energy and markets newsletter 120611
TRANSCRIPT
8/3/2019 Energy and Markets Newsletter 120611
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December 6,2011
Energy Data Highlights
Retail gasoline price12/5/2011: $3.290/galdown$0.017 from week earlierup$0.332 from year earlier
Retail diesel price12/5/2011: $3.931/galdown$0.033 from week earlierup$0.734 from year earlier
Crude oil futures price12/2/2011: $100.96/bblup$4.19 from week earlierup$12.96 from year earlier
Natural gas futures price12/2/2011: $3.584/mmBtu
up$0.042 from week earlierdown$0.759 from year earlier
Weekly coal production11/26/2011: 20.807 million tonsdown0.411 million tons from week earlierup0.324 million tons from year earlier
Natural Gas/ Power News
EIA Storage Release 11/23/11 (Actual): -1 Bcf Previous Week: +9 Bcf +1.1% Change from 1 Year Ago+7.3% Change 5-year Average
Shale-Gas Drilling to Add 870,000 U.S. Jobs
Producing natural gas from shale will support 870,000 U.S. jobs and add $118
billion to economic growth in the next four years, according to a report from IHS
Follow
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Global Insight. Gas from shale, which accounts for 34 percent of U.S. output, also
will contribute $57 billion in federal, state and local taxes by 2035, or $933 billion
in the next 25 years, according to today’s IHS report, commissioned by America’s
Natural Gas Alliance, a Washington-based industry group. Shale gas is extracted
using hydraulic fracturing, a process in which millions of gallons of chemically
treated water and sand is forced underground, breaking up the rock to freetrapped gas. Industry expansion is adding jobs in an otherwise disappointing
economy, said John Larson, a vice president at Lexington, Massachusetts-based
IHS, a management consulting company for the energy industry. “Shale gas
combines a capital-intensive industry with a broad domestic supply chain,” Larson
said in an interview. “We think that these jobs through 2015 are net new jobs
because of high unemployment.”
http://www.bloomberg.com/news/2011-12-06/shale-gas-drilling-to-add-870-000-u-
s-jobs-by-2015-report-says.html
EU energy regulators, traders, brokers unite in fight against VAT fraud
European regulators, trading firms, exchanges and brokers in the energy sector
have committed to make full use of the EU's Regulation on Energy Market
Integrity and Transparency (REMIT) to clamp down on VAT fraud in power and gas
trades.
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8666876
German, French exchange-traded power volumes fall 29% on year in
November
Total German, French and Swiss power volumes traded on the EPEX Spot and EEX
energy exchanges in November changed little from the previous month, but fell
29% year-on-year to 101.4 TWh, data from the exchanges showed Monday.
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/ElectricPower/8661714
Green/ Alternative Energy News
New policy approaches key to scale up renewable energy
Governments should consider scaling up of renewable energy as part of their
robust economic development strategy, rather than as an environmental strategy
with the secondary benefits of job creation. Such an approach is fundamental for
attracting new private-sector investment to finance renewable projects at a scale
that is needed to address climate change. Proven mechanisms should not be
abandoned, but new policies have to target ways to reduce the risk-to-reward
ratio in order to enhance private sector investor confidence for investment in
large-scale renewable energy.
http://www.commodities-now.com/commodities-now-reports/environmental-
markets/9122-new-policy-approaches-key-to-scale-up-renewable-energy.html
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Crude Oil News
OPEC Daily Basket Price 12/5/2011- $110.35
(OPEC Daily Basket Price 12/2/2011- $109.66)
Oil Recovers on Speculation Impact of S&P Ratings Reviews May Be
Limited
Oil traded near its highest in three weeks in New York, recouping earlier losses as
a surge in German manufacturing tempered concerns that Standard & Poor’s may
downgrade the credit ratings of European nations. West Texas Intermediate was
little changed after recouping a loss of 0.6 percent. German factory orders rose
the most in 19 months in October after three straight declines. Standard & Poor’s
said yesterday it may strip Germany and France of AAA credit ratings as it weighsdowngrades for 15 nations. U.S. gasoline and distillate stockpiles rose last week
while crude supplies shrank, according to a Bloomberg News survey.
