energy and markets newsletter 101811

8/3/2019 Energy and Markets Newsletter 101811

1/10

October 18,2011

Energy Data Highlights

Retail gasoline price10/17/2011: $3.476/galup$0.059 from week earlierup$0.642 from year earlier

Retail diesel price10/17/2011: $3.801/galup$0.080 from week earlierup$0.728 from year earlier

Crude oil futures price10/14/2011: $86.80/bblup$3.82 from week earlierup$4.11 from year earlier

Natural gas futures price10/14/2011: $3.703/mmBtu

up$0.222 from week earlierup$0.043 from year earlier

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

Canadian Natural Gas Advances as Midwest Braces for Cold Nights

Follow
http://www.eia.gov/oog/info/gdu/gasdiesel.asphttp://www.eia.gov/oog/info/gdu/gasdiesel.asphttp://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://www.eia.gov/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/oog/info/gdu/gasdiesel.asphttp://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://www.eia.gov/http://www.eia.gov/oog/info/gdu/gasdiesel.asp


2/10

Canadian spot natural gas surged as lower-than-normal temperatures in the U.S.Midwest are forecast to boost furnace for the rest of month. Gas for promptdelivery at the Alliance pipeline hub near Chicago jumped 9.1 percent amidforecasts that low temperatures in the city will trail seasonal norms through Oct.31. The low in Chicago will dip to 38 degrees Fahrenheit (minus 3 Celsius) Oct. 20,6 degrees below normal, according to AccuWeather Inc. The Midwest is the biggest

consuming region for Canadian gas.http://www.businessweek.com/news/2011-10-17/canadian-natural-gas-advances-as-midwest-braces-for-cold-nights.html

Asian gas oil will rely on Europe for support in winterAsia's gas oil market will look to Europe for support this winter as demand fromtop buyers India and Indonesia ebbs, weighing on prices during what is normallythe product's most profitable months because of its use for heating.http://www.reuters.com/article/2011/10/18/us-asia-gasoil-idUSTRE79H1Z320111018

Amerigas Agrees to Buy Propane Operations

Energy Transfer Partners LP agreed to sell its propane operations for $2.8 billion toAmeriGas Partners LP, a deal that would free Energy Transfer to focus on itsnatural gas pipeline business. Unit holders of Energy Transfer, which had beenone of the largest propane marketers in the U.S., will receive about $1.5 billion incash and about $1.3 billion in AmeriGas common units. The deal, expected toclose by early next year, includes the assumption of $71 million in debt. The dealis "the right move at the right time for Energy Transfer as we focus our efforts andresources on opportunities in the pipeline sectorour primary business," saidEnergy Transfer Partners Chairman and Chief Executive Kelcy Warren.http://online.wsj.com/article/SB10001424052970204479504576636943168513616.html?mod=WSJ_Commodities_LEFTTopNews

Gas Beating Oil in Shipping as Users Expand StockpilesRecord liquefied-petroleum-gas shipments are eroding a glut of the tankers

hauling the fuel used in stoves, cars and lighters, driving charter rates to the

highest ever at a time when most other ships are losing money.

http://www.bloomberg.com/news/2011-10-17/gas-beating-oil-in-shipping-as-users-

expand-stockpiles-freight.html

It's Official: 'Age of Shale' Has ArrivedShale is rocking the U.S. energy industry to its core. The technique of crackingopen shale rock to release oil and natural gas has spurred hundreds of billions ofdollars worth of deals, including Monday's $4.4 billion proposed purchase ofBrigham Exploration Co. by Norway's Statoil ASA. And it has delivered enormousprofits and revenues to those in its midst, including Halliburton Co., whichreported a record $6.5 billion in third quarter revenue. Shale discoveries havereinvigorated U.S. oil and gas production that just half a dozen years ago waswidely seen as in terminal decline. Today, there is a glut of cheap natural gas, anddomestic oil production is rising for the first time in decades. Shale development iseven spreading to other countries, such as Poland and Argentina. The shale boomhas already minted a half-dozen new billionaires comparable to the riches broughtby the Internet.http://online.wsj.com/article/SB1000142405297020365880457663739245542465

