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Charts and Graphs
Economic Update
National:
U.S. states to end fiscal year in good shape. U.S. states are expected to end their fiscal year on June 30 with a combined surplus of $23.7B after taking in stronger-than-expected revenues. However, the future is more uncertain, as income this year may have been boosted by residents selling assets ahead of a capital-gains tax rise. Going forward, states will also have to cope with federal spending cuts, an expansion of Medicaid, and increasing pension and retirement obligations.
Senate OKs bill to slash farmer payments. The Senate last night overwhelmingly passed a $955B agriculture bill that would reduce farm spending by $18B over the next decade, partly by ending the practice of making direct payments to farmers irrespective of crop yields, market prices and the economy. The bill would also slash spending on food stamps by $4B. The House is expected to take up its version of the legislation, which includes cutting food stamps by $20B, next week.
International:
Eurozone industrial output surprises on the upside. Eurozone industrial production unexpectedly rose 0.4% on month in April, although growth was held back by a fall in energy and durable and consumer goods. The highest increase was in Ireland (+3%), while Finland and Holland suffered sharp declines. Although the data is “relatively encouraging,” says economist Howard Archer, “the eurozone manufacturing sector is not yet out of the woods.”
China’s export growth slumps, inflation falls. China’s export growth slowed sharply to 1% on year in May from 14.7% in April, reflecting a crackdown on invoicing, which is thought to have distorted the April data, especially regarding Hong Kong. Imports slipped 0.3 vs +16.8% the previous month, while inflation fell to 2.1% from 2.4% and producer prices slid 2.9%, with the figures indicating reduced domestic demand. Along with other data, the indicators helped depress market sentiment.
Read MoreNatural Gas Update
Natural Gas Storage Facts
EIA (Energy Information Administration) reported a net injection of 95 Bcf (billion cubic feet) for the week ending June 7, 2013.
Inventories are at 2,347 Bcf, which is down 20% or 587 Bcf from last year and 58 Bcf below the 5-year average or 2.4%.
Natural gas hub prices declined in most regions this week (Wednesday to Wednesday). The Henry Hub closed at $3.74 per million British thermal units (MMBtu) yesterday, down 25 cents, or 6.3%, for the week.
At the Nymex, the near-month (July) Nymex contract finished trading yesterday at $3.777 per MMBtu, 22.4 cents, or 5.6%, below its previous Wednesday close.
Working natural gas in storage increased to 2,347 billion cubic feet (Bcf) as of Friday, June 7, according to the U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report (WNGSR). A net storage injection of 95 Bcf for the week resulted in storage levels of 587 Bcf below year-ago levels, and 58 Bcf below the 5-year average.
The Baker Hughes natural gas rotary rig count totaled 354 units as of Friday, June 7, the same total as the preceding three weeks. The average oil rig count declined by 4 units to 1,406.
The weekly average natural gas plant liquid composite price for last week (Monday, June 3 – Friday, June 7) fell only $0.03 per MMBtu over the previous week to $9.08 per MMBtu. The natural gasoline spot price increased by 2% and the ethane spot price fell by 4%. The ethane price has been declining consistently each week since the week of April 29 when it averaged $4.02 per MMBtu. Last week the ethane spot price averaged $3.59 per MMBtu.
12/24-Month Strip (NYMEX) Price
12 Month Strip 24 Month Strip
$3.983 MMBtu $4.071 MMBtu
Read MoreOil Update
Crude Oil Price: $96.69
Oil Article:
Nymex Crude Rallies to 3-Week High as Equities Climb
Crude-oil futures settled at a three-week high Thursday in a late-session rally, amid a rally in the equity market and encouraging data on the U.S. economy.
Light, sweet crude for July delivery settled 81 cents, or 0.8%, higher at $96.69 a barrel on the New York Mercantile Exchange, the highest settlement since May 20. Brent crude on the ICE Futures Europe settled 76 cents, or 0.7%, higher at $104.25 a barrel.
Futures spent much of the day little changed, but rallied late in the session as other markets pushed to intraday highs. Craig Turner, commodity futures broker at Daniels Trading, said oil pushed higher with equities, with the Standard & Poor’s 500 Index recently gaining 1.2% to 1,632.
Meanwhile, the Japanese yen touched a two-month high against the dollar early Thursday. A weaker dollar typically lifts the price of crude by making the dollar-denominated commodity cheaper for holders of other currencies.
Traders were also encouraged by positive economic news out of the U.S., the world’s biggest oil consumer. The Labor Department said initial claims for jobless benefits fell by 12,000 to 334,000 for the week ended Saturday. The number of new claims was lower than economists’ estimates. The Commerce Department also reported that retail sales were up 0.6% in May on the back of higher automobile sales, compared to expectations of 0.4% growth.
The reports offer a snapshot of the state of the labor market and consumer confidence, which could reflect in greater energy use by businesses and motorists heading to work or retail stores.
Oil futures have been bobbing around $95 a barrel for much of the last two months, as traders remain uncertain about the outlook for global economic growth. Weakness in Europe and a slowdown in China has kept a lid on oil prices, while uncertainty over the fate of central-bank stimulus measures have also left traders cautious.
Other data released this week offered a less encouraging economic picture. The World Bank late Wednesday lowered global economic growth to 2.2% in 2013 from 2.4% in January. It also lowered its expectations for growth China, the second-largest oil consumer, by 0.7 percentage point to 7.7% this year.
Front-month July reformulated gasoline blendstock, or RBOB, settled 5.12 cents higher at $2.8613 a gallon. July heating oil settled 4.43 cents higher at $2.9395 a gallon.
