Posts Tagged ‘Crude Inventories’
Sunday, March 11th, 2012
Energy and Natural Resources Market Radar (March 12, 2012)
- Barclays Capital highlighted robust oil figures out of China this week. Refinery runs touched a record high of 9.368 million barrels per day in January, up 6.7 percent year-over-year. February refinery runs were buoyant and stayed close to those record levels at 9.304 million barrels per day. The record refinery runs come on the back of new processing facilities starting up with Sinopec and PetroChina starting a combined 360 thousand barrels per day of new crude processing units in the last quarter of 2011.
- This week The Silver Institute demonstrated that a steady increase in demand has driven the price of silver up 20 percent in the first 10 weeks of the year, ahead of gold, platinum and palladium. The strength in silver demand has come via a surge in buying of silver-based ETFs, which now represents 586 million ounces of silver, up 10 million ounces year-to-date. In addition, there has also been increased demand for physical silver bars. Global industrial silver demand is expected to contribute to strong silver demand going forward. Total silver demand is forecast to grow 36 percent from 2010 to total 666 million ounces in 2015 due to new applications in industry and lack of substitution.
- Reuters reports that China’s daily crude steel runs reached 1.926 million tons in February, up from 1.83 million tons in January. The increase came as mills began ramping up operations ahead of a projected recovery in demand during March and April.
- The U.S. Energy Information Administration (EIA) released data that supports current crude prices. Despite indicating that crude inventories were up, the numbers also showed that stockpiles of refined products were down.
- Preliminary port data shows Brazilian iron ore exports totaled 23.3 million tons in February. The pace equals 294 million tons per year (mtpy) on an annualized basis, an increase from January but still down 8.7 percent year-over-year. Exports to China totaled 165 mtpy, down only 1.4 percent year-over-year. This put China’s share of Brazilian exports at 56 percent, the third-largest amount since 2009. On the other end of the spectrum, exports heading to South Korea were at the volume in over 10 years.
- Iraq oil production is now over 3 million barrels per day, the country’s highest output since 1979, according to Deputy Prime Minister Hussein al-Shahristani.
- Preliminary Australian port export figures for February show a month-over-month dip in both met and thermal coal export volumes as a combination of weather-related issues and industrial action hindered shipments during the month. Met coal exports were 139 million tons per annum, down 14 percent month-over-month and the lowest since July. However, the amount of exports was still well above the 107 million tons per annum level seen in February 2011. Thermal exports were 135 million tons per annum, down 13 percent month-over-month but up 14 percent from the previous year.
- The Central Bank of Chile reported that the country’s copper export revenue totaled $3.37 billion in February, slipping nearly 20 percent from $4.17 billion in January. The drop in copper export revenue comes despite a 5 percent month-over-month increase in the average copper price in February and supports our view that Chilean mine production has struggled so far in 2012 with January production reflected in February exports.
- Natural gas futures on NYMEX touched a 10-year low this week as mild winter weather across North America has reduced heating demand. Natural gas inventories were 2.433 trillion cubic feet as of March 2 which is 46.2 percent above the five-year average and 45.3 percent above a year ago. On average, this winter has been 21 percent warmer than last year.
- South Sudan plans to build a temporary underwater oil pipeline along the Nile as part of a project to deliver crude oil for export from ports in Kenya and Djibouti. The pipeline would extend from oilfields to the capital of Juba, where the crude would be transferred to trucks and taken on to Kenya and Djibouti.
- According to the International Oil Daily, China will increase the storage capacity for the second-phase expansion of its strategic petroleum reserves (SPR) program to 32.9 million cubic meters. This would allow the country to store almost 210 million barrels of crude, 24 percent higher than initially planned. At the end of last year, China had built a total of 362 million barrels of crude oil storage capacity including 142 million barrels of SPR capacity and 220 million barrels of commercial oil storage capacity; equivalent to 40 days of the nation’s oil consumption.