6.html
http://www.businessweek.com/news/2011-10-17/canadian-natural-gas-advances-as-midwest-braces-for-cold-nights.htmlhttp://www.businessweek.com/news/2011-10-17/canadian-natural-gas-advances-as-midwest-braces-for-cold-nights.htmlhttp://www.reuters.com/article/2011/10/18/us-asia-gasoil-idUSTRE79H1Z320111018http://www.reuters.com/article/2011/10/18/us-asia-gasoil-idUSTRE79H1Z320111018http://online.wsj.com/article/SB10001424052970204479504576636943168513616.html?mod=WSJ_Commodities_LEFTTopNewshttp://online.wsj.com/article/SB10001424052970204479504576636943168513616.html?mod=WSJ_Commodities_LEFTTopNewshttp://www.bloomberg.com/news/2011-10-17/gas-beating-oil-in-shipping-as-users-expand-stockpiles-freight.htmlhttp://www.bloomberg.com/news/2011-10-17/gas-beating-oil-in-shipping-as-users-expand-stockpiles-freight.htmlhttp://online.wsj.com/article/SB10001424052970203658804576637392455424656.htmlhttp://online.wsj.com/article/SB10001424052970203658804576637392455424656.htmlhttp://www.businessweek.com/news/2011-10-17/canadian-natural-gas-advances-as-midwest-braces-for-cold-nights.htmlhttp://www.businessweek.com/news/2011-10-17/canadian-natural-gas-advances-as-midwest-braces-for-cold-nights.htmlhttp://www.reuters.com/article/2011/10/18/us-asia-gasoil-idUSTRE79H1Z320111018http://www.reuters.com/article/2011/10/18/us-asia-gasoil-idUSTRE79H1Z320111018http://online.wsj.com/article/SB10001424052970204479504576636943168513616.html?mod=WSJ_Commodities_LEFTTopNewshttp://online.wsj.com/article/SB10001424052970204479504576636943168513616.html?mod=WSJ_Commodities_LEFTTopNewshttp://www.bloomberg.com/news/2011-10-17/gas-beating-oil-in-shipping-as-users-expand-stockpiles-freight.htmlhttp://www.bloomberg.com/news/2011-10-17/gas-beating-oil-in-shipping-as-users-expand-stockpiles-freight.htmlhttp://online.wsj.com/article/SB10001424052970203658804576637392455424656.htmlhttp://online.wsj.com/article/SB10001424052970203658804576637392455424656.html


3/10

Richard Kinder: New Energy Patch KingRunning pipelines may not sound as sexy as wildcatting for oil, but Richard Kinderhas made a fortune showing how lucrative it can be. The chief executive of KinderMorgan Inc. has parlayed a headstrong belief in the profitability of collecting a toll

to move energy through pipelines into a business empire that has made him thiscity's richest man. Mr. Kinder's stature in the energy world is likely to grow evenlarger with his proposed $21.1 billion purchase of rival El Paso Corp. in a deal thatwill create the nation's fourth biggest energy company. It will also be the largestU.S. operator of natural-gas pipelines at a time when gas produced by fracturingshale formations is transforming the industry across the country.http://online.wsj.com/article/SB10001424052970203658804576637443345700456.html?mod=WSJ_hp_LEFTWhatsNewsCollection

El Pasos Juicy U.S. Shale Gas Assets May Attract Reliance, Occidental

Indias Reliance Industries Ltd. (RIL), Norways Statoil ASA (STL) and Occidental

Petroleum Corp. (OXY) may be among bidders for El Paso Corp. (EP)s oil andnatural-gas unit as the companies seek to expand their stakes in U.S. shale fields.

