energy and markets newsletter january 18-2012
TRANSCRIPT
8/3/2019 Energy and Markets Newsletter January 18-2012
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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
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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
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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
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pipeline, which would run from Turkey's eastern border to Austria, may not be
built, despite years of preparation.
http://online.wsj.com/article/SB1000142405297020446800457716627379213712
2.html?mod=WSJ_Commodities_LEFTTopNews
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
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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
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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.
http://online.wsj.com/article/SB1000142405297020455590457716665090454751
4.html?mod=WSJ_Commodities_LEFTTopNews
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
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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.
http://online.wsj.com/article/SB1000142405297020446800457716687049994701
2.html?mod=WSJ_Commodities_LEFTTopNews
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
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to debottleneck existing pipelines on Enbridge's main line, Enbridge should beable to ship additional Bakken crude, shippers said.
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/3896567
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
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Precipitation
8 to 14 Day Outlooks
Temperature
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Precipitation
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