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January 5, 2012

Energy Data Highlights


Crude oil futures price 1/3/2012: $102.96/bbl up$1.62 from week earlier up$11.41 from year earlier Natural gas futures price 1/3/2012: $2.993/mmBtu down$0.119 from week earlier down$1.657 from year earlier Retail gasoline price 1/2/2012: $3.299/gal up$0.041 from week earlier up$0.229 from year earlier Retail diesel price 1/2/2012: $3.783/gal down$0.008 from week earlier up$0.452 from year earlier Weekly coal production 12/24/2011: 20.291 million tons down1.647 million tons from week earlier up0.236 million tons from year earlier Natural Gas Leads Gains in Raw Materials: Commodities at Close NATURAL GAS -- Natural gas futures advanced for a second day in New York on forecasts for colder-than-normal weather that may boost heating-fuel demand. CRUDE OIL -- Oil declined, reversing an earlier gain of 0.8 percent. Crude for February delivery fell 52 cents, or 0.5 percent to $102.44 a barrel on the New York Mercantile Exchange. Brent oil for February settlement rose 49 cents, or 0.4 percent, to $112.62 on the London-based ICE Futures Europe exchange. PRECIOUS METALS -- Gold futures for February delivery rose 0.3 percent to $1,604.80 an ounce on the Comex in New York. Earlier, the metal dropped as much as 0.4 percent after reaching a one-week high of $1,615. CARBON -- European Union carbon allowances for December rose from a record low as utilities and airlines start purchases to comply with emission limits. GRAINS, OILSEEDS -- Wheat futures fell the most in three weeks on speculation that recent precipitation has boosted subsoil moisture in the U.S. Great Plains, improving prospects for dormant winter crops. OIL PRODUCTS -- European gasoils premium to Brent, or crack, rose to near a

three-week high as the suspension of three Petroplus Holdings AG refineries curb supply. Gasoil gained to a four-week high on the ICE Futures Europe exchange. Diesel barges advanced for the fourth time in five days. Gasoline for immediate loading in northwest Europe rose to a nine-week high as Royal Dutch Shell Plc bought barges http://www.bloomberg.com/news/2012-01-04/natural-gas-leads-gains-in-rawmaterials-commodities-at-close.html

Natural Gas/ Power News

EIA Storage Release 12/29/11 (Actual): -81 Bcf Previous Week: -100 Bcf +9.1 % Change from 1 Year Ago +13.7% Change 5-year Average Development problems force Venezuela to extend natural gas imports Venezuela's inability to develop its natural gas industry as planned has forced it to revise and extend a deal with Colombia's state-controlled Ecopetrol and Chevron involving gas imports from the partners' Guajira gas field in northeastern Colombia, a Caracas-based consultant said Wednesday. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8761867 EURO GAS: Prompt prices rise on market correction Prompt contracts on the Dutch and German gas trading hubs saw gains on Wednesday as the market corrected from lower levels although prices still remain subdued on bearish fundamentals, traders said. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8756589

Canadian Stocks Rise as Natural Gas Surges Most Since October Canadian stocks rose for a fourth day, led by energy producers, as natural gas futures gained the most since October on forecasts for colder-than-normal weather in the northern U.S... Natural gas surged 3.4 percent on the New York Mercantile Exchange after AccuWeather Inc. said temperatures may fall to 6 degrees Fahrenheit (minus 14 Celsius) on Jan. 15. Natural gas futures have declined 34 percent from a year ago. http://news.businessweek.com/article.asp?documentKey=1376-LXA38407SXKX010PFAQL8A07GQE3Q9NBL9F2CBTG

Lawmaker questions merits of natural gas exports Another Democratic lawmaker is raising questions about whether the government should approve pending applications for expanded exports of natural gas, a decision that some worry could lead to higher prices for businesses and utilities.Edward Markey wants Energy Secretary Steven Chu to explain the impact on prices for consumers and manufacturers if Chu finds the export applications are in the "public interest" and allows them to proceed.The Energy Department is studying the impact of exports of bountiful U.S. natural gas on energy prices and jobs in two reports slated for completion in the first quarter of this year."I am worried that exporting America's natural gas would raise energy costs for American consumers, reduce the global competitiveness of U.S. businesses, make us more dependent on foreign sources of energy, and slow our transition away from dirtier fuels," said Markey, the top Democrat on the House of Representatives' Natural Resources Committee, in a letter to Chu on Wednesday. http://www.reuters.com/article/2012/01/04/us-usa-natgas-exportsidUSTRE8031YW20120104

Green/ Alternative Energy News

US emissions markets in flux as CSAPR put on hold Cross-State Air Pollution Rule (CSAPR) allowances came under substantial pressure in very light volumes on Tuesday due to a federal courts decision to temporarily stop the US Environmental Protection Agency (EPA) from implementing the programme. http://www.environmental-finance.com/news/view/2210 New York governor calls for more investment in solar, transmission Governor Andrew Cuomo Wednesday proposed quadrupling New York's solar capacity by 2013, and called on investors to fund $2 billion in new transmission infrastructure. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/ElectricPower/3875007

