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    Lucid Said It Will Raise Up to $1.5 Billion in Capital

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    The electric carmaker made the announcement on the same day it reported losing $670 million in the third quarter.Lucid Group, an electric car company that has struggled to ramp up manufacturing, said on Tuesday that it had reached agreements to raise up to $1.5 billion, shoring up its financial position as it works to streamline and expand its production operations.The company said in a regulatory filing that it planned to sell up to $600 million in new shares through Bank of America, Barclay’s Capital and Citi. It also said it reached an agreement to sell up to $915 million in stock to the sovereign wealth fund of Saudi Arabia, which already owns a majority of Lucid’s stock.Shares of Lucid were down about 12 percent in after-hours trading on Tuesday following the disclosure of its plans in the securities filing. The company’s stock was trading at just under $12, down from more than $50 last November.Separately on Tuesday, Lucid said that it had lost $670 million in the third quarter, compared with a loss of $524 million in the same period a year earlier. The company said it had significantly increased production in the third quarter.Revenue rose significantly to $195.5 million, from $97.3 million in the second quarter and just $232,000 in the third quarter of 2021. It delivered 1,398 cars to customers in the third quarter, more than twice as many as in the second quarter.The fledgling company, based in Newark, Calif., said it produced 2,282 electric cars in the three months that ended in September, more than three times as many as it made in the previous three months. “We’ve made great strides in ramping up our production,” Lucid’s chief executive, Peter Rawlinson, said in an interview. “We are gradually improving things and there’s a real belief we are on the right track here.”He added that the automaker was on track to hit its revised target of making 6,000 to 7,000 cars this year.The company said it had taken reservations for 34,000 cars from individuals. Its only model, the Air sedan, has won accolades from car magazines and websites. The car can travel up to 520 miles on a full charge, more than any other electric vehicle on the market. The company said it would begin taking reservations for a second model, the Gravity sport-utility vehicle, early next year.But Lucid still faces a number of challenges, including increasing production and turning a profit. With the exception of Tesla, most recent automotive start-ups have struggled to mass produce their promising designs and create self-sustaining businesses. Lucid had $3.85 billion in cash and cash equivalents at the end of September.Saudi Arabia’s government has agreed to buy up to 100,000 cars from Lucid and the company is planning to build a manufacturing facility in that country. It currently makes cars at a factory in Arizona.This year investors have lost much of their enthusiasm for start-up carmakers, making it harder and more expensive for them to raise financing. Rivian, another electric car company, reports its third-quarter earnings on Wednesday. Rivian’s shares soared to as high as $180 after its initial public offering late last year, but have since fallen sharply. On Tuesday Rivian’s stock closed at under $32 a share. More

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    Jim Farley Tries to Reinvent Ford and Catch Up to Elon Musk and Tesla

