David Feldman

Three Things to Know in Energy – 3/20/2017

Blog Post created by David Feldman Champion on Mar 19, 2017

1. Beijing closes last power plant and finalizes the switch to Natural Gas.

 

Beijing has become China’s first city to convert all of its power plants from coal-fired plants to Natural Gas.  This goal was set back in 2013, and is now in its final stages.  This is part of China’s plan to, "make our skies blue again"

 

Chinese leaders continued, "We may not be able to control the weather, but we can adjust our behavior and our way of development…Blue skies should no longer be a luxury, nor will they be."

 

2. Flat oil prices are putting a strain on oil-producing economies.

 

It’s been almost six months since OPEC agreed to mutually cut supply in an effort to boost oil prices globally.  And even though we’ve seen prices rise slightly over the last few months, we’re still hovering around the $50 mark, and that’s far from the $100 per barrel prices of 2014.  With the cuts not having the effect they anticipated, OPEC countries are finding themselves in a tough situation.  Do they break ranks and maximize production or do they agree once more to lower supply in hopes that this recent plateau will trend up once again?  Current prices are far from the comfort zone these oil-producing countries would like and if prices continue to stay flat, they’ll be forced to make a decision eventually. 

 

3. Saudi oil minister praises says that US relations are the best they’ve been in years. 

 

Last week Saudi Energy Minister Khalid Al-Falih said relations between Saudi Arabia and the United States have never been better.  He confirmed that both his country and the US are committed to confronting Iranian aggression.  During his visit to Washington he stated this new improvement in relations is attributed to the new administration’s willingness to collaborate on many issues that are of mutual interest, "It has brought it to yet a higher level than it has ever been, and there is alignment on all of the major issues between the two governments, and it's been, I think, further helped by the personal bond that was created between his royal highness, the deputy crown prince, and President Trump,"

 

Falih's positive comments are a welcomed change from the recently rocky relationship between Saudi Arabia and the Obama administration, due to a questionable multilateral deal with Iran.  President Donald Trump has quickly proven he will put pressure on Iran.  Recently his administration put Iran "on notice" and imposed sanctions on entities involved in Iran’s ballistic missile program.

Outcomes