On FT Energy Source this week:
- Tackling climate change without limiting CO2
- Could China fall out of love with coal?
- The CFTC, swaps dealers, and the single month loophole
- Why investors need to think about climate change
- California’s complex energy climate
- The changing love affair with the road
- Peak oil investment strategies are so over
- About that UK nat gas crisis…
- Google’s energy master plan(s) Read more
Quote of the week:
Kuwait Supreme Petroleum Council member Imad Al Atiqi sets the cat among the pidgeons in an interview with Dow Jones. Read more
By Izabella Kaminska
Thursday’s CFTC proposals on position limits in the energy markets were largely seen as a ‘light touch’ by industry voices. This is because, quantifiably speaking, they set loose limits that hardly went beyond those already enforced by exchanges in the form of accountability limits.
The CFTC also confirmed the new rules would only affect about 10 larger traders, who could probably seek exemptions anyway. That said, in historical terms, the limits would have prevented the likes of Amaranth, the USO and UNG amassing the sort of positions that skewed the markets in previous years.
Where the new rules really do stand out, however, is in their treatment of exemptions and trader classifications. Read more
On FT Energy Source:
- CFTC targets funds in position-limit clampdown
- CFTC: Hedgers vs swaps dealers and more
- CFTC: The single month loophole
- Why efficiency and markets don’t always mix
- No more Arab Medium or Heavy for Europe
- Supply crunch alarm – no, wait…
- Coal and Copenhagen in Energy headlines
- Qatar’s biofuels flights, and its own energy consumption
- “The environmental answer will quite often become the economic answer”
- The 2010 land rig market outlook
- The perils of the wind, wave and tide-rich Orkney Islands
- Pickens ad focuses on energy security
- Haynesville documentary a sell-out in Houston
- The delusion of energy independence Read more
India is moving ahead with plans to introduce a tradeable market in energy efficiency certificates, which Bloomberg slightly breathlessly says ‘may reach $16bn in five years’.
Energy savings targets are certainly a Good Thing, especially when coming from one of the world’s biggest and fastest-growing CO2 emitters. But whether the putative market will become as big as the targets suggest is another matter. Read more
The IEA writes that its monthly report “may provide food for thought in the optimists‐versus‐pessimists debate about supply prospects”. They’re talking of course about the worries of a short- to medium-term supply crunch as investment falls due to the recession.
In a special feature, they point to data from IHS CERA and the US Department of Labor Statistics that show upstream costs falling: Read more
The latest monthly IEA report spells out the effect of Saudi Arabia increasingly diverting its crude away from Europe and towards Asia. In late December, Saudi Aramco told European customers they would no longer receive Arab Heavy or Arab Medium in 2010, in preference for domestic power generation and Asian customers. Read more
Another criticism of the CFTC’s proposed new position limits on energy speculators – in addition to Republican commissioner Scott O’Malia’s.
Reuters columnist John Kemp says the Commission was wise to avoid furthering the debate about whether speculation is to blame for previous price spikes, and focus on its mandate to be proactive about preventing future market problems.
As we’ve written before, trying to determine the real impact of speculators is very controversial – and as Kemp pointed out last week, most of us can’t take a deeply informed view, because the CFTC has not released data for the fully detailed categories of traders. Read more
The proposed limits outlined yesterday on speculation in the main US crude oil, natural gas, gasoline and heating oil contracts seem to have drawn little outrage so far – apart from Republican appointee to the Commission Scott O’Malia. More about him later.
Fear of traders shifting to other exchanges was a big factor in the cautious approach, as indicated by Bart Chilton, the commissioner most in favour of setting limits. The UK’s Financial Services Authority, which regulates trade on London-based commodities exchanges, has shown little interest in setting position limits on energy speculators. The fact that fears about regulatory arbitrage of the existing ‘London loophole’ were overblown appears to have been little consolation to the CFTC.
This is how the the rules apply to the two groups eligible for examptions: Read more
CFTC treads softly on limits (FT)
Asia to boost 2010 coal prices, Barclays says (Argus)
Areva considers cheaper reactors (FT)
More state land may be offered to Marcellus drillers (Philadelphia Inquirer/Rigzone)
Poet sues California over plans to ban ethanol (Bloomberg)
EU’s limited clout under spotlight after Copenhagen (FT)
Chevron plaintiffs ask court to halt international arbitration bid (WSJ)
Oil prices remain below $80 a barrel (FT)
Clean energy finance slowed without US carbon cap, says Soros (Bloomberg)
US, UN officials see hope for turning Copenhagen deal into binding treaty (AP)
Jonathan closes in on Nigeria leadership (FT)
UK oil rigs should be used for homes in climate change adaptation (Times)
Devon may beat $7.5bn target for Brazil asset sales (Tulsa World/Rigzone)
Xstrata says workers to strike at Australian coillery (Reuters)
Climate is investment opportunity of a lifetime: Deutsche (Reuters)
Indonesian oil and gas stalls in 2010 (albawaba.com)
Oil poised to fall to low $70s: Technical analysis (Bloomberg) Read more