energy and markets newsletter 100611

8/3/2019 Energy and Markets Newsletter 100611

1/10

October 6,2011

Energy Data Highlights

Crude oil futures price10/4/2011: $75.67/bbldown$8.78 from week earlierdown$5.80 from year earlier

Natural gas futures price10/4/2011: $3.638/mmBtudown$0.189 from week earlierdown$0.092 from year earlier

Retail heating oil price10/3/2011: $3.688 /galNA from week earlierup$0.778 from year earlier

Crude oil inventories9/30/2011: 336.3 mmbbl

down4.7 mmbbl from week earlierdown24.7 mmbbl from year earlier

Weekly coal production9/24/2011: 21.193 million tonsdown0.015 million tons from week earlierdown0.611 million tons from year earlier

http://www.eia.gov/

Natural Gas/ Power News

EIA Storage Release 9/29/11 (Actual): +111 BcfPrevious Week: +89 Bcf-2.7% Change from 1 Year Ago+0.2% Change 5-year Average

Anadarko Petroleum scores again in MozambiqueAnadarko Petroleum Corp. said it has substantially increased its estimate for the

amount of natural gas offshore fields in Mozambique may hold in the wake of

additional exploration success there by a partnership it leads. The Woodlands-

based oil and gas company said an exploration well at its Camarao prospect

Follow
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RCLC1&f=Dhttp://www.eia.gov/dnav/ng/hist/rngc1d.htmhttp://www.eia.gov/oog/info/hopu/hopu.asphttp://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCESTUS1&f=Whttp://www.eia.gov/cneaf/coal/weekly/weekly_html/wcpweek.htmlhttp://www.eia.gov/http://fuelfix.com/blog/2011/10/05/anadarko-petroleum-scores-again-in-mozambique/http://www.choiceenergyservices.com/http://twitter.com/#!/Choice_Energyhttp://www.facebook.com/pages/Choice-Energy-Services/204397769603350http://www.linkedin.com/company/choice-energyhttp://www.eia.gov/dnav/ng/hist/rngc1d.htmhttp://www.eia.gov/oog/info/hopu/hopu.asphttp://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCESTUS1&f=Whttp://www.eia.gov/cneaf/coal/weekly/weekly_html/wcpweek.htmlhttp://www.eia.gov/http://fuelfix.com/blog/2011/10/05/anadarko-petroleum-scores-again-in-mozambique/http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RCLC1&f=D


2/10

encountered a 240 -foot-deep section of gas-rich rock in a deeply buried reservoir

that shares geologic properties with earlier discoveries called Windjammer and

Lagosta. An additional 140-foot section of gassy rock was also found in shallower

zones in the Camarao well that had not been discovered in previous wells in the

region, Anadarko said.

http://fuelfix.com/blog/2011/10/05/anadarko-petroleum-scores-again-in-

mozambique/

US shale gas bonanza: New wells to draw onWithin the past two years, the industry has woken up to the prospect that the rock

layer stretching across the north-east of the continent from Kentucky to Ontario is

rich in oil, gas and the natural gas liquids such as ethane and propane that are

used as feedstock for the chemicals industry. Leading companies including

Chesapeake Energy, ExxonMobil and Hess have between them spent billions of

dollars building land holdings with drilling rights. Estimates of the Utica shales

reserves are imprecise but Aubrey McClendon, Chesapeake chief executive, has

said he thinks the region could hold 25bn barrels of oil and gas: almost as much as

the entire proved reserves remaining in the North Sea. Chesapeake is already

reporting very strong initial drilling results from its first Utica wells in eastern

Ohio and western Pennsylvania.

