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October 4, 2011

Energy Data Highlights

Retail gasoline price 10/3/2011: $3.433/gal down$0.076 from week earlier up$0.701 from year earlier Retail diesel price 10/3/2011: $3.749/gal down$0.037 from week earlier up$0.749 from year earlier Crude oil futures price 9/30/2011: $79.20/bbl down$0.65 from week earlier down$0.77 from year earlier Natural gas futures price 9/30/2011: $3.666/mmBtu down$0.035 from week earlier down$0.204 from year earlier Weekly coal production 9/24/2011: 21.193 million tons down0.015 million tons from week earlier down0.611 million tons from year earlier http://www.eia.gov/ Natural Gas/ Power News

EIA Storage Release 9/29/11 (Actual): +111 Bcf Previous Week: +89 Bcf -2.7% Change from 1 Year Ago +0.2% Change 5-year Average NRG says summer power spikes were costly The owner of Texas second-largest power plant operator and largest retail electric provider is lowering its earnings projections for the year due to this past summers

multiple power crisis. NRG Energy is lowering its earnings before interest, taxes, depreciation and amortization, or EBITDA, to the $1.775 to $1.85 billion range. Thats down from a range of $1.9 to $2 billion. The decline in earnings was due to spikes in wholesale power prices that occured when record-breaking power demand was combined with large numbers of unplanned power plant outages. http://fuelfix.com/blog/2011/10/03/nrg-says-summer-power-spikes-were-costly/

Drill Fee Proposed for Pennsylvania Pennsylvania Gov. Tom Corbett proposed a fee on natural-gas drilling of as much as $160,000 a well in an effort to find a middle ground between public support for assessing drillers in the booming Marcellus Shale basin and a campaign pledge not to impose taxes. If passed by the state legislature, the recommendation would generate an estimated $120 million in the first year, most of which would be kept at the local level to help pay the cost to regulate drilling and to repair roads and bridges. Every other gas-drilling state already imposes a fee on wells or a tax on the value of gas that is extracted. http://online.wsj.com/article/SB1000142405297020379190457660926057348291 4.html?mod=WSJ_Commodities_LEFTTopNews France Cancels Shale-Gas Permits Over Fracking Impasse The French government on Monday canceled all three exploration permits on shale-gas fields after oil major Total SA and U.S.-based Schuepbach Energy LLC which hold the rightsmaintained their intention to drill the potential fields using hydraulic fracturing, a controversial technique that was banned in the country earlier this year. In a joint statement, France's energy minister, ric Besson, and environmental minister, Nathalie Kosciusko-Morizet, said that the three permits, which represent all of the country's potential shale-gas fields, had been cancelled after the companies submitted a mandatory report about their drilling techniques in which they maintained their plans to use hydraulic fracturing, or "fracking.' http://online.wsj.com/article/SB1000142405297020461250457660898381406901 2.html?mod=WSJ_Commodities_LEFTTopNews

Green/ Alternative Energy News

DOE Pushing On With $5 Billion In Solar Energy Loans The U.S. Department of Energy said it plans to push ahead with as much as $5.3 billion in potential additional alternative energy loans by Friday, despite Republican complaints the money is going out too quickly to untested firms. That comes against a backdrop of increasing political controversy over the ill-fated loan recipient Solyndra, the company whose bankruptcy has prompted questions of who inside the Obama Administration knew of the companys weak financial position and why they continued to pour taxpayer money into it. http://www.cnbc.com/id/44723203

A US-Backed Geothermal Plant in Nevada Struggles In a remote desert spot in northern Nevada, there is a geothermal plant run by a politically connected clean energy start-up that has relied heavily on an Obama administration loan guarantee and is now facing financial turmoil. The company is Nevada Geothermal Power, which like Solyndra, the now-famous California solar company, is struggling with debt after encountering problems at its only operating plant. After a series of technical missteps that are draining Nevada Geothermals cash reserves, its own auditor concluded in a filing released last week that there was significant doubt about the companys ability to continue as a going concern. It is a description that echoes the warning issued in 2010 by auditors hired by Solyndra, which benefited from the same Energy Department loan guarantee before its collapse in August caused the Obama administration great embarrassment. http://www.cnbc.com/id/44756837

Crude Oil News

OPEC Daily Basket Price 10/3/2011 $99.65 (9/30/2011 $101.57)

Recent Rig Counts Change from Prior Count -1 5 +33 Date of Prior Count 23 Sept 11 23 Sept 11 July 2011 Change Date of from Last Last Year's Year Count +331 +197 +81 1 Oct 10 1 Oct 10 August 2010

Area U.S. Canada

Last Count

Cou nt

30 Sept 1990 11 30 Sept 510 11

Internatio August 1183 nal 2011

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

Crude Oil Declines to Eight-Week Low on U.S. Supplies, Libyan Production Oil fell to an eight-week low in New York on signs of rising U.S. supplies and output from Libya. Goldman Sachs Group Inc. (GS) cut its 2012 forecast for Brent crude. Futures slid as much as 2.2 percent after settling yesterday at the lowest level in more than a year. Goldman Sachs said Brent will average $120 a barrel next year, down from $130. U.S. crude inventories climbed for a second week, an Energy

