8/3/2019 Energy and Markets Newsletter 101711

http://slidepdf.com/reader/full/energy-and-markets-newsletter-101711 1/10

October 17,2011

Energy Data HighlightsCrude oil futures price10/13/2011: $84.23/bblup$1.64 from week earlierup$0.87 from year earlier

Natural gas futures price

10/13/2011: $3.531/mmBtudown$0.067 from week earlierdown$0.169 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 earlier

down56 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 Bcf Previous Week: +97 Bcf -1.6% Change from 1 Year Ago+2.0% Change 5-year Average

Follow

8/3/2019 Energy and Markets Newsletter 101711

http://slidepdf.com/reader/full/energy-and-markets-newsletter-101711 2/10

Deal to Create Pipeline Giant One of the nation's largest operators of natural-gas pipelines is buying a rival for$21.1 billion in cash and stock, making a big bet that natural gas blasted fromshale rocks around the country will become a huge force in America's energyfuture. Pipeline giant Kinder Morgan Inc. says that by buying rival El Paso Corp. it

will become the largest operator of natural-gas pipelines in the country, and thefourth-largest energy company in the U.S. The new entity would have a networkof 67,000 miles of natural-gas pipelines stretching into virtually every major regionwhere natural gas is produced. It would connect Pennsylvania, Arkansas and

 Texas, and give Kinder Morgan entry in to Florida, a growing market for gas-fueledpower generation. Combined, the two companies would also be positioned tobuild new pipelines that will carry natural gas to customers from fields underdevelopment from New York to Ohio to Texas. Pipeline companies have been tryingto redesign their routes to connect fast-growing markets for gas in the southernU.S. with new sources of natural gas made possible by recent technologicaladvances that make it easier to pull natural gas from rocks far below the earth'ssurface.

http://online.wsj.com/article/SB10001424052970204346104576635282137320162.html?mod=WSJ_hp_LEFTWhatsNewsCollection 

High Point seeks approval to buy Louisiana Gulf pipeline assets

High Point Gas Transmission on Thursday asked the US Federal Energy Regulatory

Commission to allow it to buy Gulf Coast gas pipeline assets from El Paso Corp.'s

Southern Natural Gas subsidiary. The assets are south of Southern's Toca

compressor station, in St. Bernard Parish, Louisiana. They include 617 miles of 

onshore and offshore pipeline of various sizes, four platforms and other associated

equipment. The sale is part of a trend of pipelines focusing on onshore systems toavoid the costs of underutilized offshore assets, the application said. HPGT,

however, believes the offshore facilities will be worth the risk, it said.

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6583425 

Heating oil adds pain to winter fuel billsEuropeans face higher energy bills this winter as low heating oil stockpiles clashwith cold weather forecasts and a tight power and gas sector. The continent'sresidential heating is mainly from heating oil, gas or electricity. Tight markets in

all three, combined with expectations of a cold winter, are likely to sharplyincrease heating bills. The International Energy Agency said last week thatEuropean middle distillate stocks, including heating oil, which usually build by 8.9million barrels on average, fell by 0.6 million barrels in August. "Consumer costsof heating oil in Europe after tax have never been this high in the winter," saidPetromatrix's Olivier Jakob. "The other peaks were in the summer of 2008, butthat was not the season for heating oil".http://uk.reuters.com/article/2011/10/16/uk-energy-bills-analysis-

idUKLNE79F00320111016 

Russia's Putin says to cooperate with Japan on LNG, electricity 

8/3/2019 Energy and Markets Newsletter 101711

http://slidepdf.com/reader/full/energy-and-markets-newsletter-101711 3/10

Russian Prime Minister Vladimir Putin has told his Japanese counterpart Yoshihiko

Noda that Moscow hopes to advance energy cooperation with Tokyo in areas

including LNG and possible electricity supplies to the gas- and power- hungry

nation, according to Japan's Ministry of Foreign Affairs. There is no cable yet

linking the two countries. Putin's comments, made in a telephone conversation

late Friday, come after Japan's 10 major power utilities bought an all-time high26.16 million mt of LNG in the April-September period as they hiked gas-fired

power generation to make up for a shortfall in their nuclear output.