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    On a recent Tuesday afternoon, Jim Farley, the chief executive of Ford Motor, took a spin in what could become one of the most important vehicles in the company’s 113-year history: an electric F-150 pickup truck.Sitting at the wheel of a prototype at the company’s test track in Dearborn, Mr. Farley floored it. From a standing stop, the 4,000-pound truck surged forward. “Four seconds,” he shouted when it reached 60 miles per hour. “That’s unbelievable for a vehicle of this size.”Steering the truck to a series of dips and rises in the track, he said, “Let’s see if we can get some air,” and shouted “Yes!” as the wheels briefly left the tarmac over one incline. In a final lap, he careened around a steeply banked turn and floored it again on a straightaway until he hit 99 miles an hour — just short of the track’s 100 m.p.h. speed limit.“I can’t wait,” Mr. Farley said as he stepped out, shaking his head. “I can’t wait till customers get this truck.”These are tense and exciting times for the auto industry. Driven by the dizzying success of Tesla, sales of electric vehicles appear to be on an unstoppable rise. The switch from making gasoline-powered cars and trucks to electric vehicles that emit no pollution from tailpipes will have far-reaching effects on the environment, climate change, public policy and the economy.Automakers are spending tens of billions of dollars to retool plants and are rushing to retrain workers for what may be the industry’s greatest transformation since Henry Ford revolutionized manufacturing with the moving assembly line in 1913. They are also fighting to simply catch up to the juggernaut that is Tesla.The question for Ford is whether a car guy from the Detroit area can take on Elon Musk, Tesla’s chief executive, whose company is rapidly expanding and is valued by investors at about 16 times as much as Ford.Tesla nearly doubled the number of cars it sold around the world last year to almost one million. Ford sold many more vehicles — nearly four million — but sales fell 6 percent as it struggled to get enough computer chips, batteries and other parts. Tesla has a brand that people associate with luxury and technical sophistication. Ford is viewed as a maker of large, utilitarian trucks and sport utility vehicles.“The traditional auto industry is pretty far behind Tesla,” said Earl J. Hesterberg, chief executive of Group 1 Automotive, a large auto retailer, who has known Mr. Farley for two decades. “In the past, if you were behind by a few years, the big players could catch up. But today, the speed of change is so much greater.”Auto experts say the electric F-150, known as the Lightning, must be a success if Ford is to thrive in the age of electric vehicles. Introducing this truck now is equivalent to “betting the company,” said William C. Ford Jr., the company’s executive chairman, who is a great-grandson of Henry Ford. “If this launch doesn’t go well, we can tarnish the entire franchise.”A Critical Year for Electric VehiclesThe popularity of battery-powered cars is soaring worldwide, even as the overall auto market stagnates.Going Mainstream: In December, Europeans for the first time bought more electric cars than diesels, once the most popular option.Turning Point: Electric vehicles account for a small slice of the market, but in 2022, their march could become unstoppable. Here is why.Tesla’s Success: A superior command of technology and its own supply chain allowed the company to bypass an industrywide crisis.Rivian’s Troubles: As the electric vehicle maker pares down its delivery targets for 2022, investors worry the company may not live up to its promise.Green Fleet: Amazon wants electric vans to make its deliveries. The problem? The auto industry barely produces any of the vehicles yet.The company has amassed about 200,000 reservations for the trucks, but it could still stumble. Production could be slowed by the global chip shortage or the surging costs of lithium, nickel and other raw materials crucial to batteries. The software that Ford has developed for the truck could be flawed, a problem that hampered sales of a new electric Volkswagen in 2020.Ford and Mr. Farley do have some things going for them. Unlike many other electric cars, the F-150 Lightning is relatively affordable — it starts at $40,000. Tesla’s cheapest car is the compact Model 3 sedan, which starts at more than $48,000. The Lightning has tons of storage, including a giant front trunk, which is appealing to families and businesses with large truck fleets. And it helps that Tesla will not begin making its Cybertruck until next year.And Ford is also already in the E.V. game with the Mustang Mach-E, an electric sport utility vehicle. It had sales of more than 27,000 in 2021, its first year on the market, and won favorable reviews.Production of the F-150 Lightning is scheduled to start next Monday. Competing models from General Motors, Stellantis and Toyota — Ford’s main rivals in pickups — are at least a year away. Rivian, a newer manufacturer that Ford has invested in, has begun selling an electric truck but is struggling to increase production.“If the Lightning launch goes well, we have an enormous opportunity,” Mr. Ford said.‘Jimmy Car-Car’In many ways, Mr. Farley checks most of the boxes when it comes to leading a large U.S. automaker. Like Mary T. Barra, the chief executive of G.M., whose father used to work on a Pontiac assembly line, Mr. Farley has family roots in the industry: His grandfather worked at a Ford factory. On visits to his grandfather, he would tour Ford plants and other sites important to the company’s history. As a 15-year-old, he bought a Mustang while working in California one summer and drove it home to Michigan without a license. His grandfather nicknamed him “Jimmy Car-Car.”But like Mr. Musk, a native of South Africa who was a founder of PayPal and other companies, Mr. Farley has had a varied career and been involved in creating businesses. Born in Argentina when his father was working there as a banker, Mr. Farley, 59, also lived in Brazil and Canada when he was growing up. His career started not in the auto industry but at IBM. He spent a long stretch at Toyota. He helped the Japanese automaker overcome its reputation for making boring and economical cars by working on its fledgling Lexus luxury brand, now a powerhouse.“He has what I call a restless mind,” said Jim Press, a former senior executive at Toyota and Chrysler. “His mind is never idling, always contemplating. He has a boldness that helps him push beyond what others think.”Mr. Farley has family roots in the automotive industry.Sylvia Jarrus for The New York TimesIn 2007, Alan R. Mulally, Ford’s chief executive at the time, hired him to help turn around Ford. He sharpened the company’s marketing, often making early use of Facebook and social media, and ran its European operations.Some at Ford bristled at his intensity. “Worrying about hurting people’s feelings isn’t at the top of his agenda,” Mr. Hesterberg said. “But it’s probably what’s necessary these days. The traditional auto industry is behind Tesla, and business as usual isn’t going to cut it.”In the last few years, Mr. Farley re-evaluated Ford’s strategy, visited technology companies in California and came to a realization: “They’re after our customers.”In 2018, Ford’s brain trust saw that the company was at great risk of falling behind Tesla, G.M. and Rivian in electric cars and pickup trucks. Ford decided not to build a new electric truck and its batteries from scratch as other automakers were doing, but to modify an existing F-150, buying batteries designed by a supplier. The move was risky because converting traditional vehicles to battery-powered ones can be difficult — batteries weigh more than engines and are placed under the floor rather than under the front hood.“We didn’t know how this would turn out, but we knew there would be a heavy penalty if we didn’t swing for the fences,” Mr. Farley said.Yet the Ford truck team’s first estimate for how many Lightnings it might sell was a paltry 20,000 a year. The estimate was oddly low because Tesla was achieving sales growth of about 50 percent a year and planning to build two giant factories.Cars Are About Software NowIn part because of his team’s lowball estimate for Lightning sales, Mr. Farley, who became chief executive in December 2020, said he was increasingly convinced that Ford needed to transform itself. Many auto executives acknowledge that one of Tesla’s main advantages is that it is far ahead of established automakers in developing software that operates its motors, manages it batteries, and informs and entertains drivers and passengers. Partly as a result, Tesla, born in Silicon Valley, makes cars that go farther on a full battery than cars made by almost anybody else.Tesla can also remotely update the software in all its cars, an ability that Ford and other established carmakers have only recently begun using. Most cars made by established manufacturers must be taken to dealers for even minor upgrades or fixes.It is not surprising, then, that Mr. Farley worries most about the potential for software bugs in the Lightning’s millions of lines of code.“As an automotive company, we’ve been trained to put vehicles out when they’re perfect,” he said. “But with software, you can change it with over-the-air updates. Our quality system isn’t used to this software orientation.”Mr. Farley said it was so critical for Ford to beef up its software chops that he spent months recruiting one of the top names in auto technology, Doug Field, who has held senior positions at Tesla and Apple.In an interview, Mr. Field, who early in his career worked at Ford, said he was drawn by the chance to build a technology team at a company with a century’s expertise in engineering and manufacturing. “If we can combine those, that is going to be something to be reckoned with,” he said.In March, Ford announced it was separating into two divisions — one, Ford Blue, will continue making internal combustion models, and another, Model E, headed by Mr. Farley and Mr. Field, will develop electric vehicles.So far, investors have supported Mr. Farley’s strategy. Before Russia’s invasion of Ukraine, Ford stock traded as high as $25, up more than 300 percent since Mr. Farley took the helm, but it has fallen back to about $15. Still, Ford’s market value now exceeds that of G.M., which has long been the largest U.S. automaker.Yet Wall Street still thinks that Tesla, which is worth more than $1 trillion, will dominate the industry and that companies like Ford, worth $62 billion, and G.M., $58 billion, will become relative minnows.No wonder that Mr. Farley is spending most of his days on the Lightning. Over a dinner near his home in Birmingham, north of Detroit, he pulled out his phone and scrolled through a long email he gets every evening, with updates on every facet of the launch. “Software, manufacturing, batteries, chips, body assembly,” he said, reading off the subheadings.Workers on the production line of the 2022 Ford F-150 Lightning.Sylvia Jarrus for The New York TimesOne night recently, Mr. Ford was in California when an email arrived late in the evening — from Mr. Farley, who was nine time zones away in Germany. “Jim had four or five things he wanted to talk to me about,” Mr. Ford said. “I get at least two updates a day from him.”Computer chips are a big concern. A shortage has been disrupting auto production around the world for more than a year, and outside the Dearborn Truck Plant a few hundred gasoline-powered F-150 trucks are parked and waiting for a minor but crucial component — the device that controls their automatic windshield wipers is delayed for the want of chips.Before his test drive, Mr. Farley took an hourlong tour of the Lightning assembly line, looking at how much work remains.At a section of the production line, he was shown new robotic, self-guided skids that carry the Lightning’s steel bed, or box, from one work station to the next. The skids eliminate the need for a costly and complex overhead conveyor system. Bill Dorley, the box team leader, told Mr. Farley that his crew was practically ready to go. “We just need parts,” he said.Just outside that section of the plant, heavy earth-moving machines were demolishing the concrete walls and floors of a building that was built in the 1930s to produce the Ford Model A. That space will allow the company to expand Lightning production. As Mr. Farley moved along the assembly line, workers waved and shouted greetings and sought selfies with the boss.Approaching a group of workers, Mr. Farley asked how they were doing and what they needed.Michael Johnson, who will bolt in the Lightning’s suspension system, highlighted one of the central concerns that many manufacturing workers have about electric vehicles: jobs. Because electric vehicles have fewer parts than conventional trucks, they can be made by fewer workers. Mr. Johnson was specifically concerned about a truck plant that Ford is building in Tennessee, a state that has been less welcoming to unions like the one that represents workers in Dearborn.“Is this plant going to be safe?” Mr. Johnson asked.Mr. Farley replied that the Tennessee plant would build a different truck. He added that Ford planned to start making the motors and axles for its electric vehicles, rather than buying them from suppliers. “So our own plants are going to be very busy,” he said.Ford’s future rests on that being the case. More

