WTI Crude oil futures declined by almost 5% in overnight trading as markets digested a slew of new data points. In its latest monthly report, OPEC has reduced its estimate of Chinese demand growth for the year-to-date, marking the third consecutive contraction.
New sanctions against the Iranian oil industry announced by U.S. officials last week have not translated into gains in crude markets as concerns over declining demand have outweighed geopolitical crisis. Despite a runup of almost 16% for 2024 so far, the United States Oil Fund ETF USO retains negative single-digit performance for the trailing 12 months.
So far in 2024, this lack of enthusiasm in oil markets has translated into declines for renewable energy stocks. The iShares Global Clean Energy ETF ICLN has declined by more than 11% since the year began, while First Trust NASDAQ Clean Edge Green Energy QCLN has fallen by more than 16%. Even with increasing electricity demand to feed ravenous AI datacenters the rush of investors for solar, wind and other renewables has yet to materialize.
More stories we’re tracking at Equities:
California court rejects push from oil producers to dismiss ‘greenwashing’ case
The Superior Court of San Francisco County dismissed a motion to dismiss in a case by the State of California against a group of major oil producers on Friday. The suit, brought by California and a group of municipalities, argues that “greenwashing” by fossil fuel producers amounts to deceptive practices. The suit paves the way for more environmental litigation. The motion to dismiss was brought by plaintiffs including ExxonMobil, Shell, and BP.
Arizona solar project secures financing
BrightNight announced $260 million in new commitments for the Box Canyon solar project on Friday.
The company said the new facility will power up to 77,000 homes. J.P. Morgan and Capital One are providing the fresh capital as tax-equity financing to take advantage of provisions in the Inflation Reduction Act, the Biden administration’s signature green energy legislation. The new announcement arrives on the heels of a $440 million investment into BrightNight by Goldman Sachs.
What’s in a name
Due to industry pushback, the European Securities and Markets Authority (ESMA) announced forthcoming clarification of rules on naming funds that are scheduled to go into effect in late November. Among other provisions, the new regulations restrict fossil fuel investments by funds with words including “green” and “impact.” According to industry analysts, as many as European funds could be affected by the change.
ESMA’s action follows similar regulations in the U.S. The SEC announced new rules in late September 2023 that now require funds with ESG related names to commit at least 80% of deployed assets to assets meeting those criteria The new regulation sped up the pace of fund managers reclassifying products following a backlash from several state governments.
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