Oil held steady as equities headed toward all-time highs on news of potential progress in trade talks between the US and the European Union, offsetting nascent signs of a softening physical market. West Texas Intermediate crude settled little changed above $65 a barrel, recovering from its lows of the day as risk assets rallied on reports the EU and the US are closing in on a deal that would impose 15% tariffs on European imports, similar to the agreement struck with Japan. Futures fell earlier in the session after the US Energy Information Administration reported that inventory levels at Cushing, Oklahoma, the delivery point for WTI futures, rose to the highest since June. Distillate reserves increased for a second straight week. Still, overall crude inventories fell, and diesel stockpiles remain at the lowest seasonal level since 1996, lending support to oil markets. “Cushing is perhaps the most important takeaway, with more builds expected in the weeks ahead to carry it away from historic lows,” said Matt Smith, Americas lead oil analyst at market intelligence firm Kpler. The stockpile data provided a downside catalyst to prices that had been drifting aimlessly amid mixed trade developments. While President Donald Trump unveiled deals with Japan and the Philippines, the European Union plans to quickly hit the US with 30% tariffs on billions of dollars worth of goods if no agreement is reached. US Treasury Secretary Scott Bessent said he’ll discuss a potential extension of the trade truce with China during talks in Stockholm next week. The discussions can now take on a broader array of topics, potentially including Beijing’s continued purchases of “sanctioned” oil from Russia and Iran, he said. Crude has traded in a relatively narrow range this month after a volatile June, when prices were jolted by the conflict between Israel

Mexico is looking to raise between $7 billion and $10 billion with a debt sale to shore up resources for battered state-owned oil company Petroleos Mexicanos, people familiar with the matter said.  The offering, disclosed in a filing earlier Tuesday, will consist of dollar-denominated debt maturing August 2030, in the form of amortizing pre-capitalized securities, or P-Caps, a type of instrument used in asset-backed finance.  The government “is implementing a series of measures to provide support to Pemex in the management and improvement of its balance sheet,” it said without providing details on the amount it plans to raise. Once issued, the P-Caps will not be consolidated with the liabilities of Pemex or Mexico, but “constitute public debt of the Mexican Government.”  Mexico’s finance ministry said in a statement that the operation would allow Pemex to address its short-term financial and operational needs. A Pemex spokesman didn’t respond to a request for comment. Pemex bonds jumped across the curve on the news, with notes due in 2050 up about 2 cents on the dollar, according to Trace data, the best performers in the high-yield space. Five-year credit-default swaps for the oil company sank 41 basis points.  Fitch Ratings placed Pemex on Ratings Watch Positive late on Tuesday, saying that if successful, the transaction will improve the Mexican government’s track record of support for the company. The reassessment may result in a multiple notch upgrade for the driller into the BB category, Fitch said. Mexico’s five-year CDS contracts, meanwhile, jumped almost 7 basis points to the highest level in a month, according to pricing data collected by Bloomberg. Sovereign dollar notes fell across the curve and were some of the worst performers in emerging markets on Tuesday. Support  President Claudia Sheinbaum’s administration has been working on a broad plan to shore

Dive Brief: Capacity prices in the PJM Interconnection’s latest capacity auction hit a $329.17/MW-day price cap across its region, up 22% from a year ago for most of PJM, the grid operator said Tuesday. PJM expects the increase to record-high capacity prices for the 12-month period that starts in June 2026 could lead to 1.5% to 5% bill increases for some ratepayers, depending on what state they are in. PJM estimates that without a price cap that was established in an agreement with Pennsylvania Gov. Josh Shapiro, D, the capacity price for the 2026-27 delivery year would have been nearly $389/MW-day, or about 18% higher. Dive Insight: A year ago, PJM’s capacity auction sent shockwaves through its 13-state region when prices for the delivery year that started June 1 soared to $269.92/MW-day for most of its footprint, up from $28.92/MW-day. Prices in that auction hit zonal caps of $466.35/MW-day for the Baltimore Gas and Electric zone in Maryland, and $444.26/MW-day for the Dominion zone in Virginia and North Carolina. The 2024 auction’s total cost jumped to $14.7 billion from $2.2 billion. The cost of this year’s auction, which opened July 9 and closed July 15, climbed even higher to $16.1 billion, up 9.5% from a year ago. Capacity costs make up a relatively small part of electric bills, according to PJM. PJM capacity costs hit a record high The cost of PJM’s capacity auction in billions of dollars. In the auction, PJM bought 134,311 MW for the capacity year that starts June 1, according to the grid operator’s auction report. About 135,192 MW was offered in the auction, a decline from last year. PJM secured enough capacity to have an 18.9% reserve margin as forecast peak load grew by about 5,500 MW, mainly from data centers.  Gas-fired generation accounted for 45%

