SPECIAL REPORT | October 05, 2010

Obsessive compulsive drilling: Where the rigs are & why they’re still drilling

Obsessive compulsive drilling Where the rigs are & why they’re still drilling IN THE SUMMER OF 2009, US NATURAL GAS DRILLING PLUMMETED from a peak of 1,617 rigs in October 2008 to a nadir of 672 in July 2009. Since then, the rig count rebounded to 1,004 in mid-September before sliding back to 977 last week. The EIA has anticipated a drop in the rig count for several months given persistent low prices (the 12-mo natural gas strip is currently trading below $4.25/mmbtu for the .....

DATA INSIGHT | September 30, 2010

September 30, 2010

Please find attached the latest LCMC Data Insight: Shoulder-season shifts This EIA natgas report hits at dynamic balances THIS WEEK’S EIA NATURAL GAS STORAGE REPORT INDICATED A +74 BCF NET INJECTION FOR THE WEEK ENDING SEPTEMBER 24, above consensus expectations in the high 60s, the year-ago +65 bcf injection, and the +67 bcf five-year average. The November NYMEX contract immediately plumbed new lows. Even though US average cooling degree days ticked up we.....

GLOBAL OIL RECAP AND BALANCES | September 10, 2010

September 2010

Please find attached summary tables of the latest official supply and demand projections from the IEA , OPEC , and the US DOE through 2011. The IEA reference case continues to project robust +1.9 mb/d demand growth this year followed by +1.3 mb/d growth next year. The EIA expects slightly lower growth over the next two years, but with demand growth spread a bit more evenly between 2010 and 2011. OPEC is maintaining a more pessimistic demand outlook through 2011. Overall, the E.....

SPECIAL REPORT | August 16, 2010

Not So Fast: What the pace of injections suggests about the chances for another natural gas price collapse

OVER THE PAST YEAR, WE HAVE FREQUENTLY POINTED OUT THE PITFALLS OF YEAR-ON-YEAR COMPARISONS IN THE NATURAL GAS MARKET, but they continue to influence market sentiment, causing some observers to expect a repeat of last year's late-summer price collapse. We think that most indications are pointing toward relatively strong cash prices later in the injection season. Whether or not strong cash prices translate into support in the NYMEX market depends upon the relationship between physical and financ… .......

GLOBAL OIL RECAP AND BALANCES | August 13, 2010

August 13, 2010

Please find attached a PDF file detailing projections of crude oil balances from the IEA , OPEC , and the US DOE . The IEA continues to expect the greatest demand growth in 2010 at more than 1.8 mb/d. The EIA is not too far behind, expecting demand growth this year of nearly 1.6 mb/d. However, the IEA is more optimistic regarding non- OPEC supply, implying a call on OPEC of 28.7 mb/d this year and 29.1 mb/d next year. This is below the agency’s estimates of current OPEC product.....

GLOBAL OIL RECAP AND BALANCES | July 15, 2010

July 2010

Please find attached tables summarizing the latest official agency projections of oil supply and demand balances. July projections did not change drastically, with the IEA revising up their 2010 demand growth projection to 1.8 mb/d. The IEA’s call on OPEC increased by marginally to 28.8 mb/d, just below OPEC production through 1H10. The agency also published its first projection for 2011, anticipating 1.3 mb/d of demand growth, largely offset by +400 kb/d of non- OPEC supply growth and .....

DATA INSIGHT | July 15, 2010

On Holiday: Now is a good time to declare independence from basic year-on-year comparisons

NATURAL GAS STORAGE NUMBERS ARE NOTORIOUSLY HARD TO PROJECT DURING HOLIDAY WEEKS, and today’s EIA report should be no exception. As businesses and factories close, demand for power and natural gas falls short of normal weekday demand. The degree to which the holiday curbs normal demand depends largely on two things: how much economic activity declines and the temperatures during the holiday. The context for this year’s July 4 holiday presents a stark contrast to last year’s on both fronts. But … .......

SPECIAL REPORT | July 14, 2010

A grand reopening? Energy demand's sensitivity to weather is coming back as the US returns to business

SCORES OF FACTORIES AND BUSINESSES CLOSED THEIR DOORS EARLY IN 2009 as the US economy plunged deeper into recession. Chemical factories, steel mills, and coffee shops went quiet. Virtually the entire auto industry shut down in January and again during the summer. We argued at the time that shuttered factories, empty commercial space, and vacant homes would blunt energy demand for heating and cooling. Not only would the recession erode energy demand for industrial processes, but the diminished h… .......

SPECIAL REPORT | July 12, 2010

Subterranean Homesick Rules: Pending legislation unlikely to derail onshore natural gas production

A CENTURY AND A HALF AFTER THE BIRTH OF THE MODERN OIL INDUSTRY IN TITUSVILLE, PA, the state is undergoing a drilling revival. This time, rigs are popping up in search of natural gas, which had been regarded as a dangerous byproduct during the state’s first drilling boom. As producers seek the high returns possible in the prolific Marcellus play, drilling techniques that have unlocked the nation’s vast shale gas reserves are fast becoming commonplace in Appalachia. But in the wake of the Macond… .......

DATA INSIGHT | July 09, 2010

An Uphill Climb: Struggling Central Appalachian coal production could hint at future natural gas demand

CENTRAL APPALACHIAN COAL PRICES HAVE CLIMBED FROM LAST YEAR’S DEPTHS, but production has yet to follow suit. During the spring, CAPP coal production looked poised to register significant gains on the year, but output has since petered out. Even before the July 4 holiday, four-week average production had fallen 4.5% in less than two months and is now flirting with last summer’s very low levels (Figure 1). Unless production stages a vigorous rebound into the second half of the summer, full-year p… .......