| To: CommanderCricket who wrote (75847) | 12/2/2006 12:45:20 PM | | From: ChanceIs | | | | >>>For all those who think the people closet to action "know" where prices are going, you've got to read this.<<<
Commander - I don't know whether to kiss you or smack you.
First. Thank you for the great insight on Zinc. Kudos.
Now it isn't clear to me whether you wrote the below, or merely copied from some other post. I suspect that it was the latter:
>>>The key flaw of communism is that when prices for goods are set below free market prices, shortages and misery are always the result. I just don't see how anyone can justify futures contracts as a part of the ideal free market. Futures contracts, by definition, lock you in and force you to perform, and are the exact opposite of freedom.<<<
I have to agree about the comment about setting prices below market value. (If you don't believe me, see my recent memo to Nancy Pelosi.)
Now as far as futures contracts locking in and being the exact oppostie of freedom.....well....where do I start:
1) Exactly who holds a gun to a party's head and forces them to enter a contract???
2) Please consult Aubrey McClendon. His stock was trading at $30 a year ago and about the same today vice Edge Petroleum which has fallen by 50%. Aubrey sold his gas forward at nice prices. I see that the price dipped some during the year, and the purchasers may have had some angst looking at the spot market in August (thank you Amaranth). However, Aubrey is plowing those profits back into drilling, and you will be able to purchase 2008 NG from him for $18 instead of $30. Be thankful.
Your comment about the traders not being the best because they are close to the action is extremely well taken. I have never bought a commodity future. Give me credit for that. I am not close enough to the action. I prefer a big slug of corporation between me and the commodity market to dampen out the oscillations - see Amaranth.
I recall well the calamity of Duke Energy's merchant electricity subsidiary, DENA. Back when electric dereg started, all the utilities rushed to set up merchant subs. DUKE through DENA sold a whole bunch of electric power forward from generation plants which they had not yet built. These were to be natural gas fired plants. DENA "knew" that NG was headed lower in '03. Well there was a glut of generation plant, so DENA didn't build their plants. This is not a problem, because one can either buy the forward contract back or buy electric in the spot and deliver it to satisfy the contract. However since DENA knew that NG was dropping going forward. It made no sense to hedge buy buying NG, after all, it was going to drop, and along with it the price of electric because electric in that region (California) mostly comes from NG. So they had sold power forward in a declining electric market, and avoided the expense of a hedge. Brilliant trading move !!!
NOT!!!!
Of course we all knew that NG spiked and electric along with it.
DENA has since been liquidated, and I see that Duke (the parent) is now completely liquidating its NG business.
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| From: ChanceIs | 12/2/2006 5:21:34 PM | | | | | | Bush May End Drilling Ban in Alaskan Bay
Saturday December 2, 4:30 pm ET
By John Heilprin, Associated Press Writer
Bush May Lift Drilling Ban in Alaska's Bristol Bay, Home to Endangered Whales, Salmon Run
WASHINGTON (AP) -- President Bush is deciding whether to lift a ban on oil and gas drilling in federal waters off Alaska's Bristol Bay, home to endangered whales and sea lions and the world's largest sockeye salmon run.
Leasing in a portion of area rich in oil and natural gas ended nearly two decades ago -- while Bush's father was president -- in the outcry after the Exxon Valdez oil spill in 1989.
But with natural gas prices higher, the Interior Department's Minerals Management Service proposed reopening up the North Aleutian Basin. That includes Bristol Bay and part of southeastern Bering Sea.
White House spokesman Scott Stanzel confirmed Saturday the president was considering taking that step.
Environmentalists oppose drilling there because of the potential for oil spills and harm to wildlife. They have speculated in recent days that Bush might allow such drilling before Democrats regain control of Congress in January.
"If the Bush administration decides to allow drilling in Bristol Bay, it will simply illustrate the level to which they will sink to satisfy Big Oil," Carl Pope, the Sierra Club's executive director, said Saturday. "They are willing to risk a valuable, renewable resource like Bristol Bay's salmon fisheries for limited, shortsighted drilling plans."
The Minerals Management Service said in its August proposal that reopening energy development in the basin's federal waters, extending between three miles and 200 miles offshore, could produce $7.7 billion in oil and gas production and up to 11,500 jobs.
Some 200 million barrels of crude oil, about what the U.S. imports every 16 days, are thought to be there. The agency estimates the region could yield 5 trillion cubic feet of natural gas -- a quarter of all U.S. annual production.
Fourteen companies are said to be interested. The agency cited support among more than a dozen local and tribal governments nearby who believe the drilling would boost their economy. Lease payments go to the government.
