[MrBill]

I am a little nervous about these type of stories now that it is October and there is a nip in the air?

$this->bbcode_second_pass_quote('', 'N')EW YORK, Oct 6 (Reuters) - A fuel hungry United States may have a tough time importing heating oil this winter from across the Atlantic due to high European distillate demand, low European inventories, and French labor strife that could cut exports, experts said on Thursday.
The prospect is bad news for the world's largest energy consumer, where hurricanes have knocked out 14 percent of the nation's fuel production ahead of what private forecasters are saying could be a chilly winter.
Bob Slaughter, National Petrochemical and Refiners Association president, on Wednesday told reporters in Washington D.C. the United States was "going to be rough" to find heating oil to import this winter.
He said the U.S. may find some heating oil shipments from South America, but he did not think Europe or Russia -- traditional exporters of fuel to the U.S. market -- would be able to supply much.
"It's never terribly easy to find heating oil imports," he said Thursday. "The distillate market has been tight all year."
LOW EUROPEAN INVENTORIES
The most recent data from industry monitors Euroilstock showed European distillate stocks much lower than a year ago due to growing diesel and jet fuel demand, even though supplies rose by 0.5 percent in August verses July.
Stocks of distillates -- diesel, heating oil and jet -- rose by 1.8 million barrels last month versus July, but were 9.34 million barrels, or 2.5 percent, below August 2004 levels, the Sept. 9 report from Euroilstock showed. The next snapshot will arrive next Tuesday.
International Energy Agency data showed jet and kerosene use in Europe rising by 60,000 barrels per day in the first half of this year compared with the first half of 2004. Heating oil and diesel demand also rose by 70,000 bpd over the same period.
In the United States, the effects of hurricanes Katrina and Rita have pushed refinery use to the lowest on record, below 70 percent, at a time of the year suppliers typically build up inventories for the winter heating season.
Heating oil stocks showed a small 400,000-barrel gain in the most recent weekly data, putting stocks 5.9 million ahead of the year ago period, the U.S. Energy Information Administration said Wednesday.
"To the extent that we're dependent on imports, the low refinery utilization just makes the need to keep imports coming that much more important," said Refco energy analyst Marshall Steeves.
In the week to Sept. 30, gasoline imports hit a record and distillate imports were up 68 percent at 310,000 barrels per day, EIA said.
FRENCH LABOR STRIFE
"The problem would be if you get some early cold weather with Europe's already low inventories, there isn't much demand kill from high prices and the French labor problems have hurt production right at the time they would be stocking up on heating oil," said Mike Fitzpatrick, vice president for energy risk management at Fimat USA.
Strikes have kept France's largest refinery, Total's 328,000-bpd Gonfreville plant, shut since last week. A port strike in the south of France has blockaded crude supplies and products exports to and from about 600,000-bpd of refining capacity in the Fos-Lavera oil and petrochemical hub.
Meanwhile, the United States may be facing a winter chill.
Of four private forecasters surveyed by Reuters last week, all but one are predicting a colder-than-normal winter for the major energy consuming areas on the U.S. East Coast, and in particular, the Northeast.
"The unanswered question is what demand is going to be going forward. Demand is going to depend on the weather, but there has to be some kind of conservation response, however limited, to the high prices," NPRA's Slaughter said.
The world's big consumers are feeling the pain. The European Commission forecast euro zone economic growth could slow in 2005 and noted risks from expensive oil.
"I am struck that there is some demand destruction related to both high prices and logistic constraints," Claude Mandil, head of the International Energy Agency, told Reuters.
The Paris-based organization, adviser to the world's industrialized countries, has already launched one global release of emergency reserves this year -- the first in over a decade -- and is on standby to do so again.
In the United States prices have also shown signs of hitting oil demand, with EIA data showing U.S. gasoline demand down 2.6 percent in the last four weeks compared to the same period in 2004. Distillate demand was down 3.8 percent.
But high natural gas prices could increase demand for oil as an alternative heating fuel this winter, with nearly three-quarters of offshore Gulf of Mexico natural gas production still shut after the storms, and U.S. Energy Secretary Sam Bodman warning of "problems" in the market this winter.