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    Russia’s Moves in Ukraine Unsettle Energy Companies and Prices

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    Oil and gas prices are up, and Western energy giants with operations and investments in Russia could find it harder to keep doing business there.Russia’s recognition of two breakaway regions in eastern Ukraine could threaten important investments of Western oil giants and further drive up global energy prices in the next few weeks.Since the closing days of the Cold War, Russia’s energy-based economy has become entwined with Europe’s. European energy companies like BP, TotalEnergies and Shell have major operations and investments in Russia. Though expansion of those holdings was largely halted after Russia’s 2014 annexation of Crimea, they remain important profit centers and could now be at risk.Seeking to isolate President Vladimir V. Putin of Russia, President Biden and the European Union imposed new sanctions on the Russian government and the country’s political and business elite on Tuesday. The measures do not directly target the energy industry. That’s why oil and gas prices settled only modestly higher on Tuesday afternoon in New York.But analysts said the energy industry could still be hurt if the crisis dragged on, particularly if Mr. Putin decided to send troops into the rest of Ukraine or sought to take control of the capital, Kyiv. Such aggressive action would most likely force Mr. Biden and other Western leaders to ratchet up their response.European leaders are already taking aim at some Russian energy exports. Chancellor Olaf Scholz said on Tuesday that Germany would halt certification of the Nord Stream 2 pipeline, which is supposed to deliver Russian gas. The decision will not have an immediate impact on European energy supplies because the pipeline is not yet operating. But Russian gas shipments through Ukraine could be halted, especially if Mr. Putin’s troops push farther into Ukraine or if he cuts off gas to Europe in retaliation for Western sanctions.Russia supplies one out of every 10 barrels of oil used around the world. After Western officials said Russian troops had entered eastern Ukrainian regions held by separatists, oil prices quickly jumped early Tuesday to nearly $100 a barrel, their highest level in more than seven years, before moderating.Energy experts say oil prices could easily rise another $20 a barrel if Mr. Putin seeks to occupy more or all of Ukraine. Such an outcome would also cause huge problems for Western oil companies that do business in Russia.“In that environment, the legal and reputational risk faced by Western energy companies operating in Russia will rise sharply,” said Robert McNally, who was an energy adviser to President George W. Bush and is now president of the Rapidan Energy Group, a consulting firm. “For oil markets, this means slower supply growth and even tighter global balances and higher prices in the coming years.”TotalEnergies, which is based near Paris, owns nearly 20 percent of Novatek, Russia’s largest liquefied natural gas company, and Shell has a strategic alliance with Gazprom, Russia’s natural gas monopoly.The Salym oil field, which Shell operates jointly with Gazprom in western Siberia.Alexander Zemlianichenko Jr./BloombergThe Western oil company most involved in Russia is BP, which owns nearly 20 percent of Rosneft, the state-controlled energy company managed by Igor Sechin, who is widely considered a close Putin ally and adviser. BP’s chief executive, Bernard Looney, and its former chief executive Bob Dudley sit on Rosneft’s board with Mr. Sechin and Alexander Novak, Russia’s deputy prime minister.Rosneft contributed $2.4 billion in profits and $600 million in dividends to BP in 2021, and has a secondary listing on the London Stock Exchange. About a third of BP’s oil production, or 1.1 million barrels a day, came from Russia last year.BP executives have so far expressed calm. “We have been there over 30 years and our job is to focus on our business, and that is what we are doing,” Mr. Looney said in a recent conference call with analysts. “If something comes down the road, then obviously we will deal with it as it comes.”Most oil companies have been reporting bumper profits because of rising oil and gas prices. European firms are using some of their profits to invest more in wind, solar, hydrogen and other forms of cleaner energy. But the current crisis could be a major distraction, if not worse.Doing business in Russia has always been complicated, especially as Mr. Putin reasserted state control over energy, squeezing private investors.Shell was forced to give up control of its premier Russian liquefied natural gas project on Sakhalin Island, in eastern Russia, to Gazprom in 2006. Shell retains a modest stake in the facility, and it appears to want to keep the door open to more business in Russia. Along with four other European companies, it helped finance the estimated $11 billion Nord Stream 2 pipeline to Germany.TotalEnergies has continued investing in a $27 billion natural gas complex in the Yamal Peninsula, in the Arctic, that Novatek controls. The project sidestepped earlier Western sanctions by obtaining financing from Chinese banks. It began producing gas for European and Asian customers in 2017.Share prices of BP and Total closed on Tuesday down more than 2 percent, and Shell was down about 1 percent.Prospects for Western oil companies seeking to do business in Russia were once far brighter. Exxon Mobil, Italy’s ENI and other foreign oil companies teamed up with Rosneft in 2012 and 2013 to explore Arctic oil and gas fields.BP owns nearly 20 percent of Rosneft, which operates this refinery in Novokuibyshevsk, Russia.Andrey Rudakov/BloombergBut U.S. and European Union sanctions imposed after Russia’s seizure of Crimea forced many Western companies to stop expanding in Russia in part by limiting access to financing and technology for deepwater exploration.Exxon formally abandoned exploration ventures with Rosneft in 2018, and took a $200 million after-tax loss.Understand How the Ukraine Crisis DevelopedCard 1 of 7How it all began. More

