Futures Insights

Are Things Better Now?

2012-09-26T09:04:00.001-05:00

It should surprise no one that the GOP is returning to their tried-and-untrue playbook to help out in this election cycle. It has been long understood that Mr. Romney and Mr. Ryan want cut taxes, cut spending (except for the military) and roll-back government regulations. But now they are going back to the Gipper’s “Are we better off than we were four years ago?” I did a quick Google.com/Bing.com search for September 2008 headlines and here is a sampling of what I found.

Financial Headlines from 4 Years Ago

September 2008

09.02.08 More weak data likely (LA Times)
09.04.08

U.S.

bankruptcy filing rate jumps (LA Times)
09.05.08 Ex-GOP lobbyist Abramoff sentenced to 4 years in prison (LA Times)
09.06.08

U.S.

home woes mount (LA Times)
09.07.08 How Safe Is Your Bank? (LA Times)
09.08.08

U.S.

seizes mortgage titans in multibillion-dollar rescue (LA Times)
09.10.08 Lehman fears sink Wall Street (LA Times)
09.11.08 Lehman posts $3.9-billion loss, moves to shore up books (LA Times)
09.12.08 WaMu plans another huge write-down (LA Times)
09.13.08 If Lehman fails, would you feel it? (LA Times)
09.14.08 Lehman Files for Bankruptcy; Merrill Is Sold (NY Times)
09.15.08 Wall St.’s Turmoil Sends Stocks Reeling (NY Times)
09.15.08 New York Allows A.I.G. to Lend Itself Money (NY Times)
09.16.08 Fed’s $85 Billion Loan Rescues Insurer (NY Times)
09.24.08 President Bush’s Speech to the Nation on the Economic Crisis (NY Times)
09.25.08 Talks Implode During a Day of Chaos; Fate of Bailout Plan Remains Unresolved
09.25.08 Government Seizes WaMu and Sells Some Assets (NY Times)
09.29.08 For Stocks, Worst Single-Day Drop in Two Decades (NY Times)
09.30.08 Republican Party, Having Brought You the Meltdown, Now Blames Obama (NY Times)

So go on, ask yourself, are we better off than we were four years ago?

US Drought Monitor

2012-07-26T22:58:00.001-05:00

Drought map shows widespread intensification over central United States

Jul 26, 2012

The July 24 U.S. Drought Monitor showed widespread intensification of drought through the middle of the country, according to the National Drought Mitigation Center at the University of Nebraska-Lincoln. The map also set a record for the fourth straight week for the area in moderate drought or worse in the 12-year history of the U.S. Drought Monitor.

The July 24 map put 53.44 percent of the United States and Puerto Rico in moderate drought or worse, up from 53.17 percent the week before; 38.11 percent in severe drought or worse, compared with 35.32 a week earlier; 17.2 percent in extreme drought or worse, compared with 11.32 percent the week before; and 1.99 percent in exceptional drought, up from .83 percent the preceding week.

“We’ve seen tremendous intensification of drought through Illinois, Iowa, Missouri, Indiana, Arkansas, Kansa and Nebraska, and into part of Wyoming and South Dakota in the last week,” said Brian Fuchs, a climatologist and U.S. Drought Monitor author. “The amount of D3 developing in the country has increased quite a bit for each of the last several weeks.”

Fuchs also noted that as of the July 24 U.S. Drought Monitor, every state in the country had at least a small area shown as abnormally dry or worse. “It’s such a broad footprint,” he said.

“This drought is two-pronged,” Fuchs said. “Not only the dryness but the heat is playing a big and important role. Even areas that have picked up rain are still suffering because of the heat.”

The forecast for most of the drought-affected area is for drought to continue to develop and intensify. “Conditions are likely to persist,” Fuchs said. “We’ll see further development and intensification into the fall.” Fuchs based his assessment on the Seasonal Drought Outlook released July 19.

The U.S. Drought Monitor map is jointly produced by the National Drought Mitigation Center at the University of Nebraska-Lincoln, the National Oceanic and Atmospheric Administration, the U.S. Department of Agriculture, and about 350 drought observers across the country. It is released each Thursday based on data through the previous Tuesday.

Drought Monitor authors synthesize many drought indicators into a single map that identifies areas of the country that are abnormally dry (D0), in moderate drought (D1), in severe drought (D2), extreme drought (D3) and exceptional drought (D4).

Statistics for the percent area in each category of drought are automatically added to the U.S. Drought Monitor website each week for the entire country and Puerto Rico, for the 48 contiguous states, for each climate region, and for individual states: http://drought.unl.edu/MonitoringTools/USDroughtMonitor/DroughtMonitorTips.aspx

The National Climatic Data Center maintains drought data based on the Palmer Drought Severity Index, calculated to the beginning of the historic record:http://www1.ncdc.noaa.gov/pub/data/cmb/sotc/drought/2012/06/uspctarea-wetdry-mod.txt

U.S. Drought Monitor: http://droughtmonitor.unl.edu

Seasonal Drought Outlook: http://www.cpc.ncep.noaa.gov/products/expert_assessment/seasonal_drought.html

-- Kelly Helm Smith, National Drought Mitigation Center

Crop Conditions as of 07.22.12

2012-07-23T16:17:00.002-05:00

USDA Crop Progress Report
Crop conditions continue to worsen. Scattered rains have hit some areas. Certain areas in Missouri have not had rain since before Memorial Day.
GSH

Corn Condition - Selected States: Week Ending July 22, 2012
[National crop conditions for selected States are weighted based on 2011
planted acreage]
----------------------------------------------------------------------------
State : Very poor : Poor : Fair : Good : Excellent
----------------------------------------------------------------------------
: percent
:
Colorado .......: 21 23 26 27 3
Illinois .......: 36 30 27 7 -
Indiana ........: 38 33 22 6 1
Iowa ...........: 14 26 37 21 2
Kansas .........: 28 31 29 11 1
Kentucky .......: 43 34 17 5 1
Michigan .......: 27 24 26 21 2
Minnesota ......: 3 8 28 53 8
Missouri .......: 48 31 16 4 1
Nebraska .......: 14 19 30 32 5
North Carolina .: 2 13 32 39 14
North Dakota ...: 2 9 31 54 4
Ohio ...........: 21 31 33 14 1
Pennsylvania ...: 4 10 33 40 13
South Dakota ...: 13 22 34 29 2
Tennessee ......: 25 30 27 17 1
Texas ..........: 4 7 38 40 11
Wisconsin ......: 19 24 26 24 7
:
18 States ......: 21 24 29 23 3
:
Previous week ..: 16 22 31 27 4
Previous year ..: 5 9 24 46 16
----------------------------------------------------------------------------