[CARVER]

$this->bbcode_second_pass_quote('MrBill', 'H')ello Carver, welcome to Profiteer's Corner, where evil people meet to try to control the movement of the market and make sense out of random changes in direction. Don't let anyone tell you we are innocent commodity traders who cannot influence the final price, supply or demand, but can only aid in price discovery. Obviously, our motives are far more sinister.

[MrBill]

$this->bbcode_second_pass_quote('', 'A')nd then there is also a thing with public transportation and especially trains. It can't handle more people during rush hour. Even worse, more people during rush hour would shut parts of it down and cause delays. It is difficult to scale it up fast. Also, it is very likely that the staff will go on strike when inflation goes up and their paycheck does not. (Happening in belgium at the moment).

[CARVER]

Yes, I think a lot of those supposed rights will cause a lot of trouble. We have always been told that we deserve those rights, and now they have change them or take them away completely. Everything has to be paid for. Most people are not considering to cut back on their standard of living.

I think we are going to see a lot more strikes, and that is going to hurt the economy badly. It will also bring a lot of anger. In the Netherlands we have a strike here this week, as a result the food is not processed and rots, farmers angry, price of potatoes will go up, more inflation. Yet our government is telling us next year will be better, spend your savings on things you don't realy need (because we need to create jobs and we need the tax income), meanwhile the bad news is piling up. I'm not saying we should not spend our savings, but we should invest it in the things we are going to need in the future. I could make a plasma TV or PV panels. I like the pleasure the TV brings me now, but I probably will like the energy the solarpanels will provide more in the future, because in the future I don't have to work to pay for energy. Some things don't depreciate, so you don't have to produce them just-in-time, those things should be produced now. I think the government should tell us to invest our savings and should have given advise what to invest in. It's no use if we all go sit on our money and wait, because that for sure will bring down our economy and living standard in a way that will hurt a lot of people.

[MrBill]

It must be Friday afternoon and I am losing my nerve?

I am short crude and long the products. The market looks bid. I think we'll go higher this afternoon/evening when NY comes in? However, I just can't force myself to take back my crude short and let the products run? No balls.


Fortunately, I am a good saver and have never accumulated any debt except for a mortgage, which I no longer have. If I don't have the money, I don't spend it. However, the stock market and a sure fire IPO laid to waste a nice nest egg. Oh well, those dollars are just worthless IOU's right? Easy come, easy go.

[MrBill]

$this->bbcode_second_pass_quote('', 'N')atural Gas's Danger Signs
Higher Costs Threaten Economic Growth, U.S. Manufacturing

By Justin Blum
Washington Post Staff Writer
Friday, October 7, 2005; D01



Soaring natural gas prices threaten to propel winter heating bills sharply higher, slow economic growth and push manufacturers overseas.

U.S. consumers could face bills averaging 48 percent higher this season than last year, according to predictions by the economic research firm Global Insight Inc. The escalating costs could cause Americans to cut back on dinners out, trips to the mall and spending, crimping U.S. economic growth. Businesses, squeezed by high energy costs, could limit expansion plans. The high prices also are pumping up inflation.

Manufacturers that use huge amounts of natural gas are scouring the world for cheaper prices and considering moving operations to ease their costs. A renewed exodus -- many companies have already shifted overseas -- could further knock back growth in the United States and boost unemployment.

Andrew N. Liveris, chief executive of Dow Chemical Co., told a hearing yesterday before the Senate Energy and Natural Resources Committee that the country is in a "natural gas crisis." The Midland, Mich., company, which uses large amounts of the fuel to produce chemicals, must consider locating new plants in other parts of the world, such as China and the Middle East, because of U.S. energy costs, he said.

"How can I recommend investing here?" Liveris said.

U.S. natural gas prices are among the highest in the world. Though the United States imports some natural gas, most is produced domestically. But supplies have failed to keep pace with demand.

