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Posts Tagged ‘energy demand’

0 Apr 21 2010 @ 10:55am by Matt Smith in Natural Gas, risk management

US natural gas through the medium of the Hoff

So it hit me like a thunderbolt. It was after a recent bout of analysis that I came to the staggering realization that US natural gas has many similar attributes to the career of the man, the myth, the legend that is David Hasselhoff (‘the Hoff’). Through the years we have laughed, cried, and scratched our heads at the Hoff, a set of emotions not dissimilar from the ones evoked by the US natural gas market. So forthwith, I present my steadfast case.

First up to the stand, Knight Rider. After the blow-up by natural gas in the last year and a half, the face of the gas market has been drastically changed – much like Michael Knight’s. With new supply from forces such as LNG and shale coming to the fore, natty is left to battle against potential oversupply, while hoping industrial demand will continue to gather pace. Much like our quaffed hero, natural gas is not necessarily battling against other adversaries (although coal switching is a current consideration): changing dynamics make it it’s own worst enemy, like Michael’s nemesis Garthe Knight. And the kicker to all this – Michael is a man close to my heart, leaning on technical analysis (of a different kind) through his car and sidekick KITT (Knight Industries Two Thousand….I never realized…Wikipedia wins again…). 

Prior to the aforementioned blow up (-> -> $2.40), natural gas had been living to excess, partying like a rock star, and running up to $13.70. This parallels with another point in the Hoffmeister’s life. But as improving economic data attest, a return to form for natural gas may see it back under the spotlight and very much in demand again (regardless of T Boone and his natural gas wacky races). And like our dearly beloved commodity, the Hoff is also ready to rock on once again (in the night, presumably). 

The third and final serendipitous era of Mr H which ties to the good ship natural gas, is his period as lifeguard Mitch Buchannon. Life for natty, just as for Mitch, is never plain sailing, with storms (literally) seemingly always on the horizon. And just as hurricane season appears on our radars,  we have to recognize that this is a natural part of our commodity’s yearly life cycle, and is as much a mainstay as Mitch was to Baywatch. All we can do is manage our risk against these possible eventualities, as situations can turn fast. (and we can’t all move in slow motion…along a beach…with a flotation device…).

So where does this all leave natural gas? Basically, in a similar position to the Hoff. It has been down and out, but is gritting its teeth and is ready to show us what it is made of. Just like you can’t keep a good man down, natty is ready for a scrap. But it can be safe in the fact there will always demand for such a unique commodity. It’s been emotional.

3 Mar 12 2010 @ 8:27am by Matt Smith in Capital Markets, Crude Oil, Economy, Global Energy, Random, Technology

Burrito Bites

Happy Friday once again! Sometimes it is better to go heavy on the filling, and light on the bread, so let’s dive straight into this week’s main course:

–One of the stranger headlines this week  – Sumo wrestler steals cash machine from Moscow shop.

–CERAWeek conference discusses how the energy sphere of influence is shifting to emerging markets, while even oil execs like the Conocophilips CEO shift focus to natural gas.

–TreeHugger blog is so good, yet leaves you feeling so, so bad. Waste, waste, waste.

–For all my OCD friends out there…..hand sanitizer doesn’t work.

Next month’s data releases for employment are indeed going to be March madness.

–Exxon showing the love for natural gas too.

Colchagua Valley, Chile

–Admittedly, this comes a long second to all the loss of life in Chile, but one of the best valleys in the world for red wine has been hit materially – Chile and the effect of earthquakes on their vineyards.

–a new energy source developed from the common pea.

–And while we’re talking healthy, why a Big Mac costs less than a salad.

Narrowing oil contango signals worries in the crude complex.

Olympic Hockey final Affects Water Supply, Canadian Economy.

–Rightfully last, but not least – 8 unconventional ways to be buried.

The Burrito Deluxe Award of the week goes to CERAWeek, for addressing and discussing the most prevalent issues faced in the global energy complex.