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    Mexico Is Buying a Texas Oil Refinery in a Quest for Energy Independence

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    President López Obrador wants to halt most oil exports and imports of gasoline and other fuels. Critics say he is reneging on Mexico’s climate change commitments.DEER PARK, Texas — Two giant murals, on storage tanks at an oil refinery here, depict the rebels led by Sam Houston who secured Texas’ independence from Mexico in the 1830s. This week those murals will become the property of the Mexican national oil company, which is acquiring full control of the refinery.The refinery purchase is part of President Andres Manuel López Obrador’s own bid for an independence of sorts. In an effort to achieve energy self-sufficiency, the president of Mexico is investing heavily in the state-owned oil company, placing a renewed emphasis on petroleum production and retreating from renewable energy even as some oil giants like BP and Royal Dutch Shell are investing more in that sector.Mr. López Obrador aims to eliminate most Mexican oil exports over the next two years so the country can process more of it domestically. He wants to replace the gasoline and diesel supplies the country currently buys from other refineries in the United States with fuel produced domestically or by the refinery in Deer Park, which would be made from crude oil it imports from Mexico. The shift would be an ambitious leap for Petroleos Mexicanos, the company commonly known as Pemex. The company’s oil production, comparable to Chevron’s in recent years, has been falling for more than a decade, and it shoulders more than $100 billion in debt, the largest of any oil company in the world.The decision to pay $596 million for a controlling interest in the Deer Park refinery, which sits on the Houston ship channel and would be the only major Pemex operation outside Mexico, is central to fulfilling Mr. López Obrador’s plans to rehabilitate the long-ailing oil sector and establishing eight productive refineries for Mexican use. Mexico also agreed to pay off $1.2 billion in debts that Pemex and Shell jointly owe as co-owners of the refinery, which is profitable.“It’s something historic,” Mr. López Obrador said last month. In a separate news conference last year, he said, “The most important thing is that in 2023 we will be self-sufficient in gasoline and diesel and there will be no increase in fuel prices.”While Mr. Lopez Obrador’s policies diverge from the rising global concern over climate change, they reflect a lasting temptation for leaders and lawmakers worldwide: replacing imported energy sources with domestically produced fuels. Further, the generally well-paying jobs the oil and other fossil fuel industries provide are politically popular across Latin America, Africa as well as industrialized countries like the United States.In the 1930s, the Mexican government took over Royal Dutch Shell’s operations south of the border as it nationalized the entire oil industry then dominated by foreigners. Now Mr. López Obrador is poised to go one step further, taking complete control of a big Shell oil refinery.The takeover is all the more pointed because it is happening in an industrial suburb that calls itself “the birthplace of Texas,” where rebels marched to the San Jacinto battlefield to defeat the Mexican Army — the event commemorated on the refinery murals. The battlefield is a five-mile drive from the refinery.It is hard to overestimate the connection between oil and politics in Mexico, where the day petroleum was nationalized, March 18, is a national holiday. Oil provides the Mexican government with a third of its revenues, and Pemex is one of the nation’s biggest employers, with about 120,000 workers. Mr. López Obrador hails from the oil-producing state of Tabasco, and the powerful Pemex labor union is a crucial part of his political base. He ran on a platform of rebuilding the company, and has raised its production budget, cut taxes it pays and reversed efforts by his predecessor to restructure its monopoly over oil production in the country.When he took office three years ago, Mr. López Obrador began undoing changes made in 2013 to the country’s Constitution intended to open the oil and gas industry to private and foreign investment. He is also pushing to reverse electricity reforms that his predecessor, Enrique Peña Nieto, put in place to increase the use of privately funded wind and solar farms and move away from state-run power plants fueled by oil and coal.Energy experts say Mexico is backtracking on a commitment it made a decade ago under President Felipe Calderón, to generate more than a third of its power from clean energy sources by 2024. Mexico now produces just over a quarter of its power from renewables.“They are going to heavier fuels rather than to lighter fuels,” said David Goldwyn, a top State Department energy official in the Obama administration. “Virtually every foreign company — Ford, Walmart, G.E., everybody who operates there — has their own net-zero target now. If they can’t get access to clean energy, Mexico becomes a liability.”Mr. López Obrador’s government has said it will combat climate change by investing in hydroelectric power and reforestation.Many of the Mexican president’s initiatives are being contested by opposition lawmakers and the business community. But Mr. López Obrador can do a lot on his own. He plans to spend $8 billion on a project to build an oil refinery in Tabasco state, and more than $3 billion more to modernize six refineries.President Andres Manuel López Obrador hails from the oil-producing state of Tabasco, and the powerful Pemex labor union is a crucial part of his political base.Gustavo Graf Maldonado/ReutersThe purchase of the Deer Park refinery is crucial to his plans because the Tabasco complex will not be completed until 2023 or 2024 and will not produce enough gasoline, diesel and other fuels to meet all of Mexico’s needs.Long a partner of Pemex, Shell, which operates the Deer Park refinery, is selling its stake in part to satisfy investors concerned about climate change who want the oil giant to invest more in renewable energy and hydrogen.Under Mexican ownership the refinery will continue its practice of using Mexican crude oil, but it will probably sell more of the gasoline and other fuels it produces to Mexico. In the future, some energy experts said, Pemex could also use the Deer Park refinery to process oil from other countries that also produce the kinds of heavy crude that Mexico does.“I think it’s a good deal and makes sense for Pemex,” said Tom Kloza, global head of energy analysis at Oil Price Information Service, who noted that Deer Park could perhaps process Venezuelan oil if the United States lifted sanctions against that country.The Mexican policy changes would have only a modest and temporary impact on American refineries, which can replace Mexican oil with crude from Colombia, Brazil, Saudi Arabia and Canada. Refiners could lose as much as a half-million barrels of transportation fuel sales a day to Mexico, but energy experts say refiners would be able to find other markets.Guy Hackwell, the general manager of the Deer Park complex, said, “Best practices will remain in place.” He said the “vast majority of the work force will report to the same job the day after the deal closes.”As for the murals, a Pemex spokeswoman, Jimena Alvarado, said, “We would never remove a historical mural.”Residents in Deer Park, in the heart of the Gulf of Mexico petrochemical complex, say they feel assured that locals will run the plant and Shell will continue to own an adjoining chemical plant. “The phone numbers will remain the same for who we contact in the event of an emergency and we will still have the same people and relationships, so I feel good about that,” Deer Park’s city manager, Jay Stokes, said.But some energy experts said Mr. López Obrador’s approach to energy, including the refinery purchase, would waste precious government resources that could be better used to reduce greenhouse gas emissions and local air pollution. There are also doubts that Mexico can build enough refining capacity to fulfill the president’s objectives.Shell, which operates the Deer Park refinery, is selling its stake in part to satisfy investors concerned about climate change who want the oil giant to invest more in renewable energy and hydrogen.Brandon Thibodeaux for The New York TimesJorge Piñon, a former president of Amoco Oil de Mexico, said Mexico most likely would not be able to immediately profit from slashing exports of crude and processing its own fuels since the refinery business typically has low profit margins, especially in Latin America.He said the Mexican refineries could not match American refineries in handling Mexico’s high-sulfur heavy crude. Mexican fuels made from heavy oil caused severe air pollution problems in many cities before the country began importing cleaner-burning American gasoline and diesel over the last 20 years.By exporting less oil, Mexico would also almost certainly use more of it for domestic power generation, potentially pushing out solar and wind generation and producing more air pollution and greenhouse gas emissions.“His nationalistic decisions will have a negative impact on climate change,” Mr. Piñon said. “He is marching back to the 1930s.”Mr. López Obrador is unapologetic. “Oil is the best business in the world,” he said at a news conference last May. More