http://www.bloomberg.com/news/2011-12-06/oil-snaps-two-day-gain-as-s-p-
threatens-european-credit-rating-downgrades.html
Crude Seesaws With EUOil futures jumped above $102 a barrel for the first time in more than two weeks,
boosted by optimism over progress on Europe's debt crisis and the prospect of
additional sanctions on Iran. Those gains were largely wiped out after reports of a
possible downgrade of European sovereign debt undercut the rally.Light, sweet
crude for January delivery rose as high as $102.44 a barrel, its highest level since
Nov. 17, after French President Nicolas Sarkozy and German Chancellor Angela
Merkel said they agreed to firm up financial discipline in the euro zone. In the end,
U.S. crude futures settled up only three cents at $100.99 a barrel on the New York
Mercantile Exchange. Brent crude settled down 13 cents, or 1.0%, at $109.81 a
barrel. The Sarkozy-Merkel proposal is expected to be discussed at a meeting of
European Union in Brussels Thursday and Friday.
http://online.wsj.com/article/SB1000142405297020490380457708014242782994
0.html?mod=WSJ_Commodities_LEFTTopNews
Spread between WTI and Brent prices narrows on signs of easingtransportation constraintsBetween October and November, the spot price of West Texas Intermediate (WTI)crude oil increased $23 per barrel partly on signs that transportation constraintsout of the U.S. Midwest, the main market for WTI, are beginning to ease. At thesame time, the price of European benchmark Brent crude oil was up much less,only about $7 per barrel. As a result, the WTI-Brent crude oil price difference hasnarrowed. The WTI-Brent crude oil price difference was smaller earlier in the year.While the WTI-Brent oil price narrowed, gasoline prices continue to track the price
of Brent as they have for much of the year. The average price for gasoline moved
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about 6 cents a gallon from early October through mid November and then fell 13cents during the last two weeks of November.http://www.eia.gov/todayinenergy/detail.cfm?id=4170
Big Oil Heads Back Home
Big Oil is redrawing the energy map. For decades, its main stomping grounds werein the developing world—exotic locales like the Persian Gulf and the desert sands
of North Africa, the Niger Delta and the Caspian Sea. But in recent years, that
geographical focus has undergone a radical change. Western energy giants are
increasingly hunting for supplies in rich, developed countries—a shift that could
have profound implications for the industry, global politics and consumers.
Driving the change is the boom in unconventionals—the tough kinds of
hydrocarbons like shale gas and oil sands that were once considered too difficult
and expensive to extract and are now being exploited on an unprecedented scale
from Australia to Canada. The U.S. is at the forefront of the unconventionals
revolution. By 2020, shale sources will make up about a third of total U.S. oil and
gas production, according to PFC Energy, a Washington-based consultancy. By
that time, the U.S. will be the top global oil and gas producer, surpassing Russia
and Saudi Arabia, PFC predicts.
http://online.wsj.com/article/SB10001424052970204479504576638731600191382.html?mod=WSJ_hps_RIGHTTopCarousel_1
Oil's Growing Thirst for Water Water has always been a concern for 65-year-old Joe Parker, who manages a
19,000-acre cattle ranch here in South Texas. "Water is scarce in our area," he
says, and a scorching yearlong drought has made it even scarcer. What has Mr.
Parker especially concerned are the drilling rigs that now dot the flat, brushylandscape. Each oil well in the area, using the technique known as hydraulic
fracturing, requires about six million gallons of water to break open rocks far
below the surface and release oil and natural gas. Mr. Parker says he worries
about whether the underground water can support both ranching and energy
exploration.