Kinder Morgan Inc. is seeking a buyer for El Pasos exploration business to help

pay off debt from this weeks $21.1 billion takeover of the rival pipeline company,

which creates the biggest gas pipeline network in the U.S. The assets for sale,

which include more than half a million acres of shale fields, may command a $7.3

billion price tag, according to data compiled by Bloomberg.

http://www.bloomberg.com/news/2011-10-18/el-paso-s-juicy-u-s-shale-gas-assets-

may-attract-reliance-occidental.html

Green/ Alternative Energy News

Storage Makes the Difference in Reliability

Arguments for solar and wind power are so enticing (endless availability, no

pollution and so on) that its easy to see why the idea of transitioning the world

economy to alternative energy over the next 40 years keeps gaining favor.

http://www.bloomberg.com/news/2011-10-17/for-alternative-energy-storage-

makes-the-difference-in-reliability-view.html

Obamas Big Green Mess

This summer, federal inspectors made a routine visit to 11 homes in St. Louis to

see what taxpayers got for the $5 billion that President Obama spent to help

Americans weatherize their homes to save energy. What they found was quite a

surprise. Some of the energy-efficient furnaces installed at taxpayer expense

spewed carbon monoxide that could poison occupants. New water heaters lacked

required pressure valves, putting them in jeopardy of exploding. And a handful of

contractorsunfamiliar with the nuances of specialized weatherization workhad
http://online.wsj.com/article/SB10001424052970203658804576637443345700456.html?mod=WSJ_hp_LEFTWhatsNewsCollectionhttp://online.wsj.com/article/SB10001424052970203658804576637443345700456.html?mod=WSJ_hp_LEFTWhatsNewsCollectionhttp://www.bloomberg.com/news/2011-10-18/el-paso-s-juicy-u-s-shale-gas-assets-may-attract-reliance-occidental.htmlhttp://www.bloomberg.com/news/2011-10-18/el-paso-s-juicy-u-s-shale-gas-assets-may-attract-reliance-occidental.htmlhttp://www.bloomberg.com/news/2011-10-17/for-alternative-energy-storage-makes-the-difference-in-reliability-view.htmlhttp://www.bloomberg.com/news/2011-10-17/for-alternative-energy-storage-makes-the-difference-in-reliability-view.htmlhttp://online.wsj.com/article/SB10001424052970203658804576637443345700456.html?mod=WSJ_hp_LEFTWhatsNewsCollectionhttp://online.wsj.com/article/SB10001424052970203658804576637443345700456.html?mod=WSJ_hp_LEFTWhatsNewsCollectionhttp://www.bloomberg.com/news/2011-10-18/el-paso-s-juicy-u-s-shale-gas-assets-may-attract-reliance-occidental.htmlhttp://www.bloomberg.com/news/2011-10-18/el-paso-s-juicy-u-s-shale-gas-assets-may-attract-reliance-occidental.htmlhttp://www.bloomberg.com/news/2011-10-17/for-alternative-energy-storage-makes-the-difference-in-reliability-view.htmlhttp://www.bloomberg.com/news/2011-10-17/for-alternative-energy-storage-makes-the-difference-in-reliability-view.html


4/10

used air blowers in homes with asbestos, potentially dispersing the cancer-causing

agent, according to several Energy Department inspector-general reports.

http://www.thedailybeast.com/newsweek/2011/10/16/obama-s-green-energy-

agenda-flop.html

Crude Oil News

OPEC Daily Basket Price 10/17/2011- $110.13

(10/14/2011- $109.01)

Oil Drops For a Second Day After Chinas Economy Grows Slowest Since2009

Oil fell for a second day in New York after China said its economy grew at the

slowest pace in two years and U.S. crude stockpiles were forecast to increase.

Futures dropped as much as 1 percent, extending yesterdays 0.5 percent decline,

after Chinas statistics bureau said the economy grew at 9.1 percent in the third

quarter, less than predicted. An Energy Department report tomorrow may show

U.S. crude inventories climbed for a second week, according to a Bloomberg News

survey. Technical indicators indicate prices may have advanced too fast to be

sustainable.

http://www.bloomberg.com/news/2011-10-18/oil-drops-for-a-second-day-after-

china-s-economy-grows-slowest-since-2009.html

Brent falls as China GDP, euro zone weigh

Brent crude futures slid below $110 a barrel on Tuesday, paring earlier gains, after

weaker Chinese third-quarter economic growth prompted concern about future

demand from the world's second-largest oil consumer and as Moody's warned

France of a negative outlook.

