Archive for the ‘trading’ Category

For US airline industry, a penny saved on jet fuel is $180 million earned

I flew two different airlines last week. Both were packed.

Despite Ebola fears. Despite high ticket prices. Despite a slowing global economy. Despite high jet fuel prices.

Wait. Scratch that last one.

Spot market jet fuel prices have plunged as much as 50 cents below the 2014 average.

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North American crude exports: foreshadowing the future or blip on the radar?

Three North American crude exports — two from Canada and one from Alaska — captured headlines the last few weeks because of their unusual departure and arrival points.

Phillips 66 exported a cargo of Alaska North Slope crude to South Korea on September 26, the first time the grade had been exported since 2004. Sources indicated the shipment was a one-off and that the tanker was likely headed for dry dock to undergo maintenance.

However, the ever-growing rise in cheaper Bakken crude has displaced other grades on the West Coast, and a very narrow Brent/WTI spread has made Brent-based imports from Latin America and the Middle East much more profitable than WTI-based crudes like ANS.

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A veteran economist looks at oil price collapses of yore, and sees parallels to today

Phil Verleger has a long memory.

Phil is a veteran energy economist, and he and I have been emailing each other over the course of the last week, recalling the oil price collapse of the mid 1980’s. As he noted, there are a dwindling number of of people still in the industry who remember that. But I had just joined Platts when the great collapse of 1985-1986 took place. On April 1, 1986, WTI plunged to less than $10 and no, it wasn’t an April Fool’s joke. (It remains the only day in the history of the WTI contract, launched in 1983, that the price ever “printed” a number less than double digits. It has never settled at less than $10.)

In his latest weekly report, Phil recalls that fall, as well as the collapse of 1998-1999. While WTI prices didn’t drop below the $10 level in the late 90’s, the levels of that period, after adjusting for inflation, were the lowest in history.

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Guest post: Brent crude oil now has the biggest chunk of the GSCI

Jodie Gunzberg is the global  head of commodities for S&P Dow Jones Indices, which like Platts is part of McGraw Hill Financial. She writes on commodity investing on the Indexology blog. Her post from October 2, announcing an historic shift in the oil makeup of the S&P GSCI, is reproduced here. 

The S&P GSCI 2015 Rebalance Preview marks a historic shift in the benchmark renowned for its world production weight.

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Takeoff, eh? At time of need, New York jet fuel heads to Canada

New York jet fuel prices spiked from mid-July through August, and new data gives more insight why. Blame Canada.

Canada may be sending everything from comedians and crude into the US. But in July, it took in a good bit of US jet fuel, mostly out of New York.

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Kurdish attempts to sell oil are not going to get support from the Obama administration

For two months now, the United Kalavrvta tanker holding 1 million barrels of Kurdish crude has idled in international waters off the coast of Galveston, Texas, awaiting a District Court ruling on whether the oil will be allowed to be sold in the US.

But if the Kurdistan Regional Government is hoping that the Obama administration will soften its stance in opposition to Kurdish oil exports, that doesn’t appear likely, even as the US seeks to aid the Kurdish peshmerga in their fight against the Islamic jihadist group IS.

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A physical attack at a steel conference, a metaphor for tight credit

There was blood on the floor at the China Iron & Steel Association conference in Dalian Thursday. Literally.

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One more time: Canadian Western Select crude oil headed from Montreal to the US Gulf

The Greece-registered Minerva Glory oil tanker is expected to load another parcel of Western Canadian Select from Sorel, Montreal, Quebec.

This is the second parcel of WCS heavy sour crude to move out of Montreal. The destination of the Minerva Glory is not clear but players say it is most likely bound for the US Gulf Coast. The first parcel of WCS was shipped end-July to Louisiana.

Suncor has confirmed it is the seller of the parcel. Its need for the crude is probably diminished; it has begun maintenance work at its 137,000 b/d Montreal refinery. The maintenance is scheduled to last 11 weeks.

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Energy Economist: The shifting fundamentals of commodity demand

Below is an excerpt from this month’s issue of Platts Energy Economist.

Economic growth in emerging markets has driven energy commodity demand over the last decade, but that growth is now slowing. According to the IMF, GDP growth in emerging markets fell from 7% a year on average in 2003-2008 to 6% in 2010-13.

The Fund forecasts that emerging market growth will dip further to 5% from 2014-2018. The medium-term outlook is no better. The IMF writes: “In the past, we expected growth to bounce back (and it did). This time seems different.”

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US shale boom writes a tale of two emerging classes of gas carriers

Growing natural gas liquids production spurred by the US shale gas boom has stoked interest in new classes of ships to move ethane and LPG across oceans: very large ethane carriers and ultra large gas carriers.

The first VLEC orders have been placed and could keep shipyards busy for years, even as more are built to move cheap US ethane to Asia and Europe. But the time for ULGCs is yet to come.

After years of uncertainty because of economics, paltry demand and ballooning supply, the future is looking bright for ethane as appetite emerges in Europe and Asia, and with it the need for longer-haul and larger vessels.

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