energy and markets newsletter 100711

8/3/2019 Energy and Markets Newsletter 100711

1/10

October 7,2011

Energy Data Highlights

Crude oil futures price10/5/2011: $79.68/bbldown$1.53 from week earlierdown$3.14 from year earlier

Natural gas futures price10/5/2011: $3.570/mmBtudown$0.189 from week earlierdown$0.170 from year earlier

Weekly coal production10/1/2011: 21.911 million tonsup0.718 million tons from week earlierup0.481 million tons from year earlier

Natural gas inventories9/30/2011: 3,409 Bcfup97 Bcf from week earlier

down78 Bcf from year earlier

Crude oil inventories9/30/2011: 336.3 mmbbldown4.7 mmbbl from week earlierdown24.7 mmbbl from year earlier

http://www.eia.gov/

Natural Gas/ Power News

EIA Storage Release 10/6/11 (Actual): +97 Bcf

Previous Week: +111 Bcf-2.2% Change from 1 Year Ago+0.8% Change 5-year Average

Obama to Speed Up Power Line Projects in 12 States

The Obama administration wants to speed up permitting and construction of

seven proposed electric transmission lines in 12 states, as it moves to create jobs

and modernize the nation's power grid

http://www.cnbc.com/id/44785436

New England power grid facing challenges

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/cneaf/coal/weekly/weekly_html/wcpweek.htmlhttp://ir.eia.gov/ngs/ngs.htmlhttp://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCESTUS1&f=Whttp://www.eia.gov/http://www.cnbc.com/id/44785436http://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/cneaf/coal/weekly/weekly_html/wcpweek.htmlhttp://ir.eia.gov/ngs/ngs.htmlhttp://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCESTUS1&f=Whttp://www.eia.gov/http://www.cnbc.com/id/44785436http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RCLC1&f=D


2/10

The low price of natural gas and an aging fleet of soon-to-be-obsolete powerplants are among several factors that could that could dramatically change NewEngland's power grid, says the region's electricity grid managerhttp://www.forbes.com/feeds/ap/2011/10/06/general-ma-new-england-power-grid_8721890.html

INGAA lobbying Paul to drop his Senate hold on US pipeline safety billRepresentatives of the natural gas interstate pipeline industry are lobbying a USsenator to try to get him to drop his hold on reauthorization of the federal pipelinesafety act, the head of the industry's association told Platts on Thursday. DonaldSanta, president and CEO of the Interstate Natural Gas Association of America saidINGAA officials have been talking to Senator Rand Paul and his staff, urging theKentucky Republican to lift his hold, which is blocking the legislation from fast-track approval under the Senate's unanimous consent rules.http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6561722

Kazakhstan may join Nabucco project if new gas fields developeddomestically

Kazakhstan will consider joining the strategic Nabucco gas pipeline project infuture if new gas fields are developed in the country and, as a result, spare gasvolumes emerge, Kazakhstan's Deputy Energy Minister Lyazzat Kiinov said

Thursday at an energy forum in the city of Almaty. "In the future, Kazakhstan willconsider joining Nabucco as a potential gas supplier if new high-potential gasfields are developed domestically and free gas volumes emerge," Kiinov said atthe KIOGE forum.http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8429631

Gazprom, RWE extend exclusive talks on possible power JV in EuropeRussian gas giant Gazprom and German utility RWE have agreed to extend their

exclusive talks on possible partnership in the power generation sector in Europe tothe end of the year, the two companies said Thursday. "The negotiations onpossible cooperation regarding existing and/or new-build gas and hard coal firedpower plants in Germany, the United Kingdom and the Benelux countries will becarried on exclusively until the end of 2011," the companies said in a jointstatement.http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8429523

Green/ Alternative Energy News

Solyndra Casts Shadow on US Energy Loan AidPolitical furor over the Solyndra bankruptcy has dealt a body blow to the idea that

the U.S. government should try to help clean tech start-ups through the costly

"valley of death" to commercial viability


Crude Oil News

OPEC Daily Basket Price 10/6/2011- $101.63

(10/5/2011- $99.90)
http://www.forbes.com/feeds/ap/2011/10/06/general-ma-new-england-power-grid_8721890.htmlhttp://www.forbes.com/feeds/ap/2011/10/06/general-ma-new-england-power-grid_8721890.htmlhttp://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6561722http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8429631http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8429523http://www.cnbc.com/id/44813684http://www.forbes.com/feeds/ap/2011/10/06/general-ma-new-england-power-grid_8721890.htmlhttp://www.forbes.com/feeds/ap/2011/10/06/general-ma-new-england-power-grid_8721890.htmlhttp://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6561722http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8429631http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8429523http://www.cnbc.com/id/44813684