http://www.reuters.com/article/2011/10/18/us-markets-oil-

idUSTRE7922QH20111018

Index Changes Weigh on OilWest Texas Intermediate, once the unassailable global crude-oil benchmark, is

under siege on a new front. For months, many producers, traders and investors

have considered the rival European Brent blend a better barometer of global

demand. They cited a glut of oil in the U.S. as distorting prices of the West Texas

blend traded on the New York Mercantile Exchange in New York. Now, managers

of key commodities indexes have thrown their weight behind the trend. The Dow
http://www.thedailybeast.com/newsweek/2011/10/16/obama-s-green-energy-agenda-flop.htmlhttp://www.thedailybeast.com/newsweek/2011/10/16/obama-s-green-energy-agenda-flop.htmlhttp://www.bloomberg.com/news/2011-10-18/oil-drops-for-a-second-day-after-china-s-economy-grows-slowest-since-2009.htmlhttp://www.bloomberg.com/news/2011-10-18/oil-drops-for-a-second-day-after-china-s-economy-grows-slowest-since-2009.htmlhttp://www.reuters.com/article/2011/10/18/us-markets-oil-idUSTRE7922QH20111018http://www.reuters.com/article/2011/10/18/us-markets-oil-idUSTRE7922QH20111018http://www.thedailybeast.com/newsweek/2011/10/16/obama-s-green-energy-agenda-flop.htmlhttp://www.thedailybeast.com/newsweek/2011/10/16/obama-s-green-energy-agenda-flop.htmlhttp://www.bloomberg.com/news/2011-10-18/oil-drops-for-a-second-day-after-china-s-economy-grows-slowest-since-2009.htmlhttp://www.bloomberg.com/news/2011-10-18/oil-drops-for-a-second-day-after-china-s-economy-grows-slowest-since-2009.htmlhttp://www.reuters.com/article/2011/10/18/us-markets-oil-idUSTRE7922QH20111018http://www.reuters.com/article/2011/10/18/us-markets-oil-idUSTRE7922QH20111018


5/10

Jones-UBS Commodity Index and the Standard & Poor's GSCItwo of the most

widely followed commodities indexeshave said in recent days that they plan to

decrease the weighting of WTI and increase or, in DJ-UBS's case, introducethe

weighting of Brent.

http://online.wsj.com/article/SB1000142405297020365880457663728030476339

2.html?mod=WSJ_Commodities_LEFTTopNews

IEA's Birol says oil investment of $10 trillion needed over 2011-2035

The world needs to invest a total of $10 trillion between now and 2035 to meet

future demand, $2 trillion more than projected a year ago, the International

Energy Agency's chief economist, Fatih Birol, said Tuesday. Birol said this year's

World Energy Outlook, which will be released in November, sees a need for total

energy investment of $38 trillion over the period to 2035, around half of which is

needed for oil and gas and half for electricity. This means an annual investmentrequirement of around $1.5 trillion over the period, Birol told a news conference in

Paris on the sidelines of the IEA's annual ministerial meeting. "Oil and gas are the

key areas for investment," Birol said.

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8475612

BP to end payments to oil spill fund earlyBP will be able to cease its payments into a $20bn compensation fund to helpmeet claims from last years Gulf of Mexico oil spill one year earlier than expected

after striking an out-of-court settlement with Anadarko Petroleum. Anadarko, oneof BPs minority partners in the Macondo well, will pay $4bn to settle claimsbetween the two companies.http://www.ft.com/intl/cms/s/0/ec6dd916-f894-11e0-ad8f-00144feab49a.html#axzz1b8IkMBRu

TransCanda : We contribute to Houstons economyTransCanada was among the energy companies with information booths atSaturdays Energy Day in downtown Houston. The company is awaiting the Obamaadministrations decision on whether to approve a pipeline that would carry oilfrom Alberta, Canada, to the Gulf Coast.If approved, the 1,700 mile Keystone XLpipeline would deliver crude from oil sands projects in Alberta to refineries on the

Gulf Coast and expand an existing TransCanada Corp. pipeline network that nowends in Cushing, Okla.http://fuelfix.com/blog/2011/10/18/transcanda-we-contribute-to-houstons-economy/

