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Energy Burrito

 
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  • Will Oil Take Part In The Santa Rally? [View article]
    Hey airborne, thanks for the vote of support (by the way, did you know that I write on a weekly basis on my home site - the quirky nature of most of my posts mean they are not appropriate for this forum?).

    The correlation with the euro has broken down recently; we were more euro debt crisis-focused over the previous months, but the fiscal cliff is now overshadowing that for now, hence the divergence.
    Dec 5 07:39 AM | Likes Like |Link to Comment
  • Delta Air Lines Is Bakken Business [View article]
    Sorry Joe from the Beach - just saw your comment now.

    Yes, costs would be much lower to ship oil south by pipeline rather than rail - a fraction of the cost.

    Re jet fuel - no, it is not possible to produce jet fuel only. Delta has retrofitted the refinery to produce as much jet fuel as possible though.
    Oct 17 10:21 AM | Likes Like |Link to Comment
  • Gasoline Prices Are Hurting The Economy, But Releasing Stocks From The SPR Would Be Crazy [View article]
    Please explain why my assumption is in error that the crack spread is more attractive for diesel than gasoline because there is more demand for it. Also, in reality, what has WTI got to do with the crack spread of US gasoline? WTI is an irrelevant benchmark for much of the US, whose cost is based off a global benchmark such as Brent. Only the minority who have physical access to WTI gain that pricing advantage.
    Mar 6 08:58 PM | Likes Like |Link to Comment
  • Gasoline Prices Are Hurting The Economy, But Releasing Stocks From The SPR Would Be Crazy [View article]
    The crack spread is more attractive for diesel because there is more demand for it (relative to gasoline) - some of this demand is coming from exports to Latin America.

    There is no shortfall in gasoline, as highlighted by the chart in the article. Demand is weak, proven across a number of indicators. More gasoline is likely being produced as a biproduct of producing more diesel, as per my prior point.

    I wouldn't condone releasing 18 million barrels from the SPR, 180 millions barrels is ludicrous. As you say yourself, the US consumer is caught in the crossfire (ie, this is not caused by US fundamentals). Hence, there are other steps globally which need to be taken, such as Saudi increasing supply. An SPR release is a last ditch measure.
    Mar 4 09:10 PM | Likes Like |Link to Comment
  • Gasoline Prices Are Hurting The Economy, But Releasing Stocks From The SPR Would Be Crazy [View article]
    hahaha....took me a couple of seconds to get that...hilarious!
    Mar 3 07:40 AM | Likes Like |Link to Comment
  • Gasoline Prices Are Hurting The Economy, But Releasing Stocks From The SPR Would Be Crazy [View article]
    Thanks mjohn! Here's the source, it's year-on-year:

    http://read.bi/vZ7XPI
    Mar 2 07:56 AM | Likes Like |Link to Comment
  • An Energy Board Game To Explain The Future Of Natural Gas [View article]
    Associated gas made up approximately 25% of natural gas production in 2010 (EIA). With liquid rich plays ramping up, I tend to believe the estimates I am hearing that this number is now over 50%.
    Feb 23 09:28 PM | Likes Like |Link to Comment
  • 10 Points To Consider When Examining The U.S. Quest For Energy Independence [View article]
    yep, I've got mad skills.
    Feb 23 08:56 PM | Likes Like |Link to Comment
  • 10 Points To Consider When Examining The U.S. Quest For Energy Independence [View article]
    Thanks airborne.

    The Iran issue is putting a floor under prices at the moment for sure. It feels like deja vu to last year, where prices ran up until we got to such a point where high prices endangered a global economic slump (which we've obviously avoided, ahem).

    I think Opec is happy where prices are at. If they weren't we would know soon enough. As for the low dollar policy, that is only going to become more of an issue as the drumbeat builds for QE3.

    By the way, did you notice I am back to avoiding politics like the plague?!
    Feb 23 08:55 PM | Likes Like |Link to Comment
  • 10 Points To Consider When Examining The U.S. Quest For Energy Independence [View article]
    I agree with both points. The LNG capacity issue is set to leave the DOE on a hiding to nothing. It is a nigh-on impossible call to make, trying to judge how much to approve when prices in Europe and Asia are (and will likely remain) a multiple of what NYMEX natural gas prices are.
    Feb 23 08:47 PM | Likes Like |Link to Comment
  • 10 Points To Consider When Examining The U.S. Quest For Energy Independence [View article]
    An absolutely fair call, ETFdude. My day job is as an analyst who gets paid to give a long term opinion, so your question leaves me juggling a hot potato. But let me say this: all of the factors above are focused on a longer time period than the next year. Crude prices are going to continue to be dictated by the strength in emerging markets, as developed regions such as Europe and the US are going to see benign oil demand growth. The oil shale revolution in the US will yield greater energy independence (=good), but little impact on oil prices because oil is priced globally and is fungible (= unfortunate). As for natural gas, we leave it in the hands of the DOE to approve as great a volume of LNG exports as they deem appropriate to boost jobs and the general economy without rallying prices too hard. Now THAT is a hot potato to juggle.
    Feb 23 08:30 PM | Likes Like |Link to Comment
  • An Energy Board Game To Explain The Future Of Natural Gas [View article]
    I appreciate your candor - it's definitely given me some food for thought today. Politics are something I shirk at the best of times, and something I should avoid referring to at all. I'll stick to the facts and fundamentals going forward - thanks for the reminder. Please keep the faith in me!!
    Feb 21 09:11 PM | Likes Like |Link to Comment
  • An Energy Board Game To Explain The Future Of Natural Gas [View article]
    The EIA report referenced in the article states LNG exports WILL increase prices - I am just saying this may not necessarily be the case, dependent on how frugal and sensible the DOE is with approving export volumes.

    I am a non-bias commodity analyst who works for a non-bias company. The aim of this article was to present three key dynamics in the natural gas market, it just so happens that they are somewhat bearish. I would, however, argue that the current administration's energy policy as a whole is bullish if anything, given its focus on increasing the reliance on natural gas.

    It is difficult to look at the fundamentals of the current natural gas market and not be one-sided, hence the article's slant.
    Feb 11 01:33 PM | Likes Like |Link to Comment
  • The Convergence Between Retail Gasoline And Natural Gas Prices [View article]
    Thanks for all the comments. I didn't mean to mislead regarding their units - I know the two don't have the same energy content, it is just interesting to observe their price action versus how they have moved in the past.

    And I readily admit this article doesn't draw a definitive conclusion. My initial interest in following the two is that I expected to see them converge, but at a higher level.

    The key difference between the two, however, is that poor demand has ushered gasoline prices lower, while it is strong supply that has weighed most heavily on natural gas. Going forward, both of these trends should continue to hold, but given their fall in price already, both commodities look likely to trade broadly sideways rather than anything else in the near-term.
    Dec 19 12:48 PM | Likes Like |Link to Comment
  • Crude, Coal, Carbon And Natural Gas Fundamentals That Are Surpassing Expectations [View article]
    That link is six months old - here's a more recent link - another source is hyperlinked in the article also:

    http://bit.ly/ux4k6s
    Nov 27 09:01 AM | Likes Like |Link to Comment
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