Posts Tagged ‘energy demand’

1 Dec 1 2010 @ 10:50am by Matt Smith in energy consulting, Global Energy, Natural Gas, Random

The Holiday Season, And Its Path Back To Energy

Ok, we’re back in business on the burrito after going awol last week. We have now rolled into December like a  runaway snowball, and are straight into the swing of the most wonderful time of the year. Nonetheless, try as we may, energy is never too far from our minds. So here’s ten yuletide meanderings, with their paths back to energy: » read more

0 Oct 26 2010 @ 6:53am by Matt Smith in Natural Gas

If…

Err, I was working on a feature for the latest weekly outlook for clients, when I kinda got sidetracked by creating bar charts out of candy bars…..

If natural gas was a candy bar
it would probably be a Twix*;
The two bars = supply and demand
(and demand has a bite out of it).

If natural gas liked a beverage
It would have to be a beer;
Drowning all its sorrows –
at a low point for the year.

If natural gas was a building
It would have to be an Inn;
With storage full, production strong
Hence all rooms full within.

If natural gas was an animal
It would have to be a bear;
Growling…moody…kind-of stinks
(yet Charmin’ in its lair)*

*I am not sponsored, affiliated or in association with Charmin or Twix in any way, but would gladly endorse them going forward for very little money / freebies.

 

0 Oct 14 2010 @ 8:50am by Matt Smith in Crude Oil, Global Energy, risk management

Lies, Non-Lies, and Statistics – The Opec Quiz

As Opec meet today for only the second time this year, take part in this True or False Quiz to see how well you know the smoke, the mirrors, the confusing cartel that is Opec. Find the answers at the end and score yourself (c’mon folks, be honest):

1) Opec stands for the Organization of the Petroleum Exporting Countries

2) There are thirteen members of Opec: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia,  United Arab Emirates, Venezuela

3) They produce approximately 40% of the world’s 87 million barrels-a-day of oil

4) Opec is the same age as Dan Marino

5) Iraq hasn’t had an official production quota since 1990, when they were sanctioned by the UN

iddi biddi biddi Opec logo

6) The way Summit Energy Risk VP Tim Statts remembers the members is by applying his trivia logic to break them up into 6 – 4 – 2 (there’s 6 in the Middle East, 4 in Africa, 2 in South America)

7) In 2008, Opec made a decision to cut 4.2 million barrels-a-day of production, and has adhered to it to balance the market and raise prices

8) Nigeria is currently the largest overproducer versus their quota target, in both percentage and absolute terms

9) Opec’s logo was designed in the seventies by Buck Rogers and Twiki 

10) This week’s Opec meeting is somewhat of a non-event, as all members seem happy with prices around $70-$80. The loose cannon that is Venezuela, however, has the wrong hymn sheet and is singing for $90-$100 a barrel next year

Answers:
1) True
2) False – there’s only twelve – count ’em
3) True
4) False – Dan Marino was born one year later (less one day) on September 15, 1961
5) True
6) True – he takes his trivia very seriously 
7) False – they are currently only 54% compliant with the cut (only 2.26 million barrels cut)  
8) True
9) Half True – the logo was adopted in 1970
10) Sadly True

Assess your score: 1-4 = a crude performance, 5-7.5 = back to cartel class for you , 8-10 = oil baron / baroness in the making 

For newcomers to the blog, here’s a little ditty I wrote about Opec last year, that found its way onto the Financial Times website, and also got me a couple of death threats (in keeping with the post the first bit is true, second bit false). For clients there will be more Opec fun in the upcoming European and North American Weekly Outlook…thanks to all for playing!

0 Jun 25 2010 @ 10:31am by Matt Smith in Capital Markets, Crude Oil, Economy, Global Energy, Natural Gas, Random

An Energy Perspective – Part 2

The second guest post of my World Cup speech from Shakespeare’s Globe is out on the Houston Chronicle, after last week’s first part. Click on the below image to launch to it:

0 May 6 2010 @ 10:57am by Matt Smith in Crude Oil, Global Energy, Natural Gas, UK natural gas

10 simple points about energy markets

I am a huge proponent of keeping things simple (hence the use of cartoons, films, the Hoff, etc), so in these times when information whizzes past our eyes every minute of every hour of every day, I thought it useful to get back to basics and outline 10 simple points about energy markets which add some background to the news at the fore – it’s easy to forget ’em:

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.