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1
As Donald J Trump was sworn into office as the 45th President of the United States the White House website has been updated with the new vision, policy brush strokes. Notables are a 4% GDP target, renegotiating NAFTA and US to withdraw from TPP.

The site has a new energy plan, An America First Energy Plan with the following highlights;
- Lower costs that maximize the use of American resources, freeing us from dependence on foreign oil.
- Eliminating harmful and unnecessary policies such as Climate Action Plan and Waters of the U.S. rule.
 

- Shale oil and gas revolution to bring jobs and prosperity to millions of Americans, estimated $50 trillion in untapped shale, oil, and natural gas reserves
- Revenues from energy production to rebuild roads, schools, bridges and public infrastructure.
- Committed to clean coal technology, and to reviving America’s coal industry
- Committed to achieving energy independence from OPEC cartel
- Responsible stewardship of the environment. Protecting clean air and clean water, conserving our natural habitats, and preserving our natural reserves and resources will remain a high priority.
- Refocus the EPA on its essential mission of protecting our air and water.

In Full From the Whitehouse website:
An America First Energy Plan

Energy is an essential part of American life and a staple of the world economy. The Trump Administration is committed to energy policies that lower costs for hardworking Americans and maximize the use of American resources, freeing us from dependence on foreign oil.

For too long, we’ve been held back by burdensome regulations on our energy industry. President Trump is committed to eliminating harmful and unnecessary policies such as the Climate Action Plan and the Waters of the U.S. rule. Lifting these restrictions will greatly help American workers, increasing wages by more than $30 billion over the next 7 years.

Sound energy policy begins with the recognition that we have vast untapped domestic energy reserves right here in America. The Trump Administration will embrace the shale oil and gas revolution to bring jobs and prosperity to millions of Americans. We must take advantage of the estimated $50 trillion in untapped shale, oil, and natural gas reserves, especially those on federal lands that the American people own. We will use the revenues from energy production to rebuild our roads, schools, bridges and public infrastructure. Less expensive energy will be a big boost to American agriculture, as well.

The Trump Administration is also committed to clean coal technology, and to reviving America’s coal industry, which has been hurting for too long.

In addition to being good for our economy, boosting domestic energy production is in America’s national security interest. President Trump is committed to achieving energy independence from the OPEC cartel and any nations hostile to our interests. At the same time, we will work with our Gulf allies to develop a positive energy relationship as part of our anti-terrorism strategy.

Lastly, our need for energy must go hand-in-hand with responsible stewardship of the environment. Protecting clean air and clean water, conserving our natural habitats, and preserving our natural reserves and resources will remain a high priority. President Trump will refocus the EPA on its essential mission of protecting our air and water.

A brighter future depends on energy policies that stimulate our economy, ensure our security, and protect our health. Under the Trump Administration’s energy policies, that future can become a reality.

View Original Source: https://www.whitehouse.gov/america-first-energy

More Energy News

Preview EIA Oil Inventories Crude Gasoline #TCoil
What to Expect From ECB Meeting & Draghi Ahead of President Trump
Last FOMC Beige Book & Yellen Speech Before President Trump l
What to Expect From Schlumberger $SLB Earnings Friday
OPEC Monthly Oil Market Report January 2017
Shale Fracking Firm Keane Group's $FRAC First IPO in 2017
Japan Ties Up 25 Year Extension on Abu Dhabi Oil Concessions
Commodities Position Limits Mandate Scrapped by US House
EIA Reports Weekly - 151 Bcf Draw Natural Gas Storage
EIA Oil Inventories 4.097M Crude Build 5.023M Gasoline Build #TCoil 
Another Milestone for Iran Oil, Vitol does $1 Bln Pre-Finance Deal
Which Company Will Russia Oil Production Cuts Come From?
Nigeria Awards 39 Oil Contracts
Natural Gas Futures Crash 10%. Weather Trading Over Winter, A Cautionary Tale
Which Company Will Russia Oil Production Cuts Come From?
Natural Gas 2016’s Best-Performing Commodity on Weather, Options & Exports
US Oil Rigs Continue to Rise Add 2 to 525 for 9th Week says Baker Hughes
Asia Doubles Purchases of Iran Crude Oil Since Sanctions Lifted
Russia To Use Record Oil Production as Baseline For OPEC cuts
From Istanbul to Vienna The OPEC Oil Production Deal Schedule

Check out OOTTNews.com for the latest news and data on oil markets.

From TradersCommunity News Desk

2
General Electric (GE) reported fourth-quarter earnings Friday before the market opened. The results were in line but revenue missed estimates through GE's oil and gas segment. Oilfield services provider Baker Hughes (BHI) will merge with GE's oil and gas unit later this year. This morning Schlumberger (SLB) reported earnings with strong Strong MidEast & North America activity

Earnings: EPS of 46 cents on revenue of $33.1 billion. Estimates were EPS down 11.5% to 46 cents and revenue to fall 0.6% to $33.63 billion.

