Energy and Markets Newsletter 110811
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November 8, 2011 Energy Data Highlights Retail gasoline price 11/7/2011: $3.424/gal down$0.028 from week earlier up$0.559 from year earlier Retail diesel price 11/7/2011: $3.887/gal down$0.005 from week earlier up$0.771 from year earlier Crude oil futures price 11/4/2011: $94.26/bbl up$0.94 from week earlier up$7.77 from year earlier Natural gas futures price 11/4/2011: $3.783/mmBtu down$0.140 from week earlier down$0.077 from year earlier Weekly coal production 10/29/2011: 21.634 million tons up0.475 million tons from week earlier up1.154 million tons from year earlier http://www.eia.gov/
Crude Oil News
OPEC Daily Basket Price 11/7/2011- $111.08 (11/4/2011- $109.96)
Oil Trades Near a Three-Month High on U.S. Supply, European Crisis Outlook
Oil rose to the highest price in more than three months in New York on signs of shrinking stockpiles in the U.S. and amid speculation European leaders will make progress in containing the region’s debt crisis. http://www.bloomberg.com/news/2011-11-08/oil-trades-near-a-three-month-highon-u-s-supply-european-crisis-outlook.html
Oil up near $116 as Iran, Italy eyed Oil prices rose to near $116 a barrel on Tuesday as investors said strong seasonal fundamentals and concerns about an escalating dispute over Iran's nuclear program outweighed worries caused by Italy's sovereign debt risk. Brent crude futures were up $1.17 a barrel to $115.73 by 1157 GMT, close to their highest level in nearly two months. U.S. crude was up 46 cents at $95.98 a barrel. "There are several factors at play, some are offsetting each other but the general trend is to the upside," said Carsten Fritsch, an energy analyst at Commerzbank in Frankfurt. http://www.reuters.com/article/2011/11/08/us-markets-oilidUSTRE7922QH20111108 Oil rallies as tensions mount over Iran Oil prices rallied to a seven-week high on Monday as bearish investors rushed to cover their bets amid a war of words between Washington, Tel Aviv and Tehran over Iran’s nuclear programme...Iran is a member of the Opec oil cartel and traders are starting to worry that the IAEA report could lead to an attack by Israel on Tehran’s nuclear facilities. An attack could disrupt oil production and lead to closure of the Strait of Hormuz, the gateway for oil exports from key Opec producers in the Middle East region, including Saudi Arabia. http://www.ft.com/intl/cms/s/0/deb9512a-095f-11e1-a20c-00144feabdc0.html? ftcamp=rss#axzz1d7NrNN5t
Repsol Makes Record Shale-Oil Discovery at Argentina’s Loma La Lata Field Repsol YPF SA (REP), Spain’s largest oil company, said its Argentine YPF SA (YPF) unit discovered about 927 million barrels equivalent of shale oil at the Loma La Lata field in northern Patagonia, its biggest find… YPF, which produces more than 50 percent of Argentina’s crude, is boosting exploration to arrest a decline in output and last year had a 100 percent annual oil reserve-replacement ratio for the first time in 13 years. http://www.bloomberg.com/news/2011-11-07/ypf-finds-six-times-more-shale-oilthan-estimated-at-loma-la-lata-field.html
State Department Said to Weigh Altering Keystone Pipeline Route
The U.S. State Department is weighing whether to seek a rerouting of TransCanada Corp. (TRP)’s planned $7 billion Keystone XL pipeline away from the Sandhills region of Nebraska, a department official said. The department is considering how to respond to concern among Nebraska citizens and public officials about the risk that TransCanada’s current plans may pose to the Sandhills, said the official familiar with the deliberations, who spoke on condition of anonymity yesterday about internal discussions. http://www.bloomberg.com/news/2011-11-08/keystone-rerouting-said-to-beweighed-by-u-s-state-department.html
Woodside Petroleum: To Shell or Not to Shell? It’s been a year to the day since Royal Dutch Shell blindsided Australia’s largest oil and gas company Woodside Petroleum by selling down a 10% stake for A$3.3 billion (US$3.4 billion). Appeasing Woodside, Shell promised to hold onto its remaining 24.27% interest for a year unless a takeover offer or a strategic buyer surfaced. Given that no industry interest arose even when stock fell to a threeyear low below A$30 (US$31.08), analysts believe the only way Shell can divest is to return to the market. http://blogs.wsj.com/deals/2011/11/08/woodside-petroleum-to-shell-or-not-to-shell/ Recent Rig Counts Change from Prior Count 5 -23 -12 Date of Prior Count 28 Oct 11 28 Oct 11 Septembe r 2011 Change Date of from Last Last Year's Year Count +343 +59 +54 5 Nov 10 5 Nov 10 September 2010