Despite its fame among fishermen for its rich stocks of salmon, king crab and other seafood, the Bristol Bay fishing region has lost hundreds of millions of dollars over the past decade because of competition from less expensive farmed salmon.
Alaska Native villages also depend on the annual sockeye and chinook salmon runs for protein in their diet.
The commercial fishing industry has plunged into a depression, giving more support to Royal Dutch Shell PLC and other oil companies that have lobbied the White House to lift the offshore drilling ban.
Environmentalists worry about the large populations of migratory seabirds and crab, the imperiled Steller's sea lions and northern sea otters, or the North Pacific right whales -- a population so decimated only about 100 are thought to still exist.
The Minerals Management Service said accidental spills could foul coastal water quality, and the noise and pollution from more ship traffic could disturb or kill seagoing creatures. It said even a large spill probably would harm a small portion of the fish populations, but could pose a serious threat to marine mammals.
The Bering Sea Fishermen's Association raised alarms about protecting the region, as did the Yukon River Drainage Fisheries Association, which said the drilling would threaten the salmon runs.
On Friday, more than 30 people representing fishermen, native Alaskans and conservationists wrote Bush urging him not to lift the ban.
"These protections have been in place because of the great risk to Bristol Bay posed by oil and gas development," wrote representatives of the Alaska Longline Fishermen's Association, Alaska Wilderness League, Sierra Club, World Wildlife Fund and others. "The presidential withdrawal now stands as the last line of defense for this irreplaceable resource."
The southwest segment of Bristol Bay was last open for lease sales in 1988 when the federal government collected more than $95 million. The government bought back the leases after the Exxon Valdez coated Prince William Sound and the waters of south-central Alaska with 11 million gallons of crude.
Congressional protections put on the area in 1989 were lifted in 2003 at the behest of Sen. Ted Stevens, R-Alaska, who said he had been acting at the request of constituents in the region.
Environmental groups said they are confident the new Democratic-controlled Congress would work to restore congressional protections on Bristol Bay.
Associated Press writer Jeannette J. Lee in Anchorage, Alaska contributed to this report.
Interior Department: |
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| To: ChanceIs who wrote (75855) | 12/2/2006 6:33:22 PM | | From: LoneClone | | | | That quote was from Jason Hommel, who is a genius at promoting companies he has been given shares in, not bad at analysing mining companies and markets, and completely incompetent at analysis outside that narrow area of expertise.
At least this bulletin didn't end with his usual "Praise the Lord and pass me your money" salutation.
LC |
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| To: ChanceIs who wrote (75853) | 12/2/2006 8:29:43 PM | | From: Bearcatbob | | | | At my age I have quit worrying about the merits of political idiocy. It is simply time to profit. I am certain the worst of policies will only help small E&P and Canadian companies.
Most likely it is noisy rhetoric that we will be able to trade off of. |
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| To: Dennis Roth who wrote (75849) | 12/3/2006 1:07:16 AM | | From: Researcher | | | | Gas prices hardly affect demand
UC Davis survey says pump costs have to soar a lot before Americans change driving habits
- David R. Baker, Chronicle Staff Writer
Friday, December 1, 2006
Record high gasoline prices haven't made a serious dent in America's demand for fuel, a new UC Davis study suggests.
Soaring prices have prompted Americans to cut back their driving only slightly. Further, drivers changed their ways less during the most recent shocks than they did during the period of skyrocketing gas prices of the 1970s, the study found.
The research will be presented this morning as part of a UC Berkeley conference on gasoline markets. The study concludes that pump prices have to soar significantly more before Americans change their habits, a finding that has big implications.
Economists and politicians have been debating whether raising taxes on gasoline would help cut demand, easing the country's dependence on oil and fighting global warming. The study suggests that only a very large tax -- one so high that it would probably be politically impossible to enact -- could have a significant effect.
"I would advocate for a tax, but I'm also a realist, and I know it would never work," said Christopher Knittel, a Davis economist and one of the report's co-authors. "It's hard to get a 10-cent gasoline tax passed, much less one over a dollar."
The Davis study examined two periods of rising prices: 1975 to 1980 and 2001 to 2006. In each, it examined the "elasticity" of demand -- the amount that gasoline use changes as prices rise or fall.
For every 10 percent increase in price during the late 1970s, demand fell 2.1 to 3.4 percent, researchers found. But in the past five years, every 10 percent price increase drove down gasoline purchases by a mere 0.34 to 0.77 percent.
The findings fly in the face of what some energy economists expected. As gas prices rose to record heights in the past two years, experts reasoned that rising prices would eventually force drivers to cut back on trips and fill up less often.
The prediction came true. But the change didn't amount to much.
