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Posts Tagged ‘NBP’

0 Jan 20 2012 @ 10:53am by Matt Smith in Crude Oil, Economy, Global Energy, Natural Gas, UK natural gas

Burrito Bites

Good day, good day!  Crude has toppled below the monkey bar of $100 late on this week as – would you believe – Euro debt concerns arise once more. In addition, crude has been clobbered by a disheartening domestic demand situation. Total product demand is down 7.2% on this time last year, while gasoline demand has just plummeted to its lowest level since 2001. And while on the subject of plummeting to new lows, the good ship natty has keeled over and made a decade low as supply remains staunch and the storage surplus swells (…while weather is set to swelter). Ay, there’s the rub, and here’s the grub. » read more

0 Jul 28 2011 @ 10:58am by Matt Smith in Capital Markets, Crude Oil, Economy, Global Energy, Natural Gas

Let’s Face The Music

At a time when we approach the unprecedented potential of a default by the US on its national debt, it is worth acknowledging that there may well be trouble ahead (…and imminently). As we face the music and prepare to lace up our dancing shoes,  it seems prudent to remember where we were a year ago, and then appraise whether current downbeat perceptions are muddying the water. So from the starting point of Energyland™ to the general economy, let’s take a look at ten reference points, to see if we need to throw in the towel, or just throw some shapes:  » read more

2 Apr 28 2011 @ 9:53am by Matt Smith in Global Energy, Natural Gas, UK natural gas

LNG: It’s a gas! (…and 9 other facts)

Charles Dickens* is more closely linked to Liquefied Natural Gas (LNG) than you think. He is attributed with the origins of the phrase ‘it’s a gas’ (= fact no.1), as it is derived from his quote ‘everything is gas and goiters’. (A goiter is the swelling of the thyroid gland. Let’s move on, swiftly…). Here are nine other facts about LNG you can drop into conversation at a cocktail party: » read more
2 Dec 22 2010 @ 10:21am by Matt Smith in Natural Gas, risk management, UK natural gas

Now Panic And Freak Out

Earlier in the year, I wrote a post about the sideways movement in US natural gas and crude oil prices, called ‘Keep Calm And Carry On’. Well, now seems an opportune time to flip the coin, as we are seeing UK natural gas prices panic and freak out.

NBP (National Balancing Point  – aka UK natural gas) prompt month prices have rallied as much as 36% since early November, as a cold start to winter has caught the market off-guard and depleted storage levels at a rapid clip. After last year’s coldest winter in over thirty years, there was the expectation that the UK was owed a mild winter; but this seems not to be. The entire UK has spent much of December under a blanket of snow (a rare occasion in itself), while temperatures are registering record lows. Given this backdrop, it is not wholly unsurprising that prices are both panicking and freaking out to reach twenty-two month highs, as gas demand reaches record levels. » read more
0 Oct 7 2010 @ 9:39am by Matt Smith in Capital Markets, Crude Oil, Economy, energy consulting, Global Energy, Natural Gas, UK natural gas

Burrito Review of Q3

My kingdom for a horse.

Once again, time carries us over the threshold of another quarterly milestone. These past three months have brought us confirmation that the last recession has ended (in June 2009), while general markets have rallied on the hope that things are so bad that further measures will be taken to keep us from contracting again. The past ninety-two days have seen BP finally plugging the oil spill in the Gulf of Mexico (as oil prices nonchalantly went on their way), while natural gas has continued its slide down the pricing pole on further faltering fundamentals. Spain won the World Cup, the US dollar lost its luster, and some people in China spent a chunk of this past quarter in a traffic jam. Let’s use this juncture to take a look at the energy highs and lows and somewhere inbetwixts: 

Scores on the doors for Q3, 2010:   

US natural gas prompt month: -16.1%
US natural gas calendar 2011 strip: -16.8%
NBP UK natural gas prompt month: +4.0%
NBP UK natural gas calendar 2011 strip: -7.4%
German power prompt month: +2.9%
German power calendar 2011 strip: -6.2%
WTI crude oil prompt month: +5.7%
WTI crude oil calendar 2011 strip: +6.4%
S&P500: +10.7%  
US Dollar Index: -8.5% 

The above price performances sliced and diced in 156 words: 

US natural gas was whoop-bang-walloped in the past quarter as production rose to a record high, more than negating the fourth hottest US summer on record and the increased cooling demand (= air conditioning) this brought. A non-eventful hurricane season only added further color to this bearish picture, and both prompt and calendar strips both slid. Across the pond, Europe saw modest gains on the prompt month for both natural gas and power due to unpredictable flows from such exporters as Norway (as well as a contangoed contract rollover), while hope that these supply issues were a transient glitch ushered the longer end of the curve lower. Crude saw a strong quarter across the forward curve as a weaker dollar and strong emerging market demand continued to rev the global economic engine (from stalling), whilst equities also buoyed the crude complex on hopes of a global recovery, regardless of  being souped-up by government intervention or not. 

Biggest energy-related non-event of the quarter: 

Hurricane Season. Despite there being an above-average number of named storms this year (15 with Otto appearing yesterday, versus the average of 11.3), and despite the EIA predicting 146 Bcf of production to be shut in due to hurricane season, only hurricanes Alex and Bonnie caused any outages of note. And the impact of this gruesome twosome totaled less than 10 Bcf.  An eventful non-event it has been. 

The oddest energy-related event of the quarter: 

One thing that has taken the crude complex by surprise is the blowout in the crack spread for heating oil  (the exchange-traded name for the diesel contract). Despite distillate inventories being at historically glut-like levels, the crack spread (measuring the profitability of producing a barrel of heating oil from a  barrel of crude) has risen as high as $15 on increased demand from Europe and refinery outages in Latin America. 

 

 The claustrophobic event of the quarter: 

Chilean miners spent the majority of Q3 trapped underground

Burrito crystal ball prediction for next quarter: 

Q4 will be the quarter for rollovers. Precipitously-poised economic data will topple to the dark side – manufacturing data, housing numbers, and the unemployment rate. Eeekola. 

The positive end to this review: 

Fall, Thanksgiving, Christmas, and mulled wine – Q4 rocks.