http://www.ft.com/intl/cms/s/0/067a0a38-ef39-11e0-918b-

00144feab49a.html#axzz1ZuBxVeXb

Mostly praise for Texas draft frac fluid rules at hearing

Public comments on the Texas Railroad Commissions draft hydraulic fracturingfluid disclosure rules were brief and largely positive during a one hour hearing inAustin on Wednesday. Just a handful of speakers representing academia, industryand the environmental community spoke at the hearing. The rules based on alaw passed by Texas lawmakers this past legislative session require companiesto list on a public website all the ingredients in the mix of fluids pumped underhigh pressure into shale formations to break them apart to release natural gas andoilDuring the hearing Rice University chemistry professor Andrew Barron saidthe rule requires more disclosure than the Food and Drug Administration requiresfor consumer product ingredients. For example, sodas arent required to disclosewhats in flavoring listed on their labels, he said. Once you understand what isbeing used in a frac job is similar to what youre consuming every day, it becomes

demystified, Barron said.http://fuelfix.com/blog/2011/10/05/mostly-praise-for-texas-draft-frac-fluid-rules-at-hearing/
http://fuelfix.com/blog/2011/10/05/anadarko-petroleum-scores-again-in-mozambique/http://fuelfix.com/blog/2011/10/05/anadarko-petroleum-scores-again-in-mozambique/http://fuelfix.com/blog/2011/10/05/mostly-praise-for-texas-draft-frac-fluid-rules-at-hearing/http://fuelfix.com/blog/2011/10/05/mostly-praise-for-texas-draft-frac-fluid-rules-at-hearing/http://fuelfix.com/blog/2011/10/05/mostly-praise-for-texas-draft-frac-fluid-rules-at-hearing/http://fuelfix.com/blog/2011/10/05/anadarko-petroleum-scores-again-in-mozambique/http://fuelfix.com/blog/2011/10/05/anadarko-petroleum-scores-again-in-mozambique/http://fuelfix.com/blog/2011/10/05/mostly-praise-for-texas-draft-frac-fluid-rules-at-hearing/http://fuelfix.com/blog/2011/10/05/mostly-praise-for-texas-draft-frac-fluid-rules-at-hearing/http://fuelfix.com/blog/2011/10/05/mostly-praise-for-texas-draft-frac-fluid-rules-at-hearing/


3/10

Darwin LNG to undergo planned maintenance starting end April 2012Australia's Darwin LNG will undergo a scheduled maintenance at its 3.6 millionmt/year complex, which is expected to begin in the last week of April 2012, PaulDubuisson, vice president of operations drilling and supply chain at ConocoPhillips,said on the sidelines of the 2011 South East Asia Australia Offshore Conference

Thursday ConocoPhillips operates and holds 57.2% of the Darwin LNG project,which started up in 2006, processing gas from the Bayu-Undan offshore field.Santos holds 11.4% of the plant, alongside Japan's Inpex (11.3%), Italian major Eni(11%), and Japanese term LNG customers Tokyo Electric Power Company and

Tokyo Gas (9.2%).http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7482876

Green/ Alternative Energy News

California Hot Rocks Probed for Energy

For decades, energy companies have tapped steam from deep in the earth to

make electricity. Now, at least five American power producers are testing a simple

idea that may dramatically expand the industrys reach: Bring your own water.

Instead of producing power only in places where steam flows naturally, these

companies are drilling deeper to inject water into superhot, dry rocks and create

the vapor needed to generate power. The technology offers the opportunity of

creating additional reserves, said Mark Walters, a senior geologist at Calpine

Corp. (CPN), the biggest U.S. geothermal power producer. The heat is a resource

in areas around existing plants, but right now we really cant get at it. The

Houston-based company is expected to begin testing this process today. There

are hundreds of sites worldwide where the technology may be used to generate

electricity. In the U.S., such plants could supply 100 gigawatts of power by 2050,

said Ernest L. Majer, an energy geophysicist at Lawrence Berkeley National

Laboratory. Thats the equivalent of 100 nuclear reactors and would boost

geothermals share of the countrys power supply to 10 percent, from less than 1

percent now. Theres a lot of hot rock out there, Majer said. That would replace

our nuclear power plants.

http://www.bloomberg.com/news/2011-10-06/california-s-underground-hot-rocks-

probed-for-energy-of-100-nuclear-plants.html

Rice competition adds clean energy prizeIn a move that dovetails with Houstons push to transform itself from the EnergyCapital of the World to the Clean Energy Capital, Rice University is giving away$100K to entrepreneurs who come up with innovative green businesses. The prizeis a new addition to Rices annual business plan competition. Its paid for by theU.S. Department of Energys Office of Energy Efficiency and Renewable Energyand is one of three awards Rice now offers for clean energy projects: the WasteManagement Think Green Investment Prize and the KPCB Prize for Clean TechInnovation, sponsored by the Silicon Valley venture capital firm Kleiner Perkins

