What to Watch

Home Solar Dims as Tesla, Others Curb Aggressive Sales

 The number of U.S. homeowners putting solar panels on their roofs declined last year after leading installers including Tesla Inc. gave up on aggressive sales tactics that helped drive growth, writes The Wall Street Journal’s Russell Gold.

Americans have been adopting solar energy at a breakneck speed, averaging 49% annual growth between 2010 and 2016.

But the number of megawatts added last year dropped by 16% compared with the year before, the first annual decline since at least 2000, according to GTM Research, a firm that tracks renewable energy.

Industry executives and energy experts said the slowdown was driven by a sharp retreat by national solar installers, including Tesla’s SolarCity and Vivint Solar Inc.

Those big outfits had deployed large sales forces to pitch homeowners on the benefits of rooftop solar, and heavily marketed deals to lease panels that required little to no money down.

The race to build a dominant national solar brand led companies to burn through cash. Unable to maintain that pace, companies scaled back.

 

Energy News

Oil Edges Up as Inventories Fall, Trade Tensions Ease

 Meanwhile oil prices ticked up Thursday morning on the back of declining U.S. crude inventories.

Brent crude, the global benchmark, was up 0.13% at $68.11 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.08% at $63.42 a barrel.

Trade Tensions Hit a Once-Hot Metal: Palladium

Escalating tensions between the U.S. and China have recently weighed on palladium, a once-hot metal.

Palladium is used in catalytic converters that scrub emissions in gasoline engines, and as such it is sensitive to the mood of the market, which has soured over the trade spat between Beijing and Washington. The front-month futures of the metal fell 1.1% on Wednesday, bringing their year-to-date drop to 14%.

“The volumes affected by China’s tariffs on [U.S.] propane are therefore significant, and raise the question of whether U.S. crude oil could become involved in further tit-for-tat tariffs.”

– Paul Horsnell, the head of commodity research at Standard Chartered

 Norway’s Statoil Gives Big Bucks to Rig Builder

  Norway’s Statoil is moving ahead with the development of its giant offshore Johan Sverdrup oil field located in the North Sea. The firm has signed three companies in a deal worth $1.5 billion to build a platform.

WSJ Energy In-Depth

Carl Icahn to Push for Full Board Refresh at SandRidge

Carl Icahn wants new faces on the board of SandRidge Energy Inc., saying that the current board’s strategic review “is likely to be value destructive.”

The move, disclosed Wednesday in a securities filing, steps up pressure on SandRidge from Mr. Icahn, its largest investor, who just three months ago was calling for two of SandRidge’s five board members to resign.

SandRidge, an early player in the American shale boom and onetime Wall Street darling, was forced to file for bankruptcy in 2016 as a result of the downturn in oil.

Mr. Icahn has harshly criticized the company and its leadership since disclosing a stake last year, calling a since-abandoned bid for Bonanza Creek Energy Inc. “nonsensical” and saying that a so-called poison pill SandRidge had adopted as a defense mechanism would “make a totalitarian dictator blush.”

Big Number

$2.7 billion

The number of oil and gas exploration projects ticked up in 2017 compared to the year before. But companies are spending less on each venture, according to analysts for Wood Mackenzie. “The average capital expenditure to develop ‘major’ projects… sanctioned in 2017 fell to only $2.7 billion, the lowest in a decade,” the analysts said in a recent note. Experts compared last year’s expenditure to the average project size for ventures sanctioned over the last decade, which was $5.5 billion.

FutureCurve

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

April 18–19: IQPC hosts the Oil & Fuel Theft Summit in Geneva. Speakers include Mahmoud Al-Bayati, the director general for counter-terrorism for Iraq, William J. Waggoner, the chief executive officer for the Mexico Petroleum Company and Daniel Gianfalla, a member of the national maritime security advisory committee at the U.S. Department of Homeland Security.

Reporter’s Notebook

The WSJ’s Nikhil Lohade on a big oil discovery in the Middle East. Bahrain’s oil minister Sheikh Mohammed bin Khalifa Al Khalifa said Wednesday his country has discovered oil and gas reserves in a field estimated to hold 80 billion barrels.

WSJ reporter Dan Molinski on Canada’s oil prices. Prices for Canada-produced oil are rebounding, but like previous upticks they may not last. Western Canadian Select, or WCS, has seen a discount compared with WTI of $30 a barrel in recent months, but that had fallen to an $18 discount Tuesday on indications that pipeline bottlenecks are easing. “We suspect that Enbridge has freed up available capacity on primarily light dedicated lines to ease the pressure felt by heavy producers,” Tudor Pickering said. But it added that crude-by-rail will still be in the mix and believes the narrowing WTI-WCS differential is “more a short-term phenomenon than a reflection of how 2018 fundamentals will shake out,” as rail costs to the Gulf Coast may outweigh an $18 differential. Enbridge reps weren’t immediately available.