Oil on the rise
Oil prices jumped to a three-month high earlier this week on signs of rising demand and tightening supply. Brent oil prices rose 12.7% in July, the steepest monthly gain since last January.
Keeping global markets tight is Saudi Arabia’s decision to extend its voluntary output cut through September—and maybe beyond that. Meanwhile, prospects of a soft landing is also fueling bullish oil sentiment—in turn forcing hedge funds to cover their short positions, further lifting oil prices.
The US Department of Energy is paying close attention: prices have risen enough that it just rescinded an offer to buy six million barrels of oil to refill the Strategic Petroleum Reserve.
Exxon pushes ahead with lithium
Exxon Mobil is talking with automakers including Tesla, Ford, and Volkswagen, as well as battery makers like Samsung and SK On, about potentially supplying them with lithium, Bloomberg reports.
It’s part of Big Oil’s strategy to not miss out on the Big Shovel bonanza, as we wrote about in May. Exxon has bought drilling rights to a lithium-rich site in Arkansas, and is reportedly deciding whether to extract the mineral itself or in partnership with other players.
The company certainly knows it has the expertise for it: CEO Darren Woods said last week that the extraction and processing required in mining lithium from brine reservoirs like those at the Arkansas site are “very consistent with a lot of the things that we do in our refineries and chemical plants — and in fact, in some of our upstream operations.”
The challenges of rare earths processing
Digging rare earths out of the ground is the easy part. Separating and processing them into valuable rare earth metals is much more challenging—and critical to reducing reliance on China. Right now, even major players in the West are running into snags.
Reuters reports this week that a joint venture effort to build a US rare earths refining between Australian rare earths giant Lynas and Texas-based chemicals company Blue Line have collapsed. The news comes as Lynas separately announced an additional 138 million USD of funding from the US Department of Defense to build its own heavy rare earths processing facility in Texas.
The still more sobering reality: even if all its processing projects go according to plan, the West’s rare earth permanent magnet production capacity is still set to be a fraction of what China currently produces every year.