Gasoline demand to fall, petchems keep rising… Wood Mackenzie via Bloomberg

by Jim Colburn • Thursday, October 19, 2017

Boomberg reports on a Wood Mackenzie piece here:

“Global oil demand growth will slow to a crawl and gasoline use will peak within the next decade, prompting the world’s biggest energy companies to accelerate the shift to natural gas and chemicals, according to consultant Wood Mackenzie Ltd.”

And here are WM’s charts:

 

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Crude, product exports reach record levels 1st half of year… EIA

by Jim Colburn • Thursday, October 19, 2017

The EIA discusses crude oil and product exports in this issue of Today in Energy

“Crude oil exports in the first half of 2017 increased by more than 300,000 barrels per day (b/d) from the first half of 2016, reaching a record high of 0.9 million b/d. Petroleum product exports also grew over the same period with propane and distillate exports reaching record highs of 0.9 million b/d and 1.3 million b/d, respectively.”

“Distillate exports in the first half of 2017 were 14% higher than in the first half of 2016, with exports to South and Central America accounting for most of this growth. The share of distillate exports to Central and South America increased slightly to 56%, while the share of distillate exports to Western Europe fell to 19%. Mexico remained the largest single destination for U.S. distillate, averaging 17% of total exports (223,000 b/d), followed by Brazil and the Netherlands.” …

“In the first half of 2017, Mexico experienced unexpected refinery outages that reduced production of gasoline and distillates even further, and U.S. exports of gasoline to Mexico increased by 27,000 b/d compared with the first half of 2016.”

“U.S. propane exports reached a record high of 913,000 b/d in the first half of 2017, up from 793,000 b/d in the first half of 2016. Most of this increase is from U.S. exports to Asian markets, which accounted for 76% of the growth since the first half of 2016, and most of the destination countries for U.S. propane exports are Asian markets.”

 

 

 

 

 

 

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US oil production expected to reach record levels in 2018… EIA

by Jim Colburn • Tuesday, October 17, 2017

This is from the EIA’s Short Term Energy Outlook released last week:

“EIA forecasts that U.S crude oil production will average 9.4 million barrels per day (b/d) in the second half of 2017, 340,000 b/d more than in the first half of 2017. Production in 2018 is expected to average 9.9 million b/d, surpassing the previous high of 9.6 million b/d set in 1970, based on projections in EIA’s Short-Term Energy Outlook (STEO).”

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A hedge for China…

by Jim Colburn • Tuesday, October 17, 2017

From Reuters:

”China is offering to buy up to 5 percent of Saudi Aramco directly, sources said, a move that could give Saudi Arabia the flexibility to consider various options for its plan to float the world’s biggest oil producer on the stock market.”

It’s also a nice hedge fro China against rising energy prices…

 

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Oil VIX not reacting much to recent events in Iraq…

by Jim Colburn • Monday, October 16, 2017

The 5 day chart of CBOE’s oil VIX shows a small uptick of about one vol point:

Here is a one year chart including last year’s OPEC meeting which set record volume days for crude oil options:

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World Economic Outlook… IMF

by Jim Colburn • Thursday, October 12, 2017

Here is the intro:

“The global upswing in economic activity is strengthening, with global growth projected to rise to 3.6 percent in 2017 and 3.7 percent in 2018. Broad-based upward revisions in the euro area, Japan, emerging Asia, emerging Europe, and Russia more than offset downward revisions for the United States and the United Kingdom. But the recovery is not complete: while the baseline outlook is strengthening, growth remains weak in many countries, and inflation is below target in most advanced economies. Commodity exporters, especially of fuel, are particularly hard hit as their adjustment to a sharp stepdown in foreign earnings continues. And while short-term risks are broadly balanced, medium-term risks are still tilted to the downside. For policymakers, the welcome cyclical pickup in global activity provides an ideal window of opportunity to tackle key challenges—namely to boost potential output while ensuring its benefits are broadly shared, and to build resilience against downside risks.”

Here is the link:

http://www.imf.org/en/Publications/WEO/Issues/2017/09/19/world-economic-outlook-october-2017

 

 

 

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Is Gold a Good Hedge? … Bloomberg

by Jim Colburn • Thursday, October 12, 2017

This is a very good article from Bloomberg on gold for those of us who know little about the yellow metal (me)… This table shows the importance of some factors that influence gold prices:

Here are some selected time periods comparing gold to equities and treasuries:

But do read the whole thing here https://www.bloomberg.com/news/articles/2017-10-10/is-gold-really-a-good-hedge

 

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The IEA Oil Market Report for October is out…

by Jim Colburn • Thursday, October 12, 2017

Here is the link for the public (free) version:  https://www.iea.org/oilmarketreport/omrpublic/

From their summary (the key word is “balanced”):

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Power Companies to Stick With Plans… WSJ

by Jim Colburn • Wednesday, October 11, 2017

Tim Puko, of the Wall Street Journal, has a nice piece on how some power companies expect to deal With Trump administration’s plans to roll back Obama-era environmental rules here….

“This will not change our planning process,” a spokesman at Southern Co. said of the EPA’s move on Tuesday.

The same is true at American Electric Power, once one of the country’s biggest producers of coal-fired power. Just over a decade ago 70% of its power came from coal, and now that number is at 47%, the company’s chief executive, Nick Akins, said in an interview. The company has reduced carbon-dioxide emissions by a third in that span, it said.

The company said this summer it would spend $4.5 billion to develop one of the largest wind farms in the U.S. and a related 350-mile transmission line. Markets encouraged that decision and others like it, not federal policy, Mr. Akins said.

“That course will not change,” he added. “Clearly our shareholders and customers expect a clean-energy economy.”“

 

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Overtime Pay at Electric Utilities Skews U.S. Wage Growth… The Daily Shot

by Jim Colburn • Monday, October 9, 2017

The Daily Shot, a Wall Street Journal blog, has some excellent charts explaining the uptick in wage growth from Friday’s employment report.. Here is one of them:

Here is the link, there is much more:  https://blogs.wsj.com/dailyshot/2017/10/09/the-daily-shot-overtime-pay-at-electric-utilities-skewed-us-wage-growth-data/

Of course, getting higher wages for delivering ice or other scarce products is called “gouging”…

 

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