Norways Statoil to buy Brigham for $4.4 billionNorwegian oil and gas operator Statoil is acquiring Austin-based BrighamExploration Co. in a cash deal worth $4.4 billion, the companiesannounced Monday. The Williston acreage extends into the Bakken and ThreeForks formations and holds the potential to produce 60,000 to 100,000 barrels ofoil per day within five years, Statoil said in its announcement.The acreageproduces mostly light crude oil, the company said. Brigham has 88 wells in North

Dakota and seven in Montana, said Bill Maloney, executive vice president forStatoil North America in a conference with reporters.
http://online.wsj.com/article/SB10001424052970203658804576637280304763392.html?mod=WSJ_Commodities_LEFTTopNewshttp://online.wsj.com/article/SB10001424052970203658804576637280304763392.html?mod=WSJ_Commodities_LEFTTopNewshttp://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8475612http://fuelfix.com/blog/2011/10/18/transcanda-we-contribute-to-houstons-economy/http://fuelfix.com/blog/2011/10/18/transcanda-we-contribute-to-houstons-economy/http://fuelfix.com/blog/2011/10/18/transcanda-we-contribute-to-houstons-economy/http://fuelfix.com/blog/2011/10/18/norways-statoil-to-buy-brigham-for-4-4-billion/http://online.wsj.com/article/SB10001424052970203658804576637280304763392.html?mod=WSJ_Commodities_LEFTTopNewshttp://online.wsj.com/article/SB10001424052970203658804576637280304763392.html?mod=WSJ_Commodities_LEFTTopNewshttp://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8475612http://fuelfix.com/blog/2011/10/18/transcanda-we-contribute-to-houstons-economy/http://fuelfix.com/blog/2011/10/18/transcanda-we-contribute-to-houstons-economy/http://fuelfix.com/blog/2011/10/18/transcanda-we-contribute-to-houstons-economy/http://fuelfix.com/blog/2011/10/18/norways-statoil-to-buy-brigham-for-4-4-billion/


6/10

http://fuelfix.com/blog/2011/10/18/norways-statoil-to-buy-brigham-for-4-4-billion/

Tallow Replaces Crude Oil as Biofuels Go to War

Biofuels face their biggest test yet -- whether they can power fighter jets and

tanks in battle at prices the worlds best-funded military can afford. The U.S. AirForce is set to certify all of its 40-plus aircraft models to burn fuels derived from

waste oils and plants by 2013, three years ahead of target, Air Force Deputy

Assistant Secretary Kevin Geiss said. The Army wants 25 percent of its energy

from renewable sources by 2025. The Navy and Marines aim to shift half their

energy use from oil, gas and coal by 2020. Reliance on fossil fuels is simply too

much of a vulnerability for a military organization to have, U.S. Navy Secretary

Raymond Mabus said in an interview.

http://www.bloomberg.com/news/2011-10-18/animal-fat-replaces-crude-oil-in-f16s-

as-biofuels-head-to-war-commodities.html

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. 14 Oct11

2023 +11 7 Oct 11 +353 15 Oct 10

Canada 14 Oct11

512 -10 7 Oct 11 +89 15 Oct 10

International

September 2011

1174 -9 August2011

+54 September2010

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

Weather

6 to 10 Day Outlooks

Temperature
http://fuelfix.com/blog/2011/10/18/norways-statoil-to-buy-brigham-for-4-4-billion/http://www.bloomberg.com/news/2011-10-18/animal-fat-replaces-crude-oil-in-f16s-as-biofuels-head-to-war-commodities.htmlhttp://www.bloomberg.com/news/2011-10-18/animal-fat-replaces-crude-oil-in-f16s-as-biofuels-head-to-war-commodities.htmlhttp://investor.shareholder.com/bhi/rig_counts/rc_index.cfmhttp://fuelfix.com/blog/2011/10/18/norways-statoil-to-buy-brigham-for-4-4-billion/http://www.bloomberg.com/news/2011-10-18/animal-fat-replaces-crude-oil-in-f16s-as-biofuels-head-to-war-commodities.htmlhttp://www.bloomberg.com/news/2011-10-18/animal-fat-replaces-crude-oil-in-f16s-as-biofuels-head-to-war-commodities.htmlhttp://investor.shareholder.com/bhi/rig_counts/rc_index.cfm


7/10
http://www.cpc.ncep.noaa.gov/products/predictions/610day/610temp.new.gif


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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