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Venezuela is facing profound social and political crises, creating the circumstance of a potential catastrophe to come. Beyond the humanitarian concerns that exist, Venezuela has become a supply risk for oil markets, not only because of the multiple operational challenges it has recently faced but also due to the spiraling impact of the steep oil production declines already suffered this year. An important supplier of oil to the United States and China, Venezuela’s oil production declined by almost 230,000 barrels per day during the first six months of 2016. In this new report, author Luisa Palacios (’95 SIPA), a senior managing director at Medley Global Advisors, head of Latin America Macro and Energy Research and a Fellow at the Center on Global Energy Policy, explores the increasing risks posed by the troubles in this OPEC nation’s oil patch and the unprecedented economic, social and political crisis. The report notes that while the decline in production has yet to translate into a significant fall in oil exports, the most severe threats to the oil market from Venezuela are likely yet to come.
The Center has also published a brief companion piece on the statecraft approach being taken by the U.S. to Venezuela’s ongoing crisis. It can be found here [PDF].
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Key Findings
Calls to "Drill, baby drill" are back with Donald Trump's return to the White House, and for US natural gas production, the catchphrase might also be a necessity over the next three years if demand for the fuel grows as steeply as expected.
China’s demand for oil, long an important driver of global oil demand growth, slowed dramatically during January–September 2024.
The US Federal Reserve (Fed) commenced its monetary easing cycle on Wednesday with an aggressive 50 basis points policy rate cut.
Full report
Reports by , , • August 16, 2016