Welcome to Grid Brief! Here’s what we’re looking at today: what is hampering global oil futures, offshore wind’s momentum, and why cleantech is struggling.

Trouble in China Hampers Oil Outlook

On Tuesday U.S. crude oil futures fell by more than 4%. Their lowest close since December, this tumble erased all of this year’s gains.

The October contract for West Texas Intermediate—the benchmark for U.S. crude prices—closed at $70.34 per barrel, which is a decrease of $3.21 or 4.36%. Year-to-date, U.S. crude oil prices have slipped by 1.8%. Brent—the benchmark for global oil futures—closed its November contract at $73.75 per barrel, a decline of $3.77 or 4.86%. The year-to-date decline of Brent’s prices reached 4.3% on Tuesday.

While many factors contributed to this decline, one of the most important is the world’s largest oil importer, China, whose economy has struggled to rebound since Covid. The country, which was once heavily reliant on its housing and real estate sectors, has seen these sectors falter, developers collapse, and heavy debt accumulate. This has led China’s already frugal consumers to save more and spend less which has had demonstable impacts on the country’s businesses.

At the same time, China’s government is investing less in big infrastructure projects which has cooled its industrial and manufacturing sectors.

China’s downturn and new production in the U.S., Brazil, and Guyana led to a global surplus of 1 million barrels per day in Q1 of 2024, according to the IEA. Throw in OPEC, which is considering restarting production of 2 million barrels per day and we can quickly see why crude fututres are becoming cheaper.

Is Offshore Wind Having a Real Moment?

High interest rates and borrowing costs are reducing investment in clean tech (see more below), but offshore wind in the U.S. may be experiencing some momentum.

The Bureau of Ocean Energy Management recently announced that it will host Oregon’s first offshore wind lease sale in October. Two areas will be up for auction totaling around 195,000 acres and offering up to 3.1 GW of capacity.

Meanwhile, Dominion Power is moving full steam ahead on its Coastal Virginia Offshore Wind project in Virginia Beach, Virginia. Once it is completed (expected 2026) the project will be able to generate 2.6 gigawatts of energy for as many as 660,000 customers. The progress of Dominion in Virginia comes after the country’s first commercial-scale offshore wind project came online earlier this year off the coast of Rhode Island.

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Conversation Starters

• Cleantech companies are failing as fundraising challenges abound (Financial Times)

  Stung by high interest rates and some delays from federal tax credit support, cleantech businesses have found that winning investments from private equity and infrastructure funds has become more difficult.

• International Atomic Energy Agency: situation in Zaporizhzhia remains fragile (AP News)

  Rafael Mariano Grossi, the director-general of the IAEA, visited Zaporizhzhia Nuclear Power Plant after a string of recent attacks at the plant. Grossi called the situation “fragile” and said IAEA staff at Zaporizhzhia recently had to shelter indoors because of reported drone threats in the area.

• Climate change may be making seasonal allergies worse (Yale Climate Connections)

  Warmer temperatures and higher concentrations of carbon dioxide in the atmosphere cause some plants to produce more pollen, which can worsen symptoms. In some parts of North America, this means allergy season now lasts more than three weeks longer than it used to.

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