Posts Tagged ‘power’

0 Sep 30 2010 @ 10:25pm by Matt Smith in energy consulting, Global Energy, Random, risk management

Ten Tenuous Ryder Cup Links to Energy

US team uniform

With the Ryder Cup kicking off, here’s my attempt to link energy to the Ryder Cup in ten tenuous tidbits: 

1) Utility – both a company who provides energy, and a golf club for any occasion.
2) Green – the dance-floor aka the putting surface. Oh, and the future of energy!
3) Jigger – an old-school golf club for chip-shots, and a device by which coal is cleaned by water. 
4) El Niño - a climate pattern which has a big influence on the frequency of hurricanes, and the nickname of vice-captain Sergio Garcia. 
5) Coal – Wales, the venue for the latest Ryder Cup is most famous for rugby, sheep, and coal-mining.  

European Team Uniform

6) Ian Poulter – a livewire on the US circuit.
7) Louisville, Ky - hosts both one of the finest Ryder Cup venues and one of the finest Energy Consultants!  
8) Sustainability – 90% of materials arriving at the Ryder Cup site will be reused or recycled, and the Tented Village will be entirely powered by recycled vegetable oil
9) Power – Dustin Johnson is your man; the longest driver in this Ryder Cup.
10) Energy - though it pains a European to say this, the deciding factor of this Ryder Cup may be the terrific energy of captain Corey ‘Bulldog’ Pavin.

Whatever the result, enjoy your Ryder Cup!

0 Jul 2 2010 @ 9:30am by Matt Smith in Capital Markets, Crude Oil, Economy, Natural Gas

Burrito Bites

It's complicated.

Commodity markets; they never get any simpler, do they? As soon as we start to see some weakness in crude oil, uprises the uprising in US natural gas, while bonds continue to rally and equities get stomped on. A long-needed long-weekend stretches out in front of us to give us time to roll up our sleeves and mentally prepare for Q3 2010; it’s gonna be a good ‘un. In the meantime, let’s stack up the snacks and pile up our plates:   

–A wee bit contentious… doing nothing might have been best for the oil spill.  

–Would Cleveland be better off with Lebron James or a new DaimlerChrysler Plant?  

–US shale wave ripples worldwide

Busting Gulf oil spill myths, such as oily rain.  

–Cul de Sacs and 11 other unexpected things that make you fat.  

The future of natural gas by MIT (a comprehensive 104 pages long).  

–NYT bestsellers as economic indicators.  

–Wood biomass – pros and cons.  

Power from thin air – sending wireless energy.  

Per-capita emissions in China are rising.  

–Forget tomatoes powering lights, potatoes may power the batteries of the future. (caveat: they may not).  

–California considering digital number plates so they can show advertisements in traffic.  

–A survey shows what people think 2050 is going to be like.  

–The Econ Gangs of New York.  

–Behavioral economics on the best way to spend a vacation.  

Stock markets and the World Cup (=stoopid game).  

–Keep your fruit, I want a meat-flavored vodka.  

This week’s Burrito Deluxe Award goes to the euro, for a phoenix-from-the-flames recovery. Or maybe it’s just the lipstick applied to the PIIGS  this week that has made them a little more attractive…  

The Burnt Burrito Award of the week goes to crude oil, for spending the week cruisin’ for a bruisin’.  

Happy 4th July and the long weekend it brings!

0 Jul 1 2010 @ 10:23pm by Matt Smith in Capital Markets, Crude Oil, Economy, Global Energy, Natural Gas

The Burrito Review of Q2

The end of the Q2 leaves us somewhat this way.

Ironically, the end of the show ‘Lost’ this quarter has left financial markets to take up this mantle instead. Let’s rise above the confusion this week (= diplomatic way of saying ‘the worryingly bad market action’) to put on the wide-angle lens and take a broader look at the bigger picture: the key moments in the second quarter of 2010:  

Round the energycommodityworld(tm) in sixty seconds:  

US natural gas first up; natty started Q2 a nickel higher than the prompt month low of the year at $3.81, and gradually rallied through the quarter on a mild end to spring, a hot start to summer, and an expectedly busy hurricane season. That was, however until last week, when it ran full steam into a key technical resistance level around $5.23 and got knocked onto the canvas, waking up around the $4.62 mark where it finished the quarter. UK natural gas has been one-way traffic, starting the quarter sub-30p, but closing out here nearly 50% higher in the mid-40 pennies, as outage after outage at Norwegian and North Sea facilities have caused gas flows to be volatile, and traders to be skittish. European power markets prompt and calendar strips have taken a nod from natural gas,  while also tracking recovering coal and carbon prices. Finally, black gold, Texas tea started Q2 in the lofty position of the mid-$80s, before having a rollercoaster ride as low as $64.24 on a fourteen-day trouncing which saw it lose over 26% from the high of the year made at $87.15. This fall was due to a tumultuously tumbling euro / strong dollar relationship, as sovereign debt worries across the Eurozone sprung up like sprinklers on a golf course. Prices have recovered somewhat to finish the quarter at $75. Stop the clock. 

Scores on the doors for Q2, 2010:  

US natural gas prompt month: +19.3%
US natural gas Calendar 2011 strip: +0.01%
NBP UK natural gas prompt month: +48.1%
NBP UK natural gas Calendar 2011 strip: +40.9%
German power prompt month: +34.2%
German power Calendar 2011 strip: +16.7%
WTI crude oil prompt month: -11.9%
WTI crude oil Calendar 2011 strip: -13.3%
S&P500: -11.9%  

Biggest energy-related event of the quarter: The BP oil spill in the Gulf of Mexico. You probably heard about it.   

Macro-economic event of the quarter: It’s difficult to pick one from many good ‘uns, but the jobless recovery in Q2 has been as good as anything to provide smoke and mirrors for clarity on an economic recovery in the US. The smoke has mostly been blown and the mirrors held by census workers, who have temporarily boosted / distorted unemployment data, although like all good discolorations, this will all come out in the wash.   

Biggest financial non-event of the quarter: The revaluation of the Chinese Yuan. Just like getting excited about Christmas or a vacation, the arrival of this event didn’t quite live up to the hype. Despite the initial excitement it caused, the revaluation was a political manouver by the Chinese to avoid it being a key discussion point at the G20 meeting in Toronto last week. In that respect, mission accomplished. In terms of having maximum impact, minimal movement, mission accomplished too. All in all, a bold hand, cheekily played by the Chinese.  

Chart of the Quarter: The below chart tells a number of stories; that crude and equities continue to be best friends; that their fortunes have continued to improve over the past eighteen months, and that if you are culpable for the biggest oil spill in US history, your stock price will get absolutely spanked:  

  

 Largest loss of the quarter: Apart from BP’s stock price, one of the obvious candidates is eighties pint-sized icon, Gary Coleman…RIP  

Stealth datapoint move of the quarter: I have been a bond bull and wrong for a very long time (note: Pinky and the Brain post), so am not surprised to see Treasuries quietly rally throughout Q2 to pierce the 3% level. The downside to this move is what it indicates: that investors are worried about either deflation or a double dip recession. Unfortunately, the financial crisis and subsequent bailouts come with a steep price to pay; as we say in England, you pays your money and you takes your choices.  

Q3….bring it on.