1) There is an insatiable global appetite for sand, one of the world’s most important but least appreciated commodities. The problem, however, is this resource is slipping away. It is the world’s most consumed raw material after water and an essential ingredient to our everyday lives. Sand is the primary substance used in construction when using concrete. Sand, is used to make the glass found in every window, computer screen and smart phone. Even the production of silicon chips uses sand. The world consumes roughly 40 to 50 billion tons of sand on an annual basis, which has tripled over the last two decades, far exceeding the natural rate at which sand is being replenished. Desert sand grains are too smooth and rounded to bind together for construction purposes, instead sand from rivers and ocean shores is needed.
2) The oil giant Exxon is looking to enter the carbon-capture technology business, and Exxon says it’s ready to go all-in. This is a business of capturing carbon dioxide and storing it underground, which is far easier for a company like Exxon than building out renewable energy capabilities, as its European competitors are doing. The main use of captured CO2 is to extract more oil out of the ground, anyway. Exxon’s strategy is to cut emissions but pared back capital spending and a low breakeven price for oil. Experts have raised questions about the economics of carbon capture technology. Exxon has had to slash its operations budget last year to stay afloat, which resulted in job cuts that several employees described as haphazard. Morale inside the company has suffered as a result.
3) Fears are growing that the national average cost of gasoline could hit $3 a gallon by Memorial Day. With OPEC’s decision not to meaningfully boost oil production despite rising demand, the price at the pumps will soon breach $3 a gallon. Early in the coronavirus pandemic, OPEC slashed its oil production as demand for gasoline fell sharply. Presently, the national average price of gasoline is $2.76, up 30 cents from $2.46 a month ago. Last week gasoline demand reached the highest level in nearly a year, rising 15% from the prior week and now close to pre-pandemic demand. President Biden’s recent decisions to cancel the Keystone XL oil pipeline while also halting new drilling on federal land are playing no role in rising gas prices. There is no shortage of pipeline capacity and U.S. producers have little incentive to install new rigs on federal land since some existing wells remain shut down. With the economy improving, demand for gasoline has been rising, so with oil production not increasing, gasoline prices must rise.
4) Stock market closings for – 9 MAR 21:
Dow 31,832.74 up by 30.30
Nasdaq 13,073.82 up by 464.66
S&P 500 3,875.44 up by 54.09
10 Year Yield: down at 1.55%
Oil: down at $63.97