energy and markets newsletter 101411

8/3/2019 Energy and Markets Newsletter 101411

1/9

October 14,2011

Energy Data Highlights

Crude oil futures price10/12/2011: $85.57/bblup$5.89 from week earlierup$3.90 from year earlier

Natural gas futures price10/12/2011: $3.489/mmBtudown$0.081 from week earlierdown$0.141 from year earlier

Weekly coal production10/8/2011: 21.602 million tonsdown0.309 million tons from week earlierup0.137 million tons from year earlier

Natural gas inventories10/7/2011: 3,521 Bcf

up112 Bcf from week earlierdown56 Bcf from year earlier

Crude oil inventories10/7/2011: 337.6 mmbblup1.3 mmbbl from week earlierdown22.9 mmbbl from year earlier

http://www.eia.gov/

Natural Gas/ Power News

EIA Storage Release 10/13/11 (Actual): +112 BcfPrevious Week: +97 Bcf-1.6% Change from 1 Year Ago+2.0% Change 5-year Average

Is fracking set to transform the oil market?

Hydraulic fracturing and horizontal drilling revolutionised the natural gas market,

unlocking huge quantities of previous unrecoverable reserves trapped in tight

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://tmp/sv7i8.tmp/javascript:void(0)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/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://tmp/sv7i8.tmp/javascript:void(0)http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RCLC1&f=D


2/9

rock formations. The question is whether they are about to do the same for oil --

unlocking billions of barrels of crude trapped in similar rock forms, and thereby

upending forecasts about increasing oil scarcity and steeply rising prices.

http://www.commodities-now.com/commodities-now-reports/power-and-

energy/8300-is-fracking-set-to-transform-the-oil-market.html

Green/ Alternative Energy News

Houston refiner pleads guilty to environmental crimes *update*A Houston company that owns a refinery in Lake Charles, La. has pled guilty tocriminal violations of federal anti-pollution laws and obstructing justice. PelicanRefining Co., a company created by former Coastal Corp. CEO Oscar Wyatt andBayOil CEO David Chalmers in 2005, agreed to pay a fine of up to $12 million, the

largest ever criminal fine in Louisiana for violations of the Clean Air Act. Of thatfine, $2 million would be community service payments that will go toward variousenvironmental projects in Louisiana, including air pollution monitoring. Pelicanwould also be banned from future refinery operations unless and until itimplements an environmental compliance plan, which includes external auditingby independent firms and oversight by a court appointed monitor.http://fuelfix.com/blog/2011/10/13/houston-refiner-pleads-guilty-to-environmental-crimes/

China Targets GE Wind Turbines With $15.5B War Chest

China has taken on General Electric Co. (GE) and Western peers that control the$70 billion wind-turbine market, striving to repeat its 2010 coup when the Asian

nation sold more than half the worlds solar panels for the first time. Armed with at

least $15.5 billion in state-backed credit, Chinas biggest windmill makers Sinovel

Wind Group Co. and Xinjiang Goldwind Science & Technology Co. won their first

major foreign orders in the past year. They plan to set up plants abroad, including

Chinas first in the U.S., easing entry into markets for delivering machines that can

weigh 750 tons each.

http://www.bloomberg.com/news/2011-10-13/china-targets-ge-s-wind-turbines-

with-15-5-billion-war-chest.html

Crude Oil News

OPEC Daily Basket Price 10/13/2011- $107.04

(10/12/2011- $107.68)