GE segment revenue
- Oil and gas revenue fell 22% to $3.4 billion,
- Power systems revenue rose 20% to $8.48 billion.
 

- Renewable energy revenue jumped 29% to $2.5 billion
- Energy connections and lighting fell 29% to $3.3 billion
- Transportation dropped 23% to $1.24 billion
- Aviation rose 7% to $7.19 billion,
- Healthcare rose 3% to $5.1 billion,
- Industrial orders rose 4%.


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Reaction:GE NYSE: GE Pre-Market: 30.70 -1.6%

Note that oilfield services provider Baker Hughes (BHI) which will merge with GE's oil and gas unit later this year rose  less than 0.1%.



Quote
"We executed on our 2016 goals and continued to drive growth across our businesses through the GE Store while investing in additive manufacturing and digital technology. We will continue to invest in the Industrial Internet to lead in productivity and performance for our customers in 2017." said $GE's CEO Jeff Immelt.


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Guidance:Outlook: Backed 2017 organic growth target of 3%-5%.

More Earnings News

Schlumberger $SLB Earnings Show Strong MidEast & North America Activity
IBM Earnings Give Strong Guidance But Global & Systems Segments Hurting
American Express AXP Misses CostCo as Earnings Fall But Talks Up 2017
Union Pacific Railways Shares Rally On Earnings & Optimistic Guidance
UnitedHealth $UNH Strong Optum Health Earnings, Less ObamaCare Exchange
Morgan Stanley $MS Earnings Beat on Revenue and Profit
What to Expect From Netflix $NFLX Earnings This Week 
JPMorgan Chase $JPM Earnings Beats on Trading Income Rise
Bank of America $BAC Earnings Beats EPS, Misses Revenue
Wells Fargo $WFC Earnings Lower, Loan Growth Affected by Reverse Mortgages
Delta Airlines Upbeat on Outlook But Cautions on Rising Fuel Costs
Homebuilder KB Home $KBH Reports Strong Revenue and Orders
MSC Industrial Direct $MSM Shares up 6% After Earnings Guidance
Money in Spuds, ConAgra Potato Spinoff Lamb Weston $LW Earnings Beat
Iconic WD-40 $WDFC Earnings Miss Expectations, Shares Slip 6 percent 

Live From The Pit

3
Technology giant and Dow member IBM (IBM) reported fourth-quarter earnings after the market close Thursday beating on the top and bottom lines for the fifth straight quarter and also giving strong 2017 earnings guidance.

Earnings: IBM reported marginally higher 4Q16 earnings of $5.01 per share, helped by lower expenses beating the consensus estimate of $4.88 and rising 3.5% year over year. It reported revenue from continuing operations of $21.77 billion down 1.31% beating the consensus of $21.6 billion.

Reaction:IBM NYSE: IBM After-hours: 163.31 -3.50 -2.10%
 

Cognitive Solutions (CS) revenue was up 1.4% & Cloud Platforms (TSCP) revenue rose 1.7%. but the other three segments posted revenue declines. Global Business Services fell 4.1% & Systems segment revenue fell 12.5%.


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IBM said revenue from strategic imperatives rose 11% Q4 and came in at $32.8 billion for the full year, representing 41% of total IBM revenue. Since 2010, IBM has invested about $30 billion in these areas.


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Guidance: For 2017 IBM expects operating EPS of at least $13.80 vs consensus of $13.74. Operating non-GAAP diluted EPS exclude $1.85 per share of charges for amortization of purchased intangible assets, other acquisition-related charges and retirement-related charges.

IBM sold off all day and after the report chart via ‏@Lizardjb3



More Earnings News

American Express AXP Misses CostCo as Earnings Fall But Talks Up 2017
Union Pacific Railways Shares Rally On Earnings & Optimistic Guidance
UnitedHealth $UNH Strong Optum Health Earnings, Less ObamaCare Exchange
Morgan Stanley $MS Earnings Beat on Revenue and Profit
What to Expect From Goldman Sachs $GS Earnings This Week
What to Expect From Citibank $C Earnings This Week 
What to Expect From Netflix $NFLX Earnings This Week 
JPMorgan Chase $JPM Earnings Beats on Trading Income Rise
Bank of America $BAC Earnings Beats EPS, Misses Revenue
Wells Fargo $WFC Earnings Lower, Loan Growth Affected by Reverse Mortgages
Delta Airlines Upbeat on Outlook But Cautions on Rising Fuel Costs
Homebuilder KB Home $KBH Reports Strong Revenue and Orders
MSC Industrial Direct $MSM Shares up 6% After Earnings Guidance
Money in Spuds, ConAgra Potato Spinoff Lamb Weston $LW Earnings Beat
Iconic WD-40 $WDFC Earnings Miss Expectations, Shares Slip 6 percent 
Live From The Pit

4
Dow member American Express (AXP) missed analysts expectations with its 4Q16 earnings Thursday but talked up 2017. gave strong guidance.