- On the supply side, production is expected to finally resume at Freeport McMoRan’s Grasberg copper mine in Indonesia after clashes with workers delayed the restarting of production. Grasberg produces roughly 550 thousand tons of copper per year but Bloomberg says the company is reviewing its full-year production forecast following the disruption. Newmont Mining is also reviewing the economics of its $4.8 billion Minas Conga copper and gold project. The project, which at peak production expected in 2014-15 would yield around 70-105 thousand tons per year of copper, is still on suspension following protests by local residents and politicians. The dispute is predominantly over water usage and environmental concerns and the Peruvian government has undertaken an environmental impact review of the project, the results of which are expected to be ready in a few weeks.
- The Chevron Phillips Chemical Co. said its industry may spend $30 billion to build U.S. factories that convert natural gas into plastics because shale gas has made American production the cheapest outside the Middle East. Output from shale formations will yield enough natural gas liquids (NGLs) such as ethane to support about five new plants that produce ethylene and related plastics, an executive said. Each facility will cost $5-$6 billion and will be built over more than a decade. In addition, U.S. plastics exports may surge as new plants start, creating the need for new infrastructure to handle the increased shipments, the executive said.
- After Colombia’s coal production reached 84.7 million tons in 2011, the government forecasts its coal production to reach 97 million tons in 2012 and grow to 120 million tons by 2014. Colombia expects production to stabilize beyond 2014. The nation is seeing increased investment in the coal and gold mining sectors recently with the two evenly splitting $4 billion worth of investment in 2011.
- A one-day nationwide strike in South Africa led by the Congress of South African Trade Unions in protest of new road tolls and short-term contract labor agencies hit the mining sector, in particular gold and coal, this week. Gold Fields and Harmony Gold said that their operations were brought to a halt, as most of the workers took part in the strike. Anglo American’s local coal unit also took a hit. However, platinum mining remained unaffected as Impala Platinum and Anglo American Platinum continued to operate normally. Though Impala’s Rustenburg mine is recovering from a six-week long strike, the platinum group metals (PGM) sector remains at risk in our view due to the increasing frequency of labor-related disruptions this year.
- The Times of India reports that Indian Railways on Tuesday decided to increase freight rates by up to 20 percent for several commodities. The move is expected to increase prices of an array of goods, ranging from coal to fertilizers. With inflation, led by food, at a comfortable level, the freight hike won’t spare food grains. However, the agriculture ministry will pay a higher subsidy to ensure that consumers are not adversely affected. As part of the freight rationalization drive, railways increased the rate to be charged per ton per kilometer and changed the distance band to increase its earnings. The hike comes at a time when railway minister Dinesh Trivedi is under pressure to raise resources to drive the state-run transporter out of a financial mess created by his political party boss Mamata Banerjee.
- Bloomberg reports that China’s National Administration has decided to cap coal usage at about 4.1 billion tons of standard coal, a cap that would come into effect starting 2015, according to unconfirmed reports. China may announce the details of the plan around the middle of the year. China consumed a total of 3.48 billion tons of standard coal during 2011, up 7 percent year-over-year.
Tags: Agriculture, Barclays Capital, Crude Inventories, Crude Steel, Current Crude Prices, Energy Information Administration, ETF, ETFs, Gold Platinum, Industrial Silver, Iron Ore Exports, Market Radar, Petrochina, Price Of Silver, Processing Units, Refined Products, Refinery, Reuters Reports, Silver Bars, Silver Institute, Sinopec, Stockpiles, U S Energy
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Art Cashin Reveals An Aborted Goldman Attempt To Sell Greek Debt, Morgan Stanley On Tap To Underwrite Greek US-Denominated Debt
Wednesday, April 7th, 2010
This article is a guest contribution from Tyler Durden, ZeroHedge.com.
Via UBS Financial Services
Currency Confusion Compresses The Action – The uncertainty about the status (or even existence) of a Greek Rescue Package held the dollar (DXY) in check Tuesday.
