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September 20, 2011

Energy Data Highlights

Retail gasoline price 9/19/2011: $3.601/gal down$0.060 from week earlier up$0.878 from year earlier Retail diesel price 9/19/2011: $3.833/gal down$0.029 from week earlier up$0.873 from year earlier Crude oil futures price 9/16/2011: $87.96/bbl up$0.72 from week earlier up$13.39 from year earlier Natural gas futures price 9/16/2011: $3.809/mmBtu down$0.106 from week earlier down$0.251 from year earlier Weekly coal production 9/10/2011: 20.694 million tons down0.292 million tons from week earlier down0.380 million tons from year earlier http://www.eia.gov/ Natural Gas/ Power News EIA Storage Release 9/1/11 (Actual): +87 Bcf Previous Week: +64 Bcf -4.3% Change from 1 Year Ago -1.6% Change 5-year Average Natural gas key to US energy security: former President Carter The US likely will not generate a large portion of its power from green energy any time soon, but the country's abundant natural gas reserves could provide a new path toward achieving energy security, former President Jimmy Carter said in a wideranging interview on the Platts Energy Week TV program, which aired on Sunday. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/ElectricPower/6490472

Iraqi factions wrangle over gas reserves For other analysts, the price that Mr Shahristani negotiated is simply the one necessary to attract an international oil company to develop a large project in a country where security remains fragile at best. The price that Shell is due to receive under the terms of the agreement is related to the oil price. Mr Dargin estimates that if the Brent oil price is approximately $100, the Iraqi side will pay slightly above $4 per million British thermal units (mmbtu) for the gas, while being forced to sell it domestically at a fixed price of $1.04/mmbtu. "Overall, it is competitive with current US gas prices and illustrates that Middle Eastern countries, even if they drive a hard bargain, may not be able to entice investment in any other way in the natural gas sector," says Mr Dargin. http://www.zawya.com/story.cfm/sid20110919_6118_221/Wrangling_over_gas_rese rves Canadian gas exports up 10.2% in July on waning hydro levels: NEB Canadian natural gas exports to the US rose 10.2% from June to July to around 255.7 million cubic meters/d, according to statistics released by the National Energy Board on Monday. The largest gain in exports was seen at the Monchy point in Sasketchawan, which allows gas to flow mainly to the US Pacific Northwest and down to the West Coast. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6494140 Ukraine to use gas pipelines to send shale gas to Europe: Boyko Ukraine will use its natural gas pipeline to start exports of shale gas and methane to the European Union within the next seven to 10 years, Energy and Coal Industry Minister Yuriy Boyko said. His comments, in a weekend interview with Inter television, contrasted with earlier remarks from Prime Minister Mykola Azarov who suggested Ukraine may be forced to dismantle its gas pipelines if Russia keeps building Europe-bound pipelines bypassing Ukraine. "Such a radical scenario is not threatening us because we expect to fill the pipeline with our own gas," Boyko said. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8354870 European Natural-Gas Trading Rose 29% Last Year, Prospex Consultant Says Natural-gas trading volumes climbed last year in Europe, driven by a jump in Germany and the Netherlands as consumption recovered and imports of liquefied natural gas rose, Prospex Research Ltd. said. http://www.bloomberg.com/news/2011-09-20/european-natural-gas-trading-rose29-last-year-prospex-says.html LNG Surges as Japan Vies With China, Exxons Shipments Grow Liquefied natural gas prices are surging to a three-year high as demand from Japan, China and India outpaces supply increases, boosting sales for producers from BG Group Plc (BG/) to Exxon Mobil Corp. (XOM) http://www.bloomberg.com/news/2011-09-19/lng-price-boom-seen-as-japan-vieswith-china-while-exxon-s-shipments-grow.html Philippines likely to begin importing LNG commercially from 2015 Commercial LNG importing in the Philippines could start four to five years from now, with Luzon likely to be developed as a hub, Jose M Layug Jr, Undersecretary of the Department of Energy of Philippines, said Tuesday. Currently, there is a natural gas masterplan, which is determining which areas in the country would be

appropriate for constructing an LNG receiving terminal, pipelines and also a floating LNG vessel. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8360476 Green/ Alternative Energy News Statoil donates $5 million to Univ. of Texas for energy research Statoil will give $5 million over five years to the University of Texas at Austin to fund research in geology, petroleum engineering and other areas of interest for the Norwegian oil company as it grows its foothold in North America.The agreement is the biggest of its kind outside Norway for Statoil, which is two-thirds owned by the Norwegian government, and the donation builds on a relationship that the two institutions have had for many years, Statoil said. http://fuelfix.com/blog/2011/09/19/statoil-donates-5-million-to-univ-oftexas-for-energy-research/

Crude Oil News

OPEC Daily Basket Price 9/19/2011 $108.68 (9/16/2011 $110.69) Recent Rig Counts Last Count Change Cou from Prior nt Count 27 -13 +33 Date of Prior Count 9 Sept 11 9 Sept 11 July 2011 Change Date of from Last Last Year's Year Count +324 +169 +81 16 Sept 10 16 Sept 10 August 2010