Area U.S. Canada
Last Cou Count nt 4 Nov 2026 11 4 Nov 11 476
Internatio October 1162 nal 2011
http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm
Natural Gas/ Power News
EIA Storage Release 11/3/11 (Actual): +78 Bcf Previous Week: +92 Bcf -0.4% Change from 1 Year Ago +5.6% Change 5-year Average
US energy groups act on natural gas demand US energy companies are converting rigs and trucks to run on natural gas, building fuelling stations and launching educational campaigns to increase demand for the domestic fuel that has flooded the market on the back of the shale boom. With technological advances enabling gas production from shale rock, estimates of US supplies of natural gas have risen from 30 to 100 years’ worth, at current usage rates, with the US market now oversupplied. Prices have been hovering at about $4 per million British thermal units, down sharply from 2008’s record of $13.69 per mBtu, and the industry believes they could remain at that level for several years. http://www.ft.com/intl/cms/s/0/743857d6-df9a-11e0-845a00144feabdc0.html#axzz1d7NrNN5t Dynegy subsidiary files for bankruptcy protection A subsidiary of power company Dynegy Inc. has sought Chapter 11 bankruptcy protection and said it has agreed with holders of more than $1.4 billion in senior notes on a debt restructuring. Houston-based Dynegy said Tuesday Dynegy Holdings LLC and four of its subsidiaries have filed a voluntary petition in the U.S. Bankruptcy Court for the Southern District of New York. The parent company and its other subsidiaries are not seeking relief, and Dynegy said they will continue to operate with no impact from the limited Chapter 11 filings. http://online.wsj.com/article/AP7d7106babb2d49b08e74957c424a467a.html
M&A by US energy utilities at four-year high Mergers and acquisitions by US energy utilities rose to their highest level for four years in the first half of this year, emphasising how consolidation is being driven by low prices for natural gas, demand for heavy investment and more willingness by regulators to accept deals. PricewaterhouseCoopers, the professional services firm, says $52bn of deals for electricity and gas companies were announced in the first six months of this year – the strongest such period for M&A since 2007. http://www.ft.com/intl/cms/s/0/ac8a8b78-c117-11e0-b8c200144feabdc0.html#axzz1d7NrNN5t Taming Unruly Wind Power For decades, electric companies have swung into emergency mode when demand soars on blistering hot days, appealing to households to use less power. But with the rise of wind energy, utilities in the Pacific Northwest are sometimes dealing with the opposite: moments when there is too much electricity for the grid to soak up. In June 2010, for example, a violent storm in the Northwest caused a simultaneous surge in wind power and in traditional hydropower, creating an oversupply that threatened to overwhelm the grid and cause a blackout. As a result, the Bonneville Power Administration, the wholesale supplier to a broad swath of the region, turned this year to a strategy common to regions with hot summers: adjusting volunteers’ home appliances by remote control to balance supply and demand. http://www.cnbc.com/id/45174002
Another PG&E California gas line fails during test, closes interstate Another Pacific Gas & Electric natural gas transmission line in California has failed during hydrotesting -- this time along the same pipeline involved in a deadly explosion a little over a year ago. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6647316 US FERC approves changes to PJM demand response performance measurement The US Federal Energy Regulatory Commission has approved PJM Interconnection's proposal to change the way it measures performance by demand response resources during system emergencies, conditioned on PJM proposing a way to mitigate the impacts of the change on participants that have already been committed in capacity auctions. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/ElectricPower/6647569
