Energy and Markets Newsletter January 18-2012

8/3/2019 Energy and Markets Newsletter January 18-2012

http://slidepdf.com/reader/full/energy-and-markets-newsletter-january-18-2012 1/11

January 18,2012

Energy Data Highlights

Retail gasoline price

1/16/2012: $3.391/gal

up$0.009 from week earlierup$0.287 from year earlier

Retail diesel price

1/16/2012: $3.854/gal

up$0.026 from week earlierup$0.447 from year earlier

Crude oil futures price

1/13/2012: $98.70/bbl

down$2.86 from week earlierup$7.30 from year earlier

Natural gas futures price

1/13/2012: $2.670/mmBtu

down$0.392 from week earlierdown$1.737 from year earlier

Weekly coal production

1/7/2012: 21.251 million tons

up2.057 million tons from week earlierup0.205 million tons from year earlier

Natural Gas/ Power News

EIA Storage Release 1/12/12 (Actual): -95

Previous Week: -76 Bcf

+13.4% Change from 1 Year Ago

+17.0 % Change 5-year Average

Follow

http://www.eia.gov/petroleum/gasdiesel/


http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RCLC1&f=D

http://www.eia.gov/dnav/ng/hist/rngc1d.htm

http://www.eia.gov/cneaf/coal/weekly/weekly_html/wcpweek.html

http://www.choiceenergyservices.com/

http://twitter.com/#!/Choice_Energy

http://www.facebook.com/pages/Choice-Energy-Services/204397769603350

http://www.linkedin.com/company/choice-energy


http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RCLC1&f=D

http://www.eia.gov/dnav/ng/hist/rngc1d.htm

http://www.eia.gov/cneaf/coal/weekly/weekly_html/wcpweek.html




Big natural gas discovery in offshore Mozambique for AnadarkoAnadarko Petroleum Corp. on Tuesday said it has made another significant

discovery of natural gas in offshore Mozambique with the success of its seventh

appraisal well in the Rovuma basin area . The new appraisal well, Lagosta-2,

further reaffirms the value of the discovery area, which has already yielded

successful wells at Lagosta and Camarao. Lagosta-2 is 4.4 miles north of the

Lagosta well and 5.3 miles south of Camarao.

http://fuelfix.com/blog/2012/01/17/big-natural-gas-discovery-in-offshore-

mozambique-for-anadarko/

Natural Gas Nears Decade LowNatural-gas futures fell to the lowest level in nearly a decade Tuesday, extending

for the sixth day a selloff driven by mild winter temperatures across the U.S.

Without a sustained run of cold weather to spur an increase in gas-fired heating,

U.S. stockpiles of the fuel are expected to hold near the record levels hit late lastyear. That prospect has traders betting on lower prices amid still-increasing

production, highlighting the effect new domestic drilling is having on the U.S.

energy market. "We've got too much supply, and the temperatures are not cold

enough, and the economy is not improving fast enough to have an impact," said

Peter Beutel, president of trading adviser Cameron Hanover. Natural gas for

February delivery fell 18.2 cents, or 6.8%, to settle at $2.488 a million British

thermal units on the New York Mercantile Exchange, the lowest settlement since

March 5, 2002. Prices have fallen 17% since the beginning of 2012, and are down

44% from a year ago.

http://online.wsj.com/article/SB1000142405297020455590457716671342584532

8.html?mod=WSJ_Commodities_LEFTTopNews

Obama Discovers Natural Gas

Last week the White House issued its latest report on jobs and it includes asection on "America's Natural Resource Boom." The report avers that a few yearsago there were widespread "fears of a looming natural gas shortage," but that"the discovery of new natural gas reserves, such as the Marcellus Shale, and thedevelopment of hydraulic fracturing techniques to extract natural gas from thesereserves has led to rapidly growing domestic production and relatively low

domestic prices for households and downstream industrial users.".. To the best of our knowledge, this is the first time the White House has favorably mentionedthe Marcellus Shale, the natural gas reservoir below Pennsylvania, West Virginiaand other Northeastern states. And now he's taking credit for this soaringproduction. As the White House report puts it: "Of the major fossil fuels, naturalgas is the cleanest and least carbon‐intensive for electric power generation. Bykeeping domestic energy costs relatively low, this resource also supports energyintensive manufacturing in the United States. In fact, companies like DowChemical and Westlake Chemical have announced intentions to make majorinvestments in new facilities over the next several years."