Soybean Condition - Selected States: Week Ending July 22, 2012
[National crop conditions for selected States are weighted based on 2011
planted acreage]
----------------------------------------------------------------------------
State : Very poor : Poor : Fair : Good : Excellent
----------------------------------------------------------------------------
: percent
:
Arkansas .......: 4 17 31 40 8
Illinois .......: 24 25 38 12 1
Indiana ........: 23 30 35 11 1
Iowa ...........: 10 20 42 25 3
Kansas .........: 20 31 35 14 -
Kentucky .......: 23 33 28 14 2
Louisiana ......: - 6 30 53 11
Michigan .......: 13 27 31 27 2
Minnesota ......: 3 9 28 54 6
Mississippi ....: 3 4 22 50 21
Missouri .......: 31 37 24 7 1
Nebraska .......: 10 22 40 26 2
North Carolina .: 1 8 33 50 8
North Dakota ...: 1 8 32 53 6
Ohio ...........: 14 30 36 19 1
South Dakota ...: 4 20 42 31 3
Tennessee ......: 6 15 40 37 2
Wisconsin ......: 12 21 32 26 9
:
18 States ......: 13 22 34 27 4
:
Previous week ..: 10 20 36 30 4
Previous year ..: 3 8 27 49 13
----------------------------------------------------------------------------

US Seasonal Drought Outlook NWS/CPC

2012-07-19T17:34:00.000-05:00

Climate Prediction Center Website

Latest Seasonal Assessment - Dryness and drought, exacerbated by above-normal temperatures, have been increasing both in extent and intensity across much of the central and northern U.S. Based upon the July 10 U.S. Drought Monitor, nearly 61 percent of the contiguous U.S. was in drought (D1-D4), the highest such value for the U.S. Drought Monitor since its inception in 2000. The drought and heat arrived at a critical time for Midwestern agriculture, especially corn. The combination of heat and dryness has severely reduced the quality and quantity of the corn and soybean crop, with 38 percent of the corn and 30 percent of the soybeans rated as poor or very poor as of July 15 by NASS/USDA. Some states, such as Kentucky, Missouri, and Indiana, had over 70 percent of their corn adversely rated. Unfortunately, drought is expected to develop, persist, or intensify across these areas, and temperatures are likely to average above normal. Some widely-scattered relief may come in the form of cold front passages or organized thunderstorm clusters (MCSs), but widespread relief for much of the area is not expected. In the Southeast, recent widespread thunderstorm activity has slightly eased drought there, and the 3-month outlook favors increased odds for above normal precipitation along the central Gulf. This is due to the greater likelihood of a tropical system affecting these areas and from sea-breeze triggered thunderstorms. Therefore, some improvement is expected across the Deep South, from coastal Texas eastward to South Carolina. Across the Southwest, the odds favor an active (wet) southwest monsoon in both the 1- and 3-month precipitation outlooks. As a result, improvement is anticipated across much of Arizona and western New Mexico as the summer monsoon continues, with some improvement in other parts of the region. Drought persistence is the best bet across the remaining portions of the Western U.S. since late summer and early fall are typically dry. In Hawaii, subnormal seasonal rainfall is expected which should maintain drought on the leeward (west) sides while expanding it toward the windward (east) sides. Lastly, an El Niño Watch continues, with the forecaster consensus reflecting increased chances of an El Niño beginning in July-September.

Forecaster: D. Miskus

Next Outlook issued: August 2, 2012 at 8:30 AM EDT

NOAA National Drought Overview

2012-07-16T19:13:00.000-05:00

NOAA State of Climate Drought June 2012

National Drought Overview

Based on the Palmer Drought Index,severe to extreme drought affected about 33 percent of the contiguous United States as of the end of June 2012, an increase of about 10 percent from last month. About 4 percent of the contiguous U.S. fell in theseverely to extremely wet categories.
About 55 percent of the contiguous U.S. fell in the moderate to extreme droughtcategories (based on the Palmer Drought Index) at the end of June.
On a broad scale, the 1980s and 1990s were characterized by unusual wetness with short periods of extensive droughts, the 1930s and 1950s were characterized by prolonged periods of extensive droughts with little wetness, and the first decade of the 2000s saw extensive drought and extensive wetness (moderate to extreme drought graphic, severe to extreme drought graphic).

A file containing the national monthly percent area severely dry and wet from 1900 to present is available for the severe to extreme and moderate to extremecategories.
Historical temperature, precipitation, and Palmer drought data from 1895 to present for climate divisions, states, and regions in the contiguous U.S. are available at theClimate Division: Temperature-Precipitation-Drought Data page. These filenames begin with "drd964x" and end with "txt".
According to the weekly U.S. Drought Monitor, about 56 percent of the contiguous U.S. (about 47 percent of the U.S. including Alaska, Hawaii, and Puerto Rico) was classified as experiencing moderate to exceptional (D1-D4) drought at the end of June.

Crop Progress as of 7.15.12

2012-07-16T16:05:00.001-05:00

Information gathered from
http://www.usda.gov/oce/weather/pubs/Daily/TODAYSWX.pdf

http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1048

Agricultural Weather Highlights – Monday - July 16, 2012
 In the West, scattered monsoon showers stretch from the Arizona-New Mexico border northward into the Intermountain region. In addition, much cooler weather prevails in the wake of last week’s heat wave.
 On the Plains, another crop- and pasture-withering heat wave is underway. Sunday’s high temperatures
generally ranged from 95 to 110°F, except for somewhat cooler conditions on the northern High Plains, and
similar readings can be expected again today.
 In the Corn Belt, weekend showers provided only limited and localized relief from the worst drought since
1988. Today’s temperatures will again peak near 95°F in many sections of the Midwest, with a few readings
near 100°F possible in the western Corn Belt.
 In the South, summer crops and pastures continue to benefit from recent soil moisture improvements, despite a return to very warm, mostly dry weather. Last week’s rainfall totaled 4 inches or more in many locations from the western Gulf Coast region into the southern Appalachians.

