Oil prices rebound over Middle East rumblings, renewable energy investors celebrate a crucial exemption from the Dodd Frank Act, and the presidential campaign fever shines the spotlight on electric cars.
Mounting chaos and what appears to be a "white coup" attempt in Syria and a terrorist attack on Israeli tourists in Bulgaria that has Tel Aviv blaming Hezbollah have caused oil prices to rise to an eight-week high on speculation that tensions in the Middle East could reach a boiling point.
According to Bloomberg Business Week, crude for August delivery increased $2.91, or 3.2 percent, to $92.78 a barrel at 12:39 p.m. on 19 July on the New York Mercantile Exchange after climbing to $92.90, the highest intraday level since May 22. The national average price of gasoline is now $3.44 per gallon, up 11 cents since July 1.
For renewable energy developers and investors, however, the past week couldn’t have been better. Late last week, the Commodity and Futures Trading Commission (CFTC) issued its final rule on the Dodd Frank Act, exempting renewable energy developers and traders from the requirement to post 5%-25% collateral on exchanges of renewable energy credits (RECs), emissions allowances and carbon offsets. The requirement would have restricted REC trading that is used to generate liquidity for project development.
Instead, the CFTC ruled last week that trading in forward contracts for environmental commodities would not be defined as swaps in the same way as other non-financial commodities such as derivatives. While there has yet to be a visible market response to the news, developers and investors are jubilant and relieved.
As part of Oilprice.com’s ongoing coverage of the energy aspects of the US presidential campaign, electric cars pick up where solar left off—as the latest target of Mit Romney’s campaign against Barack Obama. While campaign ads gloss over the issues with the requisite drama, Oilprice.com attempts to give its readers a more comprehensive look at the state of the electric car industry, which has been privy to some sizable Energy Department loans. While Fiskar has disappointed the Obama administration’s public relations efforts by laying off workers and delaying production of its next-generation electric sedan, which was to create some 2,000 factory jobs by the end of this summer, the electric car industry is not failing, but experiencing the typical technological growing pains. The campaign season is doing the electric car industry few favors, but the bad publicity should be viewed from the prism of Romney’s need to provide a distraction from public scrutiny of his corporate history.
By. Oilprice Analysts