bulls make a splash

Hola! Hoping your week has been full of both energy and burritos. This week has been a bit of a disappointment actually - a back-loaded eventful week promised so much excitement from Thursday and Friday. In eventuality, it has caused more of a ‘plop’ and less of a  ‘fizz’, as data and quantitative easing worries have given general markets a headache. In commodityworld(tm) natural gas has spent the week trying to scramble away from the prompt month low for the year amid the shoulder-month pit-stop between cooling and heating demand, while the Opec meeting yielded little other than everyone saying how happy they were.  Anyhoo, let’s swap the talk…for a plate, a knife, a fork. Bites ahoy:     

–Natural gas elbows its way to center-stage. 

–Biofuel’s bumpy road. 

 –Absolutely brilliant – 5 things Spongebob Squarepants can teach you about business (hat tip BD!).  

–Natural gas is in its tightest range in eight years. 

–BP boiler suit is this year’s Halloween must-have. 

–How close is cheap clean energy? 

–When will Opec have to address the quota issue? 

 –How big is Africa? 

–Siesta Championship. 

–Volatility returning to oil markets? 

–Willy Wonka 3-course meal chewing gum could become reality. 

–52% of Americans flunk Climate 101. 

– Squirrels refuse medical care. 

–A Climate Proposal beyond Cap and Trade.   

–I keep flitting between thinking this is the dumbest thing I’ve ever heard of, or total genius……: Catch a thief from your armchair and win cash! 

The Burrito Non-Revelationary Fact of the week: Mr T is a goldbug. 

The Burrito Deluxe Award of the week goes to the Houston Chronicle and Tom Fowler, for putting the Opec Quiz as a lead feature on their websites to propel the burrito to its best day ever. A big burrito bravo to you!  

The Burnt Burrito Award of the week remains firmly on the mantelpiece of the US dollar. (8-mth lows versus the Euro, 15-year lows versus the Yen, parity versus the Aussie dollar …aaaaaaarrrrggghhh. thud.).  

The Burrito Fantastic Fact of the week comes courtesy of colleague Eric Bickel, who revealed that this October has 5 Fridays, 5 Saturdays, and 5 Sundays – a rare event (not 823 years rare as reported some places). Very random and very cool, Eric. 

The Burrito Play-on-Words of the week= Fish n’ chips! …tracking endangered blue fin tuna.

Have a corking weekend!!

Yep, it's that hot. (h/t MT)

I bid you a happy Friday once again, as the weekend sees us teeter over the edge of July, and into the arms of August. The past week has brought us a shaken snow globe of economic data; mixed, stormy and unsettled. Yet all the while, corporate earnings season in the US has continued the trend of underpromising and overdelivering, ultimately improving market sentiment, and ergo, equity markets. Natty has been given a boost from warmer temperature outlooks, both near-term and for the rest of summer (hot enough to melt ice cream vans) while hurricane season is errant for now. Crude has continued to trade in a tight range betwixt $76-$80, as the choppy sea of economic sentiment keeps it bobbing along.  Anyhow, too much squibbling, not enough nibbling, let’s chow: 

–New BP CEO: We won’t be found grossly negligent. BP counsel: Yes we will.  

–More buns for your buck – the updated Big Mac Index shows the euro is overvalued. 

–Cap and Trade is dead. Long live Cap and Trade!  

–Is it dangerous to drive and listen to sports radio? 

–Kinks in the ethanol message-machine? 

–Everything you need to know about global warming in 5 minutes (on p.7). 

–America’s laziest states. 

–36ft tall meerkat made out of straw. 

–US refineries still need to trim capacity.

–Why putting a glass of water on your dash helps fuel consumption. 

–Art Berman from The Oil Drum talks about Shale Gas.

–Modern cargo ships travel slower than 19th Century Clippers. 

–Monkey Economics. 

–Are Jedi knights libertarian or socialist? 

The Burrito Deluxe Award of the week goes to Chicago PMI data that was released this morning. With PMI manufacturing data released across the globe on Monday (= August!) - and possibly showing ‘expansion, but slowing expansion’ - the pre-emptive data from the Chicago PMI has boosted markets into the weekend, and raises hopes for some decent prints on Monday - fingers crossed. (No contraction from China’s manufacturing sector, please). 

EIA Crude Inventories this week: 7.3 mb build

The Burnt Burrito Award of the week goes to crude oil stockpiles which posted a hueymongous build in weekly inventories this week, growing by 7.3 million barrels versus the consensus of a draw, as imports cranked up last week. 

The Burrito Quote of the Week: “Every depression upgraded to a storm will bring in precautionary short-covering and precautionary evacuations – at least from BP’s rigs. After everything that has happened this summer, that company only needs to hear wind chimes in the Azores and things get buttoned down,” – research company Cameron Hanover. 

The Burrito Headline of the Week: Strongest Beer in the World. Served in a Dead Squirrel. 

Have a tremendous weekend!

Opec was a different animal back in 1986....

1) So what exactly is the big deal about Opec again? It is this: in 2009, the twelve-country cartel produced 39% of world’s oil (42% in the prior year, before they curtailed production in 2009 to support prices). Their influence has grown in recent times, and is likely to continue, given lackluster production growth in OECD countries. Opec has come a long way; back in 1986, Opec only made up 22% of the world’s oil production. 

2) Is the US increasing or reducing greenhouse gas emissions? Data just released by the EIA show US carbon dioxide emissions fell by 7% in 2009. But was this due to lower economic growth? In a word, yep. The ‘exceptional’ drop was more to do with lower energy demand from lower output (aka ’the great recession’), added to a cleaner mix of fuels in the economy, with a sprinkling of improving energy efficiency.   

