Category Archives: Energy

President Donald Trump will impose duties of as much as 30% on solar panels made abroad

Globalization is the word. All the world leaders in the Swiss ski resort of Davos are talking about it. And most of the worlds political and corporate elite defend globalization. But President Trump did something on Monday that some other leaders dont like.

He slapped 30% tariff on imported solar panels and washing machines, and that is his first step towards his campaign promise to get tough on China. Critics say that this step can slow down a fast-growing industry and destroy thousands of domestic manufacturing jobs.

President Emmanuel Macron will have speech in the Swiss ski resort of Davos on Wednesday. One of the most important things he will talk about is Globalization. On Friday, Mr Trump will also have a speech in Davos, and he will talk about his «America first» strategy.

Why in the world is Mr Trump doing this if it is bad for the solar industry and its jobs? Relax. This is not a new case and we have heard about this in many years. Former President Barrack Obama did the same in 2012.

In May, 2012, the Obama administration called for hefty tariffs on Chinese-made solar panels and cells. They were arguing China has been illegally «dumping» under-priced products on the U.S market.

In December 2014, The Commerce Department began closing a chapter in a protracted trade conflict with China over solar equipments, approving a collection of steep tariffs on importers from Taiwan and China.

They found that the companies were selling products below the cost of manufacture. On top of that they found that the Chinese companies were benefiting from unfair subsidies from their government.

The department announced anti-dumping duties of up to about 80% on imports made in China, and rates up to about 30% on imports of solar cells made in Taiwan. Some experts in the solar industry say this tariff will return to fair trade.

This is what all this is about: fair trade. This trade conflict has its roots in a flood of inexpensive Chinese solar products. This Chinese strategy pushed many American manufacturers out of business because of their reduced prices on solar panels.

Leaders are split over the case, and this long-simmering conflict has now ended with a 30% tax on Chinese solar panels. Mr Trump has promised to boost manufacturing jobs by cracking down on Chinese imports. It will create jobs and build or expand factories on U.S soil.

President Trump is doing this because he will defend American workers. He will defend American farmers and their ranchers. He will also defend all other businesses. He will «Make Amerian Great Again.»

Some people do not agree with Mr Trump. They said yesterday that Trump`s decision will kill American manufacturing jobs, not create them.

The Solar Energy Association has projected tens of thousands of job losses in the $28 billion industry.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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The focus is on US Oil production, which, as anticipated in earlier forecasts, is rising strong

Crude Oil has been trading flat for about 12 months now. Since June 2016, WTI Crude Oil has traded at around $50, but now it is in a bearish downtrend. Investors are conserned, shorting and selling oil with both hands.

Immediate concerns about stubbornly high stocks due to rising global production are pressing oil prices, which have fallen to levels not seen since the OPEC ministerial meeting at the end of November.

According to IEA`s report, in April, total OECD stocks increased by more than the seasonal norm. For the year-to-date, they have actually grown by 360 kb/d. Their provisional monthly data for May suggests that OECD stocks might, overall, be little changed, but recent US weekly data suggests that rising domestic production, high imports, low exports, and weaker gasoline demand, have combined to send stocks higher.

The implied market deficit in 2Q17 was 0,7 mb/d but now this has narrowed to 0,5 mb/d. The reason for this are a reduction in demand growth, mainly because of weaker Chinese and European data, and an increase in global supply.

Based on our current numbers, assuming stable OPEC production, market deficits should be significant in 2H17, although adverse changes to demand and supply data can erode prospective stock draws.

The focus is on US production, which, as anticipated in earlier forecasts, is rising strong.

For 2017, IEA expect US supply to grow by 430 kb/d and the year will end with production there 920 kb/d higher than at the end of 2016. IEA`s first look at 2018 suggests that US crude production will grow year-on-year by 780 kb/d.

Such is the dynamism of this extraordinary, very diverse industry it is possible that growth will be faster.

In 2018, IEA expect non-OPEC production to grow by 1,5 mb/d, which is slightly more than the expected increase in global demand.

While OPEC countries collectively have broadly implemented their cuts, some members have been less than holy diligent. Iraq has achieved a compliance rate of only 55% so far this year, and Venezuela and the UAE are laggards.

