houston st 22:11 GMT January 10, 2006
01/10/06 Energy Settles:
Crude $63.37 (-.13)
Nat Gas $9.336 (-024)
Heat $1.7379 (-298)
Mogas $1.7371 (-306)
some consolidation today as players priced in Wednesday's crude/product stat expectations...weather still the driver for nat gas/heat...forecasts still call for above normal temps to linger for now...MMS reports 1.856-bcfd or 18.56% of daily Nat gas output is still shut-in with cumulative lost production since 8/26 of 581.682-bcf or 15.936% of annual Gulf output.Starting Wednesday, data will be released every two weeks...MMS reports shut-in Gulf oil production is 402,2591-bpd or 26.82% of daily totals. Since 8/26, 113.247 million bbl. has been shut in or 20.684% of annual Gulf production. Starting Wednesday, data will be released every two weeks...nat gas was able to stay above $9...I fully expect it to break support before Friday...
DOE Expectations (4 sources - mln/bbls)
Crude -1.10 -0.30 0.00 -0.90
Dist +1.80 +2.20 +2.00 +1.70
Mogas +1.70 +1.80 +1.50 +1.10
Ref Utilization +0.20% +0.10% +0.20%
houston st 18:22 GMT January 10, 2006
*EIA chief Guy Caruso said OPEC needs to hold crude oil production at current levels to meet global demand in 2006. US refinery maintenance this year will be higher than last due to hurricane-related deferrals. Nearly all Gulf Coast refineries should be online by the end of the first quarter.
*Oil Market Intelligence reports global oil demand bounced back in December from its post-hurricane dip. Growth in December was just 1.2% to 86.2-mbpd, up 1.87-mbpd over November and up 1.06-mbpd year-on-year. 2005 demand growth was 1.5% vs. 4.4% in 2004. Supply rose by 840,000-bpd on year and 1.36-mbpd from Nov to 86.0-mbpd. Annual supply growth outran demand growth at 1.6%. Global demand is seen growing 1.7% or 1.44-mbpd in 2006 to 84.887-mbpd due to strong global economic growth.
*EIA issued its Short-term Energy Outlook calling for Nat gas prices to remain high through 2006 before starting to weaken. Henry Hub Nat gas is seen averaging $9.80 in 2006 from $9.00 in 2005 and then fall slightly to $8.84 in 2007. Nat gas demand is likely to remain near 2005 levels as the summer is expected to be cooler than summer 2005, but rise by 1.3% in 2007. Domestic dry gas production is estimated to have decline by 3.1% last year due primarily to the hurricane-related damage. But production is seen rising by 3.8% in 2006 and by 1.1% in 2007. LNG imports are projected to rise from 650-bcf last year to 950-bcf in 2006 and to 1,200-bcf in 2007. Nat gas storage levels at the end of 2006 and 2007 are expected to match the 5-year average.
*EIA issued its Short-term Energy Outlook calling for crude oil and product prices to remain high through 2006 before starting to weaken. WTI is seen averaging $63 in 2006 from $56 and then fall slightly to 460 in 2007. Retail regular gasoline is seen averaging $2.41 in 2006 vs. $2.27 in 2005 and $2.33 in 2007. But the steady increase in crude oil and product prices over the past two years is expected to slow if not slow down though no dramatic reductions are anticipated. World oil demand growth is expected to rise from 1.2-mbpd in 2005 to 1.6-mbpd in 2006, due in large measure to an expected recovery in US growth from a net decline in 2005.
GVI john 17:56 GMT January 10, 2006
According to the wires...The weekly oil inventory data are due Wednesday. Crude oil inventories are seen steady to down 600,000 barrels, gasoline supplies are seen up about +1.6mln and distillates are expected to build +2.0 mln barrels. The major focus remains on natural gas on the impact of a rather severe winter in some of the other northern hemisphere heating areas on the globe.
Livingston nh 17:22 GMT January 10, 2006
Eur lg -- re: Feldstein Bonanza article -- "A major reason for the dollars current overvaluation is the widespread misunderstanding of the nature of capital flows in the US." He starts right in -- who says USD is "overvalued" - he has been on this Current Account issue for years - he has a co-efficient equation to support his view but it seems like a "flat earth" theory - his FT article makes a good point about the difference between flows in 2000 and present when he describes equity investors (bubble buyers) vs bonds/fix income funds (new Bubble Buyers?)