Demand for gasoline usually increases 1.5 to 2 percent each year. In January and February of 2006, it actually fell, by less than 1 percent, according to federal data. But then it started rising again, averaging between 0.5 and 1 percent most months.
"It was growing slower, but it was still growing, and considering how much higher prices were, people were really surprised it was even growing at all," said Doug MacIntyre, senior oil market analyst with the federal Energy Information Administration.
Other researchers have found that Americans are making some changes in response to higher gas prices, but the cumulative effect of those changes has so far been limited.
A report released Thursday by Cambridge Energy Research Associates, for example, found that the amount of miles driven by the average American in 2005 dropped for the first time in 25 years.
That decline, however, was less than half of a percent. The report attributed the decline to higher prices as well as the aging of the U.S. population, since elderly Americans drive less than those of working age.
Research showing that use doesn't decline much as prices rise undercuts arguments for higher gas taxes. But gas tax advocates aren't ready to give up on the idea.
Severin Borenstein, director of the University of California Energy Institute, noted that the UC Davis study measures short-term changes in gasoline use based on short-term price increases.
Long-term changes in driving and buying habits are harder to track but matter far more, Borenstein said. And taxes, which stick around year after year, can prompt drivers to make long-term changes, such as buying more efficient cars or living closer to work.
"That's what actually changes auto fleets, housing decisions, political support for mass transit," said Borenstein, whose institute organized today's research conference. "They're right that this is a little piece of that puzzle, but the jump they make on gas taxes is a stretch."
Why the difference in gas consumption patterns between the 1970s and the current period? It could be the result of suburban sprawl, as more Americans buy homes miles away from work.
"We tend to live farther from our jobs now, so if the price of gas goes up, I'm still forced to drive to work," Knittel said. "There's not much discretion."
The difference also could be connected to the rising number of dual-income families. "Now it's two people who can't change their behavior," Knittel said.
Driving ahead
Americans aren't cutting driving much as gas prices rise.
-- From 1975 to 1980, demand fell 2.1 to 3.4 percent for every 10 percent gas price increase.
-- From 2001 to 2006, demand dropped just 0.34 to 0.77 percent.
-- Researchers conclude that only very large gas price increases would cut driving significantly.
Source: UC Davis
E-mail David R. Baker at dbaker@sfchronicle.com.
Page D - 1
URL: sfgate.com |
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| From: Dennis Roth | 12/3/2006 9:25:49 AM | | | | | | Oil May Rise on Lower U.S. Supplies, Cold Weather (Update3)
By Mark Shenk
bloomberg.com
Dec. 1 (Bloomberg) -- Crude oil may rise from a two-month high because of concern that U.S. fuel inventories will drop as cold weather arrives in the eastern U.S.
Twenty-nine of 40 analysts, traders and brokers, or 73 percent, said prices will increase next week, according to a Bloomberg News survey. Four expected a decline and seven forecast little change. The percentage of people predicting a gain was the highest since July 2005. Last week, 49 percent said oil would rise.
Prices surged this week on forecasts that cold weather from Canada will reach the eastern U.S. during the first week of December. U.S. heating oil, crude oil and gasoline stockpiles fell last week, an Energy Department report on Nov. 29 showed. The Organization of Petroleum Exporting Countries is meeting Dec. 14 to weigh whether to cut output a second time this year.
``A sustained cold spell will raise the possibility that we'll see $70 oil before the end of the year,'' said Phil Flynn, vice president of risk management with Alaron Trading Corp. in Chicago.
Crude oil for January delivery rose $4.19, or 7.1 percent, this week on the New York Mercantile Exchange. Futures rose 30 cents, or 0.5 percent today to $63.43 a barrel, the highest close since Sept. 18.
``The cold should push heating-oil demand and prices up,'' said Steve Bellino, senior vice president of energy risk management at Fimat USA Inc. in New York.
Heating Fuel
Lower-than-normal temperatures will cover most of the U.S. from Dec. 6 through Dec. 10, the National Weather Service reported yesterday. The Northeast is responsible for 80 percent of U.S. heating-oil consumption.
The region will start to see below-normal temperatures on Dec. 3, said Jason Nicholls, senior meteorologist at AccuWeather Inc. in State College, Pennsylvania.
The market ``will dwell on weather next week, with colder conditions in the Northern U.S. states likely to increase heating-oil demand,'' said Gerard Burg, energy and minerals economist at National Australia Bank Ltd. in Melbourne.
OPEC agreed to cut 1.2 million barrels of daily output beginning Nov. 1 to bolster prices. The global oil market remains ``oversupplied,'' Mohammed Barkindo, OPEC's acting secretary general, said yesterday in Cairo, where he was attending a meeting today of oil producers and consumers organized by the government of Egypt.