3/10

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 Trims First Weekly Gain in Three Weeks Before U.S. Jobs

Report

Oil fell, trimming its first weekly gain in three in New York on forecasts that a

projected gain in U.S. jobs last month was probably too small to bring down the

unemployment rate in the worlds largest crude user. Futures are set for a 3.6

percent gain this week. U.S. employment rose by 55,000 workers last month,

according to a Bloomberg News survey before data due today. Still, the jobless

rate remained at 9.1 percent for a third month. Were not very optimistic for thejobs numbers; maybe thats another trigger for oil to go lower, said Sintje Diek,

an analyst at HSH Nordbank in Hamburg who correctly predicted in January that

prices would fall in the second half of the year. Levels of around $100 for Brent

are some kind of marker for the market. If we have some kind of solution to the

debt crisis, oil could remain around here for the rest of the year.

http://www.bloomberg.com/news/2011-10-07/crude-oil-trims-first-weekly-gain-in-

three-weeks-before-u-s-jobs-report.html

Commodity Indexes in Rebalancing Act as Brent Rises

Every year around this time, the world's commodity index managers go through

the annual rite of rebalancing their mix, shifting ratios that can swing billions of

dollars from one market to another come January... This year's calibrations hold

more intrigue than usual, however, as they will feed into the biggest debate in the

oil market in years: the growing role of Europe's Brent crude contract as an

important global benchmark... DJ-UBS said in April that it was considering

changing its rules to give it the option to add Brent, trading in which has surged as

it claims a growing role as the global benchmark. And the stakes have risen since

then.
http://investor.shareholder.com/bhi/rig_counts/rc_index.cfmhttp://www.bloomberg.com/news/2011-10-07/crude-oil-trims-first-weekly-gain-in-three-weeks-before-u-s-jobs-report.htmlhttp://www.bloomberg.com/news/2011-10-07/crude-oil-trims-first-weekly-gain-in-three-weeks-before-u-s-jobs-report.htmlhttp://investor.shareholder.com/bhi/rig_counts/rc_index.cfmhttp://www.bloomberg.com/news/2011-10-07/crude-oil-trims-first-weekly-gain-in-three-weeks-before-u-s-jobs-report.htmlhttp://www.bloomberg.com/news/2011-10-07/crude-oil-trims-first-weekly-gain-in-three-weeks-before-u-s-jobs-report.html


4/10

http://www.commodities-now.com/news/power-and-energy/8198-commodity-

indexes-in-rebalancing-act-as-brent-rises.html

US delays in Gulf deepwater permitting 'understandable'

Delays in returning the pace of oil and gas drilling permitting in the Gulf of Mexico

to levels seen before last year's Deepwater Horizon disaster are "understandable"

as both the government and industry grapple with new safety rules, ExxonMobil

CEO Rex Tillerson said on Thursday. The rate of deepwater exploration permitting

is "measurably slower," as the former Minerals Management Service undergoes a

massive reorganization while also imposing new permitting requirements," he said

during an interview at the Washington Ideas Forum.

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6559122

Chevron exec sees new normal in deepwater Gulf, analyst saysDrilling activity in the deep water Gulf of Mexico, though still not back to levels

seen before the BP spill, may represent a new normal for the U.S. offshore

region, said George Kirkland, a senior vice president at Chevron Corp., according

to an analyst report today from Deutsche Bank. The prediction came in a meeting

in Boston with the investment bank and as tougher safety and environmental

regulations enacted after the deadly Macondo well blowout in April 2010 continue

to slow the pace of new drilling permits, forcing producers to scale back

exploration programs. Amid the slowdown, some smaller players, including

Murphy Oil, have weighed exiting the deepwater Gulf amid the slowdown andrising operating costs in the region.

