Posts Tagged ‘prices’

US ethanol’s dog days of summer

The increasingly stagnant US ethanol market is getting downright weird. Remember the first four months of 2014 when wild volatility was rampant and almost expected in the market?

With the benchmark Platts Chicago Argo ethanol assessment, we hit a 2014 low of $1.78/gal one quiet January day. Throw some ice and railroad logistics issues into the mix, and that price more than doubled in a matter of two months, hitting an eight-year high of $3.76/gal on March 31.

That seems like such a long time ago now.

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The changing face of global gas, or, chasing the arbitrage

The fate of US LNG import terminal projects was sealed as the amount of relatively low-cost gas produced onshore soared in the middle of the last decade. Most of them were scrapped before getting off the drawing board, but the more advanced of them, notably Cheniere’s Sabine Pass, went on to become export terminals, in a radical and apparently successful bid to salvage their backers’ fortunes.

That well-documented transformation was only made possible by the yawning price difference opening up between the depressed Henry Hub and the rest of the world.

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Low volatility is translating into less liquid energy commodity markets

There has been considerable discussion of late about the lack of volatility in some key trading markets, and the impact that is having on trading groups, their profitability, and thus their interest in remaining engaged in certain markets.

The argument has been that low or relatively flat prices have driven some key trading firms — a fair number of which are big banks — from a number of commodity markets, including energy commodities. Some believe the liquidity of some of these markets has taken a hit as counterparties have left, both because of reduced profitability but also as a result of regulatory pressures.

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“Maddening” US ethanol prices mimic RINs volatility

US ethanol prices in 2014 have become what RINs were in 2013 — volatile and downright wacky.

In the opening three months of 2013, biofuels RINs went from the nerdy kid in freshman biology to a menacing and eccentric upper-classman that scared all the other kids in the cafeteria. The previously lesser-known renewable credits generated by physical gallons of biofuels became a household name of infamy as finger-pointing linked them to rising prices at the pump.

And if there’s one thing an array of industries, commodities, and political dealings have learned over the years, you don’t mess with prices at the pump.

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An SPR bazooka and the central bank of oil

In a perfect world of crude pricing, there would exist a mechanism to soak up excess length when prices were low, and add length into the market when prices were high.

In the world of money, this is called a central bank, with a dual mandate of keeping inflation low and employment as full as possible. There is no central bank for crude oil. But if there were, its dual mandate would be a price floor for producers and a price ceiling for consumers. Read the rest of this entry »

Natural gas prices jumped after TransCanada pipeline explosion

An explosion that occurred on TransCanada’s natural gas lateral pipeline on January 25 led spot natural gas prices in the frigid US Midwest and southern Canada regions to skyrocket.

Ventura prices averaged in the low $53.90s/MMBtu on IntercontinentalExchange after a more than $44 increase in trading on January 27. Deals went as high as $85/MMBtu.

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Platts and the history of oil: an infographic

It could be argued that the history of oil is the history of the modern world. And Platts, a leading provider of analysis, news and prices for the industry, has played a significant role in this amazing story.

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Lost in translation? Why the US feedstock advantage might not mean lower prices for buyers of polyethylene

Talk to a plastics processor or buyer in South America, and watch their eyes light up when the subject turns to the shale gas boom and resulting petrochemical renaissance to their north.

For the better part of three years, they have heard constantly about how North America, and the United States in particular, will benefit greatly from lower feedstock costs thanks to shale, aggressively expand its production capacities for key chemicals and plastics, and further grow its presence in South America through a sharp increase in exports to the region.

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Getting enough premium gasoline remains a grade-A challenge at the rack

OK, raise your hand if you have done one of these things, ever:

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A few thoughts on winter and US natural gas

Granted the market is only now just in the throes of hurricane season, but given the volatility already present in natural gas financial basis markets, I offer up a few thoughts on winter.

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