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    GM’s EV Efforts Reportedly Include a Bigger Michigan Presence

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    General Motors intends to spend several billion dollars to set up production of batteries and electric pickup trucks at two locations in Michigan, giving the company’s home state an economic boost, a person with knowledge of the plans said Friday.The automaker has started sketching out proposals to convert an electric car plant in Orion Township to produce electric pickups and to build a new battery plant with a partner, LG Electronics, near the existing Lansing Delta Township plant, this person said.The company, which has laid out ambitious goals for a shift to electric vehicles, was more circumspect about its plans in a statement issued Friday. “G.M. is developing business cases for potential future investments in Michigan,” it said. “As part of developing a competitive business case, we are having discussions with the appropriate local officials on available incentives.”G.M.’s prospective development of the Michigan sites was reported earlier by The Wall Street Journal.The total investment is likely to be more than $4 billion. G.M. previously spent $2 billion to convert a Detroit plant to electric vehicle production. Incentive applications filed to the City of Lansing on Friday showed that G.M. and LG envision investing $2.5 billion in the battery plant and creating 1,700 jobs there.Production of a high-volume pickup truck could significantly increase employment at the Orion Township plant, which has been used to make the Chevrolet Bolt, an electric compact car. Bolt output has been limited and is currently suspended because of a recall of the battery packs used in the car. When in operation, the factory has 1,100 workers on a single shift, and E.V. production would probably increase production to two or even three shifts.The investment would be a victory for Michigan as automakers race to begin making battery packs and electric vehicles in high volumes. Several factories are planned for Southern states. Toyota said this week that it would build a battery plant in North Carolina that is supposed to employ 1,750 people.Ford Motor is spending $11.4 billion to build two battery plants in Kentucky and a third battery plant and a new electric truck plant in Tennessee. G.M. has battery plants under construction in Ohio and Tennessee, and it plans to add others in Ontario and Mexico.The spate of investments and job commitments has caused concern among some economic development officials in Michigan that the state was not winning a significant portion of the jobs being created by the auto industry’s conversion to electric vehicles.G.M., Ford, Toyota and other traditional automakers are trying to catch up to Tesla, which leads in global sales of electric vehicles by a wide margin and has captured the imagination of investors. Tesla has a market value of about $1 trillion — more than G.M., Ford, Toyota and several other automakers combined.G.M. plans to introduce 20 electric vehicles in the United States by 2025. The first few include the GMC Hummer electric pickup and sport-utility models, and the Cadillac Lyriq, a luxury S.U.V. Those will be built at a plant in Detroit that G.M. now calls “Factory Zero.” A variety of other E.V.s are supposed to follow, including an electric version of the Chevrolet Silverado pickup that is supposed to go into production in early 2023.These models will use modular battery packs — produced in a joint venture with LG — that G.M. is counting on to help reduce the cost of electric vehicles.Ford is slightly ahead of G.M. in electric vehicles. It began selling the electric Mustang Mach-E S.U.V. nearly a year ago, and it plans to start making an electric pickup, the F-150 Lightning, in early 2022.Ford’s chief executive, Jim Farley, told CNBC on Thursday that his company had 200,000 reservations from customers for the truck and that it was scrambling to increase production capacity to meet demand. More

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    As Western Oil Giants Cut Production, State-Owned Companies Step Up

