SPECIAL REPORT
| November 17, 2011
Seaway: A sea change in logistics and structure?
The reversal of the Seaway pipeline, announced today, sent front-month WTI prices above $100/bbl for the first time since July. This special report analyzes the likely effect of the news on planned incremental midstream capacity in the United States as well as the possible impact on the term structure of WTI futures.
SPECIAL REPORT
| November 01, 2011
Derailed? An ongoing labor dispute threatens crude oil shipments by rail
A labor dispute between rail workers and the major (Class 1) freight railroad companies in the country may escalate into a nationwide strike on December 7, 2011 and paralyze freight rail transportation for several days at an estimated cost to the economy of $2 billion per day.
SPECIAL REPORT
| October 26, 2011
The Diversification Case for Gas: Potential diversification still exists at individual commodities’ level
A natural extension of our previous note on commodity correlations ( No More Diversification? on August 4) is the examination of correlations at the level of individual commodities. A more granular view illustrates that some commodities are relatively less correlated with the equity market than others, and this insight is useful from a perspective of diversification. It might make more sense for investors to look at individual commodities (vs. aggregate indices or a basket of commodities) when .....
SPECIAL REPORT
| September 20, 2011
Modeling Cushing Crude Stocks
WITH THE WTI - BRENT SPREAD TESTING record levels despite the last two days’ retracement, the physical dislocations facing crude oil at the NYMEX pricing hub in the U.S. Midcontinent are in focus. While the extent to which physical fundamentals are driving the spread has been subject to debate, what is clear is that the confluence of several long-term structural trends has resulted in an altogether new dynamic at play in PADD II. We construct a model of crude oil stock levels in C.....
SPECIAL REPORT
| August 16, 2011
Eagle Ford oil and condensate production reaches 100 kb/d, natural gas at 1 bcf/d
Eagle Ford liquids growth shows unconventional plays have more than gas to offer. Despite the severely delayed and oft-revised numbers posted by the Texas Railroad Commission, LCMC Research estimates Eagle Ford production in July averaged 100 kb/d in oil and condensate along with 1 bcf/d of wet gas.
SPECIAL REPORT
| August 04, 2011
No More Diversification? Commodity correlations are on a higher plane
The case for portfolio diversification through commodities investment is weaker now than in the early to mid-2000s. • Correlations between returns from commodities and stocks have increased considerably during and since the recent financial crisis. • As commodities are becoming more positively correlated with each other and other asset classes, they might be in the process of losing one of their most significant characteristics in terms of investor attraction, i.e. the ability to diversify a.....
DATA INSIGHT
| June 30, 2011
Inconspicuous Consumption: Weak consumption could hinder growth in Q2
Monday’s personal spending and outlays data were no exception to the recent spate of weak economic data. Real personal consumption expenditure ( PCE ) declined -0.1% m-o-m in May (similar to a downward revised -0.1% in April). While the data could be revised going forward, current growth rates for April and May are the lowest since January 2010. • The 2-month average PCE growth rate is at the lowest level since October 2009 and represents +0.5% (annualized) growth over Q1 levels, indicating.....
DATA INSIGHT
| June 28, 2011
Declining net imports: The 2nd largest source of U.S. natural gas demand growth
In March 2011, net imports slid 1.2 bcf/d below year-ago levels. Viewed as a source of demand growth (rather than a decline in supply), net imports have served as the second largest source of demand growth (behind power) since 2009. Growing demand for LNG from Europe and Asia has contributed to higher international prices, while the U.S. shale gas boom has deflated U.S. natural gas prices. As a result, we estimate that LNG sendout in the U.S. has fallen to just about 0.8 bcf/d today......
SPECIAL REPORT
| June 28, 2011
The IEA’s credible threat to release additional stocks significantly enhances upside price protection over at least 2H11
THE SO- CALLED “FREE OPEC PUT” WAS A STAPLE OF THE OIL MARKET LEXICON during the price run-up of 2003 to 2008. The crux of the OPEC Put was the notion that OPEC , unified in its willingness to curtail output to stop prices from falling, would provide greatly enhanced downside protection for investors by guaranteeing a price floor. Over the second half of 2011, however, we would argue that a radical new flipping of the OPEC Put is likely to be in effect: the IEA Call.
SPECIAL REPORT
| June 24, 2011
The IEA backs words with actions
Stock releases intended to buoy OPEC’s promised volumes THE IEA ANNOUNCED ON THURSDAY that it will release 60m bbl of oil to counteract the ongoing loss of Libyan exports. It agreed to make 2m bbl of oil per day available from their emergency stocks over an initial period of 30 days. Oil supplies from IEA member countries should begin hitting the market around the end of next week. The Agency estimates that preventing a further tightening in the market through 3Q11 will require this 2.....