Earnings: Adjusted EPS of 91 cents on revenue of $8.02 billion vs. estimates of 20% earnings-per-share drop to 98 cents, with revenue down 5% to $7.949 billion. Noticeably they increased  provisions for losses 9% to $625 million.

AXP is hurting from lost Costco $COST Business. Q4 is also the second straight quarter of lower EPS. Adjusted for lost Costco business, currency swings and interest expense American Express said Q4 revenue rose 6%.

Reaction: American Express Company NYSE: AXP After-hours: 76.40 -0.29 -0.38%

 

Last year, American Express' partnership with Costco (COST) ended as the warehouse membership giant switched allegiances to Citigroup (C) and Visa.

In 4Q16 AXP’s US Consumer Services segment, total revenues net of interest expense decreased 10% to $3Bil from 4Q15. In International Consumer and Network Services,  total revenues were $1.4Bil, up 2% from a year ago. Global Commercial Services total revenues grew 1% to $2.5Bil. Global Merchant Services total revenues fell 7% to $1.1Bil.


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Last year, American Express' partnership with Costco (COST) ended when they switched allegiances to Citigroup (C) and Visa.

Quote
"We continued to grow our lending portfolio faster than the market while maintaining industry-leading credit metrics. We acquired over 10 million new cards globally last year, and we added more than a million new merchants to our network in the United States alone," Chairman and CEO Kenneth Chenault said in a statement.



Guidance: Full-year 2017 EPS of $5.60-$5.80, with midpoint above consensus estimates of $5.61

More Earnings News

IBM Earnings Give Strong Guidance But Global & Systems Segments Hurting
Union Pacific Railways Shares Rally On Earnings & Optimistic Guidance
UnitedHealth $UNH Strong Optum Health Earnings, Less ObamaCare Exchange
Morgan Stanley $MS Earnings Beat on Revenue and Profit
What to Expect From Goldman Sachs $GS Earnings This Week
What to Expect From Citibank $C Earnings This Week 
What to Expect From Netflix $NFLX Earnings This Week 
JPMorgan Chase $JPM Earnings Beats on Trading Income Rise
Bank of America $BAC Earnings Beats EPS, Misses Revenue
Wells Fargo $WFC Earnings Lower, Loan Growth Affected by Reverse Mortgages
Delta Airlines Upbeat on Outlook But Cautions on Rising Fuel Costs
Homebuilder KB Home $KBH Reports Strong Revenue and Orders
MSC Industrial Direct $MSM Shares up 6% After Earnings Guidance
Money in Spuds, ConAgra Potato Spinoff Lamb Weston $LW Earnings Beat
Iconic WD-40 $WDFC Earnings Miss Expectations, Shares Slip 6 percent 
Live From The Pit

5
Americas's biggest railway Union Pacific (UNP) announced above-consensus fourth-quarter earnings of $1.39 per share on $5.17 billion in revenue, which declined 0.8% year-over-year. $UP said volumes continued declining in Q416 but the pace has slowed. Total revenue carloads declined 3.0% year-over-year.

Lower volumes and lower fuel surcharge revenue outweighed an increase in core pricing.

For the year, total revenue fell 9.0% to $18.60 billion with declines in all categories except for Agricultural Products.

Reaction: Union Pacific $UNP 106.55, +2.78 +2.7% pre-market after being up 6.3% rally during the fourth quarter.

 



Shipping Category Breakdown

Agricultural Products revenue grew 7.0% year-over-year to $961 million
Chemicals revenue little changed at $857 million
Intermodal revenue flat at $969 million
Automotive revenue fell 6.0% to $517 million
Coal revenue fell 6.0% to $699 million.
Industrial Products revenue declined 2.0% to $829 million.

Operating ratio increased to 62.0% from 60.8% one year ago while quarterly train speed declined 2.0% to 26.5 mph. For the full year, average train speed was 26.6 mph, up 5.0% from 2015.


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Guidance
Going forward, Union Pacific expects to see an improvement in its business with higher energy prices and favorable agricultural markets contributing to growth.

Quote
"Looking to 2017, we are fairly optimistic about some of the macro-economic indicators that drive our core business.  Higher energy prices, favorable agricultural markets and improving business and consumer confidence all support a return to positive volume growth this year," said $UNP's CEO Lance Fritz.

For 2017, $UNP expects high global grain inventories and the strong US dollar to put some pressure on the export grain market in the agri business. In the power business, the company is cautious due to high inventory levels, dealership incentives and rising interest rates. Oil business is expected to be influenced by natural gas prices and weather.

