DATA INSIGHT
| April 24, 2012
QE: Sequel in the Works? Grasping the move in the 10-year yield and the potential for more QE
• Breaking down the nominal yield into the real yield and inflation expectations illustrates that expectations of growth prospects had improved earlier this year but have deteriorated since, reflecting concerns regarding the US and — to a lesser extent — global economic growth scenarios. • Arguably, market participants are pondering about whether a relatively positive outlook can be sustained without additional monetary policy support from the Fed given their own perceived hawkish view of th.....
GLOBAL OIL RECAP AND BALANCES
| April 12, 2012
April 2012
In its Oil Market Report for the month of April, published today, the IEA kept global oil demand growth for 2012 largely unchanged from last month’s report, at 89.9 mb/d (a +0.9% year-on-year increase). The agency also estimated that OPEC supply in March rose by +135 kb/d to 31.43 mb/d. In its Short-Term Energy Outlook, issued on Tuesday, the EIA projected global oil demand in 2012 to grow by +0.9 mb/d. In addition, the agency expects 2012 non- OPEC supply to increase by +1.8 mb/d. Me.....
SPECIAL REPORT
| April 12, 2012
Has Formula Pricing Kept Oil Prices Persistently High?
Downward price pressures could be gathering momentum Oil prices have remained at high levels since the beginning of the year, with Brent ( ICE front-month) above $120/bbl since February. Strong OPEC supply and a relative absence of new geopolitical crises in March and April have not provided sufficient downward pressure. In this Special Report, we argue that the formula pricing system has contributed to keeping prices persistently high.
SPECIAL REPORT
| March 27, 2012
Time Spread Fundamentals: The Market for Oil Storage and the Outlook for the WTI Forward Curve
In light of the possibility that inventories in Cushing will hit new records later this year, we have prepared this Special Report outlining the fundamentals of the theory of storage and its relationship with time spreads along the forward curve. We then apply the insights of the analysis to anticipate possible changes in the WTI forward curve later this year and in 2013.
SPECIAL REPORT
| March 23, 2012
Dollar to Bask in Oil’s Glory: Burgeoning US oil production raises prospects of a stronger dollar
• The US current account (CA) deficit, which peaked at 6% of GDP in 2006 and stood at 3.1% of GDP in 2011, remains a source of drag on the dollar. The petroleum deficit’s share (% of the total CA deficit) went up to 70% in 2011 from 34% in 2006. • US domestic crude oil production advanced 21% since bottoming out in September 2007. It reached 5.89 mb/d in November 2011 (highest level since June 2002) as technological advances enabled production from unconventional sources. The US beca.....
DATA INSIGHT
| March 22, 2012
Who will win the race?
The showdown between natural gas and coal is heating up The withdrawal season was cut short this year. With a +900 bcf year on year surplus by the end of March and evaporating heating demand, natural gas fired power generation is called upon to clear the glut in the market. In this paper, we estimate the year-on-year injection season incremental gas demand for power use under current prices. A normal weather assumption starting April and coal’s still dominant role in the generation markets def.....
GLOBAL OIL RECAP AND BALANCES
| March 14, 2012
March 2012
Please find attached a PDF file with official oil supply and demand projections from the IEA , OPEC , and the US DOE . In its Oil Market Report for the month of March, published today, the IEA revised non- OPEC oil supply growth for 2012 down by -0.10 mb/d compared to its February forecast, largely driven by continued output disruptions in Syria and South Sudan. The IEA continues to expect global oil demand in 2012 to average 89.9 mb/d, unchanged from its previous forecast. In its .....
GLOBAL OIL RECAP AND BALANCES
| February 16, 2012
February 2012
In its Oil Market Report for the month of February, the IEA revised global oil demand growth for 2012 down by -0.26 mb/d, following a similar downward change of -0.19 mb/d in last month’s forecasts. On the supply side, the IEA’s 2012 growth estimates for non- OPEC supply were down by -0.10 mb/d compared to January’s forecast. In its Short-Term Energy Outlook, the EIA raised slightly its demand growth forecast for 2012 by +0.05 mb/d, driven by an increase of +0.09 mb/d in non- OECD demand.....
DATA INSIGHT
| February 15, 2012
History to Repeat Itself?: A WTI price uptick would reconnect it with noncommercial net length
Non-commercial net length in WTI (futures and options) has been advancing for the last seven weeks and is now at the same level as the week ended May 31, 2011, according to the latest Commodity Futures Trading Commission’s ( CFTC ) Commitment of Traders report. The price of WTI has frequently moved in line with the level of non-commercial net length in WTI but there has been a disconnect between the two recently. Net length in WTI increased to historically high levels in April last yea.....
SPECIAL REPORT
| February 14, 2012
Is the worst yet to come? A new bottleneck is lurking beyond Cushing
The WTI -Brent arb has widened in recent days, but congestion pricing for WTI is expected to subside with the addition of pipeline capacity from Cushing to the U.S. Gulf Coast ( USGC ). However, rising U.S. shale oil output has created the risk of new bottlenecks that could continue to detach U.S. crudes from global benchmarks. In this report, we analyze the risk factors and market implications of what could be the most disruptive of these: a supply glut in the USGC that triggered an LLS -.....