Daily Archives: August 6, 2009

Kate Mackenzie

To the casual observer it might seem like the whole world has gone on a big energy markets regulation kick. Speculators are under scrutiny in the US and the UK, and now it seems that carrying on in a fraudulent way in oil and related markets is officially a very, very bad thing to do in the US.

Yes, we thought it already was illegal too, but apparently not. The US Federal Trade Commission has issued a final ruling that, under the 2007 Energy Independence and Security Act, it will indeed prohibit fraudulent activity in gasoline, crude or distillate markets. This includes submitting fraudulent information on said markets to government agencies, or deliberately withholding information with a view to manipulating the markets.

Whew. Glad we got that sorted out.

By Izabella Kaminska

Goldman’s commodity-equity team — as made famous by analyst Arjun Murti and his $200 oil call last year — is out with a new collaborative note. Unsurprisingly, it’s pretty bullish.

A choice extract (our emphasis):

We expect a commodity supply shortage in 2010 We have long emphasized that the commodity problem is, at heart, a supply shortage due to decades of suboptimal investment, which has been exacerbated over the past year by the sharp drop in prices and tight credit conditions. As the commodity markets rebound with the broader global economy we expect a redux of 2008 when severe supply constraints forced the rationing of demand through sharply higher prices to keep the markets balanced.

ARGHHH!

Kate Mackenzie

Those wildly varying accounts of Nigerian oil production, explained

The ‘clean tech’ race and China-US climate talks

Markets: Oil prices dip

Grumbling about battery grants

Further reading:

UK government wants to replace domestic flights with high-speed rail (Guardian)

Wind power problems for the grid (Scientific American)

That would be a dozen forged letters from the coal lobby (NY Times)

Chatham House economist predicts $200 oil (OilVoice)

Thousands of tonnes of leftover meat is burnt for electricity in the UK (Daily Mail)

South Korea says it will set 2020 emissions reduction targets (Cop 15)

Kate Mackenzie

After the outpouring of angst in the past few days about US standing in the clean tech “race”, you’d think $2.4bn of government money for electric vehicle batteries would be a fairly unabated cause for celebration.

But no. Companies that missed out on government money complained that electoral boundaries played into the allocations, favouring states such as Michigan.

Meanwhile Greensheet’s headline screams: New Battery Stimulus Spending Is Another GM Bailout, and the story points out that $392.8m is going to GM, while Ford and Chrysler receive $40m and $70m respectively.

Oil prices dipped after choppy trading in the previous session.

Nymex September West Texas Intermediate eased 38 cents to $71.59 a barrel while ICE September Brent hit $76.00 a barrel, a fresh 2009 high, before easing back to trade 34 cents lower at $75.17.

US inventories data released in the previous session showed a larger than expected increase in crude stocks, up 1.7m barrels and above the consensus forecast for an increase of 800,000 barrels.

Kate Mackenzie

Commitments on emissions tend to get most of the attention in US-China climate change talks. But the development of their own clean tech industries is a big domestic concern for both countries, and if the past few days are anything to go by, they are further apart on this than ever.

The debate over the US falling behind in the clean tech ‘race’ is gaining momentum, fuelled by two prominent opeds on the subject this week. GE’s Jeff Immelt and John Doerr of Kleiner Perkins Caufield & Byers wrote in the Washington Post:

We are clearly not in the lead today. That position is held by China, which understands the importance of controlling its energy future. China’s commitment to developing clean energy technologies and markets is breathtaking.

Jim Rogers of Duke Energy began his oped in the Wall Street Journal with similar sentiments before urging the US to make the most of its lead in nuclear power.

Meanwhile on the China front there was small cause for optimism when Yu Qingtai, China’s special representative on climate change, yesterday signalled a more positive tone on reaching a deal at Copenhagen.

Tom Burgis

Nigeria’s oil sector has long produced uncertainty in prodigious quantities, but the past few days may mark a record. Depending on who you listen to, crude output in Africa’s biggest producer has slipped dramatically.

The latest in a string of worrisome pronouncements came on Wednesday, when Lamido Sanusi, the respected new governor of the central bank, was quoted as telling an audience in Kenya that production had fallen to about 1m barrels of oil a day.

If the governor being quoted correctly (the central bank has been reluctant to issue a copy of his speech), something pretty monumental has happened since the first three months of this year, when the bank’s own official figure was an average of 1.68m b/d of oil, gas and condensates.

James Fontanella-Khan

Hurricane lull steadies turbulent oil industry
Unusually late stormy season is welcomed by traders (FT)

Weak dollar buoys oil prices
Crude futures edged up as dollar offset rise in U.S. inventories (WSJ)

Beijing hints at softer line in climate talks
China could commit to reducing carbon emissions beyond 2012 (FT)

Oil may set 2009 high, won’t fall below $66: technical analysis
Three-week uptrend may continue, raising market’s support level (Bloomberg)

Rise in pump price looks temporary
Gas prices won’t reach 2007 levels (WSJ)

Tories warn on nuclear power plans
Conservative party may use government subsidies for new reactors (FT)

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