Brazilian ethanol price highest in a decade: CEPEA/ESALQ Tight supply and strong demand have boosted the average price for ethanol in Brazil in the current 2011/2012 sugarcane harvest to its highest level in a decade, both in real terms or deflated values, research institute CEPEA/ESALQ said on its website Wednesday. Brazil produces two types of ethanol: anhydrous and hydrous. Anhydrous ethanol is used for mandatory blending into gasoline and hydrous ethanol is used as an alternative to gasoline by drivers of flex-fuel vehicles. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8761883

Crude Oil News

OPEC Daily Basket Price 1/4/2012- $111.73 (OPEC Daily Basket Price 1/3/2012- $109.40) Oil Trades Near Eight-Month High on Concern Iran May Curb Crude Supplies Oil traded near the highest in almost eight weeks in London as speculation that sanctions against Iran will curb crude supplies countered concern that Europes debt crisis will worsen and slow demand. Brent swung between gains and losses after a two-day advance of 5.9 percent. French Foreign Minister Alain Juppe said yesterday he hopes Europe will decide to embargo Iranian oil as part of sanctions against the countrys nuclear program. An import ban could send Brent crude to $125 a barrel, according to Societe Generale SA. Concern the European crisis will spread increased after Greece said deeper income cuts are the only way for the country to keep the euro and avert economic collapse. The prospect of sanctions is having an effect already on the outright price, said Alexander Poegl, an analyst at JBC Energy GmbH in Vienna. The market has taken this into consideration. Europe made it clear in November that theyre quite advanced with the proposals. http://www.bloomberg.com/news/2012-01-04/oil-trades-near-eight-month-high-onshrinking-crude-supplies-iran-tension.html Oil Steadies as US Dollar Gains Cap Rise on Iran Tension Oil was steady at around $113.80 a barrel on Thursday as geopolitical tensions kept a floor under prices, following a European Union agreement to stop importing Iranian crude, but a stronger dollar capped gains. Brent crude futures were up 4 cents to $113.74, giving up earlier gains as the dollar strengthened. U.S. light, sweet crude, which is less influenced than Brent by international developments and more by domestic oil inventories, was down 71 cents at $102.51 a barrel, having earlier slipped more than $1 to an intraday low of $102.16. Analysts and traders said oil prices had come under pressure as the dollar rallied, with the U.S. dollar index up 0.65 percent against a basket of currencies. But they added there was potential for crude to rise given the tensions surrounding Iran and Syria, and calls for strikes in Africa's biggest producer Nigeria, which may affect crude oil exports.
http://www.cnbc.com/id/45878820

EU Agrees in Principle on Iran Oil Embargo European Union member states are agreed in principle to press ahead with an oil embargo on Iran but there are significant differences still over details of the plan, including the timing of its implementation, EU diplomats said Wednesday. "There is a converging consensus in principle on an oil embargo," said one diplomat. "I don't see any fundamental opposition." Earlier Wednesday, a Greek government source told Dow Jones Newswires that Greece wouldn't stand in the way of an oil

embargo. Greece had led the opposition to an embargo, although other countries were concerned about moving too fast, diplomats have said in recent weeks. However, the diplomats said there was still disagreement over when the embargo would enter into force and what to do about existing contracts. http://online.wsj.com/article/SB1000142405297020347100457714058358713989 6.html?mod=WSJ_hp_LEFTWhatsNewsCollection

UK to warn Iran against closing Hormuz strait Britain will on Thursday join the US in warning that any action by Iran to close the Strait of Hormuz would be illegal and unsuccessful, insisting that western navies in the Gulf must ensure the free flow of oil trade.Amid signs that the European Union has now agreed in principle to ban oil imports from Iran this month, Philip Hammond, Britains defence secretary, will warn the Iranians that the UK would respond militarily if Tehran tries to close the strait in retaliation over sanctions. As he prepares to hold his first meeting in Washington on Thursday with Leon Panetta, the US defence secretary, Mr Hammond will say in a speech that it is in the interests of all nations that the arteries of global trade are kept free, opening and running. He will add: Disruption to the flow of oil through Strait of Hormuz would threaten regional and global economic growth. Any attempt by Iran to do this would be illegal and unsuccessful. http://www.ft.com/intl/cms/s/0/4f7ad3e4-36fa-11e1-96bf00144feabdc0.html#axzz1iUfq0Lbd The Strait of Hormuz is the world's most important oil transit chokepoint The Strait of Hormuz (shown in the oval on the map), which is located between Oman and Iran, connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. Hormuz is the world's most important oil chokepoint due to its daily oil flow of almost 17 million barrels per day (bbl/d) in 2011, up from between 15.5-16.0 million bbl/d in 2009-2010. Flows through the Strait in 2011 were roughly 35% of all seaborne traded oil, or almost 20% of oil traded worldwide. On average, 14 crude oil tankers per day passed through the Strait in 2011, with a corresponding amount of empty tankers entering to pick up new cargos. More than 85% of these crude oil exports went to Asian markets, with Japan, India, South Korea, and China representing the largest destinations. At its narrowest point, the Strait is 21 miles wide, but the width of the shipping lane in either direction is only two miles, separated by a two-mile buffer zone. The Strait is deep and wide enough to handle the world's largest crude oil tankers, with about two-thirds of oil shipments carried by tankers in excess of 150,000 deadweight tons. http://www.eia.gov/todayinenergy/detail.cfm?id=4430 Oil Market's Iran Fears Might Be Overdone After turning the page on Libya's oil-supply shutdown last year, markets now have a new drama to worry about: the rising tensions between Iran and the West. In recent days, Iran has threatened to block the Strait of Hormuz, the channel through which about a third of global seaborne oil exports pass. The saber-rattling from Tehran has come in response to moves toward new sanctions by Western nations aimed at Iran's nuclear program. The tough talk has spurred fears of supply shortages, driving prices higher. But experts say abrupt disruptions of crude from the Gulf region appear unlikely. "While the heightened tensions are sufficient to add a modest risk premium at this stage we believe that Iran's

