Connect with us

Finance

‘Serious energy deflation’ is coming whether Trump or Harris wins, says analyst

Published

on

‘Serious energy deflation’ is coming whether Trump or Harris wins, says analyst

In their bids to win the 2024 election, former President Donald Trump has promised to “drill, baby, drill” to lower energy prices, while Vice President Kamala Harris has assured she won’t ban fracking.

Those promises may not matter much in the near term. Energy prices are poised to drop, regardless of who wins, says one industry watcher.

“Whoever gets elected in November is going to be very fortunate in that they are going to be dealing with some of the most serious energy deflation … since 2020,” Tom Kloza, OPIS Global head of energy analysis, told Yahoo Finance, referring to the start of the pandemic lockdowns four years ago when US crude prices slumped as travel demand collapsed.

This past week was one of the year’s most volatile for the energy markets as oil touched its lowest level since 2021 before ticking higher on Wednesday. Year to date, West Texas Intermediate (CL=F) is down about 2%, while Brent (BZ=F), the international benchmark, is down more than 4%.

Gasoline prices have also fallen to their lowest level since February, with the national average at $3.24 per gallon, according to AAA.

Advertisement

Prices are expected to go lower as the industry soon switches to a cheaper winter-grade gasoline. Analysts predict the national average will dip below $3 per gallon in the coming weeks barring an unforeseen event.

“These sub-$3 prices are sure to boost consumer sentiment going into the fall,” GasBuddy head of petroleum analysis Patrick De Haan told Yahoo Finance.

Weak demand out of China, the biggest importer of oil, has been the main driver of declining crude prices. The country has been battling a housing crisis while shifting toward electric vehicles and more natural gas consumption.

Cracks in the US economy and Europe have also weighed on the markets, keeping some speculators notably at bay.

“What happened this summer and what continues to happen is that you do not have speculators buying futures and options contracts anymore,” said Kloza. “The fact that we didn’t see more speculative money coming into the market … that might represent a real sea change for oil.”

Advertisement

“Right now, financial participation in oil markets is probably as low as it’s been since oil became an asset class,” said Kloza.

In this combination photo, Democratic vice presidential candidate Sen. Kamala Harris, D-Calif., speaks during a debate, Oct. 7, 2020, in Salt Lake City, left, and Republican presidential candidate former President Donald Trump speaks during a debate, June 27, 2024, in Atlanta. (AP Photo)

In this combination photo, Democratic vice presidential candidate Sen. Kamala Harris, D-Calif., speaks during a debate, Oct. 7, 2020, in Salt Lake City, left, and Republican presidential candidate former President Donald Trump speaks during a debate, June 27, 2024, in Atlanta. (AP Photo) (ASSOCIATED PRESS)

The fall in oil prices has been so rapid that Wall Street analysts have been forced to revise down their forecasts. On Monday, Morgan Stanley cut its Brent price target for the second time in a matter of weeks, citing risks of “considerable demand weakness.”

The analysts forecast Brent will average $75 per barrel in the fourth quarter of this year, $5 lower than the prior downwardly revised outlook of $80 issued in late August.

Oil demand growth forecasts have also come down. The International Energy Agency cut its outlook for 2024, citing Chinese oil demand “firmly in contraction.”

Advertisement

The revision came the same week oil alliance OPEC slightly trimmed its own oil demand forecast. Despite the revision, OPEC’s expectations are still near double other industry estimates.

The oil alliance spearheaded by Saudi Arabia has been eager to bring back more of its supply by unwinding some of its production cuts, which have helped keep a floor on prices.

However, the cartel recently delayed the reintroduction of barrels initially slated for October given the slump in oil. The postponement didn’t do much to boost prices.

“OPEC+ still has a significant amount of oil that is just waiting to return to the market. And I think that’s the concern — is there really that demand to really satisfy and absorb that increased oil that is going to come back to the market sometime soon?” Tortoise senior portfolio manager Rob Thummel told Yahoo Finance on Wednesday.

In a nod to centrists, during Tuesday’s event Harris underscored record production in the US, the largest oil and gas producer in the world.

Advertisement

“We have invested a trillion dollars in a clean energy economy while we have also increased domestic gas production to historic levels,” said Harris.

Meanwhile, at rallies, Trump has promised to produce even more oil in order to cut energy prices in half and bring gasoline below $2 per gallon, though analysts expect producers to keep his “drill, baby, drill” vow in check if prices go too low.

On average, companies need the price of US crude to be at least $64 per barrel in order to profitably drill a new well, and $39 for existing ones, according to the Dallas Federal Reserve survey.