Outlook: Heat has returned to the Plains and Midwest and will persist for much of the week. Triple-digit (100-degree) heat will continue indefinitely on the central Plains and occasionally spread to the northern and southern Plains and the western Corn Belt. Later in the week, portions of the eastern Corn Belt may experience temporary relief from highs above 90°F. Showers and thunderstorms will accompany the eastern Corn Belt’s transition to slightly cooler weather, although rainfall amounts will be mostly less than an inch. Like last week, more substantial
rainfall will occur mostly south of the Ohio River, where 1- to 3-inch totals can be expected across the Southeast. Elsewhere, mostly dry weather on the central and southern Plains will contrast with scattered showers in the Four Corners region and across the nation’s northern tier. The NWS 6- to 10-day outlook for July 21-25 calls for hotter than- normal weather nationwide, except along the Pacific Coast. Meanwhile, drier-than-normal conditions across
the vast majority of the U.S. will contrast with pockets of above-normal rainfall in the central and southern

Corn Condition - Selected States: Week Ending July 15, 2012
[National crop conditions for selected States are weighted based on 2011
planted acreage]
----------------------------------------------------------------------------
State : Very poor : Poor : Fair : Good : Excellent
----------------------------------------------------------------------------
: percent
:
Colorado .......: 17 21 29 29 4
Illinois .......: 26 30 33 10 1
Indiana ........: 37 34 21 7 1
Iowa ...........: 8 19 37 32 4
Kansas .........: 21 30 34 14 1
Kentucky .......: 38 39 17 5 1
Michigan .......: 27 29 26 16 2
Minnesota ......: 2 7 24 56 11
Missouri .......: 38 34 21 6 1
Nebraska .......: 9 18 30 39 4
North Carolina .: 3 14 27 43 13
North Dakota ...: 1 8 29 56 6
Ohio ...........: 19 28 34 18 1
Pennsylvania ...: 5 11 45 30 9
South Dakota ...: 7 20 36 33 4
Tennessee ......: 25 30 27 17 1
Texas ..........: 5 6 33 42 14
Wisconsin ......: 19 24 27 25 5
:
18 States ......: 16 22 31 27 4
:
Previous week ..: 12 18 30 34 6
Previous year ..: 4 7 23 50 16

Soybean Condition - Selected States: Week Ending July 15, 2012
[National crop conditions for selected States are weighted based on 2011
planted acreage]
----------------------------------------------------------------------------
State : Very poor : Poor : Fair : Good : Excellent
----------------------------------------------------------------------------
: percent
:
Arkansas .......: 3 16 34 39 8
Illinois .......: 16 25 42 16 1
Indiana ........: 25 32 32 10 1
Iowa ...........: 5 15 42 34 4
Kansas .........: 14 27 39 19 1
Kentucky .......: 21 31 32 15 1
Louisiana ......: 1 7 31 51 10
Michigan .......: 16 34 28 21 1
Minnesota ......: 1 8 26 57 8
Mississippi ....: 2 5 20 50 23
Missouri .......: 25 34 31 9 1
Nebraska .......: 7 16 43 33 1
North Carolina .: 1 5 33 55 6
North Dakota ...: - 6 32 56 6
Ohio ...........: 14 28 36 20 2
South Dakota ...: 3 17 39 37 4
Tennessee ......: 10 17 39 32 2
Wisconsin ......: 16 23 31 25 5
:
18 States ......: 10 20 36 30 4
:
Previous week ..: 9 18 33 35 5
Previous year ..: 3 7 26 51 13

Short Term Drought Maps 6.23.12 vs 7.7.12

2012-07-12T16:51:00.000-05:00

Short Term Drought 6.23.12

Short Term Drought 7.7.12

Crop Conditions Worsen

2012-07-09T20:04:00.000-05:00

Corn Condition - Selected States: Week Ending July 8, 2012

[National crop conditions for selected States are weighted based on 2011

planted acreage]

----------------------------------------------------------------------------

  State     : Very poor :   Poor    :   Fair    :   Good   : Excellent

-----------------------------------------------------------------------

                                   percent

Colorado .......:    16          22          31          28           3

Illinois .......:    23          25          33          17           2

Indiana ........:    27          34          27          11           1

Iowa ...........:     5          13          36          40           6

Kansas .........:    15          28          38          18           1

Kentucky .......:    34          38          23           5           -

Michigan .......:    13          28          26          29           4

Minnesota ......:     1           4          18          62          15

Missouri .......:    28          32          28          11           1

Nebraska .......:     7          13          33          40           7

North Carolina .:     2          16          35          37          10

North Dakota ...:     1           4          21          64          10

Ohio ...........:    12          24          36          25           3

Pennsylvania ...:     3           9          33          42          13

South Dakota ...:     3          10          27          51           9

Tennessee ......:    29          32          27          11           1

Texas ..........:     4           8          29          47          12

Wisconsin ......:    12          19          26          36           7

18 States ......:    12          18          30          34           6

Previous week ..:     7          15          30          40           8

Previous year ..:     3           6          22          52          17

----------------------------------------------------------------------------

Soybean Condition - Selected States: Week Ending July 8, 2012

[National crop conditions for selected States are weighted based on 2011
planted acreage]
----------------------------------------------------------------------------
      State     : Very poor :   Poor    :   Fair    :   Good    : Excellent 
----------------------------------------------------------------------------
                :                          percent                          
                :                                                           
Arkansas .......:     4          16          32          40           8     
Illinois .......:    17          25          38          18           2     
Indiana ........:    21          30          35          13           1     
Iowa ...........:     4          11          37          42           6     
Kansas .........:     8          25          42          24           1     
Kentucky .......:    23          39          30           8           -     
Louisiana ......:     1           9          35          46           9     
Michigan .......:    11          29          26          29           5     
Minnesota ......:     1           6          21          64           8     
Mississippi ....:     2           8          19          46          25     
Missouri .......:    23          31          33          12           1     
Nebraska .......:     5          14          40          38           3     
North Carolina .:     -           9          35          49           7     
North Dakota ...:     1           5          23          60          11     
Ohio ...........:    11          25          37          24           3     
South Dakota ...:     2          10          29          51           8     
Tennessee ......:    15          24          35          24           2     
Wisconsin ......:    11          20          28          36           5     
                :                                                           
18 States ......:     9          18          33          35           5     
                :                                                           
Previous week ..:     7          15          33          39           6     
Previous year ..:     2           6          26          52          14

Drought Maps July 2012

2012-07-07T11:56:00.000-05:00

July 2012

What is Wrong With This Picture?

