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Ethanol Drops as Production Climbs to Highest Since December

Ethanol declined in Chicago for a fourth day following a government report that production last week climbed to the highest level since December. Futures fell 4.1 percent after the U.S. Energy Information Administration said output increased 4.8 percent to 939,000 barrels a day, the steepest gain since Sept. 27. “The trade is really keying on the production number; it was big,” said Mike Blackford, a consultant at INTL FCStone in Des Moines , Iowa. Denatured ethanol for May delivery fell 9.3 cents to settle at $2.172 a gallon on the Chicago Board of Trade, the lowest since Feb. 24. Prices have gained 14 percent this year. Gasoline for May delivery slid 0.16 cent to $3.0405 a gallon on the New York Mercantile Exchange . The contract covers reformulated gasoline, made to be blended with ethanol before delivery to filling stations. Ethanol’s discount to the motor fuel expanded 9.14 cents […]

Posted On : Published By : Tom Whipple
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Midnight Welding Picks Up Slack That Imperils Shale Boom

How high is demand for welders to work in the shale boom on the U.S. Gulf Coast? So high that “you can take every citizen in the region of Lake Charles between the ages of 5 and 85 and teach them all how to weld and you’re not going to have enough welders,” said Peter Huntsman, chief executive officer of chemical maker Huntsman Corp. (HUN) So high that San Jacinto College in Pasadena , Texas, offers a four-hour welding class in the middle of the night. So high that local employers say they’re worried there won’t be adequate supply of workers of all kinds. Just for construction, Gulf Coast oil, gas and chemical companies will have to find 36,000 new qualified workers by 2016, according to Industrial Info Resources Inc. in Sugar Land, Texas. Regional estimates call for even more new hires once those projects are built. The processing […]

Posted On : Published By : Tom Whipple
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Senators Urge Ban on Banks’ Physical Commodity Ownership

U.S. banks including Goldman Sachs Group Inc. (GS) should be banned from owning commodities businesses because they could threaten the institutions and global supply chains, Senators Sherrod Brown and Elizabeth Warren told the Federal Reserve . Financial holding companies “should be prohibited from owning physical assets like warehouses, pipelines and tankers,” Democrats Brown of Ohio and Warren of Massachusetts said in a letter to the Fed yesterday. “These activities pose significant safety and soundness, legal and reputational risks to the institutions.” The Fed yesterday concluded a comment period on risks posed by bank ownership and trading of commodities such as oil, gas and aluminum, and the possible benefits of imposing additional capital standards on such activities. The Fed announced on January 14 that it was seeking comment on curtailing banks’ involvement in the physical commodities business and other non banking activity. The Fed’s review of commodities activities at about […]

Posted On : Published By : Tom Whipple
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Fracking to thank for lower emissions, API says

The American Petroleum Institute said hydraulic fracturing of shale reserves helped lead to the gas production increase credited with lowering U.S. emissions. The Environmental Protection Agency said the amount for greenhouse gasses emitted in 2012 — the last full year for which data are available — decreased 3.4 percent from the previous year. API spokesman Zachary Cikanek said an increase in the production of cleaner-burning natural gas was in part responsible for lower reported greenhouse gas emissions. "Innovations in hydraulic fracturing and horizontal drilling have helped make the U.S. the largest producer of natural gas in the world," he said in a statement Tuesday. "America is leading the world in reducing greenhouse gasses thanks, in part, to the revolution in natural gas production." Hydraulic fracturing, known also as fracking, is highly controversial because some of the chemicals used in the process are viewed as […]

Posted On : Published By : Tom Whipple
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Canadian oil exports increase

The Canadian government said 2.7 million barrels of oil per day were exported in February, a modest increase year-on-year. The National Energy Board, the independent energy regulator in Canada, said 2.7 million bpd were exported in February, up 20,000 bpd year from the same time last year. For the first two months of 2014, Canadian oil exports were 1.5 percent higher than the same period in 2013. Nearly all of Canadian oil exports head to the United States. Canadian Prime Minister Stephen Harper has tried to add a layer of diversity to the export economy by courting Asian consumers. Last month, NEB said U.S. oil imports from Canada have increased from 16 percent of total U.S. imports in 2005 to 32 per cent in 2013. NEB’s latest set of data, published Tuesday, didn’t include export destinations. The Canadian Association of Petroleum Producers said crude oil output is expected to […]

