EIA Short-Term Energy Outlook Summary

• Lowers 2011 world oil demand growth by 10K bpd, to +1.43M bpd y/y; sees US 2011 natural gas production +2%. 
• Expects the price of West Texas Intermediate (WTI) crude oil to average about $84 per barrel this winter (October 1 to March 31), more than $6 higher than the average price last winter. Projected WTI prices rise to $89 per barrel by the end of 2011, a $2 per barrel increase from last month's Outlook, as U.S. and global economic conditions improve. EIA's forecast assumes U.S. real gross domestic product (GDP) grows 2.7 percent in 2010 and 2.1 percent in 2011, while world real GDP (weighted by oil consumption) grows by 4.0 percent and 3.2 percent, in 2010 and 2011, respectively. 
• Expects regular-grade motor gasoline retail prices to average $2.88 per gallon this winter, 22 cents per gallon higher than last winter. Projected retail diesel fuel prices average $3.14 per gallon this winter, an increase of 35 cents per gallon over last winter, while residential heating oil prices average $3.17 per gallon this winter. In 2011, higher crude oil prices combined with higher refiner margins push annual average prices for motor gasoline and diesel fuel to $3.00 and $3.23 per gallon, respectively. 
• Natural gas working inventories end November 2010 at 3.8 trillion cubic feet (Tcf), slightly less than last year's record-setting end-of-November level. The projected Henry Hub natural gas spot price averages $4.37 per million Btu (MMBtu) for 2010, a $0.42-per-MMBtu increase over the 2009 average. EIA expects the Henry Hub spot price to average $4.33 per MMBtu in 2011. 
• OPEC crude oil production will increase by 0.3 and 0.4 million bbl/d in 2010 and 2011, respectively, similar to last month's Outlook, to accommodate increasing world oil consumption. Projected non-crude liquids increase by 0.7 million bbl/d in both 2010 and 2011. OPEC surplus capacity should remain close to 5 million bbl/d, compared with 4.3 million in 2009 and 1.5 million in 2008. 
• Non-OPEC Supply will grow by just over 1.0 million bbl/d to an average 51.5 million bbl/d in 2010 - the largest year-over-year increase since 2002. The increase in total non-OPEC supply for the year is the result of higher production in the United States, Brazil, China, and Russia. However, non-OPEC supply falls by 280,000 bbl/d in 2011. The decline in non-OPEC supply in 2011 would be only the third time in the last 15 years that non-OPEC supplies fall year-over-year. 
• Projected total U.S. liquid fuels consumption increases by 320,000 bbl/d (1.7 percent) to 19.09 million bbl/d in 2010, which is about 60,000 bbl/d higher than forecast in last month's Outlook. A year-over-year decline in total liquid fuels consumption averaging 40,000 bbl/d in the first quarter of 2010 was followed by a year-over-year rise averaging 610,000 bbl/d in the second and third quarters, led by increases in motor gasoline and distillate fuel oil consumption.
• Domestic crude oil production, which increased by 410,000 bbl/d in 2009, increases by 140,000 bbl/d in 2010 and then falls by 30,000 bbl/d to 5.47 million bbl/d in 2011. The 2011 forecast includes declines of 50,000 bbl/d and 180,000 bbl/d in Alaska and the Federal Gulf of Mexico (GOM), respectively, and a 190,000-bbl/d increase in lower-48 non-GOM production. Ethanol production, which averaged 710,000 bbl/d in 2009, increases to an average of 860,000 bbl/d in 2010 and 890,000 bbl/d in 2011.  
• This month's Outlook, for the first time, reflects recent changes in the Form EIA-857 monthly natural gas survey methodology in the forecasts for residential and commercial natural gas consumption. The new survey methodology should not significantly change reported total annual consumption volumes. However, EIA expects significant changes in the seasonality of reported residential and commercial sector natural gas consumption from historical reporting norms as the improved reporting on the EIA-857 leads to more accurate monthly reports. For example, first quarter 2011 forecast residential plus commercial consumption is 1.7 billion cubic feet per day (Bcf/d) lower in this forecast compared with last month's Outlook, while fourth quarter 2011 consumption is 3.8 Bcf/d higher.

