DATA INSIGHT
| October 03, 2012
Center Stage: Phases of net length and implications for WTI price
Non-commercials boosted net length (futures and options) in WTI by 128K from June 26 to reach 378K on September 18, according to data from the Commodity Futures Trading Commission’s ( CFTC ) Commitment of Traders report. The price of WTI rose from $79.36 to $95.29 over the same period. Non-commercials, however, cut net length on September 25 as WTI price fell to $91.37. In this note, we assess current levels of WTI net length, suggest what it might imply for WTI price and place net l.....
SPECIAL REPORT
| September 26, 2012
Heavy versus light crude: The upcoming battles for market share in the U.S. Gulf Coast
What happens when light sweet crude imports are fully pushed out of the U.S. Gulf Coast? The looming light sweet supply glut in the region may be about to find an unexpected relief valve: heavy-to-light crude switching among complex refineries in PADD 3. In this Special Report, we analyze the economic and technical aspects of heavy-to-light switching and discuss potential commercial responses by producers of heavy sour crude to counter the loss in market share. As we discuss, the rate of heavy.....
DATA INSIGHT
| September 12, 2012
The Boost from Oil: Petroleum exports to continue supporting overall US exports
Exports have outperformed US economic growth during the recovery following the Great Recession. In this note, we take a look at the role of exports in the economy and highlight the significance of exports of petroleum products within total exports.
DATA INSIGHT
| August 21, 2012
Up, Close and Personal: Assessing the duration of the household deleveraging process
The post-Great Recession recovery has been sluggish in comparison with previous recoveries. That was to be expected given the recession centered on balance sheet issues in the aftermath of the bursting of the housing bubble. A gradual deleveraging (reduction of liabilities/debt) of corporate and household balance sheets is generally considered to be part of the recovery process. We review the household deleveraging process in this note and assess its potential future duration.
MARKET INSIGHT
| August 17, 2012
What happens at $4 gas? Eagle Ford teaches the importance of a functioning supply chain
How quickly would gas production respond to a significant uptick in prices? Following the massive exodus of rigs, dry gas plays look abandoned. On the other hand, oil plays — specifically the Eagle Ford — are shining as supply chain miracles, benefiting from the migration of resources from dry gas fields. In this Market Insight, we first look at Eagle Ford and quantify the impact of supply chain migration in the service sector. We then shift our focus to dry gas plays and talk about scenarios th.....
MARKET INSIGHT
| August 09, 2012
Got Water? Impact of the Drought on Upstream and Midstream Operations
Earlier this week, President Obama underscored that the worst drought in half a century is slashing U.S. crop and livestock production and called on Congress to pass a farm bill that will send disaster aid to more farmers and ranchers. The impact of the drought, however, is not limited to agricultural commodities as energy commodities can be water intensive both in the upstream and midstream markets. In this Market Insight, we analyze the drought’s effect on two specific issues: water availabili.....
MARKET INSIGHT
| July 26, 2012
CNOOC's latest bid for North American expansion
Analyzing the supply risks from the state-owned company’s takeover The specific details of CNOOC’s bid to acquire Canadian independent Nexen have been widely documented since the US$15.1 billion deal was announced on Monday. Less attention has been paid, however, to the longer term impact on crude oil production due to the entry of the state-owned Chinese oil companies into the Canadian landscape. In this Market Insight report, we identify the potential risks to crude supply arising from the a.....
DATA INSIGHT
| July 25, 2012
Reading the Tea Leaves: Outlining our expectations for the FOMC
The Fed’s extension of Operation Twist during its Federal Open Market Committee ( FOMC ) meeting on June 19-20 did not come as a surprise. In this note, we illustrate a probable course of action for the Fed during the next FOMC meeting on July 31-August 1 after taking into account the deterioration in US macroeconomic data and growth outlook since April.
DATA INSIGHT
| July 12, 2012
The Dance Continues: Nuances exist but commodity correlations remain high
With any leftover optimism from earlier this year having evaporated (the IMF is expected to lower its 2012 global growth estimate to around 3.0% in August from 3.5% in April), we take a look at current levels of commodity index investment and commodity correlations in this update of our note from last August, and provide a view on the likely path of commodity correlations going forward.
MARKET INSIGHT
| July 10, 2012
Norway's labor conflict is over... Or is it?
Another workers’ strike could take place later this year The Norwegian government’s intervention in the labor dispute in the oil sector resolved the imminent threat of a full production shutdown in the Norwegian North Sea. Following the news, today’s trading session saw Brent prices fall and the time spreads on the front end lose their gains from the previous session. However, there is yet another labor conflict in the Norwegian oil industry that remains unresolved and could threaten an additi.....