Posted On : Published By : Tom Whipple
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Analysts See 34 Billion-Cubic-Foot Addition to U.S. Natural-Gas Inventories

Analysts and traders expect government data scheduled for release Thursday to show natural-gas inventories grew last week by a smaller amount than average for this time of year. The U.S. Energy Information Administration is expected to report that storage levels rose by 34 billion cubic feet of gas during the week ended April 11, according to the average forecast of 18 analysts and traders surveyed by The Wall Street Journal. The EIA is scheduled to release its storage data for the week on Thursday at 10:30 a.m. EDT. For the April 11 week, the median estimate is for an addition of 34 bcf. Estimates range from an increase of 22 bcf to an increase of 44 bcf. The estimate for April 11 is higher than the 25 bcf added to storage for the same week last year, and slightly lower than the 37-bcf five-year average injection […]

Posted On : Published By : Tom Whipple
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Personal travel growth significantly influences projected transportation energy demand

Personal travel, measured in light-duty vehicle miles traveled (VMT) per licensed driver, reached 12,900 miles per year in 2007 and decreased to about 12,500 in 2012. This shift in travel behavior is important because it directly influences light-duty vehicle (LDV) energy demand for transportation fuels such as gasoline and diesel. Recent analysis suggests that multiple factors influence travel behavior. These include economic, demographic, technological, social, and environmental determinants that have the potential to significantly shift light-duty vehicle energy consumption. Economic factors. Although economic indicators such as employment, income, and economic growth remain a dominant influence on levels of personal travel, U.S. travel indicators started to decouple from income and employment after 2007. Declines in the labor participation rate (the percentage of the total population ages 16 years and older either employed or looking for work) since the early 2000s, as well as income, fuel prices, the costs of purchasing […]

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High US Gulf Coast crude stocks spark talk of barge conversions

Talk of barging crude from the US Gulf of Mexico up to the East Coast is gaining traction as oil inventories along the nation’s refinery row continue to swell, traders said on Wednesday. Crude oil stocks in PADD III, encompassing the US Gulf Coast and home to just over half of the nation’s 17.9 million b/d refining capacity, stood at 207.2 million barrels for the week ended April 11, 2014, the highest level on record, according to Energy Information Administration data. The demand for domestic Gulf Coast crude has moved to up to include East Coast refiners but constraints on shipping from the Jones Act, which restricts shipments between US ports to US-made, owned and operated vessels, has some smaller producers and traders considering conversion of Jones Act Articulated Tug Barges (ATBs) from carrying petroleum products to carrying crude. Article continues below… Request […]

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Talks a Chance for Russia to Step Back on Ukraine

The high-level talks on Ukraine that are set to begin here on Thursday have emerged as a pivotal test of Russia ’s intentions in the region before the United States and European nations decide whether to impose additional economic sanctions on Moscow, American officials said on Wednesday.  “The idea here is that they would stop aiding and abetting and supporting these separatists and that they would pull their troops back from the border,” said a senior State Department official, referring to Western charges that Russia is behind the separatist protests in eastern Ukraine.  “If Russia does not take this opportunity to de-escalate, the costs are going to go up,” the official said. Secretary of State John Kerry will participate in the four-way meeting, which is to be held in a luxury hotel here, along with the Russian foreign minister, Sergey V. Lavrov; Ukraine’s acting foreign minister, Andrii […]

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Russia Economy Worsens Even Before Sanctions Hit

Margarita R. Zobnina, a professor of marketing here, has been watching the Russian economy’s gathering woes with mounting alarm: friends who have moved abroad with no plans to return; others who put off new business ventures because of rising uncertainty. Meanwhile, Ms. Zobnina and her husband, Alexander, also a professor, have rented a safe deposit box to hold foreign cash as a hedge against the declining ruble. Most shocking, she says, is that her local grocery is now selling anchovies packed in sunflower oil rather than olive oil, an obvious response to the soaring cost of imports. “That really freaks me out,” she said. While the annexation of Crimea has rocketed President Vladimir V. Putin’s approval rating to more than 80 percent, it has also contributed to a sobering downturn in Russia’s economy, which was in trouble even before the West imposed sanctions. With inflation rising, growth […]

Posted On : Published By : Tom Whipple