http://online.wsj.com/article/SB10001424052970204542404577159451962332684.html?mod=WSJ_Opinion_AboveLEFTTop

http://fuelfix.com/blog/2012/01/17/big-natural-gas-discovery-in-offshore-mozambique-for-anadarko/



http://online.wsj.com/article/SB10001424052970204555904577166713425845328.html?mod=WSJ_Commodities_LEFTTopNews













EEX to launch OTC clearing for NBP Gas Futures

The European Energy Exchange ( EEX) will expand its product portfolio and offer

clearing for bilaterally concluded transactions on the National Balancing Point

( NBP) from 29 February 2012. From this date, EEX participants can register UK

NBP forward transactions conducted off exchange at EEX for clearing and

nomination purposes. Clearing of OTC transactions is provided by EuropeanCommodity Clearing AG (ECC), which also assumes full settlement of the

transactions including physical fulfilment.

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

energy/9678-eex-to-launch-otc-clearing-for-nbp-gas-futures.html

Shale gas adds to refiners' light-end woes

The U.S. natural gas industry, reborn through the shale gas revolution, has

emerged as another source of pain for beleaguered oil refineries as natural gas

liquids (NGLs) grab market share from petroleum in America. As the market for

liquid fuels in the United States has declined in recent years, petroleum has borne

more of the brunt, losing share to biofuels and, increasingly, NGLs. This is startingto hurt. Already battered by dreadful margins for making gasoline, refineries' main

product, they are now being attacked in the specialty market for petrochemicals

feedstocks as well as in the cutthroat propane business.

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

energy/9675-shale-gas-adds-to-refiners-light-end-woes.html

Canadian Natural Gas Tumbles Mild U.S. Weather, Ample Supplies

Canadian natural gas fell, tracking a decline in New York futures, as mild U.S.

weather tempered demand and increased production pared the need for imports

of the fuel.http://www.bloomberg.com/news/2012-01-17/canadian-natural-gas-tumbles-mild-

u-s-weather-ample-supplies.html

European gas demand has record fall in 2011: Societe GeneraleEuropean gas demand fell by 11% in 2011, its largest ever year-on-yeardecline, European bank Societe Generale said in a research note. Europehad mild temperatures in 2011 which reduced demand for gas fordomestic heating. In the UK, 2011 was the second warmest on record,the Met Office said. SocGen expects gas demand to rise 2.5% in 2012 butfor levels before the 2008 financial crisis to be met only in 2018.http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/88089

42

RWE May Reconsider Nabucco PipelineRWE AG could scrap its plans for the proposed Nabucco pipeline, which aims to

transport natural gas from the Caspian region to central Europe via Turkey, the

German energy giant's chief executive said. While still keen to import Caspian gas

to Europe, RWE favors options "that keep our own financial exposure limited,"

Chief Executive Jürgen Grossmann said in an interview. RWE, which has been

badly hit by the German retreat on nuclear power, could support other pipelines

that have competed with Nabucco, he noted. Mr. Grossmann's comments mark

the first concrete signal from a member of the Nabucco consortium that the

http://www.commodities-now.com/commodities-now-news/power-and-energy/9678-eex-to-launch-otc-clearing-for-nbp-gas-futures.html

http://www.eex.com/

http://tmp/svlpm.tmp/javascript:void(0)






http://www.commodities-now.com/commodities-now-reports/power-and-energy/9676-shale-gas-adds-to-refiners-light-end-woes.html




http://www.bloomberg.com/news/2012-01-17/canadian-natural-gas-tumbles-mild-u-s-weather-ample-supplies.html


http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8808942



http://www.eex.com/

















pipeline, which would run from Turkey's eastern border to Austria, may not be

built, despite years of preparation.



Green/ Alternative Energy News

Renewable Energy Tests U.S. IPO Market in First Deal of 2012

Renewable Energy Group Inc., the biodiesel maker that hasn’t posted an annual

profit since 2008, will test investor demand for new shares in the first U.S. initial

public offering this year. The Ames, Iowa-based company, which turns ingredients

including soybean oil into biodiesel for cars and trucks, plans to raise as much as

$108 million offering 7.2 million shares for $13 to $15 each today, according to a

regulatory filing. Renewable will use the proceeds to buy a factory it is currently

leasing and to invest in new processing technologies. The biodiesel maker is oneof at least eight companies that have scheduled dates to complete U.S. offerings

so far this year, even as those that went public in 2011 fell an average of 5.9

percent through Jan. 13, data compiled by Bloomberg show. Renewable is

attempting the first biofuel IPO since June, when Kior Inc. raised $162 million and

then lost more than 30 percent of its value.

http://www.businessweek.com/news/2012-01-18/renewable-energy-tests-u-s-ipo-

market-in-first-deal-of-2012.html

World Future Energy Summit Highlights Renewables, Sustainability

The annual World Future Energy Summit opened today in Abu Dhabi with a call

from UN Secretary-General Ban Ki-moon for support of his Sustainable Energy for

All Initiative. Ban used the conference as the global launching pad for 2012 as the

International Year of Sustainable Energy for All, a designation mandated by the UN

General Assembly. Globally, one person in five lacks access to modern electricity

and three billion people rely on wood, coal, charcoal or animal waste for cooking

and heating. "This is the right time for this initiative," said the secretary-general.