Recent Rig Counts
http://www.commodities-now.com/commodities-now-reports/power-and-energy/8300-is-fracking-set-to-transform-the-oil-market.htmlhttp://www.commodities-now.com/commodities-now-reports/power-and-energy/8300-is-fracking-set-to-transform-the-oil-market.htmlhttp://fuelfix.com/blog/2011/10/13/houston-refiner-pleads-guilty-to-environmental-crimes/http://fuelfix.com/blog/2011/10/13/houston-refiner-pleads-guilty-to-environmental-crimes/http://fuelfix.com/blog/2011/10/13/houston-refiner-pleads-guilty-to-environmental-crimes/http://www.bloomberg.com/news/2011-10-13/china-targets-ge-s-wind-turbines-with-15-5-billion-war-chest.htmlhttp://www.bloomberg.com/news/2011-10-13/china-targets-ge-s-wind-turbines-with-15-5-billion-war-chest.htmlhttp://www.commodities-now.com/commodities-now-reports/power-and-energy/8300-is-fracking-set-to-transform-the-oil-market.htmlhttp://www.commodities-now.com/commodities-now-reports/power-and-energy/8300-is-fracking-set-to-transform-the-oil-market.htmlhttp://fuelfix.com/blog/2011/10/13/houston-refiner-pleads-guilty-to-environmental-crimes/http://fuelfix.com/blog/2011/10/13/houston-refiner-pleads-guilty-to-environmental-crimes/http://fuelfix.com/blog/2011/10/13/houston-refiner-pleads-guilty-to-environmental-crimes/http://www.bloomberg.com/news/2011-10-13/china-targets-ge-s-wind-turbines-with-15-5-billion-war-chest.htmlhttp://www.bloomberg.com/news/2011-10-13/china-targets-ge-s-wind-turbines-with-15-5-billion-war-chest.html


3/9

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. 7 Oct 11 2012 22 30 Sept

11

+341 8 Oct 10

Canada 7 Oct 11 522 12 30 Sept11

+119 8 Oct 10

International

September 2011

1174 -9 August2011

+54 September2010

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

Oil rallies on supply constraints

Crude oil prices jumped in Europe, with ICE Brent briefly hitting $113 onanticipation of further tightening of supply and demand. The November ICE Brentcontract rose $1.56 a barrel to $112.67 in morning trading while NovemberNymex West Texas Intermediate rallied $1.14 a barrel to $85.36, with the spreadbetween the two contracts widening further to $27.31. Prices have been movingon a very tight physical market and uncertainty about the economy, and thephysical side is winning, said James Zhang, oil analyst at Standard Bank inLondon. Lower European inventories are seen by analysts to be behind the recentrise of the Brent crude contract, especially that for immediate delivery.http://www.ft.com/intl/cms/s/0/393f2548-f64b-11e0-86dc-

00144feab49a.html#axzz1aNUQw4Tp

Oil traders unravel Cushing mystery

About a month ago fleets of tank trucks started appearing at the inland port ofCatoosa in Oklahoma. Their cargo: crude oil tapped from Cushing, the big US oilstorage complex 60 miles away. At Catoosa the crude is loaded on to barges thatfloat south to the Gulf of Mexico, says port director Robert Portiss. At the Gulf, abarrel of oil sells for a lot more. Truck, barge and train shipments go some way toexplaining the decline of crude oil stocks at Cushing, the centre of the US oilmarket. But the fall in inventories has raised another question: why doesbenchmark US crude remain so much cheaper than oil in the rest of world? West

Texas Intermediate is trading at levels $26 a barrel lower than Brent, the NorthSea benchmark. The unusually wide spread between the two crudes, if sustained,will have far-reaching implications for the oil market since many commodityinvestors have exposure to both grades.http://www.ft.com/intl/cms/s/0/ca18995e-f5b1-11e0-be8c-00144feab49a.html#axzz1aNUQw4Tp

Crude Oil Heads for Second Weekly Gain Amid U.S., Europe Demand

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


4/9

Oil rose in New York, heading for a second weekly gain on speculation Europe may

contain its debt crisis and that the U.S. economy will recover, bolstering demand

for raw materials. Prices rose as much as 1.9 percent, rallying with equity markets

as Group of 20 and International Monetary Fund officials said the fund may

increase its lending resources to help stem the European debt crisis. Commerce

Department data today may show U.S. retail sales last month climbed at thefastest pace in six months, according to a Bloomberg survey of economists.