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8469242 

Russia Hits Back at EU Gas Policy Russian President Dmitry Medvedev raised the stakes for Europe's energy markets

Friday by portraying recent natural-gas troubles with the European Union as a

potential threat to be reviewed by the country's Security Council, which is led by

the former chief of the KGB's successor agency. "Unfortunately, in recent days awhole series of events have occurred that are creating problems for gas

cooperation," Mr. Medvedev told the council, which includes Russia's ministers of 

foreign affairs, emergency situations and defense, as well as Prime Minister

Vladimir Putin. "The recent events have pushed me to place this issue on the

agenda of the Security Council so that the leadership of our country can work out

an action plan for the government and the top players in the energy market in

their cooperation with Europe," Mr. Medvedev told local news agencies.

http://online.wsj.com/article/SB1000142405297020391430457663094175101151

6.html?mod=WSJ_Commodities_LEFTTopNews 

Green/ Alternative Energy News

Hydrogen gives Air Liquide a lift with fuel cells The Paris-based global corporation, with 2010 revenue of $18 billion, bases its

Americas operations in Houston. It long has supplied the nitrogen, carbon dioxide

and other gases needed to preserve food, produce plastic and manufacture

everyday products. Now Air Liquide is betting that one of its newest investments

— supplying hydrogen for the nation’s growing fleet of fuel-cell forklifts — will help

it grow as domestic manufacturing falters. Hydrogen-powered industrial

equipment is one of several clean energy businesses that Air Liquide has entered

recently. Air Liquide is increasingly tying its future to making domestic energy

more viable and less polluting.

http://fuelfix.com/blog/2011/10/17/hydrogen-gives-air-liquide-a-lift-with-fuel-cells/ 

GE picks Colorado to build biggest US solar factory General Electric Co. will build the largest solar factory in the U.S. near Denver.

 The company, which had announced in April it would build the factory, said

 Thursday it had selected Aurora, Colo., a suburb east of Denver, as the location.

GE is a leader in manufacturing natural gas turbines and wind turbines, but it had

8/3/2019 Energy and Markets Newsletter 101711

http://slidepdf.com/reader/full/energy-and-markets-newsletter-101711 4/10

mostly stayed away from solar until it acquired PrimeStar Solar, a small panel

maker, earlier this year.

http://fuelfix.com/blog/2011/10/14/ge-picks-colorado-to-build-biggest-us-solar-

factory/

Crude Oil News

OPEC Daily Basket Price 10/14/2011- $109.01

(10/13/2011- $107.04)

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

Brent turns negative on German remarksBrent crude turned negative and U.S. crude pared earlier gains on Mondayfollowing remarks from Germany that the forthcoming EU summit would notproduce a definitive solution to the euro zone debt crisis. At the weekend, inunusually direct language, finance ministers and central bankers of the Group of 20 major economies meeting in Paris said they expected an October 23 EuropeanUnion summit to "decisively address the current challenges through acomprehensive plan." However, German Finance Minister Wolfgang Schaeublesaid on Monday that European governments would not present an ultimatesolution for the sovereign debt crisis at the summit.http://www.reuters.com/article/2011/10/17/us-markets-oil-idUSTRE7922QH20111017 

Technology, high prices fuel oil rush in ArcticAs the global hunt for oil gets tougher, the icy expanse of the Arctic – one of the

last frontiers left for exploration – is looking more attractive to some producers.

Indeed, oil and gas activity in areas north of the Arctic Circle could grow

8/3/2019 Energy and Markets Newsletter 101711

http://slidepdf.com/reader/full/energy-and-markets-newsletter-101711 5/10

considerably in coming years as several major oil companies aim to move forward

with exploration plans and others weigh whether they should follow suit. While it

may be too early to call it a boom, there are clear signs of a building trend.

http://fuelfix.com/blog/2011/10/17/technology-high-prices-fuel-oil-rush-in-arctic/ 

Statoil Buys Brigham for $4.4 BillionNorway's Statoil ASA on Monday said it will buy the Texas-based oil firm BrighamExploration Co. for about $4.4 billion, in a deal that will strengthen the Norwegianoil and gas major's position in the U.S. oil and gas industry, and give it a strongerfoothold in unconventional resources. Brigham has over 100 employees and thedeal will give Statoil more than 375,000 net acres in the Williston Basin, which hasthe potential for oil production from the Bakken and Three Forks formations— thelargest oil accumulations in the U.S. Brigham also holds interests in 40,000 netacres in other areas. "Entering the Bakken and Three Forks tight oil plays andtaking on operatorship represents a new significant step for Statoil. We are

positioning ourselves as a leading player in the fast growing U.S. onshore oil andgas industry, in line with the strategic direction we have set out," said Statoil Chief Executive Helge Lund.http://online.wsj.com/article/SB10001424052970204346104576636643736228236.html?mod=WSJ_hp_LEFTWhatsNewsCollection 

