million barrels, EIA said. These record lows were roughly 4% below the five-year average and more than half a million lower than analysts had predicted.
Inventory lows were particularly notable at the delivery hub in Cushing, Oklahoma, which saw a drop of 2 million, hitting 22.7 million barrels. Experts have estimated that the hub’s tank bottoms are around 20 million barrels, per the Wall Street Journal. If stockpiles continue to decrease, it could result in oil price hikes.
Some background: The year’s record low comes as U.S. oil production and imports also fell by around 100,000 and 545,000 barrels a day respectively. Last week, nearly 40% of crude oil production and around 49% of natural gas production was shut-in in the Gulf of Mexico as Hurricane Francine made landfall along the coast of Louisiana. As of Tuesday, around 5.62% of oil production and 9.68% of natural gas output was still shut-in.
MORE ON CEOS MAKING THE CASE FOR NATURAL GAS: Top oil and gas executives took the stage yesterday at Gastech in Houston to emphasize the role natural gas plays in lowering carbon emissions.
Chevron CEO Mike Wirth and Cheniere CEO Jack Fusco both spoke to the importance of natural gas at the world’s largest energy conference, claiming “realistic science” backs up why the fuel is so important amid calls for more renewable energy.
“Cutting these emissions by switching from coal to natural gas could represent the single greatest carbon reduction initiative in history,” Wirth said, according to E&E News. “These reductions are achievable and not disruptive to national economies or individual lives.” Wirth’s remarks came as he also blasted the Biden administration over its pause on new LNG export approvals to non-free-trade-agreement countries.
Fusco warned that while environmental groups and renewable energy advocates wish to see less reliance on natural gas and more on clean power like wind and solar, that transition will take some time.
“I think there’s a misconception that you can replace base-loaded, coal-fired power plants with renewables,” Fusco said, E&E News reported. “You can’t. You can’t start your oven or your hair dryer or your dishwasher on renewable power.”
IEA CALLS FOR STRONGER INTEGRATION OF SOLAR & WIND: The International Energy Agency is asking policy makers to find a way to further integrate solar and wind energy into power systems as renewable energy capacity has skyrocketed.
The details: IEA published a report today highlighting emerging challenges around solar and wind energy. The agency found that, between 2018 and 2023, capacity for the renewable energy sources more than doubled and will only continue to expand by 2030.
As the agency found solar and wind energy accounts for two-thirds of reductions in carbon emissions, it is calling nations to further integrate the power sources, including by improving power grids and storage, or face the consequences. The report predicted that delaying integration could in fact decrease solar and wind electricity generation by 15% in 2030.
“In recent years, the world has seen a remarkable increase in solar and wind capacity as countries have looked to bolster their energy security and reduce emissions,” IEA Director of Energy Markets and Security Keisuke Sadamori said. “But they won’t reap the full benefits without stronger efforts to support the integration of these technologies into power systems.”
DRYING UP: As Brazil grapples with its worst drought since records began in 1950, branches of the immense Amazon River are seeing water levels drop to historic lows.
The details: For the first half of September, the Solimoes River – which flows just over 1,000 miles – saw water levels in Tabatinga, along the border of Colombia and Peru, measuring 4.25 meters (nearly 14 feet) below average, according to Reuters. Meanwhile, one branch of the Solimoes dried up completely in Tefé. Other water levels in Tefé are also reportedly measuring 2.92 meters (9.5 feet) below the average seen last year. Meanwhile, a nearby lake that saw over 200 freshwater dolphins die in the 2023 drought has already dried up.
“We are going through a critical year,” Greenpeace spokesperson Romulo Batista told Reuters. “This year, several months have broken last year’s records.”
RUNDOWN
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New York Times How Colorado Cowboys and Conservationists Joined Forces to Stop Drilling