The Burnt Burrito Award of the week goes to Carlos Slim – the new richest man in the world, according to Forbes magazine. As Bill Gates and Warren Buffett have seen their fortunes fall on philanthropic endeavours, Carlos Slim’s unabated desire to become the world’s richest man has finally been achieved – well done.

And finally! This week’s competition! With all the focus on natural gas at the usual oil-heavy conference for CERA, it leads my to wonder: if natural gas is to be the savior of the energy world in the future, what will it’s superhero name be? The best suggestions provided in the comments wins a prize (which may or may not be burrito-related).

Have a top weekend!

1 Mar 5 2010 @ 10:50am by Matt Smith in Capital Markets, Crude Oil, Economy, Global Energy, Natural Gas, Random, UK natural gas

Burrito Bites

Welcome to Nonfarm Friday, my favorite day of the trading month, as it brings a more volatile reaction than eating mentos and drinking soda. Here’s a random list of events that have defined my deliberations on markets this week:

  1. There was a spanner in the works of the engine room of the global recovery, as Chinese Manufacturing took a nosedive (please feel free to complete the expletive “oh —-“).
  2. To temper this news a little, India came through with impressive manufacturing growth, and is expecting economic growth to ratchet up.  
  3. US natural gas has hit a three-month low as negative sentiment is encouraged by falling  weather-driven demand as we enter shoulder months.
  4. Greece had a bond auction and it wasn’t a catastrophe, mostly due to reassurances made the previous day about how they were to narrow their deficit gap(ing hole). Greece lives to fight another day, while tragic flaws remain.
  5. Crude broke back above $80, mostly due to currency fluctuations and risk appetite, and less to do with market-specific fundamentals (per the trend of recent times). The 4 mb build in weekly inventories was not bullish, but also not unusual.
  6. UK natural gas hit a new low for the year, with a similar story of funky fundamentals to US natty (=improving weather outlook, lower demand).
  7. US unemployment data came in better than expected (-38k jobs vs. -68k expected). The number was teed up to provoke a likely positive response…if  it had been poor, it would have been blamed on recent inclement weather, but as it was good it was viewed as robust. Hum dee dum.  

 

One good list deserves another, so let’s move straight on to the burrito bite buffet:

–Green tip of the week – save electricity on those middle of the night excursions by buying glow in the dark toilet paper.

–10 companies reinventing energy infrastructure.

–If anyone is able to chip in the additional $1,999,230, I’d love to combine our savings and  buy a Greek island. It’s for a good cause too.

Natural gas wins hands down in the fight against global warming.  

–This is random but fascinating – insuring Nicole Kidman. Also the first comment below the article about Jackie Chan is great.

–We hear about peak oil, but what about peak natural gas?.

–Prohibiting insider trading in commodities – The Eddie Murphy rule  (proceed to next bite if you have never seen the film Trading Places).

–A monster of an article, but fascinating – Michael Burry, the man who led the way in shorting subprime.

–Looking to own the latest in popular pets? – go get a goat.

The Burrito Deluxe Award of the week goes to equity markets. After a tentative start to the week, they are finishing with a flourish, having survived a torrential downpour of data in this first week of the month – avoiding potential pitfalls, potholes and puddles.

The Burnt Burrito Award of the week goes to stuttering Chinese data, from tumbling manufacturing numbers to stumbling forecasts of refinery slowdowns.

0 Feb 26 2010 @ 10:55am by Matt Smith in Capital Markets, Economy, Global Energy, Natural Gas, Technology

Burrito Bites

Happy Friday! This week has been distinctly dominated by dark clouds and impending economic storms on the horizon. Economic data has been consistent (in that it has been consistently downbeat), while next week brings a new month and a new set of data – sweaty-palm time if you have placed all your chips on rising markets. As for life here in energyburritoland, I have gained some interesting perspectives on energy markets this week. There’s fascinating stuff going on in natural gas, as prices fall while storage levels deplete (now at a deficit versus last year). And while colder weather is being scapegoated for the increase in demand, in reality it seems its the (improving) economy, stupid. (smokescreened by enfeebled economic sentiment). And just to provide a contrast, crude oil and US crude product prices continue to exhibit strength while demand has nipped out to go to the store and not returned…in 18 months. Anyhow, here’s to a weekend of downing tools and raising hell toasts: 

This clown was caught speeding. Seriously.  