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    In the Middle East, Africa and Latin America, government-owned energy companies are increasing oil and natural gas production as U.S. and European companies pare supply because of climate concerns.HOUSTON — After years of pumping more oil and gas, Western energy giants like BP, Royal Dutch Shell, Exxon Mobil and Chevron are slowing down production as they switch to renewable energy or cut costs after being bruised by the pandemic.But that doesn’t mean the world will have less oil. That’s because state-owned oil companies in the Middle East, North Africa and Latin America are taking advantage of the cutbacks by investor-owned oil companies by cranking up their production.This massive shift could reverse a decade-long trend of rising domestic oil and gas production that turned the United States into a net exporter of oil, gasoline, natural gas and other petroleum products, and make America more dependent on the Organization of the Petroleum Exporting Countries, authoritarian leaders and politically unstable countries.The push by governments to increase oil and gas production means it could take decades for global fossil fuel supplies to decline unless there is a sharp drop in demand for such fuels. President Biden has effectively accepted the idea that the United States will rely more on foreign oil, at least for the next few years. His administration has been calling on OPEC and its allies to boost production to help bring down rising oil and gasoline prices, even as it seeks to limit the growth of oil and gas production on federal lands and waters.The administration’s approach is a function of two conflicting priorities: Mr. Biden wants to get the world to move away from fossil fuels while protecting Americans from a spike in energy prices. In the short run, it is hard to achieve both goals because most people cannot easily replace internal-combustion engine cars, gas furnaces and other fossil fuel-based products with versions that run on electricity generated from wind turbines, solar panels and other renewable sources of energy.Western oil companies are also under pressure from investors and environmental activists who are demanding a rapid transition to clean energy. Some U.S. producers have said they are reluctant to invest more because they fear oil prices will fall again or because banks and investors are less willing to finance their operations. As a result, some are selling off parts of their fossil fuel empires or are simply spending less on new oil and gas fields.That has created a big opportunity for state-owned oil companies that are not under as much pressure to reduce emissions, though some are also investing in renewable energy. In fact, their political masters often want these oil companies to increase production to help pay down debt, finance government programs and create jobs.Saudi Aramco, the world’s leading oil producer, has announced that it plans to increase oil production capacity by at least a million barrels a day, to 13 million, by the 2030s. Aramco increased its exploration and production investments by $8 billion this year, to $35 billion.“We are capitalizing on the opportunity,” Aramco’s chief executive, Amin H. Nasser, recently told financial analysts. “Of course we are trying to benefit from the lack of investments by major players in the market.”Aramco not only has vast reserves but it can also produce oil much more cheaply than Western companies because its crude is relatively easy to pump out of the ground. So even if demand declines because of a rapid shift to electric cars and trucks, Aramco will most likely be able to pump oil for years or decades longer than many Western energy companies.“The state companies are going their own way,” said René Ortiz, a former OPEC secretary general and a former energy minister in Ecuador. “They don’t care about the political pressure worldwide to control emissions.”State-owned oil companies in Kuwait, the United Arab Emirates, Iraq, Libya, Argentina, Colombia and Brazil are also planning to increase production. Should oil and natural gas prices stay high or rise further, energy experts say, more oil-producing nations will be tempted to crank up supply.The global oil market share of the 23 nations that belong to OPEC Plus, a group dominated by state oil companies in OPEC and allied countries like Russia and Mexico, will grow to 75 percent from 55 percent in 2040, according to Michael C. Lynch, president of Strategic Energy and Economic Research in Amherst, Mass., who is an occasional adviser to OPEC.If that forecast comes to pass, the United States and Europe could become more vulnerable to the political turmoil in those countries and to the whims of their rulers. Some European leaders and analysts have long argued that President Vladimir V. Putin of Russia uses his country’s vast natural gas reserves as a cudgel — a complaint that has been voiced again recently as European gas prices have surged to record highs.A pump jack in Stanton, Texas. American companies have been cautiously holding back exploration and production.Brandon Thibodeaux for The New York TimesOther oil and gas producers like Iraq, Libya and Nigeria are unstable, and their production can rise or fall rapidly depending on who is in power and who is trying to seize power.“By adopting a strategy of producing less oil, Western oil companies will be turning control of supply over to national oil companies in countries that could be less reliable trading partners and have weaker environmental regulations,” Mr. Lynch said.An overreliance on foreign oil can be problematic because it can limit the options American policymakers have when energy prices spike, forcing presidents to effectively beg OPEC to produce more oil. And it gives oil-producing countries greater leverage over the United States.“Today when U.S. shale companies are not going to respond to higher prices with investment for financial reasons, we are depending on OPEC, whether it is willing to release spare production or not,” said David Goldwyn, a senior energy official in the State Department in the Obama administration. He compared the current moment to one in 2000 when the energy secretary, Bill Richardson, “went around the world asking OPEC countries to release spare capacity to relieve price pressure.”This time, state-owned energy companies are not merely looking to produce more oil in their home countries. Many are expanding overseas.In recent months, Qatar Energy invested in several African offshore fields while the Romanian national gas company bought an offshore production block from Exxon Mobil. As Western companies divest polluting reserves such as Canadian oil sands, energy experts say state companies can be expected to step in.“There is a lot of low-hanging fruit state companies can pick up,” said Raoul LeBlanc, an oil analyst at IHS Markit, a consulting and research firm. “It is a huge opportunity for them to become international players.”Kuwait announced last month that it planned to invest more than $6 billion in exploration over the next five years to increase production to four million barrels a day, from 2.4 million now.This month, the United Arab Emirates, a major OPEC member that produces four million barrels of oil a day, became the first Persian Gulf state to pledge to a net zero carbon emissions target by 2050. But just last year ADNOC, the U.A.E.’s national oil company, announced it was investing $122 billion in new oil and gas projects.Iraq, OPEC’s second-largest producer after Saudi Arabia, has invested heavily in recent years to boost oil output, aiming to raise production to eight million barrels a day by 2027, from five million now. The country is suffering from political turmoil, power shortages and inadequate ports, but the government has made several major deals with foreign oil companies to help the state-owned energy company develop new fields and improve production from old ones.Even in Libya, where warring factions have hamstrung the oil industry for years, production is rising. In recent months, it has been churning out 1.3 million barrels a day, a nine-year high. The government aims to increase that total to 2.5 million within six years.National oil companies in Brazil, Colombia and Argentina are also working to produce more oil and gas to raise revenue for their governments before demand for oil falls as richer countries cut fossil fuel use.After years of frustrating disappointments, production in the Vaca Muerta, or Dead Cow, oil and gas field in Argentina has jumped this year. The field had never supplied more than 120,000 barrels of oil in a day but is now expected to end the year at 200,000 a day, according to Rystad Energy, a research and consulting firm. The government, which is considered a climate leader in Latin America, has proposed legislation that would encourage even more production.“Argentina is concerned about climate change, but they don’t see it primarily as their responsibility,” said Lisa Viscidi, an energy expert at the Inter-American Dialogue, a Washington research organization. Describing the Argentine view, she added, “The rest of the world globally needs to reduce oil production, but that doesn’t mean that we in particular need to change our behavior.” More

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    The Car Market 'Is Insane': Dealers Can't Keep Up With Demand