2012-05-30T20:59:00.000-05:00

Year to Date
WTI -11%
Gasoline (US avg) +11.5%
Gasoline (Chicago) +15.0%

Crude Futures -15% Y-T-D
RBOB Futures -1.6% Y-T-D

Ample Crude Supplies

Gasoline Supplies Tight

The More Things Stay The Same The More The Story Changes

2012-03-08T12:17:00.002-06:00

That was then....
2008 Fox News Reporting on High Gas Prices (by Media Matters)

Gasoline

Initially gasoline price fell by about 20% from the time Pres. Bush took office due to a 45% decline in the stock market. As the equity market improved, gasoline prices moved higher, gaining almost 290% before the bubble burst. At the end of his term gasoline prices gasoline prices were 35% higher than when he took office.

US Dollar

In 2001 and 2002 the USD posted 10% gains. The
dollar was under pressure for the remainder of the Bush presidency, losing as much as 35% of it's value. There was a slight rebound but the USD lost 23% during the Bush year.

Gold

Gold prices rallied during the Bush years. By the summer of 2008 gold price were up more than 280% . When Pres Bush left office gold had gained about 220% over his presidency

In the first two years of his term stocks lost almost 45% of their value. At the beginning of 2008 the stock market was up by about 15% since President Bush took office, As the financial crisis expanded, equities plunged and for the second time in his term stocks had lost about 45% of their January '01value'

This is now...
2012 Fox News Reporting On High Gas Prices (by Media Matters)

Gasoline

The Fox News pundits are correct when they say they gas prices have risen almost 160% since Pres. Obama took office

US Dollar

The USD has remained under pressure, but is 13% higher than the Bush lows.

The bull market in gold has continued during Pres Obama's term, jumping as much 110% from when he took office January '09. Gold has pulled back from its high but it is up 83%.

The stock market was still in a free-fall when Pres Obama took office and stocks lost almost 20% of their value before the effects of the stimulus programs kicked in. Equities rallied until mid 2010 then had a small retracement. The rally resumed and stocks posted a new high for the move before pausing and pulling back once again. As of this writing, stocks are testing the post-crash highs of 2011.

Anyway, all I can say is...Thank Goodness For Organizations Like "Media Matters" as they continue to point out the fallacies that flow from Fox.

2012-02-29T13:05:00.000-06:00

10 year chart of Gasoline Futures

While sitting in the bleachers at my son’s soccer match on Saturday afternoon (They won 5 to 2 and N. scored a goal) parents were talking about two things: college search efforts and the high price of gasoline. After listening to all the confusion and misconceptions regarding the pricing of gasoline I decided I should update my previous posting entitled “Oil Supplies, Demand and the Keystone Pipeline.”

This entry includes updated data from my January posting, some new data points and comments regarding shifting market dynamics and relevant industry news that may have gone unnoticed by the public.

Relevant data from the EIA.org web site :

Domestic Production: In 01.01, domestic oil production was 5.9m bpd (barrels per day). In 01.09 production had fallen to 5.2m bpd. The latest EIA data shows that

production has risen 11% from 01.09 to 5.8m bpd.

Oil rig data from Baker Hughes, an oilfield servicer who tracks industry trends, shows a 29% increase in the number of rigs in the last 3 years.

Petroleum Imports: In 01.01, the

U.S.

imported 11.6m bpd. By 01.09 that amount posted a 13% increase to 13.2m bpd. The latest report EIA shows petroleum imports were running at a rate of 11.2m bpd, a 15 % reduction since President Obama took office.

Product Supplied: (Demand)

The combination of the economic slowdown and improved energy efficiency has energy demand at levels not seen since 1999. The latest product supplied figures show current usage is off about 17% from the 2008 high.

Petroleum Inventory Levels:

Gasoline inventories are tracking on the high end of their 5 year average.

Petroleum Exports: In 01.01, the U.S. exported approximately 1m bpd of petroleum products. By 01.09 exports had increased 48% to 1.5n bpd. By 2012 exports had more than doubled and the latest 4 week average was 3.2m bpd. In 07.11 the US became a net exporter of gasoline fuels. HuffingtonPost reports that at the end of 2011 energy products were the leading export of the

United States

http://www.huffingtonpost.com/2011/12/31/united-states-gas-export_n_1177559.html

Taking a myopic United States centric view, one would think that US prices should be well contained. And it seems that many in the

ignore the rest of the world when it comes to energy pricing. Referring back to the US export chart, you can see that there is demand for “our” energy.

With US production increasing and demand falling, WTI prices are about 25% below the record highs set in the summer of 2008. Gasoline, on the other hand, is running about 15% below the summer of 08 prices. What is the disconnect between the pricing of “oil” and gasoline?

In the past West Texas WTI crude has been used as the world’s benchmark for oil prices and the prices of WTI and brent have closely tracked one another. but over the last few years logistical problems at the Cushing, Ok delivery point have crimped the accessibility to the oil to the marketplace and has limited the use of WTI as an accurate price indicator. This can be seen when viewing futures trading activity of the different contracts. In January ’11 10,681,994 Brent contracts trade on the ICE exchange and 17, 948,417 WTI contracts traded on the NYMEX platform. This January brent trading on the ICE increased by 7% to 11,208,911 while WTI trading fell by 30%, to 12,557,020.