Rig Count
The total number of oil rigs increased by 6 to 1,411 and the total number of natural gas rigs remained unchanged for the third week in a row at 354.
Oil Rigs: 1,411 | Gas Rigs: 354
Previous Week:
Oil Rigs: 1,417 | Gas Rigs: 354
Last Year:
Oil Rigs: 1,419 | Gas Rigs: 565
Wholesale Market Pricing
MCPE
ERCOT
Houston: $0.03069
North: $0.03098
South: $0.02995
West: $0.03123
Reg Down: $0.00384
Reg Up: $0.00763
RRS: $0.00724
NYISO
NYC LBMP: $0.035265
PJM
AEP GEN HUB LMP: $0.042
ISO NE
Mass. Boston Day Ahead LMP: $0.03165
MISO
Illinois Hub Hourly LMP: $0.033535
Read MoreWeather Update
Northeast:
- Showers will linger over much of the region Friday.
- Windy conditions are expected Friday morning from Long Island to Cape Cod.
- Most of the region will see highs in the 70s Friday (with some 60s) along the New England Coast.
South:
- Much of the South will enjoy a dry Friday.
- Scattered thunderstorms (a few severe) across the Panhandle and parts of the northern Florida Peninsula.
- Thunderstorms will also be scattered around the Rio Grande Valley of Texas.
- Cooler highs in the 70s across the Southeast Friday.
- Highs mainly in the 90s west of the Mississippi River.
Mid West:
- Areas from the Great Lakes to the Ohio Valley will enjoy a dry Friday.
- Thunderstorms will erupt by Friday afternoon from North Dakota down to Iowa and westward to Nebraska.
- Some thunderstorms could turn severe with hail and damaging winds.
- A few tornadoes are possible, especially in the eastern Nebraska/eastern Iowa area.
- Highs mainly in the 70s Friday from the Upper Midwest to the Great Lakes and southward to the Ohio Valley.
- Highs in the 90s across the southern Plains Friday.
- Parts of the central and northern Great Lakes may actually remain in the 60s.
West:
- Much of the region will be dry Friday.
- Scattered showers and thunderstorms are possible across much of western Montana.
- Scattered thunderstorms are also possible around higher elevations of Colorado and New Mexico Friday.
- It remains cool in the Northwest with highs generally in the 60s and 70s.
- Much hotter in the Southwest with highs in the 90s and 100s away from the coast.
- Highs in the deserts could climb as high as 120 degrees.
- The Colorado Front Range will also see highs around 90.
Charts and Graphs
Economic Update
National:
U.S. oil output surpasses imports. U.S. crude oil production exceeded imports last week for the first time in 16 years. Since January 1997, weekly U.S. crude imports averaged around 9.2M bpd, topping domestic output by 3.5M bpd. But by late 2014, U.S. crude oil output should surpass imports by nearly 2.5M bpd. A slow shift, 16 years in the making, is set to become a flood in little more than 16 months.
Firing Decline Helps Boost Consumer Confidence in U.S.: Economy. Applications for unemployment benefits declined last week and Americans’ views of the economy were the brightest since early 2008 on the heels of a housing market recovery and higher stock prices. (www.bloomberg.com)
International:
Greek unemployment keeps heading higher. Greek unemployment edged up to a fresh record of 26.8% in March from a downwardly revised 26.7% in February. The data comes a day after the IMF reportedly admitted major missteps in its prescriptions of austerity for Greece, including underestimating the damage it would do. While Greece’s jobless figure is double the eurozone average of 12.2%, there is at least one place in the country where it’s not a problem: the farming village of Anavra – population 500 – which actually has negative unemployment.
Chinese services activity adds to concerns. China’s HSBC services PMI edged up to 52.1 in May from 51.1 in April, although the composite index dropped to 50.9 from 51.1. Along with the mixed manufacturing data for May, the services reading has added to concerns about the softening in China’s economy. Export, industrial output and retail sales data later this week are forecast to confirm the trend.
Read MoreNatural Gas Update
Natural Gas Storage Facts
EIA (Energy Information Administration) reported a net injection of 111 Bcf (billion cubic feet) for the week ending May 31, 2013.
Inventories are at 2,252 Bcf, which is down 21.5% or 616 Bcf from last year and 69 Bcf below the 5-year average or 3%.
Natural gas prices declined across all regional hubs this week (Wednesday to Wednesday). The Henry Hub closed at $3.99 per MMBtu yesterday, down 16 cents, or 3.9%, for the week.
At the Nymex, the June 2013 contract closed at $4.148 per MMBtu on Wednesday, May 29, its final day of trading. The near-month (July) Nymex contract finished trading yesterday at $4.001 per MMBtu, 2.2 cents, or 0.5%, below its first day as the near-month contract on May 30, and 1.1 cents per MMBtu above the Henry Hub spot price.
Working natural gas in storage increased to 2,252 Bcf as of Friday, May 31, according to the U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report (WNGSR). A net storage injection of 111 Bcf for the week resulted in storage levels of 616 Bcf below year-ago levels, and 69 Bcf below the 5-year average.
The Baker Hughes natural gas rotary rig count totaled 354 units as of Friday, May 31, the same total as the preceding two weeks. The average oil rig count rose by 8 units to 1,410, following two weeks of declines.
The weekly average natural gas plant liquid composite price for last week (Tuesday, May 28 – Friday, May 31) decreased by 2%, falling $0.17 per MMBtu over the previous week to $9.07 per MMBtu. The ethane and propane spot prices fell by 4% and 2%, respectively, driving the decrease in the composite price.
12/24-Month Strip (NYMEX) Price
12 Month Strip 24 Month Strip
$4.002 MMBtu $4.097 MMBtu
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