Caufield & Byers.
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7482876http://www.bloomberg.com/news/2011-10-06/california-s-underground-hot-rocks-probed-for-energy-of-100-nuclear-plants.htmlhttp://www.bloomberg.com/news/2011-10-06/california-s-underground-hot-rocks-probed-for-energy-of-100-nuclear-plants.htmlhttp://fuelfix.com/blog/2011/10/05/rice-competition-adds-clean-energy-prize/http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7482876http://www.bloomberg.com/news/2011-10-06/california-s-underground-hot-rocks-probed-for-energy-of-100-nuclear-plants.htmlhttp://www.bloomberg.com/news/2011-10-06/california-s-underground-hot-rocks-probed-for-energy-of-100-nuclear-plants.htmlhttp://fuelfix.com/blog/2011/10/05/rice-competition-adds-clean-energy-prize/


4/10

http://fuelfix.com/blog/2011/10/05/rice-competition-adds-clean-energy-prize/

Crude Oil News

OPEC Daily Basket Price 10/5/2011- $99.90

(10/4/2011- $98.59)

Recent Rig Counts

Area

Last

Count

Cou

nt

Change

from Prior

Count

Date of

Prior

Count

Change

from Last

Year

Date of

Last Year's

Count

U.S. 30 Sept11

1990 -1 23 Sept 11 +331 1 Oct 10

Canada 30 Sept11

510 5 23 Sept 11 +197 1 Oct 10

International

August2011

1183 +33 July 2011 +81 August 2010

http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

Crude Oil Trades Near Four-Day High on Shrinking Supplies, U.S. Job

Growth

Oil rose for a second day in New York as shrinking U.S. crude supplies, better-

than-expected economic data and signs Europe can control its debt crisis allayed

concerns that fuel consumption will suffer. Futures gained as much as 1.8 percent

after rising the most in almost five months yesterday. Crude inventories fell 4.7

million barrels, the Energy Department reported yesterday. The Labor Department

may say tomorrow employment growth in the U.S. resumed last month after

stagnating in August. European officials are working on plans to boost bank

capital, an International Monetary Fund official said. Oil prices have been quite

resistant to the turbulence in the U.S. and Europe, said Thina Saltvedt, an analyst

at Nordea Bank AB in Oslo who expects Brent to remain at $100 a barrel for the

next few weeks and average $110 this quarter. The latest macro figures have not

been as disappointing. Itll take something worse to bring prices down.

http://www.bloomberg.com/news/2011-10-05/crude-oil-trades-near-four-day-high-

on-shrinking-supplies-u-s-job-growth.html

Saudi Arabia Increases Premiums for Crude Exports to Asia
http://fuelfix.com/blog/2011/10/05/rice-competition-adds-clean-energy-prize/http://investor.shareholder.com/bhi/rig_counts/rc_index.cfmhttp://www.bloomberg.com/news/2011-10-05/crude-oil-trades-near-four-day-high-on-shrinking-supplies-u-s-job-growth.htmlhttp://www.bloomberg.com/news/2011-10-05/crude-oil-trades-near-four-day-high-on-shrinking-supplies-u-s-job-growth.htmlhttp://fuelfix.com/blog/2011/10/05/rice-competition-adds-clean-energy-prize/http://investor.shareholder.com/bhi/rig_counts/rc_index.cfmhttp://www.bloomberg.com/news/2011-10-05/crude-oil-trades-near-four-day-high-on-shrinking-supplies-u-s-job-growth.htmlhttp://www.bloomberg.com/news/2011-10-05/crude-oil-trades-near-four-day-high-on-shrinking-supplies-u-s-job-growth.html


5/10

Saudi Arabian Oil Co., the worlds largest crude exporter, set prices for two grades

of crude to be sold to Asia at the highest premiums in at least 11 years and cut

other for the U.S., Europe and the Mediterranean. The state-owned producer,

known as Saudi Aramco, increased the pricing formula for its Arab Light crude to

Asia by $1.05 a barrel to $2.70 a barrel above the average price assessment for

Oman and Dubai grades, it said in an e-mailed statement yesterday. That is thehighest premium in Bloomberg records going back to June 2000. Oman and Dubai

assessments published by Platts are used as pricing benchmarks for Middle

Eastern oil. Dhahran-based Saudi Aramco raised the price for its Arab Medium

variety to $1.15 a barrel over the Oman-Dubai average, according to the

statement. Thats also a record based on Bloomberg data and is up from a 30-cent

discount to the benchmark in October.