Two OPEC members not included in the deal have recently seen increases in production: Libya`s output has reached nearly 800 kb/d, a level not seen since 2014, and Nigeria has announced the lifting of force majeure for Forcados exports, potentially making available to the market more than 200 kb/d.

If Libya and Nigeria continue to grow their output these extra barrels dilute the value of OPEC`s output accord and contribute to delaying the re-balancing of the market.

The currency used to express re-balancing is the five-year average level of oil stocks. OECD stocks are currently 292 mb above this level. Indeed, based on the outlook for 2017 and 2018, stocks might not fall to the desired level until close to March 2018. IEA have regularly counselled that patience is required on the part of those looking for the re-balancing of the oil market.

Their message is; «Whatever it takes» might be the mantra, but the current form of «whatever» is not having as quick an impact as expected.

What about the demand for Renewable Energy?

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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The World`s biggest oil producer

The United States has surpassed Saudi Arabia as the world`s biggest oil producer in 2014. The oil shale revolution has started to change the economy as the U.S produced 90% of the energy it consumed last year.

India has recorded the highest growth in energy consumption among major economies.

BP said the U.S shale revolution helped it overtake Saudi Arabia as the world`s biggest oil producer and surpass Russia as the world`s largest producer of oil and gas.

 

crude-oil

 

On the other hand, Chinese growth in consumption slowed to its lowest level since 1998 as the economy rebalance away from energy intensive sectors, though China remained the world`s largest growth market for energy.
The United States produced 15,9 percent more oil in 2014 at 11,6 million barrels of oil per day to topple Saudi Arabia`s 11,5 million bpd production, according to BP Plc`s Statistical Review of World Energy released today.
Russia was placed third with 10,8 million bpd oil production.
The United States surpassed Russia as the world`s largest producer of oil and gas, and they produced 1,250,4 million tons of oil and oil equivalent natural gas last year. This compared with Russia`s 1,062 million tons of oil equivalent. According to BP, world primary energy consumption slowed markedly, with growth of just 0,9 percent last year, a lower rate than at any time since the late 1990`s.
BP Group Chief Executive Bob Dudley said: “The eerie calm that had characterised energy markets in the few years prior to 2014 came to an abrupt end last year. However, we should not be surprised or alarmed.”
“These events may well come to be viewed as symptomatic of a broader shifting of the tectonic plates that make up the energy landscape, with significant developments in both the supply of energy and its demand. Our task as an industry is to meet today’s challenges while continuing to invest to meet tomorrow`s demand, safely and sustainably,» he added.

 

It seems like Saudi Arabia has a new strategy. They are pumping more oil despite weak oil prices, and their acute pressure to cut production is off. The heavyweight of OPEC is less concerned about the price of crude oil, and more concerned about delivering fuel to its growing economy.

Kuwait and the United Arab Emirates are also drilling at record rates, while Iraq is shrugging off widespread civil conflict to increase production. Even Iran is preparing plans to develop more oil fields. The surging output has taken much of the mystery out of what the delegates of the 12 OPEC countries will do when they assemble in Vienna this week to set production levels for the next six months.

The oil prices is stable at around $60 a barrel, and OPEC has already pushed the cartel`s output 3 percent above the current target, and production appears to be heading even higher. Saudi Arabia was the primary force that made OPEC the swing producer in global markets, for decades.

«Is Saudi Arabia still willing to play the swing producer and juggle the whole domestic economy, refineries, power plants, desalination, petrochemicals, just to meet the expectations of either OPEC or no-OPEC producers? The answer is no, obviously not,» said Sadad Ibrahim al-Husseini, a former executive vice president for Saudi Aramco, the state oil company.

After Saudi Arabia`s production peaked in 1980, it cut supplies later in the decade and again in the 90`s to top up prices. The Saudis followed the same playbook when oil prices briefly sank during the 2008 global financial crisis and the economy slump the next year.
When political turmoil rocked Libya, another producer, during the Arab Spring, Saudi Arabia increased production to keep markets and its own revenue stable.

Energy consumption in Saudi Arabi is growing and its growing at an average of 6 percent over the last decade, while any shift to nuclear power or renewable sources like solar has been slow.

«No cut is coming,» said Rene G. Ortiz of Ecuador, a former secretary-general of OPEC. «Each and every country, and particularly the Saudis and the other monarchies of the gulf, will protect their market share and increase their market share as much as possible,» he said.