Technical indicators showed New York crude was oversold.

http://www.bloomberg.com/news/2011-10-14/crude-oil-heads-for-second-weekly-

gain-amid-u-s-europe-demand-optimism.html

Brent rises towards $113 on euro meetingBrent crude rose toward $113 a barrel on Friday on investor speculation thatEuropean leaders could soon reach a rescue deal on the euro zone debt crisis andon early hints that China may loosen credit as inflation cools. G20 finance chiefs

and central bank heads are meeting in a Paris summit as leaders aim to thrash outa crisis resolution in time for a European Union summit on October 23.http://www.reuters.com/article/2011/10/14/us-markets-oil-idUSTRE7922QH20111014

Oil convoy blues: trucking game foils crude tradersOn paper, it's the kind of arbitrage deal that oil traders dream of: buy crude at $85a barrel in Oklahoma, truck it 550 miles south, and sell it to a Gulf coast refiner for$110.In practice, the crude trucking trade - a measure of last resort as pipelines, trainsand barges are maxed out -- has proved tantalizing but elusive. Just ask Robert"Bo" Collins, the former NYMEX president and hedge fund manager, or the teams

at global energy trading titans Mercuria and Vitol.http://www.reuters.com/article/2011/10/14/cushing-trucks-idUSL1E7LD00D20111014

US lawmakers spar over offshore drilling enforcement in wake of

Macondo

US congressional Democrats Thursday called for larger fines and stronger safety

laws at a hearing on a 17-month federal investigation into the Macondo blowout,

but Republicans pushed back, warning that new laws could stifle offshore

exploration. At a House of Representatives Committee on Natural Resources

hearing, Representative Edward Markey of Massachusetts, the senior Democrat onthe panel, said the interagency investigation into the Gulf of Mexico oil spill

showed that companies must face steeper penalties to be held accountable.

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6580166

Too soon for apocalyptic oil trading scenariosYet, the oil market does not appear to be heading for a Planet of the Apes ending.Macro-economic hedge funds have for weeks been focused on deteriorating oildemand growth. The narrative is compelling, particularly through the looking glassof the global financial crisis. But the numbers do not add up. 2011 is not looking

as bad as 2008. Three years ago the global oil market suffered an actual drop in
http://www.bloomberg.com/news/2011-10-14/crude-oil-heads-for-second-weekly-gain-amid-u-s-europe-demand-optimism.htmlhttp://www.bloomberg.com/news/2011-10-14/crude-oil-heads-for-second-weekly-gain-amid-u-s-europe-demand-optimism.htmlhttp://www.reuters.com/article/2011/10/14/us-markets-oil-idUSTRE7922QH20111014http://www.reuters.com/article/2011/10/14/us-markets-oil-idUSTRE7922QH20111014http://www.reuters.com/finance/dealshttp://www.reuters.com/article/2011/10/14/cushing-trucks-idUSL1E7LD00D20111014http://www.reuters.com/article/2011/10/14/cushing-trucks-idUSL1E7LD00D20111014http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6580166http://www.bloomberg.com/news/2011-10-14/crude-oil-heads-for-second-weekly-gain-amid-u-s-europe-demand-optimism.htmlhttp://www.bloomberg.com/news/2011-10-14/crude-oil-heads-for-second-weekly-gain-amid-u-s-europe-demand-optimism.htmlhttp://www.reuters.com/article/2011/10/14/us-markets-oil-idUSTRE7922QH20111014http://www.reuters.com/article/2011/10/14/us-markets-oil-idUSTRE7922QH20111014http://www.reuters.com/finance/dealshttp://www.reuters.com/article/2011/10/14/cushing-trucks-idUSL1E7LD00D20111014http://www.reuters.com/article/2011/10/14/cushing-trucks-idUSL1E7LD00D20111014http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6580166