Power plants have increasingly turned to natural gas for fuel over the past decade because it is cleaner-burning than coal. About 17 percent of the country's electricity is generated by natural gas, according to government data. Natural gas accounts for about 63 percent of energy consumed in U.S. households. The fuel heats 55 percent of the country's homes.

U.S. natural gas prices have been edging higher for years and shot up sharply in recent weeks because of hurricanes Rita and Katrina, which damaged production in the Gulf of Mexico along with onshore processing facilities.

Imports are not able to make up for the lost supplies -- as they have for oil and gasoline -- because not enough liquefied natural gas is available. Too few ships and terminals exist to handle a significant increase in imports. Domestic production, which has been flat in recent years, cannot be quickly increased without significantly more drilling, analysts said.

"There is justification for concern about natural gas prices at these levels," said Jason Schenker, an economist with Wachovia Corp. in Charlotte. "Prices now are essentially twice what they were last winter. That's likely to squeeze consumers."

The cost to heat homes with natural gas could increase about $500 this winter compared with last year, according to Global Insight in Lexington, Mass.

In the D.C. area, officials with Washington Gas forecast that consumer bills could jump as much as 32 percent compared with a year ago. The company said it put large amounts of natural gas in storage over the summer, when prices were slightly lower, which will help hold down prices a bit. Costs could increase if the winter is unusually cold and demand increases, company officials said.

The price of natural gas for November delivery closed at $13.38 per million British thermal units (Btu) yesterday on the New York Mercantile Exchange. That was up 90 percent from a year ago. Analysts expect prices to fall somewhat after hurricane-related repairs are completed in the Gulf.

Prices in the largest producing countries -- such as Algeria, Qatar and Nigeria -- are sharply lower than those in the United States -- below $1 per million Btu, analysts said. In some European countries, natural gas sells for about half the U.S. price.

Unlike crude oil, whose price is set on a world market, natural gas prices are set in local markets. In countries where supplies are abundant, prices tend to be lower.

Rising prices are generating concern on Capitol Hill and are increasing pressure on lawmakers to open drilling areas that are now off limits. A measure approved by the House Resources Committee last week would allow drilling for natural gas offshore on the Outer Continental Shelf.

Lawmakers who support the measure said momentum is building after years of failed attempts. "I have a lot of members saying . . . 'I'm seriously thinking of switching to your side,' " said Rep. John E. Peterson (R-Pa.)

The Washington-based National Association of Manufacturers and the Arlington-based American Chemistry Council, which represents the chemical industry, have been pushing for more domestic production. Businesses small and large have been making their case to members of Congress that something needs to be done about natural gas prices.

Peterson, whose district includes manufacturers of brick and asphalt, said, "There's just no way that business can absorb this."

Environmentalists are seizing on higher prices as evidence of a need for conservation. They are calling for more strict requirements for appliances that use natural gas and for housing insulation. They also want tax breaks to encourage consumers to buy more efficient appliances.

"We just don't have enough natural gas out there to meet our long-term needs," said Karen Wayland, the Washington-based legislative director of the Natural Resources Defense Council, an environmental group. "The only answer, especially in the short term, is energy efficiency."

Chemical industry officials are warning that more plants will shut operation in the United States and relocate. "They're saying, 'Okay, we have a budget of a billion dollars we're going to invest in production. Where's the best place to do it?' " said Owen Kean, senior policy adviser for the chemistry council. "Increasingly they're making the decisions to do it someplace else."

The United States has five terminals where liquefied natural gas can be imported, and a number of additional facilities have been proposed or approved. A number of major projects around the world are underway that will produce liquefied natural gas. Analysts said that in the future, the country will become more reliant on imports, which eventually could help to moderate prices.

But in the meantime, companies that import liquefied natural gas have been struggling to obtain more. Most of the supply is locked up in long-term contracts, and companies that sometimes have extra have been suffering production problems.

"That's kind of dried up what would normally be excess production available for spot delivery," said Jane Michalek, a vice president with Suez LNG of North America. "There's not a lot of excess production out there right now."

