SPECIAL REPORT | February 09, 2012

The Light Louisiana Sweet (LLS) Market: Overview and Short-Term Outlook

In light of the disconnect between WTI and Brent prices, LLS has emerged as a “secondary benchmark” in the U.S. Gulf Coast ( USGC ) due to its closer correlation to global crude prices, its diversified base of buyers and sellers, and the growth of an LLS swaps market in CME and ICE . Yet, the structure of the LLS trade is seldom discussed in depth. In this Special Report, we describe the main features of the LLS market and analyze its possible evolution through 1H13.

SPECIAL REPORT | February 02, 2012

Waiting for Godot: Scant gains in impaired sectors and among the less educated likely to prolong labor market recovery

The recovery in the labor market has been incremental at best with millions still unemployed which is perhaps one reason why many people maintain that the current recovery does not feel like a recovery. A closer look at the nonfarm payrolls data reveals a more nuanced view with the structurally impaired sectors dragging down the labor market (Establishment Survey) and the educated outperforming the less educated by large margins in the job market recovery (Household Survey). The labor market i.....

GLOBAL OIL RECAP AND BALANCES | January 18, 2012

January 2012

Please find attached a PDF file with official oil supply and demand projections from the IEA , OPEC , and the US DOE . The IEA released its monthly Oil Market Report today. It revised global oil demand growth down for 2012 by -0.19 mb/d. On the supply side, the IEA’s 2012 growth estimates for non- OPEC supply were largely unchanged from December’s report, while its assessment of OPEC crude supply in 4Q11 stood at 30.5 mb/d. The EIA’s monthly Short-Term Energy Outlook, released last.....

SPECIAL REPORT | January 13, 2012

Fracking-Induced Tremors? Those earthquakes can get expensive!

Underground disposal well can trigger earthquakes and we had known about that since 1968. This special report analyses the steps (and missteps) that led to the Ohio earthquake on New Year’s Eve. Although there is no evidence directly linking hydraulic fracturing to induced seismicity, waste water management practices associated with hydraulic fracturing are likely responsible for the earthquakes.

DATA INSIGHT | January 09, 2012

(Re)balancing Act: Largest inflow and outflow likely in Brent and WTI respectively

The rebalancing of the value weights for the Dow Jones- UBS (DJ UBS ) and S&P GSCI ( SPGSCI ) commodity indices is expected to have the highest impact on the flow of funds for WTI and Brent followed by natural gas. The rebalancing process will occur over five business days from January 9 to 13 with 20% of the total change occurring during each of those days using the closing price of futures contracts on that day. • Our model for estimating index investment (used in our Commitment of T.....

SPECIAL REPORT | January 03, 2012

RESEND: Iraq's political crisis: upside price pressure through year's end and beyond

Note: While Iran’s military exercises in the Strait of Hormuz have dominated today’s headlines, we believe it is important not to lose sight of the rapidly deteriorating sectarian relations in Iraq that further complicate the geopolitical outlook. In fact, earlier this morning, news agencies reported that the Sunni-backed Iraqiya coalition boycotted today’s parliamentary meeting, while the Kurdish Alliance momentarily walked out of the session. Hence, we have decided to resend our latest Spec.....

SPECIAL REPORT | December 29, 2011

Iraq's political crisis: upside price pressure through year's end and beyond

As the last U.S. combat troops left Iraq, political turmoil has surfaced at the highest echelons of the Iraqi government. Shiite Prime Minister Nouri al-Maliki’s ruling coalition faces a crisis following his government’s attempt to arrest the Sunni Vice-President Tariq al-Hashimi on terrorism charges. Underscoring the gravity of the situation, leaders of al-Hashimi’s political coalition, al-Iraqiya, published yesterday an op-ed in The New York Times stating that Iraq “stands on the brink of disa.....

SPECIAL REPORT | December 16, 2011

Cycling Natural Gas Storage: Operational flexibility provides further downside price risk

Withdrawals are essential to inventory management. And as boring as that might sound, verification of inventory is crucial to determine deliverability and structural integrity of a storage field, hence its economic viability and safety. This special report explains why the flexibility provided by technical management of storage reservoirs can determine the floor on 2012 gas prices.

SPECIAL REPORT | December 15, 2011

OPEC's 30 mb/d announcement

Bullish or Bearish? Yesterday, OPEC announced that it would set a 30 mb/d production ceiling for the first half of 2012, until its next ordinary meeting in June. According to a statement from OPEC’s secretary-general, the figure includes production from both Libya and Iraq. What should be the impact of the statement, if any, on prices? In this special report, we argue that, to the extent that the OPEC meeting provides any new information to the market, it is slightly on the bullish side.

GLOBAL OIL RECAP AND BALANCES | December 13, 2011

December 2011

Please find attached a PDF file with official oil supply and demand projections from the IEA , OPEC , and the US DOE . The IEA released its monthly Oil Market Report today. It revised global oil demand down for both 2011 and 2012, by -0.16 mb/d and -0.20 mb/d, respectively. On the supply side, the IEA decreased its forecast for non- OPEC supply for 2012 by -0.10 mb/d. The EIA’s monthly Short-Term Energy Outlook, released last week, also revised global oil demand down for 2011 (-0.1.....