Morning Petrospective – September 21, 2011

rices were higher yesterday, but the rallies were so anemic in comparison to what we have seen recently that we tend to feel that this complex might be even weaker than we thought. Prices did move higher, but there seems to have been very little behind the improvement. And, everyone was still talking about Greece. Some were talking about how the situation still seems likely to end with default. And, after losing up to 5% of their value over Friday and Monday, Tuesday’s advances looked very much like rallies in bear markets.

The Federal Open Market Committee (FOMC) started a two-day meeting on Tuesday, and it will announce its decision on Wednesday afternoon. Many observers feel that it will unveil the “twist,” which would sell nearer-term treasuries and buy longer maturities. It would theoretically lower long-term interest rates. While a number of people are pushing for it, several members of Congress have come out against any fresh stimulus by the Fed. And, after this particular Fed’s history of telegraphing its every move, we would be surprised if any sudden, new course was being decided as we write this.

The dollar was lower from slightly after 2:30 close to 3 AM early this morning, but it made its low point before 9 AM and then worked higher and then sideways for the rest of the day. The dollar still seems to have put in an important low and has a base for a move higher here.

The DJIA was up 7.65 to 11,408.66, but it finished near the day’s lows. There are signs here that we may be about to have another round of devaluation for equities and commodities. Standard & Poors downgraded Italy on Tuesday, and Greece looks like it will be a continuing factor for a while here. The “Troika,” as they are calling the European Central Bank (ECB), the IMF, and the EU, is still trying to figure out how to solve the Greek debt crisis, but no major breakthrough appears imminent.

This week’s API report showed builds across the board, with crude oil stocks up 2.574 million barrels, distillate stocks up 81,000 barrels and gasoline stocks up 62,000 barrels. These refined products builds were remarkably small. Crude oil imports rebounded from the storm-influenced week before, but one would never know that simply by looking at the numbers. Imports were up 158,000 bpd to 8.875 million bpd. Refinery utilization was up half a percentage point to 84.4%. Implied demand rebounded, with distillate demand coming in at 4.780 million bpd and gasoline demand registering 10.014 million bpd.

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 – September 2010 Power Burn Continues to Outperform 2011.
• Industrial End Users Analytic Report – Industrial Demand Down in Sample; Northeast Region Only Gainer.
• Texas Observer – Texas Storage on Track to End Season Near Year-Ago Levels.
• Nuclear Plant Status Analytic Report – D.C. Cook Enters Fall Maintenance.

Platts

• Algeria ups the October official selling price for its Saharan Blend crude oil by $1.40 from September to Dated Brent plus $3.30/barrel.
• Typhoon Roke delays VLCCs and products tankers at Japan's key ports. .
• US-based Apache has agreed to buy ExxonMobil's Beryl oil field and related properties in the North Sea for $1.75 billion.
• Iraqi Kurdistan publishes all oil production-sharing contracts.

Bloomberg

• Oil Declines in New York After Report of Higher U.S. Crude Inventories.
• Cheapest Gas Brings Boon for Kirby Shipping Dow Chemicals: Freight Markets.
• Indian Officials Said to Lift Curbs on Coal Mining in Dense Forest Areas.
• JinkoSolar Aims to Resume Output After Pollution Closes Plant.

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