http://online.wsj.com/article/SB1000142405297020452820457700993022284724
6.html?mod=WSJ_Commodities_LEFTTopNews
Russian Oil Frontier: Nowhere Land There's the middle of nowhere, and then there's here. The place isVerkhnechonsk, an oil field in eastern Russia operated by TNK-BP Ltd. that is oneof the remotest spots on the planet. To get there you have to fly to Siberia, takean aging turboprop plane deep into the taiga, or subarctic forest. Then hop on ahelicopter heading north. From Moscow, the journey takes a day, includinglayovers—longer if there are snowstorms. It is so far from anywhere that TNK-BP,a joint venture of BP PLC and a group of Soviet-born billionaires, runs operationsvia video link from an office in Irkutsk, some 600 miles away. "It's like living on anisland," says Albert Gilfanov, the oil field's deputy manager. Russia is an energysuperpower, with 13% of the planet's oil resources and a quarter of its natural gas.Having declined steeply after the collapse of the Soviet Union, oil production has
come back strongly, hitting a new post-Soviet high of 10.3 million barrels a day in
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October. Yet the mainstay of Russia's hydrocarbon wealth—the big Soviet-era oilfields of Western Siberia—is in decline. To keep production stable, Russia has nochoice but to expand into new areas like Eastern Siberia—where oil reserves areless plentiful, production costs higher and the logistical challenges mind-boggling.http://online.wsj.com/article/SB10001424052970203764804577060200073674124.html?mod=WSJ_Commodities_LeadStory
Brazil acts fast to clear up oil spillsIt was about a month ago when Chevron workers first noticed small bubbles of oil
emerging through cracks in the seabed near one of their wells, 230 miles off the
coast of Rio de Janeiro. Over the next four days, those bubbles spewed more than
2,000 barrels of oil into the Atlantic, leading to a temporary ban of the US
company, a police investigation, millions of dollars in fines, the shutdown of
another of its wells and now threats of regulatory change in one of the world’s
most promising oil industries. Speaking to the Financial Times, Carlos Minc, Rio’s
environment secretary and the country’s former environment minister, says he is
now pushing for tougher rules for companies looking to profit from Brazil’s oil
boom. “We may be a tropical country but we’re not a ‘banana republic’,” he says.“Everyone wants to come to Brazil and if we’re not strict with [Chevron], this place
is going to turn into a pool of oil.”
http://www.ft.com/intl/cms/s/0/dabd7c7a-1e6f-11e1-bae4-
00144feabdc0.html#axzz1flBF0c5J
Paris and London to press EU for Iran oil banFrance and the UK will use a gathering of European Union leaders this week topush forward their plan to approve a full embargo on oil imports from Iran. Themeeting will be dominated by efforts to shore up the single currency. Butdiplomats in Brussels say France is also pushing to use the occasion to advance itscase for strong measures against Iran over its nuclear weapons programme. EUforeign ministers agreed last week to start work on a ban, with the aim of imposing sanctions at their next meeting in January, in a move that could putsignificant new pressure on Tehran’s foreign currency receipts. British and Frenchdiplomats say Greece, which receives between 25 and 30 per cent of its oil fromIran, is the only state raising serious objections to a ban on Iranian oil imports butthose objections should be overcome by the January meeting. http://www.ft.com/intl/cms/s/0/823241ca-1f5b-11e1-ab49-
00144feabdc0.html#axzz1flBF0c5J
Oil rises above $101 as Iran tensions rise
Oil prices rose above $101 a barrel Monday in Asia amid growing tensions
between Iran and Western powers and signs the U.S. economy is improving.
Benchmark crude for January delivery was up 50 cents to $101.46 a barrel at
midday Singapore time in electronic trading on the New York Mercantile
Exchange. The contract rose 76 cents to settle at $100.96 on Friday.
http://www.taiwannews.com.tw/etn/news_content.php?id=1779220
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End of Easy Mideast Oil Means Work for Exxon, BP: Energy Markets
The Middle East will need more help from international investors to keep the title
of world’s biggest oil and gas producer because its remaining deposits are harder
to get at. Technology is the “key to prolonging the life span of the reservoirs, and
we’ve been doing this with our partners for a long time,” Mohamed Al-Hamli, oil
minister of the United Arab Emirates, said yesterday at the World PetroleumCongress in Doha, Qatar. “We are forced to go down the road of enhanced oil
recovery and using more advanced technology.”
http://www.bloomberg.com/news/2011-12-05/end-of-easy-mideast-oil-means-
work-for-exxon-bp-energy-markets.html
Peak oil debate losing relevance due to new upstream technology:
Repsol CEO
The debate over whether the world's reserves of hydrocarbons have now peaked
and are in decline has lost relevance over recent years as new technology allows
oil companies to find and exploit new hydrocarbon sources, the CEO of Repsol
Antonio Brufau said Tuesday.
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8666877
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. 2 Dec11
1993 -7 23 Nov 11 +280 24 Nov 10
Canada 2 Dec11
484 Unchanged 23 Nov 11 +35 24 Nov 10
International
October2011
1197 +23 September 2011
+98 September2010
http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm
Weather
6 to 10 Day Outlooks
Temperature
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Precipitation
8 to 14 Day Outlooks Temperature
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Precipitation
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