http://fuelfix.com/blog/2011/10/06/chevron-exec-sees-new-normal-in-deepwater-

gulf-analyst-says/
http://www.commodities-now.com/news/power-and-energy/8198-commodity-indexes-in-rebalancing-act-as-brent-rises.htmlhttp://www.commodities-now.com/news/power-and-energy/8198-commodity-indexes-in-rebalancing-act-as-brent-rises.htmlhttp://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6559122http://fuelfix.com/blog/2011/10/06/chevron-exec-sees-new-normal-in-deepwater-gulf-analyst-says/http://fuelfix.com/blog/2011/10/06/chevron-exec-sees-new-normal-in-deepwater-gulf-analyst-says/http://fuelfix.com/blog/2011/10/06/chevron-exec-sees-new-normal-in-deepwater-gulf-analyst-says/http://www.commodities-now.com/news/power-and-energy/8198-commodity-indexes-in-rebalancing-act-as-brent-rises.htmlhttp://www.commodities-now.com/news/power-and-energy/8198-commodity-indexes-in-rebalancing-act-as-brent-rises.htmlhttp://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6559122http://fuelfix.com/blog/2011/10/06/chevron-exec-sees-new-normal-in-deepwater-gulf-analyst-says/http://fuelfix.com/blog/2011/10/06/chevron-exec-sees-new-normal-in-deepwater-gulf-analyst-says/http://fuelfix.com/blog/2011/10/06/chevron-exec-sees-new-normal-in-deepwater-gulf-analyst-says/


5/10

Is crude headed for a bigger fall?Economic observers remain up in the air about the direction of the globaleconomy, wondering if issues like the Greek debt crisis will send us deeper intorecession or if well continue forward on a glacially slow, painful rise. Thisindecision applies to oil markets too, which have seen prices drop to a one-yearlow earlier this month after topping $112 earlier in the year. The rule of thumb is

if the global economy takes a dive so too would oil prices as demand falls off.Thats become a growing sentiment among some analysts. Analysts with BarclaysCapital said in a research note this week also said that the bearish sentimentseems to be winning out. The price fall could be steeper except that as demandseems to be weakening, so is supply: That supply has been weak this year is nonew news. But one of the key developments has been that there has not been justone persistent centre of weakness. Outside the US, supply has disappointed inalmost all the key centres around the world, exchanging hands from time to timein becoming the worst performer. Starting with Libya, China, Canada, Kazakhstan,Azerbaijan, Iraq, Yemen, Nigeria and Brazil have all witnessed a multitude ofshortfalls.http://fuelfix.com/blog/2011/10/06/is-crude-headed-for-a-bigger-fall/

Oil Price Slide May Hit Small Oil Companies' Spending Plans For 2012

An unexpected drop in oil prices is beginning to give small and medium-sized oil

companies pause, even though larger oil companies seem unfazed by it.

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?

storyid=201110051832dowjonesdjonline000515&title=oil-price-slide-may-hit-

small-oil-companiesspending-plans-for-2012

Oils physical strength defies slowdown woes

The physical oil market continues to show a remarkable strength even if futures

prices are lagging amid worries about the impact of an economic slowdown on

demand. The latest signals of supply and demand tightness come from Asia and

the Middle East. On the one hand, the cost of Oman-Dubai crude, the regional

benchmark, in the spot market has surged significantly above the price for

delivery later on in the year and into early 2012. The downward slope of the curve,

known as backwardation, is an indication of immediate tightness. On the other,

the premium that Saudi Arabia charges to Asian refiners for its main crude stream

has jumped to an all-time high.

http://www.ft.com/intl/cms/s/0/1345fc40-f0b0-11e0-aec8-00144feab49a.html?ftcamp=rss#axzz1a65ABpbm