The U.S. Department of Energy on Wednesday announced it has terminated its $4.9 billion conditional loan commitment for the 800-mile Grain Belt Express Phase 1 transmission project. “After a thorough review of the project’s financials, DOE found that the conditions necessary to issue the guarantee are unlikely to be met and it is not critical for the federal government to have a role in supporting this project,” the agency said in a statement.  Chicago-based Invenergy plans to build the 5-GW Grain Belt Express in phases from Kansas to Illinois. In May, the company made almost $1.7 billion in contractor awards to engineering and infrastructure services companies Quanta Services and Kiewit Energy Group. Invenergy has said it aims to begin construction next year on the portion of the project connecting Kansas and Missouri. It estimates the project will provide $52 billion in energy cost savings to U.S. residents over 15 years. But Republicans have urged the Trump administration to cancel the conditional loan commitment. Missouri Attorney General Andrew Bailey on March 6 urged the Department of Government Efficiency to cancel the loan guarantee, arguing that the Midcontinent Independent System Operator’s transmission plans and business case analyses are “highly biased in favor of over-building transmission.” Republican Sen. Josh Hawley, also from Missouri, said July 10 on X that he had spoken with President Donald Trump and Energy Secretary Chris Wright about canceling the loan commitment. “Wright said he will be putting a stop to the Grain Belt Express green scam. It’s costing taxpayers BILLIONS! Thank you, President Trump,” he wrote on July 10. Grain Belt Express developers responded in a letter to Wright on July 11. The proposed transmission line “has been the target of egregious politically motivated lawfare,” Grain Belt Express Vice President Jim Shield wrote. “Recent false accusations from Senator

Dive Brief: In order to accommodate spiking electricity demand in the U.S., the capabilities of the existing power system should be leveraged using tools like grid-enhancing technologies, and new loads should be co-located in “energy parks” — large microgrids — to minimize the need for transmission upgrades, according to a Tuesday report that the Brattle Group prepared for the Clean Air Task Force. The report recommends states and utilities consider “scaling up promising demand-side programs” and providing targeted incentives for them to customers. Energy efficiency technologies, distributed energy resources, time-varying rates and demand response can “create more headroom in the electricity system to accommodate more load growth,” it says. The report also recommends avoiding the need for costly transmission upgrades as much as possible by creating energy parks, “where large electricity consumers are co-located with generation assets that can be dispatched for grid-related needs, which can offer significantly faster grid access for new loads.” Dive Insight: Several energy parks are already in development, including the $1 billion Meitner Project in Texas, which is “developing 460 MW of wind and 340 MW of solar to power 400 MW of hydrogen electrolyzers,” the report says. It also notes that Google plans to invest $20 billion in energy parks by the end of the decade “to power data centers using solar and battery storage, with the first project expected to be operational in 2026 and complete in 2027.” “To facilitate this co-location arrangement, transmission operators and owners should adopt interconnection processes that appropriately reflect the operation of colocated load and generation, and offer expedited screening processes given the controllable, non-firm nature of their grid injections,” the report says. In December, Grid Strategies issued a report estimating that U.S. electricity demand could rise 128 GW over the next five years — a five-fold increase

Shipowners and oil traders are staying away from Russia-backed Nayara Energy Ltd. as part of the fallout faced by the Indian refiner, after it was singled out in the latest round of European Union sanctions. At least one oil tanker, the Talara, u-turned and sailed away from Vadinar port on Sunday, according to Bloomberg ship-tracking data. The vessel was meant to pick up a cargo of fuel – likely diesel – from Nayara, shipbrokers said. The booking was cancelled following Friday’s sanction, they said, and the cargo was not loaded.  Another tanker, the Chang Hang Xing Yun, that was on its way to Vadinar this week, halted off the southwestern coast of India, ballasting, ship-tracking data and chartering fixtures show. The ship is now heading to the Arabian Gulf to pick up cargoes bound for southern Africa, after its previous plans to load products from Vadinar were cancelled yesterday, shipbrokers said. Shipbrokers added owners have become wary of dealings with Nayara this week, be it fuel exports or crude imports. Rosneft PJSC holds a 49.13 percent stake in the Indian processor.  Global oil market observers are waiting to see if the hesitation among shipowners will spread beyond logistics to trading counterparties and even financiers. Indian refiners have been seeking more clarity from the EU in the past days on a variety of matters including Nayara’s blacklist and a ban on the diesel supplies made from Russian crude.  Owners from Greece to Norway control a significant portion of the world’s shipping fleet, with companies likely to adhere to EU restrictions to some extent. Since the Ukraine war in 2022, however, Greek owners have played a crucial role in the Russian oil trade, particularly when barrels were below the price cap.  Talara’s diversion adds to the concerns surrounding Nayara, after it sought advance payment or