What to Watch

Legendary U.S. Oil Man Calls It Quits

T. Boone Pickens, a famous oilman and investment manager,said he is closing the energy-focused hedge fund he has run for the last two decades as his health declines.

 

The move closes a chapter in a nearly seven-decade career that has included stints as a wildcatter, corporate raider, cattle trader and clean-energy evangelist.

The 89-year-old Oklahoma native cited both his deteriorating health and weak financial performance as reasons for closing the fund, according to a letter that he plans to publish soon and was reviewed by The Wall Street Journal.

Meanwhile, weak Chinese crude-oil imports are driving prices down on Friday, yanking support for a market that had been headed for $70 a barrel for the first time since 2015.

Brent crude, the global oil benchmark, eased 0.2% to $69.13 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.5% at $63.48 a barrel.

Energy News

Chinese Appetite for Commodities Weakens Amid Smog Fight

China’s commodities buying spree eased slightly in December, with copper, iron ore and crude oil imports all falling from bumper levels a month earlier, the latest sign that Beijing’s anti-smog crackdown is slowing industrial activity, Reuters reports.

Berkshire Makes More Management Moves Following Elevation of Two Executives

One day after Berkshire promoted Greg Abel and Ajit Jain to new jobs managing the company’s wide-ranging subsidiaries it said William Fehrman will replace Mr. Abel as chief executive of Berkshire Hathaway Energy Co. The energy subsidiary is one of Berkshire’s largest and contributed about 9.5% of the conglomerate’s earnings in 2016.

“I’d be surprised if ten years from now, we don’t have significantly more money in not only wind and solar, but probably, we’ll probably own more utility systems than we own now.

Warren Buffett, Chief Executive Officer Berkshire Hathaway Inc.

 More States Want Exemptions From Trump’s Offshore Drilling Expansion

Several more governors are asking the Trump administration to pare back plans for one of the largest offshore-drilling expansions in history, adding to pressure that has already led officials to exempt Florida from the plan. The governors of North and South Carolina have requested their own meetings with Trump officials. Governors of New York, Oregon and Delaware have made similar appeals.

WSJ Energy In-Depth

Trump to Extend Sanctions Relief to Iran, Keeping Nuclear Deal in Place, for Now

U.S. President Donald Trump has given Iran a reprieve, writes Felicia Schwartz.

Mr. Trump decided to extend sanctions relief to Iran, keeping the landmark Iran nuclear agreement intact for at least another several months.

The Trump administration is expected to couple that decision with a package of new sanctions, including some aimed at confronting human rights abuses in Iran, that are not technically related to the agreement.

Under the 2015 nuclear pact, the U.S. agreed to waive sanctions against Iran that are contained in a series of U.S. laws. The waivers for each law must be renewed periodically to extend the sanctions relief.

The White House plans to announce the decision on Friday.

Iran boosted its oil production after international sanctions against the nation were removed in early 2016 as part of the deal with six world powers where Tehran curbed it nuclear program.

Big Number

0.1

Automakers improved the fuel economy on their vehicles by just 0.1 mile per gallon in 2016, and in the 2017 model year are projected to hit another record of 25.2 mpg, the U.S. Environmental Protection Agency said in a report.

Still, the 2016 fuel economy improvement fell well short of the 1 mile per gallon that Obama-administration rules called for. President Trump has ordered a review with the aim to potentially soften U.S. vehicle fuel-efficiency standards.

FutureCurve

Today: Oil-services firm Baker Hughes Inc. releases its count of active drilling rigs, a bellwether for production in the U.S. oil industry.

Tuesday: The American Petroleum Institute releases its forecast of U.S. crude inventories.

Wednesday: The U.S. Energy Information Administration releases its weekly petroleum status report.

Reporter’s Notebook

The WSJ’s correspondent Erin Ailworth on the impact of tax reform on energy firms. Utilities are beginning to reckon with the impacts of tax reform, and how best to use the savings reaped from the lowering of the corporate tax rate. A coalition of state officials and consumer advocates already is urging federal regulators to ensure that ratepayers “promptly receive the full economic benefit of the tax reduction.” National Grid, which has a pending rate case in Massachusetts, said it will seek to pass savings to customers there by reducing its rate request from $87 million to $51 million. Xcel Energy said in a filing that it could consider passing savings to customers via rates, but would also look at other options, including increasing capital investments.

WSJ Deputy Texas Bureau Chief Lynn Cook on China’s appetite for crude. Chinese gasoline demand is growing despite government subsidies for electric cars, according to ESAI Energy, a Boston consulting firm. China’s passenger car fleet was 190 million last year and is forecast to reach 220 million this year. With just 36 cars per 100 families, the market is far from saturated. “Continued urbanization and the movement of manufacturing inland will boost growth in car ownership,” an ESAI report said. “The market share of electric cars is still too small to have an impact on gasoline demand in 2018.”