http://www.bloomberg.com/news/2011-10-06/saudi-arabia-sets-record-premiums-

for-two-crude-grades-exported-to-asia.html

Oil Wager Looks to Be on WaneOil prices rallied 5.3% on an unexpected decline in crude stockpiles, damping

prospects for a popular bet tied to a rival benchmark. Front-month oil for

November delivery jumped $4.01, to $79.68 a barrel on the New York Mercantile

Exchange on Wednesday, with much of the gain coming after the Department of

Energy reported that oil inventories last week fell by 4.7 million barrels. Brent

crude for November delivery, a benchmark oil price cited widely in Europe, closed

up $2.94, or 3%, at $102.73 a barrel on the ICE futures exchange. A majority of

the world's physical barrels are priced off Brent. The $23.05 difference in prices

between the two still is high by historical standards, but is down 14% from aSeptember high.

http://online.wsj.com/article/SB10001424052970203476804576612590354117166.html?mod=WSJ_Commodities_LEFTTopNews

Worst Oil Industry Slump Since Lehman May Herald Takeovers

The oil and gas industrys worst slump since the financial crisis heralds a surge of

takeovers for Goldman Sachs Group Inc. and Sanford C. Bernstein Co. as Asia

buyers put $150 billion in cash to work. The market valuation of U.K. and North

American exploration company reserves has dropped 23 percent this year to thelowest since 2008, Bloomberg data shows, while Brent crude prices gained 8

percent to $102 a barrel. The dislocation between crude and company valuations

is extreme and may lead to twice as many deals as usual, Goldman said last

month. Asian buyers may spend $150 billion by 2016 to secure energy resources

for their faster-growing economies and targets could include Tullow Oil Plc (TLW),

Canadian Oil Sands Ltd. and Kosmos Energy Ltd., according to Bernstein. London-

listed Premier Oil Plc (PMO) said it will seek more acquisitions after buying EnCore

Oil Plc for $340 million yesterday. The valuations are pretty compelling if you

believe in $100 oil, said Christopher Wheaton, who manages RCM Ltd.s $140

billion Energy Fund in London. Once the economic uncertainty clears, we should
http://www.bloomberg.com/news/2011-10-06/saudi-arabia-sets-record-premiums-for-two-crude-grades-exported-to-asia.htmlhttp://www.bloomberg.com/news/2011-10-06/saudi-arabia-sets-record-premiums-for-two-crude-grades-exported-to-asia.htmlhttp://online.wsj.com/article/SB10001424052970203476804576612590354117166.html?mod=WSJ_Commodities_LEFTTopNewshttp://online.wsj.com/article/SB10001424052970203476804576612590354117166.html?mod=WSJ_Commodities_LEFTTopNewshttp://www.bloomberg.com/news/2011-10-06/saudi-arabia-sets-record-premiums-for-two-crude-grades-exported-to-asia.htmlhttp://www.bloomberg.com/news/2011-10-06/saudi-arabia-sets-record-premiums-for-two-crude-grades-exported-to-asia.htmlhttp://online.wsj.com/article/SB10001424052970203476804576612590354117166.html?mod=WSJ_Commodities_LEFTTopNewshttp://online.wsj.com/article/SB10001424052970203476804576612590354117166.html?mod=WSJ_Commodities_LEFTTopNews


6/10

see a pickup in deals. Asia still has the appetite because the security of supply

issues havent gone away.

http://www.bloomberg.com/news/2011-10-05/oil-industry-s-worst-slump-since-

lehman-may-herald-takeover-wave.html

Marathon Oil may sell stake in deepwater Gulf assetsMarathon Oil Corp. is evaluating the possible sale of a minority stake in its

deepwater Gulf of Mexico assets as the company, which recently spun off its

refining arm, seeks to boost shareholder returns and strengthen its portfolio, a

spokeswoman with the Houston oil company said today. Consistent with this

plan, and given the significant prospect inventory weve built in the Gulf and our

focus on capital discipline, we are evaluating the opportunity to farm down a

minority working interest in our Gulf of Mexico portfolio, Marathons Lee Warren

said in an e-mailed statement.