More Earnings News

UnitedHealth $UNH Strong Optum Health Earnings, Less ObamaCare Exchange
Morgan Stanley $MS Earnings Beat on Revenue and Profit
What to Expect From Goldman Sachs $GS Earnings This Week
What to Expect From Citibank $C Earnings This Week 
What to Expect From Netflix $NFLX Earnings This Week 
JPMorgan Chase $JPM Earnings Beats on Trading Income Rise
Bank of America $BAC Earnings Beats EPS, Misses Revenue
Wells Fargo $WFC Earnings Lower, Loan Growth Affected by Reverse Mortgages
Delta Airlines Upbeat on Outlook But Cautions on Rising Fuel Costs
Homebuilder KB Home $KBH Reports Strong Revenue and Orders
MSC Industrial Direct $MSM Shares up 6% After Earnings Guidance
Money in Spuds, ConAgra Potato Spinoff Lamb Weston $LW Earnings Beat
Iconic WD-40 $WDFC Earnings Miss Expectations, Shares Slip 6 percent 

Live From The Pit

6
We heard from Federal Reserve Chair Janet Yellen and the Regional Federal Reserve Beige Book for the last time ahead of the Trump Presidential inauguration, now the ECB gets to meet before the inauguration also. Unrelated but in a week of UK PM May's speech, Trump comments on NATO, Merkel & Brexit it is wise to be prepared.

Thursday, 19 Jan 2017 Governing Council of the ECB: monetary policy meeting in Frankfurt
ECB Monetary Policy Decision
- Time: 13:45 CET 12:45 GMT 6:45 ET
President Draghi's Press conference in Frankfurt following the Governing Council meeting of the ECB
- Time: 14:30 CET 13:30 GMT 7:30 ET

No change expected to any rates What the market will look for is commentary & economic forecasts.
 

Current Rates:

Refinancing rate expected to remain unchanged at 0%
Marginal lending rate expected to remain unchanged at 0.25%
Deposit Facility rate expected to remain unchanged  at -0.4%

ECB President Mario Draghi and Vice-President Vítor Constâncio explain the Governing Council’s monetary policy decisions and answer questions from journalists.

Watch Live on YouTube:
https://www.ecb.europa.eu/press/tvservices/webcast/html/webcast_pc_youtube.en.html

President Draghi and the ECB Economic Projections are expected to make the following comments:

- Euro zone growth and inflation slowly picking up pace with the ECB to maintain it's liberal policy stance to keep the recovery on course through uncertainty.
- Risks include future elections in Europe (France, Germany) and a changing of the guard in the US.
- Draghi to maintain his promise for lengthy stimulus, no surprise given the ECB extended its bond-buying program just last month
- Of note will be Inflation having hit a three year high last month, was it just ebnergy? Even so it is half of the bank's 2 percent target.
- Economic data tells us European manufacturing activity is accelerating with confidence indicators firming, all pointing to solid growth at the end of last year.
- Euro zone business growth was the fastest in more than five years in December with consumption holding up
- The lower Euro has seen order books filling up on export demand
- Will he shy away from Italy?
- Will he avoid aggravating Merkel & Wiedmann?
- Watch for a wry smile on any questions on Brexit or Donald trump.

Source: Reuters

From the TradersCommunity Research Desk

7
Breaking News / EIA Weekly Natural Gas Storage -243 BCF #TCNG
« on: January 18, 2017, 06:24:26 PM »
EIA's Weekly Gas Storage Report Report Date: 1/19/17
Release Time: Thursday 19 Jan 2017 - 16:30 GMT 10:30 ET

Another week of natural gas volatility interspersed by the MLK long weekend. Expect more weather-driven algorithm volatility and surprise after last week's reversion to the mean -151 Bcf draw. Again no one seem's to have a clue what's going on in the south-central region. The first two reports for 2017 and the consensus and actual delta was
35 Bcf, oh to be a bookie on this right now.

Last week’s weather was 4 percent colder than last year and 13 percent colder than the five-year average. Since September weather has been 6 percent colder than last year, but 7 percent warmer than five-year average.

Market Expectations
Actual -243 Bcf Prior -151 Bcf
Consensus Forecast  - 237Bcf
Cons. Range: -225 to -249 Bcf
EIA swap: -237 to -238 @ CT 15.13

 




Bentek

Quote
Bentek says that while the deficit relative to five-year average levels will undoubtedly grow this week, this morning’s Supply & Demand Daily forecasts for the next two storage weeks show withdrawals well below the five-year average withdrawals of 176 Bcf and 166 Bcf at 115 Bcf and 69 Bcf respectively, suggesting the deficit relative to five-year average levels may flip back to a surplus of roughly the same magnitude with the release of the next two storage reports, barring any changes to the current weather forecasts.

