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PIRA Energy Groups Weekly Natural Fuel, Energy, and Coal Marketplace Recap for the Week Ending December 8.

by admin on December 13, 2012


New York, NY (PRWEB) December eleven, 2012

NYC-based PIRA Power Group believes that Israel will add new dimensions to the Mediterranean LNG trade in the coming weeks. In the U.S., the weekly gasoline storage draw was more substantial than expected, whilst weaker oil and gasoline rates pushed coal prices decrease on the week. In Europe, the declining role of gas-fired generation ongoing to ignite exciting discussions. Exclusively, PIRAs analysis of natural fuel and electrical power market fundamentals has revealed the following:

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*PIRA’s Normal Fuel Producers Quarterly Earnings Call Exhibits Falloff in Drilling Activity&#13

Gasoline drilling activity declined by upwards of 60% year-on-yr, for the companies in PIRAs Earnings Phone Group, outpacing the 50% falloff for the industry as a whole. However, 14 of the 20 companies surveyed enhanced fuel manufacturing year-on-yr in 3Q12. Four of the leading five producers in terms of development have considerable positions in the Marcellus, which has been the largest driver of U.S. gas manufacturing growth recently. Furthermore, only five had stock charges that have been relatively strongly correlated with the Henry Hub 12-month strip, in comparison to more than half that had a moderate or quite substantial correlation with the WTI 12-month strip.

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*U.S. Weekly Gas Storage Draw Larger Than Expected&#13

The EIA reported a larger-than-anticipated U.S. storage decline for the week ending November 30. Wintery weather came roaring back, albeit temporarily, across much of the eastern half of the country. The resultant week-on-week increase in fuel-weighted heating degree days bolstered residential/business heating loads. Gasoline-fired electrical energy generation also ramped up, largely thanks to Mother Nature, reversing the multi-week downtrend.

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*European Spot Normal Gasoline Costs Can Exceed Contract Gas Rates&#13

PIRA believes that spot prices can be increased than contract fuel costs for a sustainable period, offered the volume of provide versatility coming into the marketplace in the past week. For the previous couple of months, PIRA has emphasized the concept that spot price will move increased simply because the pitfalls tied to a more concentrated provide network are actually higher than any risk coming from underlying need growth. Climate-connected demand raises adjust this equation a bit, but underlying fuel demand has been severely eroded by renewables and the broader market. This means that weather-associated demand spikes are not as dire as in a pre-2009 world.

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*Israel Adds New Dimensions to the Mediterranean LNG Trade&#13

In the coming weeks, many new dimensions to the Mediterranean LNG trade will be additional, when Israel joins Turkey and Greece by way of Cyprus as the newest eastern Mediterranean LNG buyer. The play is anticipated to be short-term, owing to domestic production prospective from the offshore Tamar area as quickly as 2Q13. Imminent Israeli purchasing will consist of Cyprus, which will serve as an offshore ship-to-ship transfer point for Israel-bound volumes, almost certainly to mitigate political pitfalls and minimize insurance charges.

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*Declining Role of European Gasoline-Fired Generation Continues to Ignite Intriguing Discussions&#13

The declining function of fuel-fired electrical power generation within the European power fuel mix continues to ignite interesting discussions. German fuel-fired dispatching set a ten-yr very low throughout November, and official figures from the German Statistical office demonstrate that output throughout the first nine months of the year was down drastically yr-on-yr. The emergence of colder climate in December has presented some stimulus to gas-fired output. Gas-fired units have been rewarding for really couple of hrs this yr, confirming that even with colder weather (albeit beneath-pattern macroeconomic development), gasoline units have been unable to impact the peak section of the curve.

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*Coal Miners Blues&#13

With weaker barge and rail loadings CAPP (Central Appalachian) coal pricing has seen small change in modern weeks. Both ILB (Illinois Basin) and Pitt eight coal forwards have held rather steady this previous month. SPRB (Southern Powder River Basin) pricing has slid in latest weeks.

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*Prolonged-Phrase International Thermal Coal Trading&#13

The international thermal coal market is trading effectively off its ten-yr highs and lows. Nonetheless, due to structural and cyclical expense pressures, recent charges (netting back to the field) are bumping up towards marginal production charges in numerous supply basins. Supply-side actions that are currently getting taken will recalibrate quick-expression balances, but will have a resounding impact on medium-term pricing (two-7 many years out).

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*Weaker Oil and Gas Charges Push Coal Charges Lower&#13

Weaker oil and gasoline prices pushed coal costs decrease final week. The decline in coal pricing was particularly acute in the Atlantic Basin, with 1Q13 API#two (Northwest Europe) and API#4 (South Africa) charges declining by a lot more than FOB Newcastle (Australia) costs.

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The information over is element of PIRA Energy Group’s weekly Vitality Market Recap, which alerts readers to PIRAs recent examination of energy markets around the world as well as the important economic and political aspects driving individuals markets.

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Click right here For Additional Info on PIRAs international vitality commodity marketplace investigation providers.

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PIRA Power Group&#13

3 Park Avenue, 26th Floor&#13

New York, NY 10016&#13

(212) 542- 1677 &#13

data@pira.com

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