With WTI trading near $69, production is expected to continue growing amid technological breakthroughs. The US reached peak production last year despite declining US drilling activity because new wells are more efficient, according to government data. US oil production next year is expected to reach another record level, given advances in horizontal drilling and fracking.

“Ukraine war, the COVID lockdowns, those are the things that shaped oil prices in the last four years,” said OPIS’s Kloza.

Advertisement

“The more likely thing is that we’re going to see much more modest prices next year, and we’ll see oil trade in [on] a lot quieter terms than we have for the last three years,” he added.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

Click here for in-depth analysis of the latest stock market news and events moving stock prices

Read the latest financial and business news from Yahoo Finance

Advertisement
Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Finance

Xylem Inc. (XYL) Stock Price, News, Quote & History – Yahoo Finance

Published

on

Xylem Inc. (XYL) Stock Price, News, Quote & History – Yahoo Finance

Xylem Inc., together with its subsidiaries, engages in the design, manufacture, and servicing of engineered products and solutions worldwide. It operates through four segments: Water Infrastructure, Applied Water, Measurement & Control Solutions, and Integrated Solutions and Services. The Water Infrastructure segment offers products, including water, storm water, and wastewater pumps; controls and systems; filtration, disinfection, and biological treatment equipment; and mobile dewatering equipment and rental services under the ADI, Flygt, Godwin, Sanitaire, Magneto, Neptune Benson, Ionpure, Leopold, Wedeco, and Xylem Vue brands. The Applied Water segment provides pumps, valves, heat exchangers, controls, and dispensing equipment systems under the Goulds Water Technology, Bell & Gossett, A-C Fire Pump, Standard Xchange, Lowara, Jabsco, Xylem Vue, and Flojet brands. The Measurement & Control Solutions segment offers smart meters, networked communication devices, data analytics, test equipment, controls, sensor devices, software and managed services, and critical infrastructure services; and software and services, including cloud-based analytics, remote monitoring and data management, leak detection, condition assessment, asset management, and pressure monitoring solutions, as well as testing equipment. This segment sells its products under the Pure Technologies, Sensus, Smith Blair, WTW, Xylem Vue, and YSI brands. The Integrated Solutions and Services segment provides maintenance services, mobile services, digital outsourced solutions, wastewater systems, environmental remediation, odor and corrosion control, filtration, reverse osmosis, ion exchange, and deionization under Aquapro, WaterOne, and Ion Pure brands. Xylem Inc. was formerly known as ITT WCO, Inc. and changed its name to Xylem Inc. in May 2011. Xylem Inc. was incorporated in 2011 and is headquartered in Washington, District of Columbia.

www.xylem.com

Continue Reading

Finance

Andre Smith, finance manager, running for 6th District school board seat

Published

on

Andre Smith, finance manager, running for 6th District school board seat

Andre Smith, a finance manager and founder of a violence prevention nonprofit, is running for the 6th District school board seat to promote equal opportunity education and overhaul Chicago Public Schools’ annual budget.

“Every child in Chicago deserves the same opportunities. Every parent deserves their children to have the best education that we as board members can provide for them,” Smith said.

The great-grandson of Caroline Williams, a West Virginia teacher who won a landmark civil rights case 1898 that mandated equal pay for teachers regardless of race, Smith said he believes this familial legacy of advocating for educational equality makes him a strong candidate for the seat.

“She stood up to make sure that colored school teachers had equal rights and equal pay,” Smith said. “Here we are in 2024, when Chicago is having, for the first time in history, an elected school board, and we’re making history again as her great-grandson is running.”

Advertisement

He also said his varied leadership experience sets him apart in the race. Smith has been a vice chair of the Washington Park Resident Advisory Council, is the founder of the group Chicago Against Violence, and has been a beat facilitator for the Chicago Police Department’s Beat 311. 

“My opponents, they have no history of doing those things,” Smith claimed. “They have no history of being on the ground level, they have no history of fighting for the people.”

In the 6th District, which stretches from Old Town and Streeterville to Washington Park, Englewood and parts of Hyde Park, Smith is running against Jessica Biggs, a former CPS principal and community organizer, and Anusha Thotakura, a former teacher and leader of a progressive political organization. 

Perhaps one of the biggest differences between Smith and his competitors is funding: Smith is the only candidate in the 6th District who has taken donations from the political funds of the Illinois Network of Charter Schools (INCS). Smith has received about $6,000 from the organization so far out of nearly $3 million that two of that organization’s political arms have amassed to back candidates in Chicago’s first-ever school board races.