As you can see the price moves in gasoline are closely following brent oil.

A couple of other facts to bear in mind: Most exports of US petroleum products flow from oil facilities in the Gulf of Mexico where they end up in Mexico and Latin American countries like Ecuadoor (an OPEC member!)

Because various East Coast refineries have been idled, much of the gasoline needed on the Eastern Seaboard is imported from Europe.

More than 50% of US energy demand is met by domestic production.

Almost one half of what we do import comes from within the Western Hemisphere. Less than 20% comes from the Persian Gulf

Some other notable news items that you probably haven't heard in the media:

The US government sold leases for more than one million acres offshore Texas
The US and Mexico signed a treaty that makes 1.5 million acres of the US Continental shelf more accessible.
The US will offer 38 million acres for lease in an area that shows great promise.

(source http://www.platts.com/BlogDetails/oilblog of February 24, 2012

As you can see, President Obama does have an "oil" agenda. The only thing we could do differently would be to nationalize the petroleum industry and prohibit oil companies from selling their product on the "free market'. Hey that sounds like Socialism or something

Oil Supplies, Demand and the Keystone Pipeline

2012-01-19T19:18:00.001-06:00

Stocks at Adequate Levels

Refinery Capacity at All Time Highs

With US Supplies at comfortable levels, plenty of refinery capacity, increasing domestic production
and constrained domestic demand one would think that high prices wouldn't be an issue

Increasing US Production

Falling Demand

BUT this is where prices are.

Gasoline is 25% below Record High and 375% Above Dec '08 Low

It doesn't make much sense does it??? Until you look at the following chart. Who thinks of the United States as an energy exporter, right?

Rapidly Expanding US EXPORTS

So we really don't need to rush through the Keystone pipeline. It is just another subsidy for the petroleum industry. Of course they tout all of the jobs that would be created with the project, but realistically they would be temporary blue collar jobs. Sure it is a shovel ready project but so are all the infrastructure repairs that President Obama has proposed. The oil companies are doing just fine, but our schools and bridges are in sad shape.

UPDATE

I should have done more research into who would benefit from the Keystone Pipeline. This link

answers a lot of questions about who would benefit from this project and why the GOP is fighting so hard for its completion.

DECEMBER 2011 JOBS SITUATION

2012-01-06T19:15:00.000-06:00

Unemployment Data

Headline Unemployment Rate = 8.5% down 9.6% from last year

Real Rate= 15.6% down 7.7% from last year

Ave Weeks Unemployed = 40.8 wks up 17% from last year

Number Unemployed for 27 weeks or Longer =5.6million down 13% from last year

Employment Data

Non Farm Payroll

Private Sector Jobs

Government Jobs

Challenger Reports

2011-11-30T21:07:00.001-06:00

1) Challenger Job-cut report

Announced Layoffs: Actual 42,474 Prior 42,759

November11 marks the 2nd straight month of lower job loses and is 13% below November10. With this report, total job cuts in 2011 now totals 564,297, which is 13% above last year’s year-to-date total of 497,969. (The 564,297 cuts y-t-d are above the 2010 year-end total of 529.973.

For the 8^th time this year Government layoffs were at the top of the list. So far this year 180,881 government jobs have been eliminated, which is 30% above the 138,979 announced through November 2010

The Food sector was in the 2^nd spot, losing 2,368 jobs. Retailers lost 2,285 jobs. The Financial sector was in the 5^thspot in November losing only 1,681 jobs for the month but its in the #2 spot for year-to-date job cuts, with 56,191.

TOP FIVE INDUSTRIES

Year To Date

2011 2010

Government 180,881 138,979

Financial 56,191 21,430

Retail 48,338 33,814

Aerospace/Defense 34,354 17,981

Health Care/Products 23,812 26,612

An Overlooked Economic Indicator

Challenger Holiday Party Survey (Released 11.22.11)

Year Party $ Cost On Site Alcohol

2011 70% Unchanged 30% 50%

2010 64% 76% Unch 18% + 50% 50%

2009 62% 66% Unch 24% - 65% 50%

2008 77% na na na

2007 90% 38% incease 25% 75%

Challenger notes that this unscientific report shows corporate parties are on the upswing despite a stagnating economy.

Anyway, Happy Holiday Season to All

World Reaction to US Debt Downgrade

2011-08-06T13:37:00.001-05:00

G7 major powers to confer on markets crisis: source Reuters

G20 deputies to hold crisis call Saturday: Brazil Source: Reuters

Path to debt deal was too divisive: White House Reuters

Asia, Europe Set to ‘Stick It Out’ With U.S. Debt Bloomberg

China has right to demand US address debt problem Source Peopleforum.cn

Research Update: United States of America Long-Term Rating Lowered To 'AA+' On Political Risks And Rising Debt Burden; Outlook Negative

2011-08-05T20:32:00.001-05:00

Bing search for US Credit downgrade news

Google search for US Credit News

Standard and Poors Research Update: United States of America Long-Term Rating Lowered To 'AA+' On Political Risks And Rising Debt Burden; Outlook Negative

Overview
· We have lowered our long-term sovereign credit rating on the United
States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term
rating.
· We have also removed both the short- and long-term ratings from
CreditWatch negative.
· The downgrade reflects our opinion that the fiscal consolidation plan
that Congress and the Administration recently agreed to falls short of
what, in our view, would be necessary to stabilize the government's
medium-term debt dynamics.
· More broadly, the downgrade reflects our view that the effectiveness,
stability, and predictability of American policymaking and political
institutions have weakened at a time of ongoing fiscal and economic
challenges to a degree more than we envisioned when we assigned a
negative outlook to the rating on April 18, 2011.
· Since then, we have changed our view of the difficulties in bridging the
gulf between the political parties over fiscal policy, which makes us
pessimistic about the capacity of Congress and the Administration to be
able to leverage their agreement this week into a broader fiscal
consolidation plan that stabilizes the government's debt dynamics any
time soon.
· The outlook on the long-term rating is negative. We could lower the
long-term rating to 'AA' within the next two years if we see that less
reduction in spending than agreed to, higher interest rates, or new
fiscal pressures during the period result in a higher general government
debt trajectory than we currently assume in our base case.
Rating Action
On Aug. 5, 2011, Standard & Poor's Ratings Services lowered its long-term
sovereign credit rating on the United States of America to 'AA+' from 'AAA'.
The outlook on the long-term rating is negative. At the same time, Standard &
Poor's affirmed its 'A-1+' short-term rating on the U.S. In addition, Standard
& Poor's removed both ratings from CreditWatch, where they were placed on July
14, 2011, with negative implications.
The transfer and convertibility (T&C) assessment of the U.S.--our
assessment of the likelihood of official interference in the ability of
U.S.-based public- and private-sector issuers to secure foreign exchange for
debt service--remains 'AAA'.