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    Rick Ricart is expecting nearly 40 Kia Telluride sport utility vehicles to arrive at his family’s dealership near Columbus, Ohio, over the next three weeks. Most will be on his lot for just a few hours.“They’re all sold,” Mr. Ricart said. “Customers have either signed the papers or have a deposit on them. The market is insane right now.”In showrooms across the country, Americans are buying most makes and models almost as fast as they can be made or resold. The frenzy for new and used vehicles is being fed by two related forces: Automakers are struggling to increase production because of a shortage of computer chips caused in large part by the pandemic. And a strong economic recovery, low interest rates, high savings and government stimulus payments have boosted demand.The combination has left dealers and individuals struggling to get their hands on vehicles. Some dealers are calling and emailing former customers offering to buy back cars they sold a year or two earlier because demand for used vehicles is as strong as it is for new cars, if not stronger. Used car prices are up about 45 percent over the past year, according to government data published this week. New car and truck prices are up about 5 percent over the past year.Those price increases have fed a debate in Washington about whether President Biden’s policies, particularly the $1.9 trillion American Rescue Plan he signed in March, are responsible for the sharp rise in inflation. The government said this week that consumer prices across the economy rose 5.4 percent in the last year through June.Republican lawmakers have argued that the March legislation is overheating the economy and are citing the rise in prices to oppose additional government spending. But Biden administration officials have pointed out that temporary supply shortages are largely responsible for the surge in prices of cars and other goods.Government stimulus may have helped some consumers, but it is hard to say how much. Several large forces are at play.The chip shortage, for example, is affecting automakers all over the world and is not directly related to U.S. policies. Industry officials blame limited production capacity for semiconductors and pandemic-related disruptions in supply and demand for the shortage.To make the most of limited chip supplies, General Motors has temporarily done away with certain features in some models, like stop-start systems that automatically turn off engines when cars stop for, say, a traffic light. And the French carmaker Peugeot has replaced digital speedometers with analog ones in some cars.Rental car companies that sold off thousands of cars during the pandemic to survive are now in the market to buy cars and trucks. They want to take advantage of a summer travel boom that has driven up rental rates to several hundred dollars a day in some places.“The industry has had strikes and material shortages before that have left us short of inventory, but I’ve never seen anything like this,” said Mark Scarpelli, the owner of two Chevrolet dealerships near Chicago. “Never, never, never.”His dealerships normally have 600 to 700 cars in stock. Now, he has about 50. Once or twice a week, a truck arrives with five or 10 vehicles. The cars disappear quickly because of customer waiting lists, Mr. Scarpelli said.Industry executives said the last time demand and supply were this out of sync was most likely after the end of World War II, when U.S. auto plants returned to making cars after years of churning out tanks and planes.Dealers said virtually everything was selling, from luxury vehicles and sports cars that cost more than $100,000 to basic used cars that many parents buy for teenagers.Even though the unemployment rate is still higher than before the pandemic, many people have money to spend. Government payments have helped lots of people, but many Americans, kept from vacationing or eating out, saved money. Financing cars is also relatively cheap — at least for people with good credit. Some automakers like Toyota, which has been less affected by the chip shortage than others, are advertising zero-interest loans on some cars.Mr. Ricart’s family businesses include a custom shop that sells high-end, special-edition trucks and sports cars. “We had a $125,000 Shelby pickup, and I said, ‘Who’s going to buy that?’” he recalled. “The next day it was gone. There’s so much free cash in the market. People are paying full price, even for the most expensive vehicles we have.”Buyers often have to take vehicles that don’t meet their specifications, and move fast when they find one close enough.Gary Werle, a retiree in Lake Worth, Fla., recently traded in a 2017 Buick Encore for a 2021 version, drawn by its safety features such as blind-spot monitoring and automatic braking. “I’m 80, and I thought it would be good to have those,” he said.On Memorial Day, his dealer called, and Mr. Werle didn’t hesitate. “I was at a party and left to buy the car,” he said. “I’d heard about the shortages, so I wasn’t sure the car would be there the next day.”Dealers are selling fewer vehicles, but their profits are up a lot. That’s a huge change from the spring of 2020, when most dealerships shut down for roughly two months and they had to lay off workers to survive.“The strong demand from consumers paired with a lack of supply from the manufacturers has created a gusher of profits for dealers,” said Alan Haig, president of Haig Partners, an automotive consultant.Now, dealers typically dictate the price of new or used cars. New cars typically sell for the manufacturer’s suggested retail price or, in some cases, thousands of dollars more for models in very high demand. Haggling over used cars is a distant memory.“There’s not a lot of negotiating that goes on right now on price,” said Wes Lutz, owner of Extreme Dodge in Jackson, Mich.Some customers have balked at paying top dollar for new cars and have opted to make do with older vehicles. That has increased demand for parts and service, one of the most profitable businesses for car dealers. Many dealers have extended repair-shop hours. Mr. Ricart said he had some repair technicians putting in 10- or 12-hour days three or four days in a row before taking a few days off.Of course, the shortage of cars will end, but it isn’t clear when.As Covid-19 cases and deaths rose last spring, automakers shut down plants across North America from late March until mid-May. Since their plants were down and they expected sales to come back slowly, they ordered fewer semiconductors, the tiny brains that control engines, transmissions, touch screens, and many other components of modern cars and trucks.At the same time, consumers confined to their homes began buying laptops, smartphones and game consoles, which increased demand for chips from companies that make those devices. When automakers restarted their plants, fewer chips were available.Many automakers have had to idle plants for a week or two at a time in the first half of 2021. G.M., Ford Motor and others have also resorted to producing vehicles without certain components and holding them at plants until the required parts arrive. At one point, G.M. had about 20,000 nearly complete vehicles awaiting electronic components. It began shipping them in June.Ford has been hit harder than many other automakers because of a fire at one of its suppliers’ factories in Japan. At the end of June, Ford had about 162,000 vehicles at dealer lots, fewer than half the number it had just three months ago and roughly a quarter of the stock its dealers typically hold.This month, Ford is slowing production at several North American plants because of the chip shortage. The company said it planned to focus on completing vehicles.Mr. Ricart recently took a trip on his Harley-Davidson to Louisville, Ky., and got a look at the trucks and S.U.V.s at a Ford plant that are waiting to be finished. He said he had seen “thousands of trucks in fields with temporary fencing around them.”He said he hoped to get some of those trucks soon because Ricart Ford had only about 30 F-150 pickup trucks in stock. “We’re used to selling a couple hundred a month.” More

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    Gas Price Increase Poses Challenge to U.S. Economy

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    Experts say a period of costlier fuel is likely to be brief. But if consumers start to assume otherwise, it could mean problems for Biden and the Fed.As the U.S. economy struggles to emerge from its pandemic-induced hibernation, consumers and businesses have encountered product shortages, hiring difficulties and often conflicting public health guidance, among other challenges.Now the recovery faces a more familiar foe: rising oil and gasoline prices.West Texas Intermediate, the U.S. oil-price benchmark, hit $76.98 a barrel on Tuesday, its highest level in six years, as OPEC, Russia and their allies again failed to agree on production increases. Prices moderated later in the day but remained nearly $10 a barrel higher than in mid-May.Reflecting the increase in crude prices, the average price of a gallon of regular gasoline in the United States has risen to $3.13, according to AAA, up from $3.05 a month ago. A year ago, as the coronavirus kept people home, gas cost just $2.18 a gallon on average. The auto club said on Tuesday that it expected prices to increase another 10 to 20 cents through the end of August.The price of a gallon of gas