Week-over-week, the largest change in storage activity is estimated to have occurred in the EIA South Central region, where a withdrawal of 85 Bcf is forecast compared to a larger than expected 34 Bcf withdrawal announced by the EIA
for the previous week. Within the region the sample of salt-dome storage activity showed the largest week-over-week change with a sample net withdrawal totaling 22.2 Bcf compared to a net-injection of 4.6 Bcf the week prior, when the EIA announced zero netactivity for the facilities. The next largest week-over-week change is expected to have occurred in the EIA East region, which is expected to have withdrawn 23 Bcf more than the previous week’s announced 39 Bcf withdrawal. Temperatures in the Northeast cell region averaged about 7.5 degrees Fahrenheit below the previous week’s average at 29.9 degrees F, sending demand estimates up by nearly 5.6 Bcf/d.
Analysts Forecasts

Bloomberg Energy S/D Model: -249 Bcf
TFS: -245 Bcf
Schneider Electric: -245 Bcf
Bentek Flow Model: -245 Bcf
Paul Belflower, Mustang Fuel: -228 Bcf
Robry825: -228 Bcf
Gabe Harris, WoodMac: -227 Bcf
Tim Evans, CITI Futures: -216 Bcf
GWDD Model: -226 Bcf
UBS: -225 Bcf

Brynne Kelly @BrynneandRic
Natural Gas Storage Futures weekly EIA storage futures 1/17 (EIA Swap)



Current Storage Level vs. Last Year & 5-Yr

Current Storage Level: 3,523 Bcf
Storage 2015/same week: 3,675
(Delta: -363 Bcf or 10.3%)
Storage 5-Yr Avg/same week: 3,16

More Energy News

Preview EIA Oil Inventories Crude Gasoline #TCoil
What to Expect From ECB Meeting & Draghi Ahead of President Trump
Last FOMC Beige Book & Yellen Speech Before President Trump l
What to Expect From Schlumberger $SLB Earnings Friday
OPEC Monthly Oil Market Report January 2017
Shale Fracking Firm Keane Group's $FRAC First IPO in 2017
Japan Ties Up 25 Year Extension on Abu Dhabi Oil Concessions
Commodities Position Limits Mandate Scrapped by US House
EIA Reports Weekly - 151 Bcf Draw Natural Gas Storage
EIA Oil Inventories 4.097M Crude Build 5.023M Gasoline Build #TCoil 
Another Milestone for Iran Oil, Vitol does $1 Bln Pre-Finance Deal
Which Company Will Russia Oil Production Cuts Come From?
Nigeria Awards 39 Oil Contracts
Natural Gas Futures Crash 10%. Weather Trading Over Winter, A Cautionary Tale
Which Company Will Russia Oil Production Cuts Come From?
Natural Gas 2016’s Best-Performing Commodity on Weather, Options & Exports
US Oil Rigs Continue to Rise Add 2 to 525 for 9th Week says Baker Hughes
Asia Doubles Purchases of Iran Crude Oil Since Sanctions Lifted
Russia To Use Record Oil Production as Baseline For OPEC cuts
From Istanbul to Vienna The OPEC Oil Production Deal Schedule

Check out OOTTNews.com for the latest news and data on oil markets.

From TradersCommunity Research Desk

8
U.S. Energy Information Administration (EIA) data for the week ended January 13, 2017

DOE Weekly Petroleum Status Report Date: 1/19/17
Release Time: Thursday 19 Jan 2017 - 17:00 GMT 11:30 ET


Market Expectations
Crude +2347K vs exp  Draw -1000k Prior +4097 API -5042k
Cushing -1274k vs exp Draw -756k Prior-579k API -1100k
Gasoline +5951K vs exp Build+2300k Prior+5023k API +9750k
Distillate -968K vs exp Draw -900k Prior 8356k API +1170k
Refinery utilization -2.9% vs exp -0.4% Prior 1.60%
Weekly production fell by -0.002 mbpd to 8.944 mbpd -0.291 mbpd lower YOY
Imports -651k
Note in in bbls *exp = Reuters poll est except Cushing

View Prev Week Report & Analysis.
 


DOE Estimates via @EnergyBasis

NB: Based off of 11-Yr Avg this is the last week Distillate stocks draw, then build through the beginning of January
also "Historically" #Gasoline stocks build now through end of February



EIA Prep via @DigStic

API via Marketwatch

The American Petroleum Institute late Wednesday reported a drop of 5 million barrels in U.S. crude supplies for the week ended Jan. 13, according to sources. Analysts polled by S&P Global Platts forecast a decline of 900,000 barrels. The API data also showed a jump of 9.8 million barrels in gasoline supplies and a rise of 1.2 million barrels in distillates, sources said. Supply data from the Energy Information Administration will be released Thursday morning, a day later than usual because of the Martin Luther King Jr. holiday. February crude CLG7, -2.10% was at $51.38 a barrel in electronic trading, up from the contract’s settlement of $51.08 on the New York Mercantile Exchange.

http://www.marketwatch.com/story/api-data-show-us-crude-supplies-fell-5-million-barrels-last-week-sources-2017-01-18

Ahead of API crude oil futures CL_G7 settled at $51.08/bbl - $1.40 -2.67%.

