Oil prices on the slide again [Recharge]

Signs of lackluster demand have sent oil prices falling again; Rising oil supply isn't helping matters, either; Meanwhile in Washington, President Obama's climate plan comes under fire. Catch up on global energy with the Monitor's Recharge.

Hasan Jamali/AP/File
In this May 28, 2015 file photo, oil pumps work in the desert oil fields of Sakhir, Bahrain.

Recharge is a weekly e-mail digest of energy news and analysis written by Monitor reporters David J. Unger and Jared Gilmour.

Slowdown: It was beginning to seem like oil prices had finally leveled off after last fall’s steady, precipitous decline. A barrel of Brent crude hovered between $60 and $65 for much of May and June, but then plummeted some 6 percent to three-month lows Monday as Greece voted to reject debt bailout terms. Markets have since recovered slightly, but there are plenty of reasons to expect continued turbulence and restrained oil demand in coming weeks and months. Greece’s fate hangs in the balance, and China shows signs of an economic slowdown.

Oversupply: The supply side looks equally bearish. Iran negotiations remain in limbo with a new deadline set for Monday, but oil companies are circling Tehran, expecting at least an easing of sanctions. US shale, meanwhile, remains stubbornly resilient. Defying middling prices, US oil drilling rig counts have ticked up over the past two weeks, after a prolonged downturn. It’s why IEA, in its latest oil market report, says the market remains “massively oversupplied” and concludes “[t]he bottom of the market may still be ahead.”

Pushback: In Washington, President Obama’s Climate Action Plan is under fire on several fronts. EPA Administrator Gina McCarthy took heat from Republican lawmakers this week at a House hearing and during debate over her agency’s budget. Republicans want to slash EPA funding to prevent it from implementing the Obama administration’s signature climate rule: the Clean Power Plan. But EPA has shown few – if any – signs of backing down. “We’re actually very good at writing rules and defending them,” Administrator McCarthy told reporters at this week's Recharge Conversation, “and [the Clean Power Plan] will be no exception.”

In the pipeline

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Energy sources

  • Marvin Odum, director of Shell Oil Co.’s upstream Americas business, via Bloomberg: "[The 'oil' in 'Shell Oil Co.'] is a little old-fashioned, I’d say, and at one point we’ll probably do something about that ... The increasing returns and the profile of some of the renewable-energy companies is absolutely true. The good news about that is it’s a clear signal that the transition is actually here."
  • EIA: "Coal production from mines with mountaintop removal (MTR) permits has declined since 2008, more than the downward trend in total U.S. coal production. Total U.S. coal production decreased about 15% from 2008 to 2014. Surface production decreased about 21%, and mountaintop removal, one type of surface production, decreased 62% over this period."
  • BNEF: "Global investment in clean energy slumped 28 percent in the second quarter as volatile financial markets damped funding deals, while the strong U.S. dollar drove down the value of projects in other regions."



Recharge is a weekly e-mail digest of energy news and analysis written by Monitor reporters David J. Unger and Jared Gilmour.

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