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October 25, 2011

Energy Data Highlights

Retail gasoline price 10/24/2011: $3.462/gal down$0.014 from week earlier up$0.645 from year earlier Retail diesel price 10/24/2011: $3.825/gal up$0.024 from week earlier up$0.758 from year earlier Crude oil futures price 10/21/2011: $87.40/bbl up$0.60 from week earlier up$6.84 from year earlier Natural gas futures price 10/21/2011: $3.629/mmBtu down$0.074 from week earlier up$0.259 from year earlier Weekly coal production 10/15/2011: 21.386 million tons down0.216 million tons from week earlier down0.345 million tons from year earlier http://www.eia.gov/

Natural Gas/ Power News

EIA Storage Release 10/20/11 (Actual): +112 Bcf Previous Week: +103 Bcf -1.3% Change from 1 Year Ago +3.2% Change 5-year Average Sakhalin Energy partners could decide on train 3 in 2012 The partners in Russia's Sakhalin 2 project may take an investment decision on a third gas liquefaction train next year, Gazprom Export CEO Alexander Medvedev told Platts Tuesday. Speaking to Platts in Tokyo, Medvedev said the Sakhalin 2

project could take an investment decision by as early as next year if its project partners agree to launch a feasibility study this year. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8502392

ConocoPhillips launches test to unlock methane hydrates ConocoPhillips is teaming up with the Energy Department to test a promising method for harvesting energy-rich methane gas deposits trapped in ice-like crystals on Alaskas north slope. Beginning in January, the company is set to begin testing its carbon dioxide-based extraction technique at a trial well installed earlier this year in the Prudhoe Bay region. ConocoPhillips is also working with the Japan Oil, Gas and Metals National Corp. on the project. http://fuelfix.com/blog/2011/10/24/conocophillips-launches-test-to-unlockmethane-gas-potential/

Green/ Alternative Energy News

Indias Kiran Energy Gets Funding From Solyndra-Backer Argonaut Kiran Energy Solar Power Pvt., an Indian developer of sun-powered plants, raised $50 million from three private equity firms, including Argonaut Ventures, which invested in the failed U.S. panel maker Solyndra LLC. Kiran Energy is setting up a 20-megawatt solar plant in the western state of Gujarat that is using panels made by Sharp Corp. and getting financing from State Bank of India (SBIN) and Mizuho Financial Group Inc. (8411), Contractor said. http://www.bloomberg.com/news/2011-10-25/india-s-kiran-energy-gets-fundingfrom-solyndra-backer-argonaut.html

Crude Oil News

OPEC Daily Basket Price 10/24/2011- $109.11 (10/21/2011- $108.31)

Brent Steady, US Crude Hits 3-Month High Brent was steady above $111 on Tuesday as concerns over Europe's economic health kept prices in check, while U.S. oil rose for a third straight day to hit a fresh three-month high. "The real economy in Europe is not that strong," said Masaki Suematsu, a broker at Newedge in Tokyo. Brent was prone to dip, said Christopher Bellew, a broker with Jeffrey Bache, citing technical factors. "In the very short term, it is in a range of $108/$112 for front month Brent," Bellew said. "It is close to the top of the range now and maybe it is time for a pull back." But the fall in Brent crude prices was limited by relatively strong corporate earnings.

http://www.cnbc.com/id/45023719 Oil Rises to 12-Week High as Demand Signals Spur Bull Market Oil rose a third day to trade at the highest in 12 weeks in New York on signs of improving U.S. demand and speculation European leaders will agree on a fund to contain a debt crisis threatening the regions economic growth. Futures erased this years loss after climbing as much as 1.9 percent. Oil has gained more than 20 percent in the past three weeks, putting it in a so-called bull market. Stockpiles at Cushing, Oklahoma, the delivery point for New York crude, fell last week, according to a satellite survey. A report today may show U.S. consumer confidence increased a second month and European leaders will meet tomorrow to decide on a blueprint to tame the regions debt problems, while Hurricane Rina headed for Mexican oil platforms. There are some empty storage tanks in Cushing, said Olivier Jakob, managing director of Zug, Switerzland-based consultants Petromatrix GmbH. So were going through this glut, and currently stocks are pretty low. http://www.bloomberg.com/news/2011-10-24/crude-oil-gains-for-a-third-day-innew-york-climbing-from-12-week-high.html