Department report tomorrow may show. Libya aims to raise production to more than 500,000 barrels a day by the end of this month, according to the chairman of state-run National Oil Corp. http://www.bloomberg.com/news/2011-10-04/crude-oil-declines-to-eight-week-lowon-u-s-supplies-libyan-production.html

Oil May Draw Support From OPEC Cuts in Grim Q4: Survey Possible OPEC supply cuts, the delayed return of Libyan oil and peak winter heating fuel demand may provide pockets of support to benchmark crude oil prices during an otherwise grim final quarter plagued by global growth concerns, CNBC's weekly survey showed. http://www.cnbc.com/id/44766772 Crude Fluctuates Amid Uncertainties Crude oil continues to fluctuate since the opening of todays session despite the bad sentiment that appear among investors after the rising possibility of a Greek default due to their announcement that the country will not meet the target deficit for 2011 and 2012. Yesterday, Euro area finance ministers met in Luxemburg to discuss the latest development that in the region, especially the Greek situation which been the focus for many days, with rising possibility that it will default. After the finance ministers meeting, they decide to delay the decision of giving the sixth tranche of last years bailout to Greece till after October, which is considered the second time they delay this decision because Greece didnt keep its part of the deal by missing the target deficit. http://uk.ibtimes.com/articles/224485/20111004/fundamental-oil-report-2011-1004.htm

Midwest ULSD, regular unleaded prices rise on news of Ozark pipeline shutdown Cash differentials for unleaded gasoline and ultra low sulfur diesel in the Midwest strengthened Monday on news that Enbridge had shut its 231,000 b/d Ozark pipeline indefinitely, market sources said . Enbridge shut the Ozark line, which runs from Cushing, Oklahoma, to Wood River, Illinois, on Friday after finding an exposed area of the pipeline on the bottom of the Mississippi River near Wood River. No leak has been found, but Enbridge said the pipeline will remain shut until a detailed assessment is completed, which is expected in the next few days. Midwest traders said they expect prices to continue to strengthen until they have more of an idea how long the pipeline will be shut. "Tight crude supply means reduced refinery run," one Midwest trader said. "But no one seems to know how big of a problem it is." http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6545216

Activists Criticize TransCanada-Government Emails An environmental group opposed to TransCanada Corp.'s planned Keystone pipeline expansion released emails on Monday it says show a cozy relationship between a company lobbyist and an employee of the U.S. State Department, the government agency responsible for approving the line. TransCanada's planned Keystone XL expansion, which would deliver an additional 500,000 barrels a day of crude oil from Alberta's oil-sands region to the Gulf Coast refining belt, has provoked opposition from Friends of the Earth and other environmental groups as well as some Democratic and Republican politicians. Foes say the tar-sands oil traveling the pipeline is dirtier than other types of crude, a charge that TransCanada disputes. Pipeline supporters say it would supply the U.S. with oil from a close ally. http://online.wsj.com/article/SB1000142405297020461250457660911185424375 4.html

Middle East oil products surplus seen emerging The Middle East's refining capacity will translate into a surplus of oil products in the region in the medium term, Saeed Khoory, Group CEO of Dubai governmentowned Emirates National Oil Company said Monday. "There will be increasing competition between refineries east of Suez to place their products," he told the Middle East Petroleum and Gas Conference in Dubai. Refinery expansion would continue in the East of Suez market, which includes the Persian Gulf and AsiaPacific regions, Khoory predicted. Nonetheless, he forecast 1.7 million b/d of eastern refinery closures by 2020, mainly in China and Japan. "Oil demand in the West has peaked and we do not expect any growth in future," Khoory said. "Similarly, crude supply in the West has peaked." He predicted that oil-demand growth East of Suez would falter in 2012 before subsequently resuming a strong upward trajectory. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8411299

China says Myanmar pipeline project continues despite dam suspension Construction of the $2.5 billion Sino-Myanmar oil and natural gas pipelines by China National Petroleum Corp is progressing according to plan and proceeding smoothly, the official Xinhua news agency reported on Tuesday, just days after Myanmar announced that it has suspended construction of a China-backed dam project. CNPC has attached great importance to Myanmar's public welfare and fulfilling its social responsibility. Whenever there is a cyclone or earthquake in Myanmar, CNPC has always provided aid in the form of cash donations or goods," Xinhua said. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7470407

Shell Singapore Fire Caused by Maintenance Preparation, Today Says The fire at Royal Dutch Shell Plc (RDSA)s refinery at Pulau Bukom in Singapore was caused by preparation work for maintenance, which included the draining of residual oil in a pipeline, Today newspaper reported. http://www.bloomberg.com/news/2011-10-03/shell-singapore-fire-caused-bymaintenance-preparation-today-says.html Norway Oil Find May Be its Third Biggest Ever An oil discovery in the North Sea could be the third-biggest find ever made off Norway, oil minnow Lundin Petroleum said after giving new estimates on Friday, breathing life into a mature oil region largely written off by the majors. The Avaldsnes/Aldous Major South find, which could already be the biggest discovery so far this year worldwide, may hold 1.2 billion to 2.6 billion barrels of oil equivalent, Sweden's Lundin said after more than quadrupling the size of Avaldsnes. http://www.cnbc.com/id/44731178

Weather
Tropical Storm PHILIPPE http://www.nhc.noaa.gov/text/refresh/MIATCPAT2+shtml/290842.shtml 6 to 10 Day Outlooks Temperature

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