Seems none of the doomsayers (Setser on the Roubini site welcomed Feldstein) really understand what has happened in the last ten years - they talk about the US trade deficit as if it were a debt problem when in reality trade is a closed transaction -- they talk about "the current account financing" (FT - "If they decide to buy fewer dollar bonds, the US current account deficit could not continue to be financed at current exchage rates and interest rates.") - so what do the other countries do with the USD? once the USD leaves the country as payment for trade it is like company scrip and we are the company store -- foreign holders can trade it like baseball cards but it only becomes money when it comes home to buy something here
They also treat the US as subject to the same rules as countries that borrow in foreign currency (this is the source of most of the confusion) - Feldstein used Argentina as an example in one of his earlier jeremiads // when and if others refuse to accept USD in payment all of this could be a problem but so could a meteor strike
I tried on the PF to get some comment about this a few months ago but not much discussion and I'm sure I put some comments over the years on this forum
Bad money drives out good
Inflation is the debtor's friend
All that USD sloshing around in the world capital accounts (our currency, your problem)
houston st 16:56 GMT January 10, 2006
JOHN 16:32 -- I'll post it after today's close.
GVI john 16:32 GMT January 10, 2006
Any word yet on what is expected from the energy data due on Wednesday?
GVI john 16:31 GMT January 10, 2006
Temperatures will be much above-average in the northern Plains from Jan. 15 through 19 and above-average in the Northeast, private forecaster EarthSat said. In an outlook that covers Jan. 20 through 24, the forecaster predicted normal temperatures for much of the middle of the country.
houston st 15:18 GMT January 10, 2006
*Several units at Marathonís 245,000-bpd Garyville, LA refinery are shut for three weeks of turnaround maintenance.
*Dow Jones survey shows OPEC Dec output fell 490,000-bpd to 29.73-mbpd due to pipeline sabotage in Iraq. Iraqi output fell 200,000-bpd to 1.65-mbpd. Saudi output was off 30,000-bpd to 9.4-mbpd.
Livingston nh 12:44 GMT January 10, 2006
Dow broke thru 11,000 but at least there were no silly hats passed around - equity markets around the world are giving back a bit of the New Year exuberance // Alcoa reports lower profit on energy costs - DuPont and Dow Chem also expected to be hurt - this is the way inflation takes hold - companies will raise prices in Q1
Folks that think the Fed will stop hiking rates after Q1 should give serious thought to where the excess money will flow, especially if inflation stays near 4% - keep in mind that the trillions in USD sent overseas may start to find their way home
Nat Gas looks to be overdone - the feed stock users may start to snap up sub $10 NG // our European friends may become a bit stingier w/ reserves if Russia keeps playing hardball // speaking of Russia - the next few years will likely see a major infrastructure repair and expansion as petro and natural resource cash is deployed
Canada 02:15 GMT January 10, 2006
"It never was my thinking that made big money for me. It was always my sitting. Got that? My sitting tight!"
"There is a random distribution between wins and losses for any given set of variables that defines an edge. In other words, based on the past performance of your edge, you may know that out of the next 20 trades, 12 will be winners and 8 will be losers. What you don't know is the sequence of wins and losses or how much money the market is going to make available on the winning trades. This truth makes trading a probability or numbers game. When you really believe that trading is simply a probability game, concepts like "right" and "wrong" or "win" and "lose" no longer have the same significance. As a result, your expectations will be in harmony with the possibilities."
Mark Douglas, Trading In The Zone
Tonbridge AL 01:58 GMT January 10, 2006
gvm: Beans did a perfect 38% retrace 4 days ago. Jun 24 hi Nov 28 lo. and with todays gap dump lower you have one last bastion of support which is the gap tween Dec 9th and 12th ie a close < 5.781/2 not good. similar patterns in all the grains. - Corn is the one I have been trying to buy - Think the problem is that we had a decent crop & these are still markets that can't be swamped (yet) by HF buy any asset that moves liquidity whilst the silos are fully stocked from a decent crop
sydney gvm 01:03 GMT January 10, 2006
Anyone trading Soybeans here? My system has been trying to stay long over the last month or so with no luck - anyone else looking to long anything in this complex?