Area U.S. Canada Internatio nal

16 Sept 1985 11 16 Sept 502 11 August 1183 2011

http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm Crude Oil Recovers in New York as Equities Advance, Euro Pares Losses Crude oil rose for the first time in three days in New York as the euro pared losses against the dollar and European equity markets advanced, easing concern that the regions debt crisis is damping demand for fuel. Futures gained as much as 1.1 percent, halting a slide of more than 4 percent in the previous two trading days, as the Stoxx Europe 600 index advanced 1 percent. Oil earlier fell as much as 0.7 percent following a downgrade in Italys credit rating by Standard & Poors. http://www.bloomberg.com/news/2011-09-20/crude-oil-futures-recover-in-newyork-as-euro-pares-losses-against-dollar.html Oil bounces from sell-off on Europe economic woe Brent rose on Tuesday, recouping from heavy losses as worries over global economy were seen factored into current prices.The gain in oil prices was limited, however, by economic run cuts in European refineries, which offset support from output problems at key North Sea

oilfields. http://www.reuters.com/article/2011/09/20/us-markets-oilidUSTRE77838320110920 Gasoline prices remain far above 2010 levels Retail gasoline prices are falling, but at rates that are difficult to notice, especially in California. Perhaps even worse for consumers during a weak economic recovery, the pump pain remains locked in far above the cost of filling up a tank a year ago.http://latimesblogs.latimes.com/money_co/2011/09/gasoline-pricesremain-far-above-2010-levels.html Hedge Funds Raise Oil Wagers Most Since March: Energy Markets Hedge funds raised bullish bets on oil by the most since March as a tropical storm curtailed production in the Gulf of Mexico. http://www.sfgate.com/cgi-bin/article.cgi? f=/g/a/2011/09/19/bloomberg_articlesLRS0EP6K50YD.DTL#ixzz1YQdWco12 ICE looks at new Brent oil contract amid pricing moves ICE Futures Europe, the exchange home of the Brent oil benchmark, is mulling the launch of a parallel Brent contract to prevent a disconnect between the derivatives and physical markets ahead of a change in the way oil prices are calculated. Platts, the pricing agency which acts as the de facto regulator of the Brent physical market, announced last week that it would overhaul the formula it uses to estimate the cost of the oil benchmark from January next year. http://www.ft.com/intl/cms/s/0/39136d20-e2d9-11e0-93d900144feabdc0.html#axzz1YUSlSgCa Supply-side support keeps Brent over $100 Oil demand growth is weakening fast as global economic growth slows down, so why does Brent crude oil trade persistently above $100 a barrel? The answer lies on the supply side non-Opec production growth is weakening fast too. http://www.ft.com/intl/cms/s/0/3605df74-e355-11e0-8f47-00144feabdc0.html? ftcamp=rss#axzz1YUSlSgCa $44 million settles Cosco Busan oil spill in bay The shipping companies responsible for the 2007 Cosco Busan oil spill, which polluted San Francisco Bay and killed thousands of birds and fish, have agreed to pay $44.4 million to restore habitat and reimburse the agencies that responded to the disaster, state and federal officials announced Monday. http://fuelfix.com/blog/2011/09/20/44-million-settles-cosco-busan-oil-spill-in-bay/ ConocoPhillips establishes second Chinese spill fund ConocoPhillips said its board of directors has approved a second fund to deal with costs arising from offshore spills at two of the companys oil platforms in Chinas Bohai Bay earlier this summer. The Houston oil giant said the fund will specifically address environmental issues in the offshore area, and it is working with the China National Offshore Oil Corporation (CNOOC), its co-venturer in the Peng Lai 19-3 field, and other parties to assess the spills impact. The move comes after ConocoPhillips said on Sept. 6 that it would establish a separate fund to pay for damages related to the spills.

http://fuelfix.com/blog/2011/09/19/conocophillips-establishes-second-chinese-spillfund/ Petrobras passes first post-Macondo test of deepwater containment US regulators said Monday that Petrobras America passed a surprise drill to prove its ability to respond to a hypothetical blowout at one of its deepwater wells in the Gulf of Mexico. The Bureau of Ocean Energy Management, Regulation and Enforcement said last week's unannounced table-top exercise tested Petrobras' response to an imaginary loss of well control. It had to show that it could quickly notify state and federal authorities and deploy contractors to contain the blowout. It was the first drill of the sort since BP's Macondo disaster last year. The Coast Guard and Louisiana emergency officials also participated. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6494138 OPECs $1 Trillion Cash Quiets Poor on Longest Ever $100 Oil Saudi Arabia will spend $43 billion on its poorer citizens and religious institutions. Kuwaitis are getting free food for a year. Civil servants in Algeria received a 34 percent pay rise. Desert cities in the United Arab Emirates may soon enjoy uninterrupted electricity http://www.bloomberg.com/news/2011-09-19/opec-s-1t-cash-quiets-poor-onlongest-ever-100-oil.html

GKP raises $200m to fund Kurdistan exploration Gulf Keystone Petroleum, the Aim-quoted oil explorer, has raised $200m through a share placement to appraise the amount of oil in its concessions in Kurdistan, northern Iraq...GKP estimates its Kurdistan assets could contain 12bn barrels of oil in total. http://www.ft.com/intl/cms/s/0/b97839c2-e35c-11e0-8f47-00144feabdc0.html? ftcamp=rss#axzz1YUSlSgCa Lost in the sands The effort to revive Libyas oil industry will have global consequences...The revolution has delivered a big setback for the countrys oil industry. It will take months, if not years, to recover to pre-war levels. But in the medium term, the end of the Gaddafi regime also provides an opportunity. In 1969, the year Gaddafi gained power, Libya produced nearly as much as Saudi Arabia 3.1m b/d and 3.3m b/d, respectively a clear sign of its potential. http://www.ft.com/intl/cms/s/0/5674bcb0-e2b7-11e0-897a00144feabdc0.html#axzz1YUSlSgCa China and India account for half of global energy growth through 2035 Strong economic growth leads China and India to more than double their combined energy demand by 2035, accounting for one-half of the world's energy growth according to EIA's recently released International Energy Outlook 2011 (IEO2011) http://www.eia.gov/todayinenergy/detail.cfm?id=3130

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