Natural gas may help cut emissions. (ya think?!).

–Life is creating smarter grids, appliances and consumers.

–This weightlifting ant is able to bench press 100 times its bodyweight. Without breaking a sweat.

–The next three links are like a burrito bite of burrito bites dedicated to Google. First up, as someone who uses about 17 different Google applications, I really should realize there is no such thing as a free lunch – big Googlebrother is watching you. 

–Then there is more – big Googlebrother is also playing (in the energy markets). 

–And finally, courtesy of big Googlebrother Earth via Treehugger, US military airplane graveyard

–Headline of the week: The Best Way To Enjoy Wine: Try Overpaying. (Aw, c’mon, wine snobs: we all know it’s true).  

–There’s been more hype about this in the energy world this week than a new Apple iproduct… a ‘power plant in a box’ from Bloom Energy.

Competition for the oddest book title of the year. This year’s shortlist contains book titles including worm hunters, lethal robots and Nazi spoons, with previous champions being “Bombproof Your Horse” and “Living With Crazy Buttocks.”

The Burrito Deluxe Award of the week goes to San Francisco Fed’s Janet Yellen. Like a port in a storm, she was once again the voice of reason this week, telling it like it is on the US economy. If David Rosenberg is Batman, Janet Yellen is Wonderwoman. 

The Burnt Burrito Award of the week goes to global econonic data this week. There were some bright spots (from GDP upward revisions), but generally, they sucked. Big style.

Have a good one!

2 Jan 28 2010 @ 10:15am by Matt Smith in energy consulting

Five and a half facts and four and a half fallacies to lower your company’s energy costs.

Here are ten simple ways for an industrial company to lower their energy costs:

1) Energy demand management: reduce your energy bills, but not your energy consumption. By being smarter about when you use energy (i.e. moving energy usage to off-peak times), you can potentially create huge savings.

2) Having twenty employees rubbing their feet on the carpet for one hour to create static can increase the temperature in an average-sized boardroom by 1.5 degrees.

3) Be nice to your boiler. Government regulations require boilers to be inspected each year, but inspection does not mean calibration. Going the extra step and calibrating your boiler can save thousands.

4) Install highly sensitive motion sensors in breakrooms, restrooms, corridors and stairwells. Not only will this conserve energy, it will also keep employees warm due to having to wave their arms around like a crazy person. (A nice little side benefit – turn all thermostats down by 2.5 degrees).

5) Understand your energy charges. If you receive service through your utility, make sure you are being charged the correct tariff rate. If you receive service from a third party supplier, attempt to negotiate a lower rate.

6) Purchase Energy Star products where possible. A collection of three or more Energy Star products means you can apply for an additional bonus tax rebate called the Energy Constellation Cashback Rebate.

7) For a plant / factory, buy electrical-driven machinery rather than compressed air-driven. Cut down on compressed air usage wherever possible. The misconception with compressed air is that it is free (the air is free, compression is not). In effect, 92% of the energy used to power compressed air machinery is lost through transmission. The moral of the story – go for electrical-driven machinery.

8) If you lower your thermostat by one degree a week starting on October 1, employees gradually acclimatize to an ever-dropping temperature. By January 1, their movement may be restricted due to too many layers, at which point you crank up the heat again. By one degree a week. Estimated savings on a 3000 square foot building: $1359. ($59 for the Christmas party kitty, $1,300 to the bottom line).

9) Have your plant undergo an energy audit or a consumption workshop (where your team can be taught how to assess their own energy audit).

10) Adjust the brightness on your monitors lower by 80%. Not only will this save energy, but the darker tone will place less stress on your eyes, which means less vision insurance claims for your company (approximated savings of $843 per 100 employees).