That, in turn, left the Troika (oil, gold and stocks) milling about on a short tether. Pundits and reporters tried to fill up the allotted time and space with the usual citations. Some pointed to seemingly upbeat chain store surveys. Other seized on the FOMC minutes. A few tried to find direction in the three year auction.
It was all very interesting and filled up air time. Unfortunately, they had little or nothing to do with what motivated the moves in the markets. Stocks, oil and gold remain almost totally obsessed with the dollar (DXY).
It may be boring. It certainly is frustrating. But it is, what it is. Yawn.
Today’s Calendar – We usually publish the week’s calendar in our Monday Comments. Today, however, is so crammed with potentially market moving events and data. So, here’s a few things to watch:
7:00: MBA Mortgage Applications
9:00: Hearing: Subprime Lending and Securitization and the GSEs
9:30: Business Roundtable CEO Survey
10:00: SEC Meets on Asset-Backed Securities
10:30: Crude Inventories
12:15: Fed’s Dudley: Economic Outlook
1:00: Ten Year Treasury Auction
1:30: Fed’s Bernanke: Economic Challenges
2:00: Fed’s Hoenig: ‘What About Zero?’
3:00: Consumer Credit
Employment Picture Offers More Confusion And Conflict – Yesterday, the Bureau of Labor Statistics released its Job Openings and Labor Turnover (JOLTS) report for February. The JOLTS report was not particularly encouraging. The number of job openings did not increase. The number of unemployed people for each job opening did, however, increase to 5.5.
Further, the rate of hiring actually dropped from 4.09 million to 3.96 million. While it was not a terrible report, it held out the risk that the jobs picture remains vulnerable to a possible double dip.
Contrast that with the following TrimTabs assessment published in the Garman Letter this morning:
We estimate that the U.S. economy added 280,000 jobs in March, nearly double the Bureau of Labor Statistics (BLS) estimate of 162,000. The main reason for the discrepancy lies in different cut-off dates. While we use income tax withholdings through the end of March, the BLS establishment survey cut-off date is in mid-March. Growth in withholdings accelerated late last month, so the BLS did not fully capture the surge in employment atthat time. While temporary census hiring drove much of the increase in employment in March, a range of sectors—including temporary staffing, health care, durable goods manufacturing, and retail—posted solid job growth. We expect the economy to keep adding jobs at a healthy pace as long as the U.S. government can keep selling huge amounts of debt at low interest rates.
The economy is clearly recovering, and both the public and private sectors are adding jobs. On the one hand, this positive news draws investors into riskier assets. On the other hand, it makes it more difficult for the government to attract buyers for the massive amount of U.S. Treasuries it needs to sell to fund its deficit spending.
Sharp-eyed readers will note that the JOLTS survey covers February while TrimTabs covers March (and particularly late March). That having been noted, we maintain that the employment picture remains cloudy. Tomorrow’s Initial Claims will be watched carefully.
An Interesting Contention On Marketing Greek Debt – In this morning’s Option Investor, Jim Brown makes an interesting comment on Greece’s attempt to move some of its bonds in the U.S. market. Here’s what he wrote:
If you don’t want to bid for U.S. debt you could walk on the wild side and bid on up to $10 billion in Greek debt being sold in the U.S. sometime over the next 2-3 weeks. Morgan Stanley is the likely candidate to sell the debt after a Goldman Sachs effort fell apart from lack of bidders. Greek finance minister George Papaconstantinou will lead a U.S. road show sometime after April 20th in an effort to drum up interest. Greece is trying to sell itself as an emerging market, Balkan country and thus investors will get a higher yield from emerging market debt. I guess that is a good ploy if they can sell it but I think U.S. investors may be a little more intelligent than that. Secondly, if Goldman could not sell the debt I doubt Morgan Stanley can either. Greek 10-year debt yields rose over 7% intraday today.
We had not heard of the earlier Goldman attempt. This could get interesting.