The District 6 race is for one of 10 elected seats on the new 21-member Chicago Board of Education, with the remaining spots to be appointed by Mayor Brandon Johnson. Each of the 10 seats represents a district in the city mapped out by the Illinois General Assembly this past spring. 

Advertisement

In all, Smith has raised about $24,600 since January – though some of this may be used for his ongoing and concurrent run for the Illinois  House of Representatives –, compared to Thotakura’s $32,700 and Biggs’ $6,700, according to campaign filings. 

“The donation from (INCS) is just like a donation from anyone else, like the (Chicago Teachers Union) or any other business or any other person – there are no strings attached and there are no obligations,” Smith said. “They like what I believe in, that parents need to have a choice in their children’s education and they figure that I’m the best candidate.”

If elected, Smith said his first order of business would be to conduct an independent audit of CPS’ budget to “investigate” its $400 million budget deficit this year and to reallocate money to “better-fit community needs.”

This summer, CPS announced it was laying off almost 700 support staff and implementing a hiring freeze on 200 positions, in a move to help close that deficit. This year’s $9.9 billion budget was passed in July.

“We keep creating ideas, raising taxes, putting the burden on the taxpayers and the parents, that’s unfair,” Smith said. “People deserve board members that are really going to be careful about spending their money and spending their money on the right ideas and what’s working.”

Advertisement

Smith would also like to conduct a listening tour with principals, teachers, parents and students throughout the 6th District to get a sense of its educational needs.

“I want to sit down with the principal and know what’s working and what’s not working. What are the issues that you’re faced with? Is it more funding? If it’s more funding, funding for what?” Smith said. “When I’m on the school board, I know what I’m fighting with, because I’m equipped with my district.”

Smith was most recently a finance manager at Kingdom Chevrolet, but he’s taking a leave of absence to focus on his campaign. He grew up in Bronzeville’s Robert Taylor Homes and attended DuSable High School. Throughout his adult life he’s worked in a variety of industries and roles, among them welding and railroad construction, as well as a barber and minister.

An advocate for improving public safety on the South Side, Smith said he regularly collaborates with local police, community organizations and residents in his role with Chicago Against Violence in an effort to bolster resources for ex-offenders and youth.

A big part of the organization is youth mentorship, through a mix of group programs and one-on-one meetings, which aims to “combat the rise in violent crimes and vehicular carjackings,” reads a description on his campaign flier. (Smith does not have a live campaign site as of press time.) He thinks this experience would be useful in developing safety plans to prevent wt violence at CPS.

Advertisement

“Our schools should be equipped to teach, educate and get our children the best education that they can ever get, not have to worry about any type of violence happening outside of the school, in the school or around the school,” Smith said.

Smith has been vying for local office for some time: he unsuccessfully ran for 20th Ward alderman in 2011, 2015, 2019 and 2022; for a seat in the Illinois House of Representatives in 2016; and for Cook County’s Board of Commissioners in 2022.

He attributed his failure in previous campaigns to a lack of funding and resources to facilitate outreach, but is feeling confident about his chances going into the Nov. 5 election.

“I want the Chicago education system to be the best in the world. So we got to have the best

teachers that are being paid with a great salary and benefits, ” Smith said. “We want people from other cities to want to come to Chicago to be taught, but before we do any of that, you’ve got to know where your money’s at.”

Advertisement
Continue Reading

Finance

Minnesota school district’s finances under scrutiny ahead of referendum

Published

on

Minnesota school district’s finances under scrutiny ahead of referendum

Neubeck said the district first learned of issues with the 2023-24 budget around the time it was preparing the budget for this school year. Ashley Bocchi, who was hired as financial director at the beginning of 2024 and has since departed, found that the previous director, Todd Lechtenberg, had miscalculated an increase in staff wages, leading to a budget deficit.

The increase stemmed from budget negotiations the year before that resulted in a 5% bump in wages. The models used by the district and presented to the school board, however, inadvertently showed a 1.5% increase.

The district said that during the transition from Lechtenberg to Bocchi, an outside financial adviser also found bank reconciliations that had not been completed, low cash reserves and an $800,000 credit line that had been run up.

Lechtenberg, who was contracted part-time as financial director for Byron, left the district in early 2024 to join Austin Public Schools. He did not respond to a request for comment.

Byron School Board Chair Duane Quam III declined a request for comment.

Advertisement

“In hindsight, more could have been done,” Neubeck said. “But I will tell you that when you hire people with that expertise, then you would expect that they would follow through on that expertise — that’s what you pay for.”

Continue Reading
Advertisement

Trending