Morning Petrospective – September 7, 2011
ll 30 companies in the Dow Jones Industrial Average (DJIA) opened lower on Tuesday morning as US investors played ‘catch-up’ with Europe. On Monday, European equities had come under heavy selling pressure and that weakness spread to oil markets. Crude oil prices came in more than two dollars lower in New York, after tumbling overnight on renewed fears that European debt deals and banks were once again lined up in the crosshairs. This was underlined in the morning’s trading, as the euro went from 36 points higher at 8:30 to 36 points lower by 10:30 AM.
The first three days of this September have the undesirable distinction of having combined to give us the worst start to the month ever, according to CNBC. We presume that they are talking about equities, but the August employment figures, combined with the ISM manufacturing and services indices, have hardly been helpful. It is certainly possible that there was a worse September before records were kept or when the world was lit by fire. But, that’s hardly reassuring.
The ISM non-manufacturing index unexpectedly rallied to 53.3 in August, up from 52.7 in July, and that helped equities and oil markets rally into the afternoon. Curiously enough, new orders rebounded, leading the index higher. It was good news, but the economy is still precariously perched here.
Capital Economics sees the seeds of GDP growth at about 1.5% based on the ISM manufacturing and non-manufacturing indices. While that would avoid recession, it would hardly be the kind of growth the country wants, needs or has come to expect.
Everyone is waiting to see if President Obama can come up with something that will inspire at least some segment of his 2008 electoral base of liberals and independents. Few expect that he will come up with proposals that will attract true bipartisan support, especially with the 2012 election just 14 months away. He needs to inspire someone, though, or all eyes will turn in desperation to the Fed, which is increasingly expected to respond with Operation Twist. We are uncertain who that might genuinely inspire.:
“Estimates for this week’s DOE report are calling for draws and declines across the board. We are still expecting a build in distillate stocks and an increase in refinery utilization, although we seem singularly alone in those predictions.
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.
Platts
- Sunoco wraps up a long transformation, like nobody else in the oil business ever has.
- European ultra low sulfur diesel cargo premiums rise as import flows drop off: traders.
- Nigerian ex-militants' protest fails to move government on amnesty.
- South Korea's Daewoo Ship building wins $1.1 bil semi-submersible drilling rigs deal.
Bentek Energy
- Power Burn Analytic Report – Texas Burn Down 3.0 Bcf/d Since August.
- Industrial End Users Analytic Report – Demand Sample Shows Small Gains in Eastern Half of US.
- Rockies Observer – Rockies Storage Injections Up Sharply from August.
- Nuclear Plant Status Analytic Report – Outages Over 4.2 GW Higher Than Year Ago Level.
Bloomberg
- Crude Gains on Forecast Stockpile Drop as Cyclone Builds in Gulf of Mexico.
- Vallares Acquires Iraq Fields in $2.1 Billion All-Share Merger With Genel.
- Russia Says No Plans to Build Nuclear Power Stations in Iran After Bushehr.
- Suncor Energy Chief Sees Record Year for Cash Flow on Oil Price, Cost Cuts.
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