Housing Shaky At Best – CNBC’s Diana Olick had a somewhat scary report on foreclosures yesterday. She suggests a new wave is coming and it may be a whopper. She quotes the Fannie Mae chief as saying that home prices will dip again before hitting a new bottom later this year (the report is on CNBC website). The housing struggle is underscored by this morning’s report on mortgage applications. Applications fell 11% (primarily on re-fis). The report cited a significant jump in mortgage rates last week. Watch the ten year Treasury and stay tuned.
Dennis Gartman – Part II – Yesterday, I had the privilege of attending a Bond Club of New York luncheon where my dear friend, Dennis Gartman spoke. While I am prejudiced, it was a really terrific presentation – earnest, enlightening and entertaining. Unfortunately, tight schedules prevented us from marinating. If you ever hear Dennis is speaking in yourarea, make a special effort to attend. He’s the real deal.
Cocktail Napkin Charting – Same numbers as yesterday. S&P resistance looks like 1192/1195 with support around 1175/1178. Declining number of new highs leaves market vulnerable to possible pullback.
Consensus – Auction likely to be the key. The ten year dictates mortgage rates. Will Fed lose control? Stay very nimble.
Answer - As we noted, the solution is rather elegant and requires no algebra. The bin you are looking for has the 17 ounce weights (one ounce more than a pound) all other weights are exactly 1 pound. So….take 1 from bin 1; two from bin 2, etc., etc. When you place it all on the scale, you read the number of ounces and that’s the odd bin. (Example: If it’s bin 2, the scale reads 55 pounds 2 ounces…..if bin 4, it’s 55 lbs. 4 oz.)
Today’s Question - There are 11 states that border Canada. Without looking at a map, what are they? (Hint: Four start with “M” and 3 with “N”.)
AN ENCORE PRESENTATION
On this day in 1788, Gen. Rufus Putnam, on behalf of the Ohio Company of Associates founded the river settlement of Marietta and opened the west. (Now don’t start waving your Daniel Boone coonskin cap at me – Boone never wore that cap – he hated them – and Ohio was the gateway to the west — that’s what the French and Indian war was about….so there!!)
At the time, the river near Marietta was so strategic that a few years later, when Aaron Burr hatched his treasonous plot to seize most of the west, his kickoff point was right near Marietta. But Marietta, Putnam and the Ohio Associates really figured in a presidential land deal and accidentally helped change America.
George Washington, who was not yet the president, was wondering how he could increase the value of his new inheritance, Mount Vernon. Sure it sat right on the Potomac but that was only good for scenery. The river was too choppy for boats to navigate that far.
So, Washington talked his cronies (make that Fellow Founding Fathers) into backing a plan to make the Potomac navigable and extend it close to his pal Putnam’s intended metropolis on the Ohio. Thus most of American commerce would sail past Mount Vernon and George could sell lemonade to the sailors.
But after they founded the Potomack Co., disputes among the bordering states hampered work. So they called a conference to set up rules on how states should act with each other. It went so well that Alexander Hamilton suggested that they go to Philadelphia, invite all the states, buy some clay pipes and punch…and see what they could agree on. Soon the conference on rivers decided to become the Constitutional Convention and wrote the law of the land. They felt badly that Washington never got his canal so they made him the First President just to keep him busy. With no canal, Marietta never became Chicago but did okay anyway. And tax records failed to show if President Washington ever wrote off his losses on the land deal.
The markets looked a little like they were stuck in the swamp yesterday. Most markets moved about in small circles following the example of the dollar (DXY).
Source: ZeroHedge.com, April 7, 2010
Tags: Art Cashin, Asset Backed Securities, Bernanke, Bureau Of Labor Statistics, Business Roundtable, Canadian Market, Ceo Survey, Crude Inventories, Currency Confusion, Dxy, Fomc Minutes, Gold, Hoenig, India, Job Opening, Jolts, Labor Turnover, Morgan Stanley, Mortgage Applications, Treasury Auction, Tyler Durden, Ubs Financial Services, Zero 3
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