DATA INSIGHT
| February 15, 2011
Distillate's Winter of Discontent: Temperatures may be cold, but the weather has dragged on US demand
The weather has dragged on distillate demand, but likely not as much as estimates suggest MANY OBSERVERS HAVE BEEN SCRATCHING THEIR HEADS OVER THIS WINTER’S US DISTILLATE DEMAND NUMBERS , with apparent demand data hovering around last year’s depressed levels despite unusually cold weather. This winter has generated 8.2% more population-weighted heating degree days ( HDD ) than last year and 3.7% more than the 30-year norm. Yet weekly apparent distillate demand data do not.....
DATA INSIGHT
| February 14, 2011
Something's Gotta Give: US spending is outpacing consumer confidence
THE SURGE IN US REAL PERSONAL CONSUMPTION EXPENDITURE ( PCE ) INTO THE END OF LAST YEAR GENERATED WIDESPREAD ENTHUSIASM ABOUT THE TRAJECTORY OF THE US ECONOMY , but the jump in spending has obscured a growing disconnect between PCE and US consumer confidence measures. Changes in PCE have typically correlated well with consumer confidence surveys, but consumer confidence has moved sideways from the end of 2009 while PCE grew 1.8% y-o-y in 2010. The recent.....
SPECIAL REPORT
| February 03, 2011
Panic Room: Seasonal natural gas spreads are offering some interesting opportunities
IT IS NO SECRET THAT THE NATURAL GAS MARKET HAS HAMMERED THE BACK OF THE NYMEX CURVE ; late last week, the 2012 calendar strip fell back below $5/mmbtu, now down 22.5% in the past year. At the same time, the market seems prepared for a repeat of last year’s seasonal spreads. The Oct/Jan spread tightened to just -$0.50 two weeks ago and settled as tight as -$0.438 on January 21, which is the tightest front Oct/Jan spread since 2004 (Figure 1). Market participants often ci.....
SPECIAL REPORT
| January 21, 2011
Chinese handcuffs: Despite China's downshift, potential tightness as distillate is pulled from two directions
CHINA’S EVER-GROWING THIRST FOR DISTILLATE FUEL HAS EMERGED AS ONE OF THE CENTRAL DRIVERS of global petroleum markets. But China is far from the only country grabbing at the middle of the barrel; in fact, the OECD’s rising consumption of diesel fuel is a key source of distillate growth. Total distillate consumption may be relatively stagnant within OECD markets, but demand for low-sulfur diesel fuel has been moving steadily upward on both sides of the Atlantic. Indeed, widespread consumption o… .......
SPECIAL REPORT
| January 18, 2011
Laws of Extraction: A look at the laws affecting natural gas in 2011
THE 112TH US CONGRESS CONVENED ON JANUARY 5 and recent and proposed regulations could make 2011 a watershed year for natural gas. The prior Democratic-dominated congress failed to adopt a comprehensive energy plan in 2010. Instead, the Obama Administration resigned itself to piecemeal policies, often adopting regulations unilaterally via the Environmental Protection Agency ( EPA ) and Bureau of Ocean, Energy Management, Regulation and Enforcement ( BOEMRE ). At the same time, many states .....
DATA INSIGHT
| December 30, 2010
Data Insight - A Shot for Q4 GDP: Strong US personal consumption data were lost in the holiday season
LOST AMONG THE HOLIDAY WEEKEND WERE LAST WEEK’S RELATIVELY STRONG DATA ON PERSONAL INCOME AND OUTLAYS . The +0.3% m-o-m increase in real personal consumption expenditure ( PCE ) in November and October’s upward revision to +0.5% (from +0.3% previously) slipped through the cracks. Taken together, October and November PCE averaged close to $9.42 trillion; if subsequent data confirm this level of spending for Q4, it would correspond to +3.7% annualized growth. With PCE .....
DATA INSIGHT
| December 29, 2010
A Loss for Words: Revised extraction loss among the key stories in this week's natural gas data blizzard
AS THE NORTHEAST DIGS OUT FROM THE BLIZZARD OF 2010, THE EIA DUMPED MORE THAN A FLURRY OF DATA ON THE US NATURAL GAS MARKET between the Christmas and New Year holidays. Within a matter of hours yesterday, the agency released its 914 production estimates and natural gas monthly data for October, as well as its 2009 annual data. On top of that, the EIA’s new estimation methodology for residential and commercial gas consumption adds a wrinkle to interpreting demand data. The interaction of the mon… .......
SPECIAL REPORT
| December 07, 2010
Rocking the Boat: US LNG export prospects are still facing stiff headwinds
JUST A FEW YEARS AGO, EXPECTATIONS OF NATURAL GAS SHORTAGES PROMPTED COMPANIES TO SPEND billions of dollars expanding importation capacity. Before regasification capacity started to swell in 2005, 23 years had passed without the commissioning of a new terminal. Only six years later, with the output potential of US shale plays readily apparent, some of the same companies that had banked on the prospect of bringing gas into the US market are now vying for the opportunity to send domestically prod… .......
SPECIAL REPORT
| December 01, 2010
Correction: Baked in
Please find attached a corrected version of our Special Report, Baked in: With warm winter forecasts embedded in gas prices, will mild weather drive prices even lower? There was a mistake in Figure 12 of the prior version. We apologize for any inconvenience.
SPECIAL REPORT
| November 30, 2010
Baked in: With warm winter forecasts embedded in gas prices, will mild weather drive prices even lower?
AS THE US NATURAL GAS MARKET SHUFFLES INTO THE WINTER HEATING SEASON , bears seem in full control of prices. The prevailing market narrative hinges upon the onward march of domestic production and the consensus warm outlook for winter weather—and rightly so. There are certainly plenty of molecules in the market and gas prices should reflect the structural state of the market. But to say that balances are likely to be loose through the winter does not necessarily imply that the.....