5/9

consumption. This time it is merely weathering a slowdown in growth. Look at themost recent numbers from the International Energy Agency. Global oilconsumption in the third quarter of the year grew by 800,000 barrels a day. In thesame period of 2008, demand fell by 600,000 b/d.http://www.ft.com/intl/cms/s/0/1bfac22c-f631-11e0-86dc-

00144feab49a.html#axzz1aNUQw4Tp

BP gets go-ahead for large North Sea project

BP and its partners have won government approval for a 4.5bn oilfielddevelopment in the huge Clair field, marking one of the groups biggestinvestments in the UK North Sea that should see oil being produced until at least2050. The commitment comes just months after the industry launched a stingingattack on the government over its surprise tax hike on North Sea production .Under plans announced on Thursday, BP and its partners Royal Dutch Shell,ConocoPhillips and Chevron will push ahead with a 4.5bn second-phase

investment to develop the Clair field, west of Shetlands.http://www.ft.com/intl/cms/s/0/c705f904-f571-11e0-824e-00144feab49a.html#axzz1aNUQw4Tp

Energy Risk Europe: academic research suggests China and India haveimpact on oil pricesNew academic research suggests a direct link between oil imports into China and

world oil prices. Speaking at the Energy Risk Europe Conference yesterday,

Sharon Xiaowen Lin from the faculty of finance at Cass Business School described

the results of analysis conducted with colleague Hong Li, which suggests a

relationship does exist between demand for oil from China and India and Brent

crude oil prices. "That relationship starts in August 2003, and continues until wefinished our analysis, which was March 2010. Our work supports the media claims

that China and India are factors behind the oil price increases but not before

2003. Before then, China's and India's import volume was relatively low. Since

2003, it is definitively a driving force," explained Lin.

http://www.risk.net/energy-risk/news/2117226/energy-risk-europe-academic-research-suggests-china-india-impact-oil-prices

Pakistan's Mari Gas makes 1,700 b/d oil discovery at Karak block

Pakistani upstream oil and gas company Mari Gas has discovered crude oil, withan additional potential of associated gas, at the Karak block on the border of the

northern Khyber Pakhtunkhwa and Punjab provinces, the country's Ministry of

Petroleum and Natural Resources said Friday. The oil was found at the Halini well,

which was spud on January 7 and drilled to a depth of 5,350 meters. Initial tests

indicated a flow rate of 1,700 b/d, according to the statement.


Russia suspends crude transport via ESPO after earthquake
http://www.risk.net/energy-risk/news/2117226/energy-risk-europe-academic-research-suggests-china-india-impact-oil-priceshttp://www.risk.net/energy-risk/news/2117226/energy-risk-europe-academic-research-suggests-china-india-impact-oil-priceshttp://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8463279http://www.risk.net/energy-risk/news/2117226/energy-risk-europe-academic-research-suggests-china-india-impact-oil-priceshttp://www.risk.net/energy-risk/news/2117226/energy-risk-europe-academic-research-suggests-china-india-impact-oil-priceshttp://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8463279


6/9

Russian oil pipeline operator Transneft has suspended crude transport through the

East Siberia-Pacific Ocean line towards China and the export terminal of Kozmino

on the Pacific Ocean after an earthquake near East Siberia's Skovorodino,

company spokesman Igor Dyomin said Friday. "Crude transportation to China has

been just suspended," he said. Crude loadings from pipeline into railroad tanks for

delivery to Kozmino have also been suspended, he added.


Weather

6 to 10 Day Outlooks Temperature
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8463405http://www.cpc.ncep.noaa.gov/products/predictions/610day/610temp.new.gifhttp://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8463405


7/9

Precipitation

8 to 14 Day Outlooks Temperature
http://www.cpc.ncep.noaa.gov/products/predictions/610day/610prcp.new.gif


8/9

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


9/9

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