``OPEC always tries to move the market in advance of their meetings and I don't see why this time should be any different,'' Bellino said. ``It looks like OPEC may already be reducing output.''
Refinery Operations
OPEC shipments will fall 0.8 percent in the month to Dec. 16 to 24.3 million barrels a day, compared with 24.5 million barrels a day in the four weeks ended Nov. 18, Oil Movements said yesterday.
Refineries operated at 88.1 percent of capacity last week, up 1 percentage point from the week before, the Energy Department report showed. Refiners typically start in November units that had been closed for maintenance as they prepare for increased fuel demand in the winter months.
``Prices will rise because refinery runs will increase with the end of maintenance,'' said Eric Wittenauer, an energy analyst at A.G. Edwards & Sons Inc. in St. Louis. ``The 1 percent gain last week will be the start of a recovery and we should see bigger declines than last week's 300,000 barrel drop'' in U.S. inventories.
Stockpiles declined 360,000 barrels to 340.8 million barrels last week, the department reported.
`Weak Bull Market'
Analysts looking for little-changed or falling prices said stockpiles were sufficient to meet demand. Crude-oil inventories in the week ended Nov. 24 were 14 percent higher than the five- year average for the week, the Energy Department said. Heating oil and diesel supplies were also above the five-year average.
Next week, warmer-than-normal weather will begin moving into the Great Plains, according to the National Weather Service.
``This is a very weak bull market,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``It won't take much to turn the market around. Warm weather and a weak economy do not make for a strong oil market.''
U.S. gross domestic product increased at an annual pace of 2.2 percent in the third quarter, the slowest this year, the Commerce Department said Nov. 29. The U.S. consumes 25 percent of the world's oil.
The oil survey has correctly predicted the direction of prices 53 percent of the time since it was introduced.
Bloomberg's survey of oil analysts and traders, conducted
each Thursday, asks for an assessment of whether crude oil
futures are likely to rise, fall or remain neutral in the
coming
week. The results were:
RISE NEUTRAL FALL
29 7 4
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net
Last Updated: December 1, 2006 15:56 EST |
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| From: CommanderCricket | 12/3/2006 10:21:45 AM | | | | | | Copied this from the iV CWEI thread.
This ought to make a few bears take pause of their arguments. Now why in world would the UAE need to build coal plants with their huge NG reserves? Not only that, I don't believe the UAE has coal resources, so these are imports. Read - booming economy so there will be fewer exports of LNQ in the future. So much for global warming.....
It may be full steam ahead for coal-fed power plants in UAE
UAE may build coal-burning power plants for the first time to help meet rising demand for energy.
Abu Dhabi: The UAE, holder of the world's fifth largest gas reserves, may build coal-burning power plants for the first time to help meet rising demand for energy spurred by a booming economy, a company official said.
"Alternative sources of energy for power generation including coal are being discussed," Peter Barker-Homek, Chief Executive Officer of Abu Dhabi National Energy told Bloom-berg.
Abu Dhabi is producing about 4.5 billion cubic feet of natural gas per day, of which 3.6 billion is for local consumption, mostly to generate energy, and 720 million cubic feet per day is exported in the form of Liquefied Natural Gas (LNG). |
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| From: Dennis Roth | 12/3/2006 10:53:03 AM | | | | | | Alternative Fuels and Their Potential Impact on Aviation
by D. Daggett, O. Hadaller, R. Hendricks, and R. Walther
Published on 1 Oct 2006 - 15 pages
gltrs.grc.nasa.gov
Abstract
With a growing gap between the growth rate of petroleum production and demand, and with mounting environmental needs, the aircraft industry is investigating issues related to fuel availability, candidates for alternative fuels, and improved aircraft fuel efficiency.
Bio-derived fuels, methanol, ethanol, liquid natural gas, liquid hydrogen, and synthetic fuels are considered in this study for their potential to replace or supplement conventional jet fuels. Most of these fuels present the airplane designers with safety, logistical, and performance challenges.
Synthetic fuel made from coal, natural gas, or other hydrocarbon feedstock shows significant promise as a fuel that could be easily integrated into present and future aircraft with little or no modification to current aircraft designs.
Alternatives, such as biofuel, and in the longer term hydrogen, have good potential but presently appear to be better suited for use in ground transportation. With the increased use of these fuels, a greater portion of a barrel of crude oil can be used for producing jet fuel because aircraft are not as fuel-flexible as ground vehicles.
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Fischer-Tropsch fuels make the grade, Liquid hydrogen and ethanol flunk out, biodiesel is problematic. Pictures, charts, diagrams and more details in the pdf. |
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