Jobs, Jobs, Jobs Is New Energy Rallying Cry

When you're trying to land a big fish, you need a big boat. For Edison Chouest

Offshore, to land the big jobs building the massive service vessels oil companies

want for new deepwater exploration meant expanding its business in the midst

of the 2008 financial crisis

http://fuelfix.com/blog/2011/10/06/is-crude-headed-for-a-bigger-fall/http://fuelfix.com/blog/2011/10/06/is-crude-headed-for-a-bigger-fall/http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201110051832dowjonesdjonline000515&title=oil-price-slide-may-hit-small-oil-companiesspending-plans-for-2012http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201110051832dowjonesdjonline000515&title=oil-price-slide-may-hit-small-oil-companiesspending-plans-for-2012http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201110051832dowjonesdjonline000515&title=oil-price-slide-may-hit-small-oil-companiesspending-plans-for-2012http://www.cnbc.com/id/44806315http://fuelfix.com/blog/2011/10/06/is-crude-headed-for-a-bigger-fall/http://fuelfix.com/blog/2011/10/06/is-crude-headed-for-a-bigger-fall/http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201110051832dowjonesdjonline000515&title=oil-price-slide-may-hit-small-oil-companiesspending-plans-for-2012http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201110051832dowjonesdjonline000515&title=oil-price-slide-may-hit-small-oil-companiesspending-plans-for-2012http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201110051832dowjonesdjonline000515&title=oil-price-slide-may-hit-small-oil-companiesspending-plans-for-2012http://www.cnbc.com/id/44806315


6/10

Saudi Aramco Raises Light and Medium Oil-Price Premium for Asia to

Record

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 the

highest 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.

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

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

Pakistan refiners eye $1 bil spend in next 3 years on upgrades

Pakistan's private sector refiners are likely to invest nearly $1 billion over the next

three years to expand their plants and also produce Euro 2 compliant high speed

diesel, a refinery chief said last week. "The government has asked all the

[private] refiners in Pakistan -- Attock Refinery, National Refinery, Pakistan

Refinery and Byco [formerly known as Bocior] -- to reduce sulfur content in high

speed diesel to meet Euro 2 [specifications] by June 30, 2014," said Adil Khattak,

CEO of Attock Refinery. The refinery is located at Morgah, 30 kilometers (18.6

miles) from the capital Islamabad.


Saudi protests highlight sectarian fault lines in oil-rich kingdom

New sectarian anti-government riots in Saudi Arabia's oil-rich eastern province

have unsettled international markets while exposing the deepening rift between

the two biggest Persian Gulf oil producers. On Tuesday, Riyadh blamed an

unnamed "foreign power" for fomenting violent unrest in the kingdom's Persian

Gulf coastal province of Khobar, in what observers said was a thinly veiled

reference to Iran, the major Shi'ite Muslim power in the Middle East. The

government also vowed to use "an iron fist" to thwart anyone compromising the

country's security, after 14 people including 11 policemen were hurt by gunfire

and petrol bombs in a clash at the Shi'ite village of Al-Awamia, according to the

official Saudi press agency. "We've seen rising sectarian tension in the region

since the Arab Spring started," Samuel Ciszuk, senior Middle East energy analyst

at IHS Global Insight, said Wednesday. "This obviously unsettles oil markets."

Nonetheless, he was unconvinced that the two-day clash between Shi'ite

protesters and police Monday and Tuesday was a sign of widening Saudi

instability. Moreover, Saudi oil facilities were heavily guarded, making serious

damage to infrastructure unlikely, he said.


UK's Gulfsands sees Syrian production slip further on sanctions
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://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7491969http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8434679http://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://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7491969http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8434679


7/10

UK-based, Syria-focused explorer Gulfsands Petroleum said Thursday it had been

forced to further cut its production in Syria in the wake of US and EU sanctions on

the country. Gulfsands, which produces almost all its oil from Syria, said

production from Block 26 has been reduced to around 6,000 b/d from Monday as

the availability of domestic crude storage capacity dries up following sanctions on

Syrian oil exports. Last month, Gulfsands warned that its production outlook forthe rest of 2011 was uncertain after output from the block was reduced by some

40% to 14,500 b/d on the direction of Syrian authorities.


Weather

Tropical Storm PHILIPPE

http://www.nhc.noaa.gov/text/refresh/MIATCPAT2+shtml/290842.shtml6 to 10

Day Outlooks Temperature
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8429618http://www.nhc.noaa.gov/text/refresh/MIATCPAT2+shtml/290842.shtmlhttp://www.nhc.noaa.gov/text/refresh/MIATCPAT2+shtml/290842.shtmlhttp://www.cpc.ncep.noaa.gov/products/predictions/610day/610temp.new.gifhttp://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8429618http://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/814temp.new.gif


10/10
http://www.cpc.ncep.noaa.gov/products/predictions/814day/814prcp.new.gif

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