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October 17, 2011
Energy Data Highlights
Crude oil futures price 10/13/2011: $84.23/bbl up$1.64 from week earlier up$0.87 from year earlier
Natural gas futures price 10/13/2011: $3.531/mmBtu down$0.067 from week earlier down$0.169 from year earlier Weekly coal production 10/8/2011: 21.602 million tons down0.309 million tons from week earlier up0.137 million tons from year earlier Natural gas inventories 10/7/2011: 3,521 Bcf up112 Bcf from week earlier down56 Bcf from year earlier Crude oil inventories 10/7/2011: 337.6 mmbbl up1.3 mmbbl from week earlier down22.9 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
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 from shale rocks around the country will become a huge force in America's energy future. 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 the fourth-largest energy company in the U.S. The new entity would have a network of 67,000 miles of natural-gas pipelines stretching into virtually every major region where natural gas is produced. It would connect Pennsylvania, Arkansas and Texas, and give Kinder Morgan entry in to Florida, a growing market for gas-fueled power generation. Combined, the two companies would also be positioned to build new pipelines that will carry natural gas to customers from fields under development from New York to Ohio to Texas. Pipeline companies have been trying to redesign their routes to connect fast-growing markets for gas in the southern U.S. with new sources of natural gas made possible by recent technological advances that make it easier to pull natural gas from rocks far below the earth's surface. http://online.wsj.com/article/SB1000142405297020434610457663528213732016 2.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 to avoid 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 bills Europeans face higher energy bills this winter as low heating oil stockpiles clash with cold weather forecasts and a tight power and gas sector. The continent's residential heating is mainly from heating oil, gas or electricity. Tight markets in all three, combined with expectations of a cold winter, are likely to sharply increase heating bills. The International Energy Agency said last week that European middle distillate stocks, including heating oil, which usually build by 8.9 million barrels on average, fell by 0.6 million barrels in August. "Consumer costs of heating oil in Europe after tax have never been this high in the winter," said Petromatrix's Olivier Jakob. "The other peaks were in the summer of 2008, but that was not the season for heating oil". http://uk.reuters.com/article/2011/10/16/uk-energy-bills-analysisidUKLNE79F00320111016
Russia's Putin says to cooperate with Japan on LNG, electricity
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 high 26.16 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 a whole 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
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-solarfactory/
Crude Oil News
OPEC Daily Basket Price 10/14/2011- $109.01 (10/13/2011- $107.04)
Recent Rig Counts Change from Prior Count +11 -10 -9 Date of Prior Count 7 Oct 11 7 Oct 11 August 2011 Change Date of from Last Last Year's Year Count +353 +89 +54 15 Oct 10 15 Oct 10 September 2010
Area U.S. Canada
Last Count 14 Oct 11 14 Oct 11
Cou nt 2023 512
Internatio Septemb 1174 nal er 2011
Brent turns negative on German remarks Brent crude turned negative and U.S. crude pared earlier gains on Monday following remarks from Germany that the forthcoming EU summit would not produce a definitive solution to the euro zone debt crisis. At the weekend, in unusually direct language, finance ministers and central bankers of the Group of 20 major economies meeting in Paris said they expected an October 23 European Union summit to "decisively address the current challenges through a comprehensive plan." However, German Finance Minister Wolfgang Schaeuble said on Monday that European governments would not present an ultimate solution for the sovereign debt crisis at the summit. http://www.reuters.com/article/2011/10/17/us-markets-oilidUSTRE7922QH20111017 Technology, high prices fuel oil rush in Arctic As 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
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 Billion Norway's Statoil ASA on Monday said it will buy the Texas-based oil firm Brigham Exploration Co. for about $4.4 billion, in a deal that will strengthen the Norwegian oil and gas major's position in the U.S. oil and gas industry, and give it a stronger foothold in unconventional resources. Brigham has over 100 employees and the deal will give Statoil more than 375,000 net acres in the Williston Basin, which has the potential for oil production from the Bakken and Three Forks formations— the largest oil accumulations in the U.S. Brigham also holds interests in 40,000 net acres in other areas. "Entering the Bakken and Three Forks tight oil plays and taking 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 and gas industry, in line with the strategic direction we have set out," said Statoil Chief Executive Helge Lund. http://online.wsj.com/article/SB1000142405297020434610457663664373622823 6.html?mod=WSJ_hp_LEFTWhatsNewsCollection Halliburton Rides Drilling Rebound Halliburton Co.'s third-quarter net profit rose 26% as a North American drilling rebound showed no signs of slowing, despite uncertainty about the global economy. Revenue beat analysts' expectations, setting another quarterly record, up 40% to $6.54 billion. The industry has benefited from a drilling boom in alternative shale formations in the U.S. as well as increased offshore activity. The first major oilfield-services company to report quarterly results offered a first glimpse of how retreating oil prices are affecting a North American drilling rebound and whether an anticipated recovery is taking hold in the sector's international markets. In the latest quarter, North American revenue was up 63% and profit nearly doubled. In its international business, revenue rose 17%, an improvement from recent quarters, but profit was down 1.6%. Chairman Chief Executive Dave Lesar said recent declines in oil prices and equity markets have unsettled investors. Still, despite short-term economic concerns, he continues "to believe in the long-term prospects for our business." http://online.wsj.com/article/SB1000142405297020447950457663667022649852 8.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/
Analysts: U.S. land drilling will boost earnings for oilfield services companies FBR Capital announced that it is boosting estimated earnings for several companies 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 the dense shale formations, has driven a business boom for the oilfield services industry. Despite some concerns that lower oil prices could cause oil and gas exploration and production companies to pull back on spending, the FBR Capital analysts remained bullish about the industry’s future. “Oil service providers have yet to see material changes in customer behavior,” the analysts noted in the report. “The recently announced merger between Complete Production Services and Superior Energy Services, despite heightened macroeconomic worries, is another bullish indicator for the industry.” http://fuelfix.com/blog/2011/10/14/analysts-u-s-land-drilling-will-boost-earningsfor-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-tosettle-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 cooperate 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/0/8316f698f801-11e0-8e7e-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
million by the end of September, it said. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8469055
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