exports will continue to reach the global oil market," Standard Chartered said in a report Tuesday. http://online.wsj.com/article/SB1000142405297020347100457714055205493667 4.html?mod=WSJ_Commodities_LEFTTopNews

Oil industry begins push for Keystone pipeline President Barack Obama will face the threat of a backlash at this years election if he refuses to approve TransCanadas proposed Keystone XL pipeline project, the leading US oil industry lobby group has warned.The American Petroleum Institute, which represents all the leading oil and gas companies, yesterday launched a political campaign called Vote 4 Energy, which will use advertising, social media and grass roots organisation to press both Republican and Democratic politicians to support the industrys agenda. One issue high on its list is Keystone XL, a planned 1,661-mile pipeline route from the oil sands region of western Canada to refineries on the coast of Texas. The API argues that the potential for the project to create jobs, both in construction and in refineries and chemical plants that would use the oil brought from Canada, means that a decision by the Obama administration to block it would be politically damaging.Marty Durbin, the APIs executive vice-president, said: The publics number one concern is jobs and the economy, and this is the biggest shovel-ready project thats out there. Because the route crosses the international border, the project needs approval from the US State Department, which last year postponed its decision until 2013 at the earliest following intensive lobbying from environmental groups. http://www.ft.com/intl/cms/s/0/b3e4c4bc-3726-11e1-b74100144feabdc0.html#axzz1iUfq0Lbd

Chevrons Ecuador case takes new twist Lawyers acting for plaintiffs suing Chevron, the US oil group, over pollution in Ecuador plan to pursue the American company with legal actions in other countries after an Ecuadorean court upheld an $18bn damages award. Pablo Fajardo, an Ecuador-based lawyer representing the 30,000 plaintiffs suing over environmental damage in the Amazon region, said: Its not going to be easy to enforce this judgment, but even if hell freezes over were going to do it. Chevron, which denounced the judgment as procured through a corrupt and fraudulent scheme has no assets in Ecuador, so the plaintiffs will be forced to bring actions in other countries. http://www.ft.com/intl/cms/s/0/86d1169c-36ef-11e1-b74100144feabdc0.html#axzz1iUfq0Lbd Enterprise, Genesis to build oil pipeline from Gulf Enterprise Products Partners and Genesis Energy plan to build a new pipeline capable of transporting 115,000 barrels of crude oil per day from the Gulf of Mexico to an existing junction. The 149-mile, 18-inch pipeline would support development of the Lucius area in the Southern Keathley Canyon in the Gulf of Mexico, the company said in a statement. The Lucius area is estimated to have more than 300 million barrels of crude oil.

http://fuelfix.com/blog/2012/01/04/enterprise-genesis-to-build-oil-pipeline-fromgulf/ China's Grab For Energy: Softly, Softly China's oil majors are notching up big purchases by steering clear of controversy. Sinopec's $2.5 billion deal to acquire an interest in Devon Energy's shale fields, and PetroChina's $666 million purchase of Canadian oil sands from Athabasca Oil Sands, have started the year with a bang. It's all a far cry from 2005, when China National Offshore Oil Co.'s failed bid for Unocal threatened to stop China's outbound energy acquisition in its tracks. The latest wave of acquisitions by China's national oil companies shows they have learned from past missteps. Where Cnooc's $18 billion bid was an attempt to swallow Unocal whole, the national oil companies now target minority stakes and joint ventures that are less likely to ring alarm bells in Western capitals. Sinopec's latest deal is typical in this respect, giving it a one-third share of Devon's shale fields. http://online.wsj.com/article/SB1000142405297020351360457714008162189802 6.html?mod=WSJ_Commodities_LEFTTopNews

Recent Rig Counts


Date of Cou Change from Prior nt Prior Count Count -1 -185 -12 22 Dec 11 22 Dec 11 October 2011 Change from Last Year +313 -25 +55 Date of Last Year's Count 30 Dec 10 30 Dec 10 November 2010

Area U.S. Canada

Last Count

29 Dec 2007 11 29 Dec 11 221

Internatio Novemb 1185 nal er 2011

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

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