3) Why does storage inspire such concern in the UK natural gas market? – simply because there is so little. Due to a maximum daily withdrawal rate (like at an ATM), there are 80-ish days of supply in storage. But if there were no technical constraints on withdrawals, there are only approximately 21 days of supply (or as little as 9 days at the height of demand). This compares to the US which has approximately 44 days (without constraint on withdrawals) – hence, there is a corresponding rise in blood pressure in the UK to a falling level of storage, especially at the start of the winter months. 

4) Just who is the largest exporter of oil to the US? This may come as a surprise, but it is Canada. The US imports more from our friends in the Great White North than from the entire Persian Gulf (= Saudi Arabia, UAE, Bahrain, Qatar, Kuwait and Oman). And also interestingly, Venezuela is ever-present in the top four eager exporters to the US, despite their rhetoric to the contrary. 

The shale revolution has left LNG rather deflated.

5) Shale, schmale. How much of US natural gas production comes from LNG?  In 2009 this level was approximately 1.6%. This is expected to grow this year, as more global production comes to market. Part of LNG’s charm comes from the fact that it can be stored and transported at a size 600 times smaller than its gaseous form. 

6) Is coal still relevant in the US? In these greener-than-thou times that we live in, the fact that half the power generation in the US comes from coal is swept under the rug somewhat. And it doesn’t look like this percentage is going to radically change anytime soon, despite the possible implementation of a cap-and-trade-and-tax-and-shimmy scheme, or otherwise. Although technological advancement such as CCS (carbon capture and sequestration) may mitigate some of the emissions from coal, coal consumption in 2008 accounted for 37% of energy-related carbon emissions in the US.     

7) WTF is the SPR? (What Type of Facility is the Strategic Petroleum Reserve?) It is the emergency fuel store of oil for the US. There are four storage facilities, two in Louisiana, and two in Texas. Current capacity is 727 million barrels (over a trillion gallons). How full is the SPR? Pretty much to the brim. 

8) Is China really taking over the world through consuming more and more oil?  The answer is a resounding yes. In 1990, Chinese oil demand represented 3.4% of global demand. The estimate for 2010 is 10%. More importantly, since 2000, China alone has represented half of all growth in global oil demand. At the current rate, China will represent 20% of global oil demand by 2020, potentially a larger share than the US. 

9) Aw, c’mon then. How much of current US production comes from gas shale? While gas shale accounted for 2 Bcf/d five years ago (approximately 4% of total US production), this has now dramatically increased to approximately 8 Bcf/d due to seven key shale plays, including Barnett (5 Bcf/d), Fayetteville (1.3 Bcf/d) and Haynesville (1.1 Bcf/d).  This is approximately 14% of total US production; a rather significant amount.         

10) How much gasoline does the US consume in a year? The amount of gasoline consumed in the US annually would fill approximately 250,000 Olympic-size swimming pools.

What's up, doc?

Although I will be the first to admit that life is for attacking at full pelt, I am appreciative for such a pit-stop pause as Easter. So as we rock on into a long weekend, a new month, and a new quarter to boot, I am ready to embrace the joys of spring and a few days break, and sincerely hope you are too. So please excuse me for not trying to sell you some dodgy April fool’s gag; there’s enough weird stuff going on out there in the world. And to prove it, let’s dive into this week’s smorgasbord:    

–If Emmett ‘Doc’ Brown were to invent something called the random word generator, it would inspire such headlines as this:  robot jockeys ride camels.    

–If you think the EIA data is fuzzy, what about Opec’s?   

–Topic du jour…a view on whether China is in a bubble here.  

–Boozy baboons raid South African vineyards.   

–Oil reserves exaggerated by one third.   

–Cap and Trade is dead. (oh, no it isn’t).   

–I knew it had super powers – wasabi can save lives.   

–More mainstream media prophesying natural gas.   

–And then we get inevitable backlash against shale.

–Gold price to be affected by oil in the future.     

–world energy briefing sees peak oil by 2020.   

–Scooter rage –  rider installs flamethrower to fend off irate drivers.   

The Burrito Deluxe Award of the week goes to  the S&P500, for having the best performance for a first quarter since 1998. 

The Burnt Burrito Award of the week goes to policymakers in Europe, who have rumbled on and on and on before finally putting a bailout plan in place for Greece.

Happy Easter!

And it all started so well…Monday’s ISM manufacturing data sent markets sprinting out of the blocks, only for things to go downhill from there. Swiftly. Black gold, Texas tea has seen more action this week than Chuck Norris, but has ultimately been dealt a sucker punch and beaten down to $70. Equities succumbed to a pummeling on Euro deficit worries and poor jobs data – back we go below 10,000 on the Dow Jones (again). Our beloved buddy US natural gas put up a brave fight this week, spurred on by a cooler weather outlook and a certain groundhog called Phil seeing his shadow. Without out further ado, here are this week’s snack attacks:

–Shale boom could leave US exporting natural gas?.

–US debt clock.

–A good intro to a Cap-and-Trade program by the EIA.

–The nine biggest rip-offs in American life.

–The ongoing housing market crisis in five simple charts.

–Gasoline prices good, Superbowl prices bad.

–milky way map in the style of the London Underground.

–Finally, apparently you now get ID’d for buying quiche in the UK.

The Burrito Deluxe Award of the week goes to Punxatawney Phil, who once again shows his uncanny knack for predicting cold weather. Based on the forecasts for the next two weeks, he is on the money so far.

The Burnt Burrito Award of the week is being juggled between Portugal, Italy, Greece and Spain (new acronym = PIGS!), as their spiraling budget deficits could rupture their economies.

The image of the week is of a white whale blowing smoke rings. (not really). The whale is from a theme park in Northeast China, who has been trained to blow ring-shaped bubbles as a New Year tourist attraction. Have a great weekend!

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