US House bill aims to allow states to revoke, replace federal haze plans Legislation has been introduced in the US House of Representatives that would allow states to revoke federal implementation plans to control haze pollution from coal-fired power plants in favor of their own plans that would consider local economics for how best to reduce emissions. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/ElectricPower/6650432
Green/ Alternative Energy News
Mexico to earn royalty on light bulb carbon credits Mexico will earn a royalty on carbon credits generated from energy-saving light bulbs through a world first deal that could pave the way for other developing countries to fund emissions cuts, the investors said on Monday http://finance.yahoo.com/news/Mexico-earn-royalty-light-rc-3619700341.html
Roth & Rau Falls Most on Record After Meyer Burger Takeover to Be Delayed Roth & Rau AG (R8R) dropped the most since it began trading in Frankfurt in 2006 as a planned full takeover by Meyer Burger Technology Ltd., Europe’s biggest solar-panel equipment maker, may take longer than previously anticipated. http://www.bloomberg.com/news/2011-11-08/roth-rau-falls-most-on-record-aftermeyer-burger-takeover-to-be-delayed.html
Biggest Solar Silicon Maker Expands Production as Prices Plunge
The Hemlock Semiconductor Group, the world’s biggest maker of polysilicon, is increasing production as a glut for the material used in semiconductors and solar cells pushes down prices to the lowest since 2003. http://www.bloomberg.com/news/2011-11-07/hemlock-expanding-solar-siliconcapacity-as-china-idles-plants.html
Most Solar Makers Will Disappear: Trina CEO Most of the biggest solar-equipment makers may disappear in the next few years as plunging prices erode margins and drive the weakest out of business, according to Trina Solar Ltd. (TSL), the fifth-largest supplier of solar panels. “This is the decade of mergers and acquisitions,” Jifan Gao, chief executive officer of Changzhou, China-based Trina, said in an interview. “From now until 2015 is the first phase, when about two-thirds of the players will be shaken out.” http://www.bloomberg.com/news/2011-11-08/most-solar-manufacturers-maydisappear-by-2015-trina-ceo-says.html
Weather 6 to 10 Day Outlooks
Temperature
Precipitation
8 to 14 Day Outlooks Temperature
Precipitation
November 8, 2011 Energy Data Highlights Retail gasoline price 11/7/2011: $3.424/gal down$0.028 from week earlier up$0.559 from year earlier Retail diesel price 11/7/2011: $3.887/gal down$0.005 from week earlier up$0.771 from year earlier Crude oil futures price 11/4/2011: $94.26/bbl up$0.94 from week earlier up$7.77 from year earlier Natural gas futures price 11/4/2011: $3.783/mmBtu down$0.140 from week earlier down$0.077 from year earlier Weekly coal production 10/29/2011: 21.634 million tons up0.475 million tons from week earlier up1.154 million tons from year earlier http://www.eia.gov/
Crude Oil News
OPEC Daily Basket Price 11/7/2011- $111.08 (11/4/2011- $109.96)
Oil Trades Near a Three-Month High on U.S. Supply, European Crisis Outlook
Oil rose to the highest price in more than three months in New York on signs of shrinking stockpiles in the U.S. and amid speculation European leaders will make progress in containing the region’s debt crisis. http://www.bloomberg.com/news/2011-11-08/oil-trades-near-a-three-month-highon-u-s-supply-european-crisis-outlook.html
Oil up near $116 as Iran, Italy eyed Oil prices rose to near $116 a barrel on Tuesday as investors said strong seasonal fundamentals and concerns about an escalating dispute over Iran's nuclear program outweighed worries caused by Italy's sovereign debt risk. Brent crude futures were up $1.17 a barrel to $115.73 by 1157 GMT, close to their highest level in nearly two months. U.S. crude was up 46 cents at $95.98 a barrel. "There are several factors at play, some are offsetting each other but the general trend is to the upside," said Carsten Fritsch, an energy analyst at Commerzbank in Frankfurt. http://www.reuters.com/article/2011/11/08/us-markets-oilidUSTRE7922QH20111108 Oil rallies as tensions mount over Iran Oil prices rallied to a seven-week high on Monday as bearish investors rushed to cover their bets amid a war of words between Washington, Tel Aviv and Tehran over Iran’s nuclear programme...Iran is a member of the Opec oil cartel and traders are starting to worry that the IAEA report could lead to an attack by Israel on Tehran’s nuclear facilities. An attack could disrupt oil production and lead to closure of the Strait of Hormuz, the gateway for oil exports from key Opec producers in the Middle East region, including Saudi Arabia. http://www.ft.com/intl/cms/s/0/deb9512a-095f-11e1-a20c-00144feabdc0.html? ftcamp=rss#axzz1d7NrNN5t
