What to Watch

Oil Gains as Trump Mulls Iran Nuclear Deal

Oil prices rose Tuesday, as geopolitical risk relating to Iran continued to buoy markets.

Brent crude, the global benchmark, was up 0.1% at $67.86 a barrel on London’s Intercontinental Exchange . On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.3% at $61.90 a barrel.

Traders and oil market observers are waiting to see whether President Donald Trump on Wednesday extends U.S. sanctions relief to Iran as part of the 2015 international agreement to curb the Islamic Republic’s nuclear program. Reinstating economic sanctions could limit Iran’s oil exports.

Energy News

Iranian Oil Tanker at Risk of Exploding and Sinking, Chinese Officials Say

Chinese authorities said a large Iranian oil tanker that collided with a cargo ship in the East China Sea over the weekend was at risk of exploding and sinking.

Asia Powers Demand for Thermal Coal

Thermal coal has jumped to its highest level since late 2016 as strong manufacturing activity in Asia and appetite from China drives demand, Financial Times reports. China is allowing more coal-fired power generation this winter because of gas shortages and has loosened import restrictions.

“It’s hard to imagine that all the 50,000 jobs that disappeared during the [oil] industry’s downturn will be brought back”

– Terje Soeviknes, Norway’s minister of petroleum and energy

Trump Power Plan Rejected by Regulators

Federal energy regulators on Monday rejected a Trump administrationproposal aimed at subsidizing struggling coal-fired and nuclear power plants to bolster the nation’s electricity grid. Dozens of nuclear and coal-fired power plants—once the bedrock of the country’s electricity system—have closed in recent years as falling prices for natural gas and improving technology have made it harder for them to compete.

Big Number

$4 billion

An analysis from consulting firm ICF International Inc. said consumers would pay an additional $1 billion to $4 billion a year if the Trump administration’s proposal to shore up nuclear and coal- fired power plants was adopted.

WSJ Energy In-Depth

World’s Largest Electric-Car Market Is Growing

Those who doubted the staying power of China’s booming electric-vehicle market have been proven wrong, writes WSJ’s Anjani Trivedi.

Even though Beijing cut subsidies for electric-vehicle makers by as much as 40% last year and imposed tougher technological standards, Chinese electric-car sales rose more than 80% from a year earlier in November.

Both production and sales of electric cars were up about 50% in the first 11 months of last year.

China has become the industry’s clear global leader: 40% of global investment in electric vehicles happens there.

One company— BAIC, a unit of Beijing Automotive—sold nearly 16,000 battery-electric cars in November, or 16% of all battery electric vehicles sold that month world-wide.

And consumer appetite for electric cars is growing. About one in three Chinese people now say they are considering buying an electric car, an increase from 2016, according to a recent survey by UBS.

The UBS survey also showed buyers in Europe and Japan are also more likely to purchase an electric car. The U.S. is now the only outlier.

FutureCurve

Today: 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.

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

Reporter’s Notebook

WSJ reporter Dan Molinski on rising costs in the oil industry. The Dallas Fed’s recently-released quarterly survey of more than 100 oil companies may signal headwinds ahead for U.S. oil-production growth, investment bank Evercore said. It noted rising costs for oilfield services, higher wages and no broad belief that rig-counts will rise significantly. Explorers and producers “noted a deceleration in supplier delivery times, but the service industry indicated an acceleration in supplier delivery times,” it said. “This would suggest that while the mad dash mentality exhibited by E&Ps in 3Q is subsiding, the service industry remains undersupplied which should help support pricing.” Headcount, employee hours and employee wages also continue to rise, it said, “which will also serve as a headwind for production growth.”

The WSJ’s correspondent Erin Ailworth on the impact of the cold snap. Entergy’s nuclear power plant in Massachusetts was still offline Friday, a day after the strong winter storm moving across the Northeast knocked out one of three offsite power lines that feed the plant. The loss of the 345-kilovolt line on Thursday afternoon required the plant, Pilgrim, to initiate a manual reactor “scram,” or sudden shutdown of the reactor, according to a notice filed with the U.S. Nuclear Regulatory Commission. Entergy said it is working to fix the line and performing preventative maintenance it couldn’t do if Pilgrim was running. The outage likely helped push up the region’s wholesale power prices, which have risen during the frigid weather.