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0 Mar 15 2012 @ 10:34am by Matt Smith in Crude Oil, Global Energy, Natural Gas

March Madness Medley

Given my blatant lack of heritage, it gives me an excuse (as if I needed one) to look into both the nerdier side of March madness, and its obvious parallels with energy. So here is a random collection of definitions, divergences, and distinctions about current spring insanity:

March Madness Energy Mashup

The Failed Alley-Oop (btw, Alley-Oop is one of my all-time favorite words…) represents what has happened to the US solar industry. The US government attempted to set up the solar industry on an upward trajectory through a federal loan program, which seemingly gave companies a slam dunking opportunity to succeed. However, after the high-profile bankruptcy of Solyndra last fall, the DOE has refused to provide any more alley-oops – with no further loans approved since

Power Forward is both a position in basketball and something Summit analysts spend a lot of time trying to model and predict

Jump Ball – geopolitical tension has the US and Iran currently squaring off, while the UN tries to officiate as each struggles to gain the upper hand

Lay-up is a fair representation of the movement of current gasoline prices, as they drive to the basket of a $4 national average. Once there, prices will be halted in their trajectory by the backboard of demand destruction, and hopefully fall to a positive end (insert transport pun here, such as disputed traveling by coach)

Why there is March Madness In Energy Markets

–Gasoline prices are at a record high for the time of year – topping $4 a gallon on average in a number of states, including Illinois, California, Alaska, and Hawaii

–All the while the US is exporting fuel at a record rate, becoming a net exporter for the first time since 1949

–Crude stockpiles are at six-month highs and US product demand is off 5.4% from last year, yet President Obama is considering an emergency release of oil from the SPR to lower prices at the pump (wowee….it could easily have the opposite effect)

–Natural gas prices are at a 10-year low as storage levels are at a 45% surplus to last year’s level and a 52% surplus to the five-year average, while the US experiences the 4th warmest winter on record

–This week’s storage number just released was a withdrawal of 64 Bcf, the same number of teams in the NCAA tournament…spoooooky….

March Madness Links:

–Embracing the more quantitative approach, here is a statistical breakdown via charts of how the top seeds generally perform in the NCAA tournament

–The President has taken his mind off energy prices to make his picks for who is going to win

–While here you can see where NBA players score the most points from

–Finally (and oh, this is awesome) here is a bunch of other brackets which prove March Madness is not just about basketball

Good luck to all, may the best team win!

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