    Note: Weekly prices through Monday. Data is not seasonally adjusted and includes all formulations of regular gasoline.Source: Energy Information AdministrationBy The New York TimesThe rapid run-up comes at a delicate moment for the U.S. economy, which was already experiencing the fastest inflation in years amid resurgent consumer activity and supply-chain bottlenecks. And it could cause a political headache for President Biden as he tries to convince the public that his policies are helping the country regain its footing.Asked about oil prices at a White House news conference on Tuesday, Jen Psaki, the press secretary, said the administration was monitoring the situation and had been in touch with officials from Saudi Arabia and other major producers. But she suggested that the president had limited control over gas prices.“There sometimes is a misunderstanding of what causes gas prices to increase,” Ms. Psaki said. “The supply availability of oil has a huge impact.”Indeed, energy experts said the recent jump in oil prices had more to do with global economic and geopolitical forces than with domestic policies. Global energy demand slumped when the pandemic hit last year, eventually leading the Organization of the Petroleum Exporting Countries and its allies to cut production to prevent a collapse in prices. Demand has begun to rebound as economic activity resumes, but production has not kept pace: OPEC Plus, the alliance of oil producers, on Monday called off a teleconference to discuss increasing output.The direct economic impact of higher oil prices will probably be substantially more modest than in past decades. Energy overall plays a smaller role in the economy because of improved efficiency and a shift away from manufacturing, and the rise of renewable energy means the United States is less reliant on oil in particular.In addition, the surge in domestic oil production in recent years means that rising oil prices are no longer an unambiguous negative for the U.S. economy: Higher prices are bad news for drivers and consumers, but good news for oil companies and their workers, and the vast network of equipment manufacturers and service providers that supply them. Joe Brusuelas, chief economist at the accounting firm RSM, said oil prices of $80 or even $100 a barrel didn’t concern him. Not until prices top $120 a barrel would he start to worry seriously about the economic impact, he said.“The world has changed,” Mr. Brusuelas said. “The risks aren’t what they once were.”Still, the costs of higher prices will not be felt equally. Poor and working-class Americans drive older, less efficient cars and trucks and spend more of their incomes on fuel.Higher oil prices are no longer an altogether bad thing for the U.S. economy, but they are a particular burden to poor and working-class Americans.Audra Melton for The New York TimesScott Hanson of Western Springs, Ill., said $40 was enough to fill up his gas tank last year, when he lost his job as an office manager because of the pandemic. Now Mr. Hanson is paying over $60 to fill his Dodge Charger, making trips to take his mother to her medical appointments more expensive. Gas in Illinois is averaging $3.36 a gallon, according to AAA.“It’s too much for too many people that lost their jobs or have low-paying jobs,” Mr. Hanson said. “Everything bad that could happen is happening all at once.”Gas prices also remain a potent and highly visible symbol of rising prices when many consumers — and some economists — are nervous about inflation. Consumer prices rose 5 percent in May from a year earlier, the biggest annual increase in more than a decade, and forecasters expect figures for June, which will be released next week, to show another significant increase.Policymakers at the Federal Reserve have said they expect the increase in inflation to be short-lived, and they are unlikely to change that view based on an increase in energy prices, which are often volatile even in normal times, said Jay Bryson, chief economist at Wells Fargo.But if rising oil prices lead consumers and businesses to believe that faster inflation will continue, that could be a harder problem for the Fed. Economic research suggests that prices of things that consumers buy often, such as food and gasoline, weigh particularly heavily on their expectations for inflation. With public opinion surveys showing increasing concern about inflation, rising oil prices increase the risk of a more lasting shift in expectations, said David Wilcox, a former Fed economist who is now a senior fellow at the Peterson Institute for International Economics in Washington.“I don’t expect the price of oil to be the last straw on the camel’s back, but it is another straw on a camel’s back that’s already carrying a fair amount of baggage,” Mr. Wilcox said. “There is a much greater risk today of an inflationary psychology taking hold than I would have said three to five years ago.”Republicans have seized on rising prices to criticize Mr. Biden’s energy policies, including his decision to cancel permits for the Keystone XL oil pipeline and his pause on selling new oil leases on federal lands, a move that a federal judge has blocked.“Bad policy is already creating conditions like higher gasoline prices that we haven’t seen in a very long time,” Senator John Barrasso, Republican of Wyoming, wrote in an opinion essay last week. (Energy experts say Mr. Biden’s policies have had no meaningful impact on oil prices.)Ms. Psaki noted that Mr. Biden had consistently opposed an increase in the federal gas tax, which some Republican senators and business groups had advocated to help fund spending on infrastructure. The deal Mr. Biden reached with a bipartisan group of senators last month did not include a gas tax increase.“Ensuring Americans don’t bear a burden at the pump continues to be a top priority for the administration writ large,” Ms. Psaki said. “That’s one of the core reasons why the president was opposed — vehemently opposed — to a gas tax and any tax on vehicle mileage, because he felt that would on the backs of Americans. And that was a bottom-line red line for him.”Domestic oil production is expected to rise in coming months as higher prices and rising demand lead companies to step up drilling. But any rebound is likely to be gradual. U.S. oil companies have been cautious about investing in new exploration and production over the last year, even as oil prices have roughly doubled from the first half of 2020, when the pandemic punctured demand. Company executives say they are focused on share buybacks and debt reduction as sales rise.The Energy Department predicts that production will average 11.1 million barrels a day this year and 11.8 million barrels a day in 2022, 400,000 barrels a day less than in 2019.Even without a surge in domestic oil production, many forecasters doubt that prices will continue to rise at their recent pace. OPEC members generally agree that production should increase; they just disagree about how much. And a new nuclear deal with Iran or a thawing of U.S.-Venezuela relations could bring a flood of new supplies. Iran alone could potentially add 2.5 million to three million barrels of oil daily on the global market, or roughly a 3 percent addition to supplies.At the same time, the spread of new coronavirus variants has led some countries to reimpose or tighten restrictions on activity, which could dampen demand for oil. Capital Economics, a forecasting firm, said on Tuesday that it expected oil prices to peak at about $80 a barrel before falling back as supply increases. But the firm said that a collapse in prices or a further spike both remained possible.Reporting was contributed by More