2011-06-27T19:58:00.000-05:00

Economic Data

Personal Income and Outlays http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm

Personal Income - M/M change	Prior 0.4 %	Revised 0.3 %	Est 0.4 %	Range 0.1 % to 0.5 %	Act 0.3 %
Personal Income - Yr/Yr change	4.4 %	4.4 %			4.2 %
Consumer Spending - M/M change	0.4 %	0.3 %	0.0 %	-0.2 % to 0.3 %	0.0 %
Consumer Spending - Yr/Yr change	4.8 %	4.8 %			4.7 %
Core PCE price index - M/M change	0.2 %		0.2 %	0.2 % to 0.3 %	0.3 %
Core PCE price index - Yr/Yr change	1.0 %	1.1 %			1.2 %

Price Data

Indices+1.17%

Nasdaq +1.97% Russell +1.01% S&P 500 +0.95% DJIA +0.92% Midcap +0.66%

U.S. Stocks Gain as Banks Get New Rules, Technology Shares Rise

Energies+0.10%

Gasoline +1.26% H Oil +0.59% Nat Gas +0.59% WTI -0.34% Ethanol -0.87%

Oil Slides on Outlook for Slower Demand as IEA May Release More Stockpiles

Currencies-0.06%

Euro +0.79% S Franc +0.18% C$ +0.17% Pound +0.06% Peso-0.06% A$ -0.48% Yen -0.57% USD -0.58%

Euro Rises Versus Dollar on Greece Optimism

Softs-0.21%

Cocoa +1.25% Sugar +0.94%Coffee+0.46% Lumber-0.64% OJ-1.36% Cotton -1.95%

Financials-0.45%

Eurodollar+0.02% 2-Year -0.09% 5-Year -0.20% 10-Year -0.20% T-Bond -0.84%

Treasury bond yields rise as some investors shun new debt sale

Grains-0.62%

Meal+0.91% Beans +0.72% Canola -0.26% B Oil -0.56% Oats -0.75% Corn -1.38% Rice -1.60% Wheat -2.04%

Wheat Extends June Slide as Accelerating Harvest Boosts U.S. Grain Supply

Metals-0.94%

Plat -0.11% Gold -0.33% Pall-0.34% Copper -0.65% Silver -3.23%

Gold falls as safe-haven bids ease, equities up

IEA Oil Release News Reports

2011-06-23T23:32:00.001-05:00

Brent Weekly

RBOV Weekly

WTI Weekly

Press releases IEA makes 60 million barrels of oil available to market to offset Libyan disruption

IEA collective action – June 23, 2011 Frequently asked questions

How many times has the IEA undertaken such a “collective action”? When was the last time?
How exactly will stocks be made available to the market in each of your member countries? What mechanism is used?
How much time will it take for these stocks to become available?
How much oil will each country release? Will each country release the same proportional amount, or will some countries do more? How is that decision made?
THas the IEA consulted with OPEC or Saudi Arabia on this decision? Would this IEA action not discourage Saudi Arabia and other willing OPEC members from increasing oil production?
I thought the IEA only does this for supply disruptions in excess of 7%. The 1.5 million-barrels-a-day disruption from Libya doesn’t seem all that much, given that global demand is around 88 mb/d, so why go to all the trouble?
If the disruption from Libya is 1.5 million barrels per day, why are the IEA member countries releasing 2 million barrels per day?
Libyan supplies have been off the market since February. Why are you only doing this now?
Are IEA countries not putting at risk their capacity to react to more serious oil disruptions that may happen in the coming months considering geopolitical uncertainties in MENA countries?No;
Several analysts say this is only likely to have a short-term effect on the market, and that prices will be higher in a month’s time. What’s your response? Will you extend this by 30 days? How will you decide?
Isn’t the IEA effectively doing this to counter high prices – and in that sense isn’t this fundamentally different from a traditional release in response to a supply disruption? Doesn’t this therefore set a bad precedent, by making the IEA a market manipulator?

API Head: SPR Release Avoids Question Of Domestic Supply -CNBC

U.S., allies to release 60 million barrels from oil reserves

UPDATE 2-Bids for 30 mln barrels of SPR oil due by June 29

2011-06-22T20:17:00.000-05:00

MBA Purchase Applications

Purchase Index - W/W Change	Prior 4.5 %	Actual -2.8 %
Refinance Index - W/W Change	16.5 %	-7.2 %
Composite Index - W/W Change	13.0 %	-5.9 %

MBA: U.S. Mortgage Demand Slips As Rates Creep Higher

FHFA House Price Index

FHFA House Price Index Rises 0.8 Percent in April; First Monthly Increase Since May 2010

EIA Petroleum Status Report Report Summary

Crude oil inventories (weekly change)	-3.4 M barrels	-1.7 M barrels
Gasoline (weekly change)	0.6 M barrels	-0.5 M barrels
Distillates (weekly change)	-0.1 M barrels	1.2 M barrels

Crude Inventories by PADD

Gasoline Inventories by PADD

FOMC Statement

Federal Reserve Lowers U.S. Growth Outlook

Softs+0.80%

Cotton +4.19% Lumber +1.16% Cocoa +0.43% Coffee +0.10% OJ -0.33% Sugar -0.76%

Energies+0.18%

Gasoline +2.63% Heating Oil +1.53% WTI +0.42% Natural Gas -1.60% Ethanol -2.49%

Analysis of US EIA data: US oil product demand rebounds, but inventories rise on increased refinery runs

