OPEC Fails to Boost Oil Supply
Energy Digital reported this last weekend that OPEC was preparing to increase crude oil supply—for which the alliance of oil producing nations accounts for some 40 percent of the international market. However, OPEC ministers this week have been unable to agree upon the terms of boosting supply, and have decided to maintain present output ceilings. The oil conglomerate has stated that they will reconvene over the next three months to readdress a production hike.
The announcement has rocked financial markets that had prepared for a boost in supply, given that just a few days ago OPEC leaders made several comments on the likelihood of a supply increase. Crude oil jumped 1.5 percent to $100.53 a barrel. Energy shares in the Standard & Poor’s 500 Index jumped 0.9 percent. Even Europe was hit hard as the Stoxx Europe 600 Index fell 0.8 percent and German 10-year bond yields fell four basis points to 3.05 percent. The yen gained 1.3 percent versus the Norwegian krone and 1 percent versus the Euro.
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Apparently, the inability of OPEC to reach some kind of decision marks a further division in the oil cartel’s ranks. Analysts covering OPEC note that the indecision marks the possible decline of OPEC as a power player in the realm of international non-governmental organizations. The indecision certainly has failed market speculation expecting a supply hike, and players in world money markets may be less inclined in future scenarios to take OPEC seriously on its claims.
While Saudi Arabia was one of the major proponents in OPEC urging a heightened supply ceiling, opposition, led by Iran, caused the deadlock. Political unrest in Yemen and Libya, which combined account for roughly 4 percent of world production, has led to countries like Saudi Arabia boosting production to fill the market gap. One of the major causes of the deadlock is the fact that other OPEC nations can’t match Saudi Arabia’s ability to increase production.
"Despite all their efforts, the Saudis were not able to convince Iran and other countries to increase production," said Ehsan Ul-Haq, an analyst with KBC Energy Economics. "It means there is a huge disagreement—but it also means that it gives the Saudis free space to do what they like."
OPEC nations are already producing at about 1.3 million barrels per day above their normal quota to meet international demand.
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.