Crude Surges on Bullish Signals, Euro Hopes Oil futures rose to their highest level in nearly three months, settling above $90 a barrel as a condition emerged in the market suggesting a supply squeeze in the near term. The spread between the Nymex crude contracts for the current month and next month turned strongly positive, entering a state called "backwardation" in which it is more expensive to buy a commodity now than in the future. at condition is the opposite of the market's state for most of the time since the financial crisis exploded in September 2008, suggesting the supply-demand picture is tightening. It is a bullish signal for oil traders, stimulating long investment or at a minimum the closing out of short positions. "We're going to start seeing people believe this is going to go higher rather than come back down," said Carl Larry, director of research and derivatives at Blue Ocean Brokerage. "Now that it's flipped over, you have a lot of those people who were holding out hope for a short market who are going to get flat or go long http://online.wsj.com/article/SB1000142405297020477790457665079122994993 6.html?mod=WSJ_Commodities_LEFTTopNews

US crude stocks expected to build by 200,000 barrels Weekly oil data from the US Energy Information Administration and the American Petroleum Institute should show a 200,000-barrel rise in US commercial crude inventories for the week ended October 21, analysts polled by Platts said MondayAlthough on average analysts forecast a rise in stocks, Jacob Correll, commodity analyst at Summit Energy, expects a slight draw in US crude inventories of around 1 million barrels. "We have seen a situation where stocks have fallen quite a bit and we don't typically see that, but I am still anticipating a

slight draw as we are in a position to see lower imports due to some tightness in the market [outside the US]," Correll said. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6610957 BP's Profit More Than Doubles BP PLC shares rose in early trading Tuesday after the U.K. energy giant reported solid earnings and announced plans to expand its asset-sale program and boost distributions to shareholders. The London-based energy company said net profit for the three months to Sept. 30 was $4.91 billion, compared with $1.79 billion a year earlier. The sharp increase was owing to the $7.66 billion pre-tax charge that BP booked for the Gulf spill in the third quarter of 2010. Revenue rose to $97.59 billion, from $74.65 billion. BP said the company has turned the corner, and that the progress it has made in 2011 had succeeded in "creating a stronger and safer BP." Still, some analysts said they wanted more evidence of progress given recent disappointments. http://online.wsj.com/article/SB1000142405297020477790457665245122755429 0.html?mod=WSJ_hp_LEFTWhatsNewsCollection BP raises disposals target to $45bn BP has raised its target for disposals to $45bn and promised to boost pay-outs to shareholders as the UK oil group said it had reached a definite turning point after last years devastating Gulf of Mexico spill. http://www.ft.com/intl/cms/s/0/43cad81e-fece-11e0-9b2f-00144feabdc0.html? ftcamp=rss#axzz1bnLVvK6K China PMI Signals Victory for Commodity Bulls Speaking of oil, this appears to be an area of weakness in recent China commodity data, in contrast to robust imports of copper and iron ore and to a lesser extent coal. Implied demand rose a scant 1 percent to 8.9 million barrels a day in September, with imports rising only slightly to 4.98 million barrels a day from August's 4.95 million. This confounded expectations that imports would grow and was one of the few arguments the bears could cite in saying the Chinese economy was slowing. There are a few things to note on oil demand. Firstly prices were still fairly high when September cargoes would have been booked, making it likely Chinese refiners bought only what they needed and weren't rebuilding inventories. Furthermore, the implied demand figure excludes movements in inventories and it's possible that these were drawn down in September, especially given some refineries were still undergoing maintenance. JPMorgan analysts said refinery maintenance in the third quarter of 2011 exceeded that of the same quarter last year by 300,000 barrels a day, certainly enough to weigh on implied demand. http://www.commodities-now.com/commodities-now-news/general/8500-chinapmi-signals-victory-for-commodity-bulls.html

Recent Rig Counts

Area U.S. Canada

Last Count 21 Oct 11 21 Oct 11

Cou nt 2013 497

Change from Prior Count -10 -15 -9

Date of Prior Count 14 Oct 11 14 Oct 11 August 2011

Change Date of from Last Last Year's Year Count +344 +78 +54 22 Oct 10 22 Oct 10 September 2010

Internatio Septemb 1174 nal er 2011

http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

Weather

Hurricane RINA- http://www.nhc.noaa.gov/

6 to 10 Day Outlooks Temperature

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8 to 14 Day Outlooks Temperature

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