http://fuelfix.com/blog/2011/10/05/marathon-oil-may-sell-stake-in-deepwater-gulf-

assets/

Green groups seek injunction to stop Keystone XL preparationsEnvironmental groups opposed to the Keystone XL pipeline sued the USgovernment Wednesday to halt TransCanada's preparations for building theincreasingly controversial project.http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6557861

Venezuela stations are hit by shortages of gasoline, dieselFor the past week, Venezuela has experienced shortages of fuel supplies such asgasoline and diesel, sources and local news reports indicated Wednesday. InCaracas, for example, lines of automobiles have formed at service stations sincelast Thursday as motorists stock stock up on gasoline. And other stations havebeen partially or completely closed while waiting for additional supplies for theirpumps.http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6557873

Weather

Philippe Close to Hurricane Strength in Atlantic, Storm Forms Off Mexico

Tropical Storm Philippe is nearing hurricane status in the Atlantic southeast of

Bermuda though it poses no threat to land, the National Hurricane Center said.

http://www.bloomberg.com/news/2011-10-06/philippe-close-to-hurricane-strength-

in-atlantic-storm-forms-off-mexico.html
http://www.bloomberg.com/news/2011-10-05/oil-industry-s-worst-slump-since-lehman-may-herald-takeover-wave.htmlhttp://www.bloomberg.com/news/2011-10-05/oil-industry-s-worst-slump-since-lehman-may-herald-takeover-wave.htmlhttp://fuelfix.com/blog/2011/10/05/marathon-oil-may-sell-stake-in-deepwater-gulf-assets/http://fuelfix.com/blog/2011/10/05/marathon-oil-may-sell-stake-in-deepwater-gulf-assets/http://fuelfix.com/blog/2011/10/05/marathon-oil-may-sell-stake-in-deepwater-gulf-assets/http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6557861http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6557873http://www.bloomberg.com/news/2011-10-06/philippe-close-to-hurricane-strength-in-atlantic-storm-forms-off-mexico.htmlhttp://www.bloomberg.com/news/2011-10-06/philippe-close-to-hurricane-strength-in-atlantic-storm-forms-off-mexico.htmlhttp://www.bloomberg.com/news/2011-10-05/oil-industry-s-worst-slump-since-lehman-may-herald-takeover-wave.htmlhttp://www.bloomberg.com/news/2011-10-05/oil-industry-s-worst-slump-since-lehman-may-herald-takeover-wave.htmlhttp://fuelfix.com/blog/2011/10/05/marathon-oil-may-sell-stake-in-deepwater-gulf-assets/http://fuelfix.com/blog/2011/10/05/marathon-oil-may-sell-stake-in-deepwater-gulf-assets/http://fuelfix.com/blog/2011/10/05/marathon-oil-may-sell-stake-in-deepwater-gulf-assets/http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6557861http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6557873http://www.bloomberg.com/news/2011-10-06/philippe-close-to-hurricane-strength-in-atlantic-storm-forms-off-mexico.htmlhttp://www.bloomberg.com/news/2011-10-06/philippe-close-to-hurricane-strength-in-atlantic-storm-forms-off-mexico.html


7/10

Tropical Storm PHILIPPE

http://www.nhc.noaa.gov/text/refresh/MIATCPAT2+shtml/290842.shtml

6 to 10 Day Outlooks

Temperature
http://www.nhc.noaa.gov/text/refresh/MIATCPAT2+shtml/290842.shtmlhttp://www.cpc.ncep.noaa.gov/products/predictions/610day/610temp.new.gifhttp://www.nhc.noaa.gov/text/refresh/MIATCPAT2+shtml/290842.shtml


8/10

Precipitation

8 to 14 Day Outlooks

Temperature
http://www.cpc.ncep.noaa.gov/products/predictions/610day/610prcp.new.gif


9/10

Precipitation
http://www.cpc.ncep.noaa.gov/products/predictions/814day/814prcp.new.gifhttp://www.cpc.ncep.noaa.gov/products/predictions/814day/814temp.new.gif


10/10

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