The growth of COVID-19 cases is "casting a shadow" over oil's recovery despite the partial demand revival and supply cuts that have considerably tightened the market in recent months, the International Energy Agency said this morning.

Why it matters: IEA's monthly report confirms what analysts have seen coming for a long time: Failure to contain the virus is a huge threat to the market rebound that has seen prices grow, but remain at a perilous level for many companies.

• Those fears are now being realized. In particular, the surge of cases in the U.S., the world's largest oil consumer, is consequential for the global market.
• The price recovery has largely stalled over the last month and prices are falling this morning as the market absorbs the IEA analysis and glum news about the pandemic, which threatens the demand comeback.
• This morning, Brent was trading around $42.19 and WTI at $39.40.

What they're saying: "The market started realizing what the impact of the continuously rising COVID-19 cases may be for the U.S. and its oil demand and corrected gains of previous days," Rystad Energy analyst Louise Dickson said in a note.

What's new: IEA notes they have reduced their demand expectations in several regions due to rising cases and "the decision by several states to freeze or roll back the easing of lockdown measures."

• "Similar reductions apply to Brazil, Russia and Saudi Arabia, among other countries," they write.

By the numbers: With the caveat that things are fluid, IEA currently estimates that full-year oil demand this year will be 7.9 million barrels per day below 2019 levels.

• That's a slightly smaller collapse than they previously projected, but that's not a statement about recovery going forward, but instead a reflection that the second-quarter decline was slightly less than expected.
• The report also takes stock of the remarkable decline in global production that has tightened the market. Global supply in June was at its lowest level in nine years.
• "Robust compliance with the OPEC+ output deal and steep declines from other producers, led by the United States and Canada, has cut world oil output by nearly 14 [million bpd] since April," IEA said.

The bottom line: "While the oil market has undoubtedly made progress since 'Black April', the large, and in some countries, accelerating number of COVID-19 cases is a disturbing reminder that the pandemic is not under control and the risk to our market outlook is almost certainly to the downside," IEA said.

Joe Biden is making it increasingly clear that he'll push for a large increase in energy research, development and demonstration funding if he wins the White House.

Driving the news: The economic proposals Biden unveiled yesterday include $300 billion over four years for investments in R&D and "breakthrough" tech — and one of the focus areas is energy.

• Plus, part of Biden's $400 billion "buy American" proposal yesterday says the administration would "commit to purchasing tens of billions of dollars of clean vehicles and products to support the expansion of clean energy generation capacity, ensuring we are on the forefront of the clean energy export markets of the future."

Flashback: The campaign already had called for spending $400 billon over 10 years on clean energy R&D and innovation.

What's next: The campaign is expected to unveil other new provisions in its climate and energy plans in the near future.

Go deeper:

• Inside Joe Biden's economic plan
• Biden's 2020 rivals line up to pitch his economic recovery plan

A new-ish IEA report on the state of clean energy innovation finds that government R&D spending on energy among their member countries in 2019 was $30 billion, with 80% steered toward low-carbon technologies.

Why it matters: While faster deployment of existing tech can do a lot to cut emissions, achieving deep decarbonization goals also require improvements to known technologies and development of new ones.

Yes, but: In the U.S., energy R&D represents a lower share of GDP than a number of countries and regions (which you can see in the chart above). In addition, energy represents less than 3% of total government R&D spending in the United States.

Threat level: The report sounds several warning notes.

• It says that among IEA member countries in the aggregate, energy R&D spending has been "broadly flat since 2012 after having doubled over the previous decade or so."
• Also: "[T]he portfolio remains strongly oriented towards supply-side technologies, rather than the types of end-use innovations needed for sectors that currently have no commercially available and scalable options for achieving deep emissions reductions."

Meadows of seagrass on the ocean floor are among the planet's most efficient ecosystems for absorbing and storing carbon, Axios' Alison Snyder writes.

Why it matters: Climate change, industrial and agricultural runoff, and development along coastlines are threatening the world's seagrass meadows.

• About 161,150 hectares of seagrass have been lost along Australia's coasts since the 1950s, releasing carbon dioxide equivalent to that from 5 million cars each year, according to new research.

What they did: Cristian Salinas of Edith Cowan University and his colleagues compared carbon stored in the sediment of seagrass meadows with areas that no longer had seagrass in western Australia's Cockburn Sound.

• A loss of seagrass by itself didn't account for the carbon dioxide emitted from the soil, the researchers report in the journal Global Change Biology.
• Waves, tides and currents disrupted the soil and sand in shallow areas without seagrass, releasing the carbon sequestered in it.
• They also found seagrass meadows in shallow water stored more carbon than those in deep water, making the nearshore an important area to preserve, Salinas notes.

Read more in the Axios Science newsletter.

Fisker, one of the many EV startups with big plans to make cars but no actual production yet, could soon become a public company.

Driving the news: Reuters reported Thursday that Fisker is in talks to start trading via sale to a so-called blank check acquisition company (basically an already public firm that Fisker would inhabit).

• The reported discussions come after Nikola Motors, an electric and hydrogen fuel cell truck company, started trading via such a transaction last month and saw its shares quickly soar.

Why it matters: If Fisker has a successful public launch, it'll be yet another sign that the market hive-mind sees something in EVs that aren't yet reflected in their actual financials.

• Nikola hasn't started building trucks. Fisker doesn't plan production of its SUV until 2022.
• Tesla is a relative graybeard, but it has an astonishing market cap (around $260 billion, largest in the whole auto industry) even though it's not yet consistently profitable.

The bottom line: EVs remain a tiny share of the market, but the ability of companies to attract investor interest — indeed Fisker just raised another $50 million and Karma Automotive just raised another $100 million — underscores how the transition is underway, and investors want in early.

I've written a couple pieces lately — pegged to the House Democrats' climate plan and new proposals from a Biden-Sanders task force — about the relative lack of disharmony among progressives as the election looms.

Yes, but: Yesterday brought evidence of some discontent with the task force proposal from the left flank of the green movement.

• A piece in Earther yesterday quotes several critics, including Oil Change International's Collin Rees, who says portions on limiting fossil fuel production are "woefully insufficient."

Quick take: The criticisms aside, the most influential players on the climate left seem to be keeping their powder rather dry.

• Check out Rep. Alexandria Ocasio-Cortez's optimistic comments about what ultimately emerged from the task force she co-chaired, alongside the Sunrise Movement comments I flagged yesterday.
• Finally, if there's really a chance to actually legislate, IMHO the bigger challenge for Biden will be corralling moderate Senate Democrats, not addressing discontent among the most lefty groups.