Technical Trading alerts 12.6.2010

BULLISH ALERTS


10-Day/21-Day Moving Avg. Cross: CRK FCX GDP IVN OIL TLM USO
21-Day/50-Day Moving Avg. Cross: GDP
MACD Cross: BHP DVN ESV JEC RIO TLM

BEARISH ALERTS: None

Technical Trading alerts 12.3.2010

BULLISH ALERTS


10-Day/21-Day Moving Avg. Cross: CVE DD ERF PETD PTEN XLB
MACD Cross: ATPG CF CVX DBA DNR FST MON MOO NBL NBR NXY OKE
                       PETD PXP RRC TS URS XEC

BEARISH ALERTS: None

Technical Trading alerts 12.2.2010

BULLISH ALERTS


10-Day/21-Day Moving Avg. Cross: APC CF DOW MUR SHAW XOM
MACD Cross: ACI APA APC BTU CBI CCJ CNQ COP DBC DIG DOW
                       EQT FCX FWLT GDP HES HK HOS HP NFX OIH PVA RIG SE
                       SU TCK VALE VLO XLB XLE XOP

BEARISH ALERTS


21 Day/50-Day Moving Avg. Cross: TOT

Weekly DOE Natural Gas Inventory Analysis - 12.02.2010

Withdrawal slightly greater than expectations – The EIA reported a natural gas withdrawal of 23 bcf, lower than expectations (as per Bloomberg) for a 29 bcf withdrawal but less than the five-year average of a 43 bcf withdrawal. For the comparable week last year, the EIA reported an injection of 2 bcf. 

Storage levels still at record highs – Total storage now sits at 3,814 bcf, or 0.6% below last year’s levels for the comparable week of 3,837 bcf, and 10.0% above the five-year average of 3,467 bcf.

High coal prices shoring up gas prices – Appalachian coal prices surged dramatically yesterday to new 2010 highs, and this coal move is helping to shore up gas prices on the basis of a coal-gas switching in regards to power generation. Coal prices yesterday were up 3%, which is pretty impressive volatility in the normally sedate coal market, resulting in our implicit coal-gas switching price escalating to $4.52 as of last night’s close.

EIA 914 data for September Shows Solid Growth – Total Lower 48 volumes of 66.33bcfpd were up +480mmcfpd (+0.7%) MTM and +5bcfpd (+8.1%) YOY. Onshore Lower 48 volumes of 60.37bcfpd were up +680mmcfpd (+1.1%) MTM and +5.77bcfpd (+10.4%) YOY.

Technical Trading alerts 12.1.2010

BULLISH ALERTS


10-Day/21-Day Moving Avg. Cross: APD CNQ EMN HOS INT TDW
MACD Cross: APD BEXP COG CVE DD EMN ERF JOYG MRO MUR OIL OIS PX
                        PXD SFY SLB TDW USO WTI XME
Bullish Up/Down Volume Ratio Reversal: MOS MRO

BEARISH ALERTS


Bearish Up/Down Volume Reversal: FRO MT

Weekly DOE Crude & Products Inventory Analysis - 12/1/2010

·         Crude inventories build vs expectations of draw –Crude oil inventories increased 1.1 mmbbls last week, compared with market expectations for a 2.0 mmbbls draw (per Bloomberg). Crude oil inventories are now sitting at 359.7 mmbbls, which are 5.8% above last year and 10.6% above the five-year average. It seems like supply/demand fundamentals have taken a back seat as crude was buoyed by Chinese economic data this morning that showed a large increase in factory orders, while numbers out of the Euro zone point to the fact that its manufacturing sector expanded at its fastest pace in 4 months in November. European Central Bank chief Jean-Claude Trichet also signalled officials may be willing to step up their response to the Euro zone debt crisis. In addition, US private sector jobs surged in November with the largest monthly increase in three years.

·         Gasoline inventories build vs expectations of draw –Gasoline inventories rose 0.6 mmbbls last week, compared with market expectations for a 1.3 mmbbls draw (per Bloomberg). Inventories of gasoline are now sitting at 210.2 mmbbls, which are 1.8% below last year and 3.4% above the five-year average.

·         Distillates draw below expectations –Inventories of distillates decreased 0.2 mmbbls last week, compared with market expectations for a 1.5 mmbbls draw (per Bloomberg). Distillate inventories are now sitting at 158.1 mmbbls, which are 4.6% below last year and 15.2% above the five-year average.

·         Refinery utilization decreases –Refinery utilization was down 2.9% last week to 82.6% and compares to utilization of 79.7% last year and the five-year average of 86.9%.