"Across the world we see momentum building for concrete action that reduces

energy poverty, catalyzes sustainable economic growth, and mitigates the risks of climate change. Achieving sustainable energy for all is both feasible and

necessary. My initiative will help us meet these objectives simultaneously. It can

be a triple win for all."

http://www.ens-newswire.com/ens/jan2012/2012-01-16-02.html

Calls For Cost Of Green Energy To Be Revealed

Plans to expand renewable energy sources will cost families £400 a year by 2020,

a leading think tank has warned. Policy Exchange accuses Energy Secretary Chris



http://www.businessweek.com/news/2012-01-18/renewable-energy-tests-u-s-ipo-market-in-first-deal-of-2012.html










Huhne of "misleading" the public by suggesting bills may go down as a result of the Government's drive for green energy.

The think tank has called on ministers to be "more transparent" and believes theGovernment's green targets should be "renegotiated".

http://news.sky.com/home/politics/article/16151485

Crude Oil News

OPEC Daily Basket Price 1/17/2012 – 112.24

(OPEC Daily Basket Price 1/16/2012 – 111.71)

Oil Rises to Three-Day High in New York as Iran Tension CountersEconomy

Oil rose to the highest level in three days in New York as speculation supplies from

Iran will be disrupted countered concern that economic growth will slow. Iran

called on Saudi Arabia to be “more wise and responsible” after the kingdom said it

could make up for any supply loss resulting from a European ban on imports of

Iranian crude. The International Energy Agency reduced its 2012 global oil

demand forecast, after consumption fell in the fourth quarter for the first time

since 2009, warning it may cut estimates further. “Only Saudi Arabia is currently

in a position to plug the gap from Iran,” said Carsten Fritsch, an analyst at

Commerzbank AG in Frankfurt. “This fact should lend support to the oil price for

the time being.”

http://www.bloomberg.com/news/2012-01-18/oil-rises-to-three-day-high-in-new-

york-as-iran-tension-counters-economy.html

Brent Flat, Strong Data Offsets Europe Debt Worry

Oil was flat on Wednesday, as optimism prompted by positive economic data fromChina was eroded by recurrent worries about European debt problems. Asianshares, the euro and base metals held steady after the positive data, althoughmarket participants have now shifted focus to Europe with Portugal testing

investor confidence in a debt sale, and as talks of a default by Greece resurface.Front-month Brent crude 6 cents higher at $111.59 a barrel earlier Wednesday,after touching an intraday peak of $112.16. U.S. oil gained 27 cents $100.98 abarrel. "Oil markets are still rallying on positive data, particularly from China, andexpectations of more easing by the country to ensure steady growth," said NatalieRobertson, an analyst at ANZ.http://www.cnbc.com/id/46031196

Crude Prices Rise 2%

Oil futures finished above $100 a barrel, lifted by brisk economic growth in China

and steps toward an Iranian oil embargo in Europe. Light, sweet crude for


http://www.bloomberg.com/news/2012-01-18/oil-rises-to-three-day-high-in-new-york-as-iran-tension-counters-economy.html


http://www.cnbc.com/id/46031196




http://www.cnbc.com/id/46031196



February delivery settled up $2.01, or 2%, to $100.71 a barrel on the New York

Mercantile Exchange. Brent crude on the ICE futures exchange recently traded up

10 cents, or 0.1%, to $111.44 a barrel. China's economy grew 8.9% in the fourth

quarter, helping to ease concerns about an oil demand slowdown from the world's

second-largest crude consumer. Although the figure was smaller than a year ago,

it came in above many analysts' expectations and remains well above rates in theU.S. and Europe. "If you ask me, 8.9% is still pretty good growth," said Peter

Donovan, vice president at oil options brokerage Vantage Trading in New York. "If

the bearish thing you're seeing is growth of 8.9%, is that so bearish?" The oil

market has increasingly turned to China and other emerging markets to support

demand and prices in recent years, as the country continues to enjoy brisk growth

despite weakness in the U.S. and Europe. That growth has helped feed surging

demand for automobiles and energy, and has made China the second-largest oil

consumer after the U.S.