** Note with the unreliability of the API numbers highlighted by its constant debacles we offer you the bare bones of that report.


More Energy News

Preview EIA Natural Gas Inventories #TCNG
What to Expect From ECB Meeting & Draghi Ahead of President Trump
Last FOMC Beige Book & Yellen Speech Before President Trump l
What to Expect From Schlumberger $SLB Earnings Friday
OPEC Monthly Oil Market Report January 2017
Shale Fracking Firm Keane Group's $FRAC First IPO in 2017
Japan Ties Up 25 Year Extension on Abu Dhabi Oil Concessions
Commodities Position Limits Mandate Scrapped by US House
EIA Reports Weekly - 151 Bcf Draw Natural Gas Storage
EIA Oil Inventories 4.097M Crude Build 5.023M Gasoline Build #TCoil 
Another Milestone for Iran Oil, Vitol does $1 Bln Pre-Finance Deal
Which Company Will Russia Oil Production Cuts Come From?
Nigeria Awards 39 Oil Contracts
Natural Gas Futures Crash 10%. Weather Trading Over Winter, A Cautionary Tale
Which Company Will Russia Oil Production Cuts Come From?
Natural Gas 2016’s Best-Performing Commodity on Weather, Options & Exports
US Oil Rigs Continue to Rise Add 2 to 525 for 9th Week says Baker Hughes
Asia Doubles Purchases of Iran Crude Oil Since Sanctions Lifted
Russia To Use Record Oil Production as Baseline For OPEC cuts
From Istanbul to Vienna The OPEC Oil Production Deal Schedule

Check out OOTTNews.com for the latest news and data on oil markets.

From TradersCommunity Research

9
Today we get to see what the Regional Federal Reserve Banks and Fed Chair Janet Yellen have to add before President-Elect Donald Trump is inaugurated as President of the United States. Yellen Speaks in San Francisco at 3.00 PM ET. The Beige Book is released at 2.00 PM ET.

Beige Book Highlights
- Most areas of US economy continued to see modest growth with financial conditions stable
- Wages gained modestly in most areas amid tight job market
- Wages in some districts were pushed up by increases in state's minimum wages
- Pricing pressures intensified somewhat as firms face widespread difficulties of finding skilled labor
 

- Most manufacturers saw sales rise with hiring problems for less skilled jobs
- Input price gains wider than rises in final goods prices
- Economy continued to expand and modest pace with 8 of 12 districts reported modest price increases
- Auto  retail sales had expanded but retailer selling prices were flat or down amidst competitive discounting
- Residential construction and sales were generally mixed
- Businesses across the country and industries said to be optimistic about growth in 2017

Full Text

Feds Beige book: economy continued to expand at a modest pace

Overall Economic Activity
Reports from the twelve Federal Reserve Districts indicated that the economy continued to expand at a modest pace across most regions from late November through the end of the year. Manufacturers in most Districts reported increased sales with several citing a turnaround versus earlier in 2016. Growth in the energy industry was mixed; two Districts reported weakness in coal production but others reported improvements in coal, oil, or gas activity. Most Districts said that non-auto retail sales had expanded, but several noted that sales over the holiday season were disappointing and reports in more than one District suggested that growth in e-commerce had come at the expense of bricks-and-mortar retailers. All Districts reported varying degrees of growth in employment and a majority described their labor markets as tight. Residential construction and sales were generally mixed, although San Francisco reported strong real estate market activity throughout the 12th District. Financial conditions were stable. Firms across the country and industries were said to be optimistic about growth in 2017.

Employment and Wages
Labor markets were reported to be tight or tightening during the period. Employment growth ranged from slight to moderate and most Districts indicated that wages increased modestly. A couple of Districts mentioned layoffs, but even in those Districts, as in other regions, most responding firms were said to have added employment, on net. District reports cited widespread difficulties in finding workers for skilled positions; several also noted problems recruiting for less-skilled jobs. Wages in some Districts were pushed up a bit by increases in the states' minimum wages and most Districts said wage pressures had increased. Many Districts said contacts expect labor markets to continue to tighten in 2017, with wage pressures likely to rise and the pace of hiring to hold steady or increase.

Prices
Pricing pressures intensified somewhat since the last report. Eight out of twelve Districts saw modest price increases and the remainder experienced slight increases, or flat prices in the case of the Atlanta District. Increases in input costs were more widespread than increases in final goods prices. Cost increases were reported for coal, natural gas, and selected building and manufacturing materials. Retailers' selling prices were mixed, but on balance were flat or down amidst competitive discounting. Prices of most agricultural commodities stayed flat at very low levels. Home prices were stable or up modestly. Businesses in several districts reportedly expect further modest increases in input costs and selling prices in 2017.

Further Crude Oil Analysis

#OOTTNews .