[rkerver]

MrBill, Thanks for your kind encouragement to invest wisely. I have done so, but have sucombed to the "cash is king" state of financial being for the moment. Because of posts like these. Warm regards.

[MrBill]

You may not believe me, but functiong financial markets that allocate capital and risk efficiently help lift more people out of poverty and increase standards to living more than they are given credit for. I have pioneered several new products for developing markets, which gave the people in these markets access to capital for much less than they would have paid if they had relied solely on bank credit which was non existant or more expensive. You don't have to believe me, but I have no problem sleeping at night.

As for trading oil & gas it is an efficient means of price discovery and a means of transfering risk from those who don't want it to those that do. No one is forced to trade futures. Again, this makes the market more efficient and lowers costs. As a matter of fact, trading futures is the ultimate in clean technology. Zero emmissions. Non-polluting. Unless there is physical delivery there are no costs to transport anything, so it uses very little fuel. It is much cleaner than many industries that so called green funds invest in.

But, in any case, I am not a missionary and I am not here to preach to the converted, so I will just wish you a nice weekend and hope to hear from you soon if you have any good investment ideas for me. Bye for now. Cheers.

[SuperNova]

$this->bbcode_second_pass_quote('MrBill', 'I')t must be Friday afternoon and I am losing my nerve?

I am short crude and long the products. The market looks bid. I think we'll go higher this afternoon/evening when NY comes in? However, I just can't force myself to take back my crude short and let the products run? No balls.

[MrBill]

crude is headed a little lower 6177 after testing 6223, but the products are still holding up reasonably well, heating oil at 1.9600 and unleaded at 1.8500, which are off their highs.

usually when I am day trading, I watch the 60 minute tick chart and use a simple moving average, so that I generally change my direction each time it moves through the moving average, especially if the products and the crude are all headed the same direction.

it is not fool proof to be sure, but just give me 51% chance to make money and the rest is all money management

however, this afternoon I seem to have lost my edge, so usually a sign I am tired and should give it a rest. Friday afternoon's have never been my luckiest

[MrBill]

headline on Reuters at 16.30

Nat gas will hit $20 by Christmas Eve predicts Economides in World Energy Monthly

ain't that a lump of coal, some season to be jolly?

[SuperNova]

is a savvy approach... using some sort of moving average means you never get the wrong side of the trend.

Opening here I am neutral... looking for a break on crude.

Z/F gasoiline is value around +150 I think.... for a bull spread position

[CARVER]

$this->bbcode_second_pass_quote('rkerver', 'M')rBill, Thanks for your kind encouragement to invest wisely. I have done so, but have sucombed to the "cash is king" state of financial being for the moment. Because of posts like these. Warm regards.

[MrBill]

Brent looks cheap relative to WTi considering production is shut-in in the States and Europe is likely to ship more products to the USA as soon as this strike in France is cleared up? Dunno?

You're right Carver, inflation will eat up the value of your cash, but to be honest, I just don't know where to invest at this point? Stocks, bonds, real estate all look like poor choices at the moment. At least in cash you have some flexibility and can leverage it via bank credit when the time is right for you?

You know I like options, it is just the time value is always decaying, so timing is just as important as direction.

[SuperNova]

I agree with respect to the ARB/Box plays but don't look offered so am cautious about piling in

[MrBill]

I am going to call it a week. Nothing is working out as planned. Just looked at a web page with the number of truck stops out of diesel on another page( sorry out of diesel ) and for the life of me cannot understand why this spread has gone all pear shaped? sigh

Have a great weekend and speak to you next week. Cheers.

[SuperNova]

ok boss.... spk next week

[cube]

Is this thread exclusively for energy? Gold has been making some pretty fabulous returns recently. After what happened last month I'm taking a break from oil.

When oil starts picking up again I'll jump back in, but for now I've got gold fever.

[cube]

Is this thread exclusively for energy? Gold has been making some pretty fabulous returns recently. After what happened last month I'm taking a break from oil.

When oil starts picking up again I'll jump back in, but for now I've got gold fever.

[fossil_fuel]

i'll be buying some silver futures as soon as the check i sent to my xpresstrade account clears....