Repsol Makes Record Shale-Oil Discovery at Argentina’s Loma La Lata Field Repsol YPF SA (REP), Spain’s largest oil company, said its Argentine YPF SA (YPF) unit discovered about 927 million barrels equivalent of shale oil at the Loma La Lata field in northern Patagonia, its biggest find… YPF, which produces more than 50 percent of Argentina’s crude, is boosting exploration to arrest a decline in output and last year had a 100 percent annual oil reserve-replacement ratio for the first time in 13 years. http://www.bloomberg.com/news/2011-11-07/ypf-finds-six-times-more-shale-oilthan-estimated-at-loma-la-lata-field.html
State Department Said to Weigh Altering Keystone Pipeline Route
The U.S. State Department is weighing whether to seek a rerouting of TransCanada Corp. (TRP)’s planned $7 billion Keystone XL pipeline away from the Sandhills region of Nebraska, a department official said. The department is considering how to respond to concern among Nebraska citizens and public officials about the risk that TransCanada’s current plans may pose to the Sandhills, said the official familiar with the deliberations, who spoke on condition of anonymity yesterday about internal discussions. http://www.bloomberg.com/news/2011-11-08/keystone-rerouting-said-to-beweighed-by-u-s-state-department.html
Woodside Petroleum: To Shell or Not to Shell? It’s been a year to the day since Royal Dutch Shell blindsided Australia’s largest oil and gas company Woodside Petroleum by selling down a 10% stake for A$3.3 billion (US$3.4 billion). Appeasing Woodside, Shell promised to hold onto its remaining 24.27% interest for a year unless a takeover offer or a strategic buyer surfaced. Given that no industry interest arose even when stock fell to a threeyear low below A$30 (US$31.08), analysts believe the only way Shell can divest is to return to the market. http://blogs.wsj.com/deals/2011/11/08/woodside-petroleum-to-shell-or-not-to-shell/ Recent Rig Counts Change from Prior Count 5 -23 -12 Date of Prior Count 28 Oct 11 28 Oct 11 Septembe r 2011 Change Date of from Last Last Year's Year Count +343 +59 +54 5 Nov 10 5 Nov 10 September 2010
Area U.S. Canada
Last Cou Count nt 4 Nov 2026 11 4 Nov 11 476
Internatio October 1162 nal 2011
http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm
Natural Gas/ Power News
EIA Storage Release 11/3/11 (Actual): +78 Bcf Previous Week: +92 Bcf -0.4% Change from 1 Year Ago +5.6% Change 5-year Average
US energy groups act on natural gas demand US energy companies are converting rigs and trucks to run on natural gas, building fuelling stations and launching educational campaigns to increase demand for the domestic fuel that has flooded the market on the back of the shale boom. With technological advances enabling gas production from shale rock, estimates of US supplies of natural gas have risen from 30 to 100 years’ worth, at current usage rates, with the US market now oversupplied. Prices have been hovering at about $4 per million British thermal units, down sharply from 2008’s record of $13.69 per mBtu, and the industry believes they could remain at that level for several years. http://www.ft.com/intl/cms/s/0/743857d6-df9a-11e0-845a00144feabdc0.html#axzz1d7NrNN5t Dynegy subsidiary files for bankruptcy protection A subsidiary of power company Dynegy Inc. has sought Chapter 11 bankruptcy protection and said it has agreed with holders of more than $1.4 billion in senior notes on a debt restructuring. Houston-based Dynegy said Tuesday Dynegy Holdings LLC and four of its subsidiaries have filed a voluntary petition in the U.S. Bankruptcy Court for the Southern District of New York. The parent company and its other subsidiaries are not seeking relief, and Dynegy said they will continue to operate with no impact from the limited Chapter 11 filings. http://online.wsj.com/article/AP7d7106babb2d49b08e74957c424a467a.html