From the Traders Community News Desk

10
Breaking News / OPEC Monthly Oil Market Report January 2017
« on: January 18, 2017, 07:55:15 AM »

The OPEC Monthly Oil Market Report (MOMR) for January released Wedneday provides OPEC's outlook for crude oil market developments for the coming year with key developments impacting oil market trends in world oil demand and supply.

MOMR Oil market highlights
- 2017 world oil demand is anticipated to rise by a solid 1.16 mb/d y-o-y to average 95.60 mb/d.
- Global oil market will see 985kbpd average surplus in 2017 vs 1.24mbpd prior
- Reports show positive signs of non-OPEC compliance with pledged production cuts
- Non-OPEC supply growth forecast lowered to 120kbpd vs 300kbpd gain prior
- Secondary sources says OPEC output (excl Indonesia) falls 221kbpd in Dec to 33.085mbpd
- Raises US 2017 output forecast to 230kbpd on drilling rebound and shale growth
- OPEC says a continued normalization of monetary policy and oil output cuts should help to bring stability to the market in 2017
 

Oil market highlights

Crude Oil Price Movements

The OPEC Reference Basket jumped nearly 20% in December to $51.67/b, ending above $50/b for the first time in 18 months. In contrast, the Basket’s yearly average value came in at its lowest in more than 12 years at $40.76/b. The oil complex surged on news of the historic cooperation between OPEC and non-OPEC. ICE Brent ended $7.84 higher at $54.92/b, while NYMEX WTI soared $6.40 to $52.17/b. For the year, ICE Brent and NYMEX WTI averaged $45.13/b and $43.47/b, respectively, the lowest since 2004.

World Economy

World economic growth for 2016 and 2017 has been revised up by 0.1 percentage point to stand at 3.0% and 3.2%, respectively. The OECD growth in 2017 was revised higher to 1.8%, following growth of 1.7% in 2016. China’s forecast remains at 6.7% in 2016 and 6.2% in 2017, while India’s growth in 2016 was revised down slightly to 7.2%, followed by growth of 7.1% in 2017. After two years of recession, both Russia and Brazil are forecast to recover in 2017 with growth of 0.9% and 0.4% respectively.

World Oil Demand

Global oil demand growth in 2016 is expected at 1.25 mb/d after a marginal upward revision of around 10 tb/d, mainly reflecting the better-than-expected performance in OECD Asia Pacific and Europe. World oil demand is expect to average 94.44 mb/d in 2016. In 2017, world oil demand is anticipated to rise by a solid 1.16 mb/d y-o-y to average 95.60 mb/d. This represents an upward revision of 10 tb/d, mostly due to an expected uptick in oil requirements in OECD Europe in 1Q17.

World Oil Supply

Non-OPEC oil supply in 2016 is now expected to show a contraction of 0.71 mb/d, following an upward revision of 70 tb/d, mainly driven by higher-than-expected growth in Norway, Russia and the US. In 2017, non-OPEC oil supply is projected to grow by 0.12 mb/d, representing a downward adjustment of 0.18 mb/d. Downward revisions to Russia, Kazakhstan, China, Congo and Norway, were partially offset by a 0.23 mb/d upward adjustment to US supply. OPEC NGL production is forecast to grow by 0.15 mb/d in 2017, following growth of 0.15 mb/d last year. In December, OPEC production decreased by 221 tb/d, according to secondary sources, to average 33.08 mb/d.

Product Markets and Refining Operations

Product markets showed a mixed performance in the Atlantic Basin in December 2016. US refinery margins were supported by the recovery seen in the gasoline cracks on the back of healthy domestic demand amid stronger exports to Latin America. Refinery margins in Europe weakened due to slower gasoline export opportunities and a lack of support at the middle of the barrel, despite the colder weather. In Asia, product oversupply weighed on margins.

Tanker Market

Tanker spot freight rates in December 2016 rose in both dirty and clean segments of the market. Average VLCC, Suezmax and Aframax spot freight rates rose by 18%, 25% and 1%, respectively, from a month before. The higher rates were driven by delays in eastern ports, pre-holiday activities and thinning tonnage supply in some areas. Average clean spot freight rates for both East and West of Suez increased in December by 19% and 26% m-o-m, respectively. Compared to the same  month last year, both clean and dirty spot freight also increased on average.

Stock Movements

Total OECD commercial stocks fell in November 2016 to stand at 2,993 mb, some 271 mb above the latest five-year average. Crude and product inventories showed surpluses of 190 mb and 82 mb, respectively. In terms of days of forward cover, OECD commercial stocks in November stood at 63.7 days, some 5.2 days higher than the seasonal average.

Balance of Supply and Demand

Demand for OPEC crude in 2016 is estimated to stand at 31.2 mb/d, some 1.8 mb/d higher than in 2015. In 2017, demand for OPEC crude is forecast at 32.1 mb/d, a further increase of 0.9 mb/d over 2016.

Complete Report
OPEC News Release 18 January 2017 .

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Further Crude Oil Analysis
#OOTTNews .