Platts report: China’s May oil demand robust at 9.31 million b/d, but inventories rising

Financials+0.01%

10-Year +0.08% 5-Year +0.06% T-Bond +0.02% 2-Year +0.01% Eurodollar +0.01%

Metals-0.08%

Gold +0.29% Silver +0.09% Plat+0.03% Pall-0.29% Copper -0.68%

Currencies-0.21%

.USD +0.47% Swiss +0.14% Peso -0.09% C$ -0.20% Yen -0.25% A$-0.37% Euro FX -0.46% Pound -1.10%

Sterling turns ugly, Fed stance gives dollar lift

Indices-0.28%

Midcap -0.23% DJIA -0.44% S&P 500 -0.52% Russell -0.55% Nasdaq 100 -0.60%

Grains-2.01%

Oats -0.42% Bean Oil -0.80% Canola -1.12% Meal -1.31% Beans -1.37% Rice -1.52% Corn -4.24% Wheat -5.34%

Grain Prices Plunge as Favorable Weather May Revive Crops in U.S., Europe

Drought Worries Boost Ags

2011-06-21T15:51:00.000-05:00

Economic Data

Existing Home Sales

	Prior	Prior Revised	Consensus	Consensus Range	Actual
Existing Home Sales - Level - SAAR	5.05 M	5.00 M	4.750 M	4.600 M to 5.100 M	4.81 M
Existing Home Sales - M/M Change	-0.8 %	-1.8 %			-3.8 %
Existing Home Sales - Yr/Yr Change	-12.9 %	-13.8 %			-15.3 %

Market Data

Softs+1.74%

OJ+4.17% Cotton +4.03% Cocoa +2.02% Lumber +0.17% Sugar +0.07% Coffee -0.04%

Drought, dust darkens nation's biggest cotton patch

Indices+1.60%

Russell +2.16% Nasdaq +2.13% Midcap +1.76% S&P 500 +1.35% DJIA +0.99%

U.S. Stocks Advance as Concern About Greek Debt Default Eases

Metals +1.13%

Pall+2.65% Silver +1.12% Plat+1.10% Copper +0.41% Gold +0.36%

Grains +0.86%

Wheat +2.28% Oil +1.04% Corn +1.00% Oats +1.00% Beans +0.97% Meal +0.49% Canola +0.07% Rice +0.04%

Corn Rises Most in a Week as Hot Weather May Hurt U.S. Crop; Soybeans Gain

Currencies+0.36%

C$+0.75% E FX +0.72% Swiss +0.69% Peso +0.69% British +0.40% A$+0.31% Yen +0.15%

U.S.

$-0.68%

Euro gains 4th day but path hinges on Greece vote

Energies+0.20%

Ethanol +2.40% Nat Gas +1.90% WTI +0.18% Gasoline -1.15% Heating Oil -1.92%

UPDATE 1-Alaska N.Slope oil at $19 over WTI seen a record

Financials-0.07%

E$+0.03% 2-Year unch 5-Year -0.01% 10-Year -0.11% T-Bond -0.30%

FTC To Investigate Oil - Retail OTC Metals Ban

2011-06-20T20:21:00.001-05:00

Softs+2.02%

Sugar +4.17% Lumber+3.09% OJ +3.09% Cotton +2.45% Cocoa+1.71% Coffee-2.38%

Sugar Rises to Two-Month High on Supply Concern; Coffee Falls; Cocoa Gains

Indices+0.68%

Russell +1.04% Midcap +0.99% DJIA +0.63% S&P 500 +0.61% Nasdaq 100 +0.45%

Financials+0.02%

T-Bond +0.12% 2-Year +0.02% Eurodollar unch 10-Year -0.01% 5-Year -0.03%

Currencies-0.01%

Peso +0.27% Swiss +0.23% Pound +0.15%Canadian $+0.05% U.S. +0.03% E- FX-0.08% Yen -0.26% A$-0.39%

Metals +0.09%

Silver+0.76% Pall+0.45% Gold+0.19% Copper-0.63% Plat-1.01%

Trading Of Over The Counter Gold And Silver To Be Illegal Beginning July 15

Dodd-Frank rules outlaw retail gold, silver trading?

Grains-0.38%

Meal+0.29% Beans +0.21% B Oil+0.18% Corn +0.04% Canola -0.31% Oats -0.43% Rice -1.11% Wheat -1.93%

Corn Stocks Plunging to 1974 Low as China Adds Brazil-Sized Crop to Demand

Energies-0.43%

Ethanol +0.91% WTI +0.39% Natural Gas -0.44% Gasoline -1.30% H Oil -1.78%

FTC opens probe into oil, gasoline markets

6.16.11 Jobs, CFTC, BOJ & Wheat

2011-06-16T19:41:00.000-05:00

Economic Data

BOJ May minutes: Nishimura saw no signs of worsening sentiment

Swiss National Bank : Interest rate 0.25% No Change

Swiss National Bank Holds Rates at Historic Lows

	Prior		Consensus		Actual
Italy CPI Mover M	0.1 %		0.1 %		0.1 %
Year over Year	2.6 %		2.6 %		2.6 %
UK Retail Sales M over M	1.1 %			-1.4 %
Year over Year	2.8 %	2.4 %		0.2 %
EU HICP M over M	0.6 %	0 %		0 %
Year over Year	2.8 %	2.7 %		2.7 %

United States

	Prior	Prior Revised		Consensus	Consensus Range		Actual
Home Starts - Level - SAAR	0.523 M	0.541 M		0.547 M	0.530 M to 0.560 M		0.560 M
Permits - Level - SAAR	0.551 M	0.563 M					0.612 M
Jobless New Claims - Level	427 K	430 K		420 K	408 K to 425 K		414 K
4-week Moving Average - Level	424.0 K						424.75 K
Philly Fed Index	Prior 3.9	Est 9.0	Range 0.0 to 19.8			-7.7

