Daily Archives: June 18, 2009

Kate Mackenzie

Cheap, plentiful natural gas is a mixed bag. With a glut of natural gas and depressed demand in the US, the industry outlook may have been glum. Plenty of big LNG projects are still going ahead. So news today that US natural gas reserves may be much bigger than thought may not be welcome news for many.

Investors hoping to take advantage of the recent unusually wide gap between gas and oil prices might be disappointed (although this depends very much on your views of what is driving natural gas markets).

Environmentalists – and for that matter, governments seeking to reduce their carbon emissions limits – could be seeing a different side of today’s cheap natural gas. It may still be more expensive than coal, but it is less polluting and today’s prices make it attractive. Read more

Ed Crooks

KazMunaigas Exploration and Production, the London-listed arm of Kazakhstan’s national oil company, is drilling more wells and spending more on raising production than it planned at the start of the year.

Kenzhebek Ibrashev (left), the new chief executive of KMG E&P who took over at the start of June, discussed the plans when he spoke to the FT in London on Wednesday, when he also talked about his company’s ambitions for acquisitions both in Kazakhstan and abroad.

It is the latest sign of an oil company increasing its planned capital spending, following a similar move from TNK-BP last week, and more evidence of how $70 oil is helping restore confidence to the industry. Read more

Kate Mackenzie

Updated: An interesting diversion: Deutsche Asset Management’s Climate Advisors business has made a counter tallying the metric tons of greenhouse gases that have been released into the atmosphere to date. The numbers move upwards rather quickly. At  3.64 trillion tonnes of carbon dioxide equivalent released so far, the atmospheric concentration is about 467 parts per million (this is however a gross measure – omitting the effect of cooling gases which go into the IPCC measurements).

 Read more

Kate Mackenzie

Screenshot from Met Office interactive presentation

Screenshot from Met Office interactive presentation

A new UK study maps out how hotter weather and more floods and droughts could affect the country over the next 90 years.

The UK Met Office has launched an updated climate analysis tool, funded by the Department of the Environment, Food and Rural Affairs, which forecasts the effects of climate change down to a 25 square kilometre range. Climate Projections 2009 makes estimates over three 30-year intervals. Rather like the US report launched earlier this week, it looks at specific industries as well as locations. But it is also a source of information for companies and government agencies wanting to take climate changes into account. Read more

Kate Mackenzie

On Energy Source:

Markets: China optimism boosts sentiment
World Bank publishes positive outlook Read more

Kate Mackenzie

The Senate Committee on Energy and Natural Resources on Wednesday reached agreement on the American Clean Energy Leadership Act, which aims to set a renewable energy target of 15 per cent of electricity generation by 2021, and to create a strategic reserve of 30m barrels of petroleum products including gasoline and diesel.

The WSJ reports that it is more generous to oil and gas companies than the American Clean Energy and Security Act, aka the Waxman-Markey bill, which also includes a renewable energy target along with a carbon cap-and-trade scheme. This bill is facing further hurdles on the road to a vote in the House, having already been extensively re-worked before passing the House of Representatives Energy and Commerce Committee last month. The opposition, coming from Democrats with rural constituencies, and is delaying the next vote. Read more

Crude edged higher on Thursday, tracking dollar weakness, as the market struggled to find any clear direction but took some comfort in the World Bank’s tempered yet positive outlook on Chinese economic growth.

The World Bank said that China’s fiscal stimulus package would help its economy to grow faster than expected this year – raising its year-on-year gross domestic product growth forecast for China to 7.2 per cent for 2009 – but warned against assumptions that a recovery was in full swing. Read more

Kate Mackenzie

Jeffrey Currie at Goldman Sachs has expanded on the bullish case made two weeks ago at a presentation to investors.

Equity markets, the presentation says, have been trading on expectations of emerging markets growth, but this emerging market sentiment has in turn created rising inflation expectations and higher commodity prices.

The markets have been trading the EM growth story, not inflation expectations, which are a result of the EM growth story.

 Read more

Sheila McNulty

NRG has been under pressure for months now from a $6.2bn hostile takeover attempt by Exelon, which has been moving since last year to form a merged group to become the largest US power producer. But the tide is starting to turn for the company.

Not only was NRG shortlisted in May by the Department of Energy to receive loan guarantees for its new nuclear plant, but it seems support for Exelon’s purchase of NRG is shrinking. Exelon said in a lettter to NRG shareholders that as of June 16, 12 per cent of NRG’s outstanding shares had been tendered under its offer. That was sharply down from the 51 per cent it had received in February. Read more

- Crude oil ignores Iran turmoil
Built-up inventories counter disruption (FT)

- China attacks BHP-Rio iron ore deal
Antitrust law expected in move to scupper deal (FT) Read more