Morning Petrospective – July 29, 2011
peaker of the House John Boehner spent much of Thursday trying to whip his caucus behind his plan to raise the debt limit. A number of Republicans required persuading, but it looked like they were going to pass Speaker Boehner’s plan. The problem is that it was never all that likely to pass in the Democratic-held Senate. The Speaker is playing a high-stakes game of brinkmanship. If the Senate does not adopt the House plan and it leads to a default, then the Democrats will look worse than the Republicans. At least that is what political analysts are saying. Oil prices were mixed through this on Thursday.
Oil prices were mixed through this on Thursday. Heating oil and crude oil prices were higher but gasoline prices were lower. Traders were confused. We had two plans snaking their way through different houses of Congress, a president and speaker of the house both claiming that getting the debt ceiling raised was the first priority … while they seemed to be working against each other’s plans. It was not a moment historians will pick out as a shining example of bipartisan statesmanship. And we have not even gotten to the point where one party might actually work to scuttle or prevent any progress made by the other.
The DJIA dropped 62.44 to 12,240.11 on Thursday and the US dollar was higher from 4 AM until about 8 AM Thursday morning, but then fell from about 9 AM until a little before 5 PM. What we have now, between equities, currencies and different contracts in the oil complex is one big confused mess. Things that should be moving together, like equities, the euro and oil, are moving in different directions. Gasoline dropped while heating oil advanced. The dollar was higher, but the stock market dropped, during nervousness because of the debt ceiling.
Traders were also trying to figure out where to file Thursday morning’s unexpectedly positive decline in first-time unemployment filings. Unemployment applications fell by 24,000 to 398,000, breaking the psychologically important 400,000 mark. Economists also said that the drop below 400,000 signifies that the economy is adding more jobs than it is losing, according to Dow Jones. That would have been an unequivocally bullish development on another day.
Traders also would have been buying in front of Tropical Storm Don, which is expected to make landfall sometime Saturday along the Texas coast. Non-essential personnel have already been evacuated from a number of production and drilling platforms and Exxon has curtailed an estimated 8,000 bpd of oil output as a precautionary measure. More barrels and natural gas output will be sidelined on Friday.
FMX Newswire
FMX Newswire is an overnight news summary designed to meet the needs of professional energy traders. The content is to-the point, professional grade and not widely reported in the mainstream media. All sources are professional respected firms and newspapers.
Bentek Energy
- Power Burn Analytic Report – July 2011 Power Burn Averages 0.1 Bcf/d Below 2010.
- Nuclear Plant Status Analytic Report – Generation Down Nearly 50% At Oyster Creek.
- Northeast Observer – TCO Storage Inventories Are Nearly Even With 2010.
- Supply/Demand Balance Analytic Report – US Demand Drops 2.0 Bcf/d; Tropical Storm Don Disrupts Production.
Platts
- Amsterdam-Rotterdam-Antwerp ultra-low sulfur diesel premiums fall on lack of end-user & wholesale demand.
- Japan's shipping firms post net losses for Apr-Jun on costlier fuel.
- US EPA says wants to cut volatile organic compound (VOC) emissions from gas fracking by 95%.
- China's mega national #oil companies grapple with new whistle-blowing tool.
Bloomberg
- Crude Oil Falls, Heads for Weekly Decline, on U.S. Debt Ceiling Dispute.
- Galp Raises 2020 Production Target After ‘Exceptional’ Progress in Brazil.
- EDF First-Half Profit Rises on Nuclear Output; Spending to Increase.
- Ambani Bond Yield Drops by Record as Sale to BP to Cut Debt: India Credit.
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