Chesapeake Energy Corp and Exxon Mobil Corp are both shale drillers. They both spent about $120 billion last year in the U.S, and the surge in output and a slowdown in the demand have pushed crude oil prices down.
The number of rigs drilling in shale fields are down by half from an October peak, BP Chief Executive Officer Bob Dudley said.

«The shale revolution hasn`t run out of steam in the U.S,» Dudley said.

 

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. UA-63539824-1.

 

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Renewable energy is the future

The crude oil is back above 50, up over 3% today. A great bounce for oil stocks as well, and it can go back up to about $70 – $75 a barrel, but this can be temporarily. The demand and supply look like the same as it was in 1986, boss Bob Dudley (BP) said to Bloomberg today.

Technically it seems like the oil price has peaked and that a hundred years old oil rally is over, but it all depends on what happens in the world. After the oil slumped in 1986, it came back again during the Iraqi war in 1990, but I don`t hope a new war will turn the price up again this time.

Yesterday I talked about Apple which is the best luxury brand in China right now. Apple is also the biggest company in the world. This is simply because they are selling Internet of things (IoT). It will be the biggest sector ever. It will become about 40 times bigger than internet. But what about the energy sector?

crude-oil

Oil have been the black gold for decades and ExxonMobil (XOM) have been the worlds biggest company before Apple took that place. The biggest oil companies like ExxonMobil, PetroBras (PBR) and total (TOT) are still big, but at some point they will end up writing off tens of billions of dollars worth of standard assets in their oil fields.

The plunge in the price of oil is more than Opec`s attempt to bankrupt U.S oil shale drillers and to destabilize the petro-economies of rivals Iran and Russia. It`s gonna take some time to fill up the world with battery driven cars, but we will also see a new era for solar and wind energy.

This world need to prevent catastrophic climate change, and that`s why we need to act now. Climate change today is fundamentally a development issue, not a pollution problem.

The new shift will probably take place in a few years from now and alternative energy will go through a «phase change» from fringe to mainstream. It`s still early in the stage, and that`s why you don`t hear about it in the media anymore.

It will be a sharp shift and standard assets of coal, oil and natural gas will turn the global economy up side down. First Solar (FSLR) can be one of the biggest in the solar sector and many others are ready. Look at Denmark. They gets 40% of their electricity from wind, while Texas gets 30%.

This is just piece of cake compared to what we will see in the future, when 5 cent/kilowatt-hour solar becomes standard pricing around the world. I wrote about Solar City in January 2014. They are a little bit bigger than First Solar, and I belive in that company in the long run. Up +11% on monday.

What goes up, must come down. Right now it seems like the oil price is moving up again, but once the market starts to discount the end of the fossil fuel era, the crash is just around the corner, and big oil companies like ExxonMobil will lose more than half their current value.

It is when the solar prices is cheaper than fossil fuels it will overwhelm the markets, and that will be a revolution in the making. A technological phase change from oil to solar. From oil to solar and wind power, and that`s gonna overwhelm the energy markets.

The energy movement will be massive. It is when prices goes down to about 4 – 5 cents/kwh the new shift will come, but it may take some time.

Solar-Wind is an owner of 184,6MW of solar and wind projects assets, and they has set a $19 – $21 price range for its 8,7 million shares IPO. Ticker is set to be SLWD. This is a valuation of $200 million. The YieldCo planed cash distributions of $26 million ($1,30/share) in 2015.

TerraForm`s (TERP) successful IPO could bode well for Sol-Wind. The SunEdison YieldCo remains up 30% from its $25 IPO price in spite of the huge selloff seen in solar stocks in recent months.

TAN Guggenheim

If you`re not familiar with stock picking, I suggest you look at Guggenheim Solar ETF (TAN). As you can see from the chart above, there has been a big selloff in the solar sector, but this sector will come back again, but it is very early right now. TAN is up +4,79% so far today.

The Prime Minister in India, Narendra Modi reiterated plans for the country to install as much as 100 gigawatts of photovoltaic capacity by 2022. President Obama stated that the U.S will stand ready to speed this advancement with additional financing. China has 33,4 gigawatts installed. They are undergoing a photovoltaic expansion that targets 100 gigawatt capacity by 2020.

Personally, I love clean and renewable energy!

Green energy is the future.

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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