IEA Slashes Oil-Demand Forecast The International Energy Agency Wednesday took an ax to its oil-demand forecast,

after consumption fell in the fourth quarter of 2011 for the first time since the tail

end of the credit crunch. The agency, which represents major energy-consuming

countries, warned of, "the rising likelihood of a sharp economic slow down, if not

outright recession," that creates the very real possibility of zero oil-demand

growth in 2012. "The data is supportive of our view that the oil price should move

lower in the first half of 2012," said analysts at Bernstein Research in a note to

clients. The IEA warned of multiple risks to oil supply, not least looming sanctions

against Iranian crude exports that could cause significant oil supply difficulties for

European refiners. However, the IEA also noted that Western sanctions are

unlikely to have a meaningful effect until the middle of the year and will probably

be flexible enough to avoid a severe oil-market reaction. "At least a portion of

Iran's 2.5 million barrels a day of crude exports will likely be denied to

[Organisation for Economic Cooperation and Development] refiners during second

half 2012, although more apocalyptic scenarios for sustained disruption to Strait

of Hormuz transits look less likely," it said.

http://online.wsj.com/article/SB10001424052970204555904577168273584222012.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Oil demand falls for first time since 2009

Oil demand is falling for the first time since the 2008-09 global financial crisis as aresult of a mild winter, high crude prices and the European economic crisis,according to fresh estimates from the International Energy Agency. Theindustrialised nations’ watchdog said oil demand dropped by 300,000 barrels aday in the final quarter of 2011. Such a fall is rare: over the last decade, oil

demand has posted drops only in the financial crisis of mid-2008 to mid-2009. The











IEA revised down its outlook for growth in 2012 to 1.1m b/d from 1.3m b/d amidsigns of weakness in the world economy.

http://www.ft.com/intl/cms/s/0/32edf5a0-41b1-11e1-a586-00144feab49a.html#axzz1jickRYpN

Iran Warns Saudis Not to Raise Oil Output Iran warned Saudi Arabia not to deliver more oil to world markets in

compensation for any loss in Iran's oil exports if they are hit by sanctions,

following a pledge by Riyadh to boost output if needed. An Iranian threat to

retaliate against sanctions by blocking the Strait of Hormuz, a strategic route in

the world's largest oil-producing region, has already pushed crude prices higher.

"We invite Saudi officials to further reflect on and consider" their pledge to make

up for any cut in Iranian oil exports, Iran's Foreign Minister Ali Akbar Salehi said,

in comments carried by state news agency IRNA.



EU sets deadline for Iran oil embargo

European Union member states are coalescing around a July 1 deadline fully to

implement an embargo against Iranian oil imports, a timescale that would align

the bloc with US plans to impose related restrictions. Meanwhile, European

diplomats also reported fresh momentum in efforts to sanction Iran’s central bank

– a campaign that has largely been overlooked amid the headlong rush toward an

oil embargo.

http://www.ft.com/intl/cms/s/0/d49e0bc8-4121-11e1-b521-

00144feab49a.html#axzz1jickRYpN

Japanese finance minister again says Iranian crude imports will fall

Japan's Finance Minister Jun Azumi Wednesday reiterated the view that hiscountry's crude oil imports from Iran would decrease further, as a general trend.Azumi's comments, made at a press conference in Tokyo Wednesday, follow hismeeting last week with US Treasury Secretary Timothy Geithner for talks on a

stepping up of sanctions in response to Iran's nuclear program. After last week'smeeting and again Wednesday, Azumi said Japan's Iranian crude oil imports hadfallen by 40% over the past five years and now accounted for just 10% of thenation's total intake.

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7050392

Enbridge considering additional Bakken crude pipeline capacity: shippers

Enbridge is considering options to expand its crude pipeline capacity in the US'Bakken region in addition to company projects already proposed and under way,shippers said Tuesday. Shippers said Enbridge presented the potential options at a

shippers meeting in Denver, Colorado, on January 10. By working on other projects









to debottleneck existing pipelines on Enbridge's main line, Enbridge should beable to ship additional Bakken crude, shippers said.


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. 13 Jan12

1987 -20 6 Jan 12 +287 14 Jan 11

Canada 13 Jan12

611 +250 6 Jan 12 +34 14 Jan 11

International

December 2011

1180 -5 November 2011

+62 December2010

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

6 to 10 Day Outlooks

Temperature



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





Precipitation

8 to 14 Day Outlooks

Temperature

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



Precipitation

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



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

Energy and Markets Newsletter January 18-2012

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Transcript of Energy and Markets Newsletter January 18-2012