US Dept of Labor Weekly Unemployment report

Philly FED Survey

EIA Natural Gas Report

Storage Data

Total (06/10/11): 2,256 Bcf (06/03/11): 2,187 Bcf

Change: 69 Bcf

Year ago stocks: 2,531 Bcf  % diff to yr ago: -10.9 %

5-year avg stocks: 2,332 Bcf % dif to 5-yr avg: -3.3 %

Industry News

House Passes Bill to Cut CFTC Funding

Senate Votes to End Tax Break for Ethanol

Market Data

Financials+0.27%

T-Bond+0.60%T-Note +0.24% 5-Year +0.10% 2-Year -0.01%Eurodollar-0.04%

Treasuries Advance on Concern Greece Will Struggle to Contain Debt Turmoil

Currencies-0.05%

Franc+0.48% Yen +0.40% Euro FX +0.17% A$-0.01% USD-0.15% c$-0.19% British -0.20% Peso -0.24%

FOREX-Euro calmer after wild ride; Greece aid eyed

Indices-0.21%

DJIA+0.55% &P 500 +0.20%Russell +0.17% Midcap+0.01% Nasdaq 100 -0.40%

Metals-0.62%

Silver +0.25% Gold +0.25% Copper -0.01% Plat-0.91% Pall-2.45%

Softs-0.63%

Sugar +3.35%Lumber+2.17% OJ-1.28% Coffee-1.81%Cocoa-2.44% Cotton -3.95%

Energies-0.78%

Gasoline +0.94% H Oil+0.74% WTI +0.11% Ethanol -1.93% N Gas -3.19%

US FERC approves Appalachian Gateway gas pipeline project

Grains-2.18%

Canola -0.24% B OIL -1.28% BEANS-1.28% Rice-1.41% Meal-1.75%Oats -3.13%Corn-3.34% Wheat -4.98%

Wheat Breaks Below 52 wk average

2011-06-15T17:26:00.000-05:00

ECONOMIC DATA

Unemployment

Claimant Count-Chg	12,400	16,900	5,000	19,600
Claimant Count	4.6 %		4.6 %	4.6 %
ILO Unemployment	7.7 %		7.7 %	7.7 %

European Union : Industrial Production

Month over Month	-0.2 %	0.0 %	-0.2 %	0.2 %
Year over Year	5.3 %	5.8 %	5.0 %	5.2 %

United States

: MBA Purchase Applications

Purchase Index - W/W Change	-4.4 %	4.5 %
Refinance Index - W/W Change	1.3 %	16.5 %
Composite Index - W/W Change	-0.4 %	13.0 %

hMortgage applications see biggest gain in 3 months: MBA

United States

: Consumer Price Index

CPI - M/M change	0.4 %	0.0 %	0.0 % to 0.3 %	0.2 %
CPI - Y/Y change	3.1 %			3.4 %
CPI less food & energy	0.2 %	0.2 %	0.1 % to 0.2 %	0.3 %
CPI less food & energy - Y/Y change	1.3 %			1.5 %

Inflation slows in May as gas prices fall

United States

: Empire State Mfg Survey

General Business Conditions Index - Level

11.88

14.0

3.8 to 18.1

-7.8

June Empire State index plunges to negative figure

United States

: Treasury International Capital

Foreign Demand for Long-Term U.S. Securities

$24.0 B

$30.6 B

United States

: Industrial Production

Production - M/M change	0.0 %		0.2 %	0.0 % to 0.4 %	0.1 %
Capacity Utilization Rate - Level	76.9 %	76.7 %	77.0 %	72.2 % to 77.1 %	76.7 %

U.S. May Industrial Production and Capacity Report (Text)

United States

: Housing Market Index

Housing Market Index

United States

: EIA Petroleum Status Report

Crude oil inventories (weekly change)	-4.8 M barrels	-3.4 M barrels
Gasoline (weekly change)	2.2 M barrels	0.6 M barrels
Distillates (weekly change)	0.8 M barrels	-0.1 M barrels

Market Data

Today in Commodities: Manic Market

C.F.T.C. Faces More Budget Woes

Financials +0.77%

ZB+1.34% ZN+1.01% ZF+0.61% ZY +0.12% ED -0.06%

Treasury prices soar on worries over Greece

Metals-0.77%

SI+1.16% GC+0.48% PL-0.95% HG-1.05% PA-1.99%

Currencies-0.87%

USD+1.82% JY-0.57% SF-1.01% MP-1.10% CD-1.17% BP-1.28% AD-1.31% EC-2.02%

Euro-Dollar Puts Reach Highest Level in Year as Greece Bailout Talks Stall

Grains-1.49%

RS+0.48% SM+0.36% BO+0.35% S unch RR-0.91% W-3.11% C-3.94% O-5.16%

Corn, Soybeans Fall on Bets Sluggish U.S. Economy to Damp Commodity Use

Softs-1.72%

SB-0.28% CC-0.90% OJ-1.51% CT-2.30% KC-2.45% LB-2.91%

Indices-2.03%

YM-1.55% NQ -1.88% EW-1.89% ES-1.91% RJ-1.99%

Worsening Greek debt crisis sinks stocks, euro

Energies-3.05%

NG+0.11% ZK-2.73% HO-3.92 RB-3.98% CL-4.06%

Oil dives 4 percent on demand worry, dollar surge

2011-06-14T17:18:00.000-05:00

Economic Events

China

CPI

M/M % Change	Prior 0.1	Est	Actual 0.1 %
Y/Y % Change	5.3	5.5 %	5.5 %

http://english.people.com.cn/90001/90778/90862/7409504.html

China Industrial Production

M/M % Change	0.9		1.03
Yr/Yr % change	13.4 %	13.2 %	13.3 %

China PPI

M/M % Change	1.0		0.3
Y/Y % Change	6.8	6.45	6.8

China Retail Sales

M/M % Change	1.4 %		1.28
Y/Y % Change	17.1 %	16.95	16.9

USA PPI

PPI - M/M change	0.8 %	0.1 %	-0.4 % to 0.3 %	0.2 %
PPI -Yr/Yr change	6.6 %			7.0 %
PPI less food & energy - M/M change	0.3 %	0.2 %	0.0 % to 0.3 %	0.2 %
PPI less food & energy - Yr/Yr change	2.1 %			2.1 %