Halliburton Rides Drilling Rebound Halliburton Co.'s third-quarter net profit rose 26% as a North American drillingrebound showed no signs of slowing, despite uncertainty about the globaleconomy. Revenue beat analysts' expectations, setting another quarterly record,up 40% to $6.54 billion. The industry has benefited from a drilling boom inalternative shale formations in the U.S. as well as increased offshore activity. The

first major oilfield-services company to report quarterly results offered a firstglimpse of how retreating oil prices are affecting a North American drillingrebound and whether an anticipated recovery is taking hold in the sector'sinternational markets. In the latest quarter, North American revenue was up 63%and profit nearly doubled. In its international business, revenue rose 17%, animprovement from recent quarters, but profit was down 1.6%. Chairman Chief Executive Dave Lesar said recent declines in oil prices and equity markets haveunsettled investors. Still, despite short-term economic concerns, he continues "tobelieve in the long-term prospects for our business."http://online.wsj.com/article/SB10001424052970204479504576636670226498528.html?mod=WSJ_hp_LEFTWhatsNewsCollection 

Rig count rises by 11 The number of rigs actively exploring for oil and natural gas in the U.S. rose 11

this week to 2,023. Houston-based drilling product provider Baker Hughes

reported Friday that 1,080 rigs were exploring for oil and 936 for natural gas.

Seven were listed as miscellaneous. A year ago this week the rig count stood at

1,670.

http://fuelfix.com/blog/2011/10/14/rig-count-rises/ 

8/3/2019 Energy and Markets Newsletter 101711

http://slidepdf.com/reader/full/energy-and-markets-newsletter-101711 6/10

 Analysts: U.S. land drilling will boost earnings for oilfield services

companies

FBR Capital announced that it is boosting estimated earnings for severalcompanies in the business of drilling and extracting oil and gas from the ground,including Weatherford International and RPC Inc., in an industry report released

Friday morning. Domestic drilling for natural gas in unconventional plays, like thedense shale formations, has driven a business boom for the oilfield servicesindustry. Despite some concerns that lower oil prices could cause oil and gasexploration and production companies to pull back on spending, the FBR Capitalanalysts remained bullish about the industry’s future. “Oil service providers haveyet to see material changes in customer behavior,” the analysts noted in thereport. “The recently announced merger between Complete Production Servicesand Superior Energy Services, despite heightened macroeconomic worries, isanother bullish indicator for the industry.”http://fuelfix.com/blog/2011/10/14/analysts-u-s-land-drilling-will-boost-earnings-for-oilfield-companies/ 

 Anadarko to Pay $4B to Settle Spill Claim: BP

BP Plc (BP/), the operator of the Macondo well in the Gulf of Mexico that was the

source of the worst U.S. oil spill last year, said Anadarko Petroleum Corp. (APC)

will pay $4 billion to settle all claims over the disaster. Anadarko, which had a 25

percent stake in the well, will no longer pursue allegations of gross negligence

against BP. The payment will be made in a single cash payment and will be put in

the $20 billion trust being used to repay claims and damages. Under the terms of 

the deal, Anadarko will transfer its stake in the Macondo well back to BP.

http://www.bloomberg.com/news/2011-10-17/bp-says-anadarko-to-pay-4b-to-settle-spill-claim.html 

Tensions flare over oil in South China Sea

China has warned India to halt joint energy projects with Vietnam in the South

China Sea even as Beijing takes steps to reduce tensions with Hanoi and co-

operate more closely in oil and gas exploration in the disputed waters. In a joint

statement issued on Saturday at the conclusion of a high-profile visit to China by

Nguyen Phu Trong, the head of Vietnam’s ruling Communist party, Beijing and

Hanoi said they would “actively boost co-operation” in offshore oil and gas

exploration and exploitation as well as speed up negotiations to find a peaceful

settlement to their long-running dispute. http://www.ft.com/intl/cms/s/0/8316f698-f801-11e0-8e7e-00144feab49a.html#axzz1b2PWEo6P 

China Q3 crude throughput growth lowest this year as demand slows

China's crude throughput rose 1.2% year-on-year during the third quarter to 99.72

million mt (7.95 million b/d), the slowest growth rate so far for the country's

refineries, figures released by the National Development and Reform Commission

showed…"With the slowdown in car sales and a decline in demand growth (in

other areas), the consumption of refined products started to decelerate (in the

second and third quarters)," the NDRC said. At the same time, refined product

inventories reached a high of 15.61 million mt in February. This eased to 11.48

8/3/2019 Energy and Markets Newsletter 101711

http://slidepdf.com/reader/full/energy-and-markets-newsletter-101711 7/10

million by the end of September, it said.

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8469055 

Weather

6 to 10 Day Outlooks

Temperature

Precipitation

8/3/2019 Energy and Markets Newsletter 101711

http://slidepdf.com/reader/full/energy-and-markets-newsletter-101711 8/10

8 to 14 Day Outlooks Temperature

8/3/2019 Energy and Markets Newsletter 101711

http://slidepdf.com/reader/full/energy-and-markets-newsletter-101711 9/10

Precipitation

8/3/2019 Energy and Markets Newsletter 101711

http://slidepdf.com/reader/full/energy-and-markets-newsletter-101711 10/10