M&A by US energy utilities at four-year high Mergers and acquisitions by US energy utilities rose to their highest level for four years in the first half of this year, emphasising how consolidation is being driven by low prices for natural gas, demand for heavy investment and more willingness by regulators to accept deals. PricewaterhouseCoopers, the professional services firm, says $52bn of deals for electricity and gas companies were announced in the first six months of this year – the strongest such period for M&A since 2007. http://www.ft.com/intl/cms/s/0/ac8a8b78-c117-11e0-b8c200144feabdc0.html#axzz1d7NrNN5t Taming Unruly Wind Power For decades, electric companies have swung into emergency mode when demand soars on blistering hot days, appealing to households to use less power. But with the rise of wind energy, utilities in the Pacific Northwest are sometimes dealing with the opposite: moments when there is too much electricity for the grid to soak up. In June 2010, for example, a violent storm in the Northwest caused a simultaneous surge in wind power and in traditional hydropower, creating an oversupply that threatened to overwhelm the grid and cause a blackout. As a result, the Bonneville Power Administration, the wholesale supplier to a broad swath of the region, turned this year to a strategy common to regions with hot summers: adjusting volunteers’ home appliances by remote control to balance supply and demand. http://www.cnbc.com/id/45174002
Another PG&E California gas line fails during test, closes interstate Another Pacific Gas & Electric natural gas transmission line in California has failed during hydrotesting -- this time along the same pipeline involved in a deadly explosion a little over a year ago. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6647316 US FERC approves changes to PJM demand response performance measurement The US Federal Energy Regulatory Commission has approved PJM Interconnection's proposal to change the way it measures performance by demand response resources during system emergencies, conditioned on PJM proposing a way to mitigate the impacts of the change on participants that have already been committed in capacity auctions. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/ElectricPower/6647569
US House bill aims to allow states to revoke, replace federal haze plans Legislation has been introduced in the US House of Representatives that would allow states to revoke federal implementation plans to control haze pollution from coal-fired power plants in favor of their own plans that would consider local economics for how best to reduce emissions. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/ElectricPower/6650432
Green/ Alternative Energy News
Mexico to earn royalty on light bulb carbon credits Mexico will earn a royalty on carbon credits generated from energy-saving light bulbs through a world first deal that could pave the way for other developing countries to fund emissions cuts, the investors said on Monday http://finance.yahoo.com/news/Mexico-earn-royalty-light-rc-3619700341.html
Roth & Rau Falls Most on Record After Meyer Burger Takeover to Be Delayed Roth & Rau AG (R8R) dropped the most since it began trading in Frankfurt in 2006 as a planned full takeover by Meyer Burger Technology Ltd., Europe’s biggest solar-panel equipment maker, may take longer than previously anticipated. http://www.bloomberg.com/news/2011-11-08/roth-rau-falls-most-on-record-aftermeyer-burger-takeover-to-be-delayed.html
Biggest Solar Silicon Maker Expands Production as Prices Plunge
The Hemlock Semiconductor Group, the world’s biggest maker of polysilicon, is increasing production as a glut for the material used in semiconductors and solar cells pushes down prices to the lowest since 2003. http://www.bloomberg.com/news/2011-11-07/hemlock-expanding-solar-siliconcapacity-as-china-idles-plants.html
Most Solar Makers Will Disappear: Trina CEO Most of the biggest solar-equipment makers may disappear in the next few years as plunging prices erode margins and drive the weakest out of business, according to Trina Solar Ltd. (TSL), the fifth-largest supplier of solar panels. “This is the decade of mergers and acquisitions,” Jifan Gao, chief executive officer of Changzhou, China-based Trina, said in an interview. “From now until 2015 is the first phase, when about two-thirds of the players will be shaken out.” http://www.bloomberg.com/news/2011-11-08/most-solar-manufacturers-maydisappear-by-2015-trina-ceo-says.html
Weather 6 to 10 Day Outlooks
Temperature
Precipitation
8 to 14 Day Outlooks Temperature
Precipitation