From the Traders Community News Desk

11
The British Pound has been at the height of rumor and innuendo the past week on will she or won't she. Today Prime Minister Theresa May cleared that up with her speech. The GBPUSD moved around 400 pips higher on her words.

Quote
"I am equally clear that no deal for Britain is better than a bad deal for Britain."said May

Highlights
. May' has shown a strong hand against both the UK Parliament and the EU. The onus is on Europe now.
- No halfways, the UK is coming out of EU with strong talk on those trading markets going forward.
 
. The pressure is now on Europe to negotiate properly.  Meaning May is going to offer an open door to 27 EU countries   what are you going to do Europe?
- May effectively has put the UK MP opponents of Brexit as disrespecting their constituents votes
- Scotland has their stance here, time will tell.
- The parliamentary vote offer seems to head off the pending Supreme Court decision with Article 50 the key
- May wants EU citizens in the UK to remain and will expect the same consideration from Europe.

May said any agreement with the EU must

Quote
"allow for the freest possible trade in goods and services", Mrs May said.
"But I want to be clear: what I am proposing cannot mean membership of the single market.
"It would, to all intents and purposes, mean not leaving the EU at all.
"That is why both sides in the referendum campaign made it clear that a vote to leave the EU would be a vote to leave the single market."
Moving forward, there is some clarity now, but this is just another battle in a long war in many wars in saying that gone is confusion about hard or soft Brexit. What is noteworthy a hard exit has been positive for the pound this time. Much like a Trump victory after being negative for the dollar and the Dow (on election night) has been the reverse evr since.

Next up for May will be Prime Ministers Question time tomorrow from 12.00GMT.

Unintended consequences will be a factor until the deal is done and long after, so stay open minded and nimble.

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From TradersCommunity Research

12
Unintended consequences is a factor we are familiar when markets are tampered with by politics, monopolies and leverage. we are now seeing those bifurcation from when Non-OPEC countries joined OPEC in global oil production cuts with higher crude prices.

The decline in Russian fuel oil exports are pushing up the heavy oil used by  shipping lines, fuel oil C. The price increase has seen a rise in the prices of fuel oil C-type products such as marine and thermal power oil. The last thing the maligned shipping business needed as container shipping costs surge 38% after Hanjin collapse.

Singapore benchmark price of fuel oil C:
 
- In January 2016 fuel oil C was $142 a ton, 40% of current level.
- $340 per ton early January +30% in November
- Highest level in 19 months.
- Russian fuel oil is 20-30% of trading in Singapore

The fall out of the shipping business since the commodity price collapse has been well documented. The industry has been hesitant to how it would be affected by the OPEC agreement.

Crude Oil Tanker Owners Sweat on OPEC Oil Shipping Outcome
Which Company Will Russia Oil Production Cuts Come From?

The Nikkei Asian Review reports that the Japanese shipping company Nippon Yusen estimated in its October earnings report that an increase of $10 per ton in fuel oil prices would shave 1.2 billion yen ($10.4 million) off its annual earnings.

The price of crude since the OPEC meeting has a tap on affect on margins;

Quote
Fuel oil offers narrower price margins over crude oil than other products such as gasoline, gas oil and jet fuel. For this reason, "petroleum companies in Russia have been expanding the refining capacities of their oil refineries," said Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp., or Jogmec. This has resulted in a decrease in the supply of fuel oil C and an increase in production of gasoline, gas oil and other wider-margin fuels.

This was compacted by Russia raising export margins

Quote
Russia has also been raising its export duties on fuel oil in stages since 2014. As this further reduces the margin, Russian producers are more inclined to supply fuel oil for domestic consumption rather than export it. And with Moscow having raised the export tariff again in January, the supply of Russian fuel oil is unlikely to revert to previous levels.

The end of the golden era of cheap fuel?

Quote
While the tighter supply has improved the margin on fuel oil, it remains narrow compared with gasoline and gas oil. And as refining infrastructure expands and modernizes worldwide, fuel oil supply is on a downward trajectory worldwide, not just in Russia. For shipping companies and the electric power industry, this likely means the end of the golden period of cheap fuel.

The next few months will be critical as to compliance as to the OPEC agreement, in particular the Russian oil companies and their revenues.

Source: http://asia.nikkei.com/Features/Commodities-eye/Shipping-lines-pinched-as-fuel-oil-prices-surge-in-Singapore

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From TradersCommunity Research

13
Breaking News / Shale Fracking Firm Keane Group's $FRAC First IPO in 2017
« on: January 15, 2017, 05:17:09 PM »
We will see the first IPO of 2017 on Thursday, Houston's Keane Group's IPO which will have the stock symbol FRAC. Keane Group is "one of the largest pure-play providers of integrated well completion services in the U.S., with a focus on complex, technically demanding completion solutions. Our primary service offerings include horizontal and vertical fracturing, wireline perforation and logging and engineered solutions, as well as other value-added service offerings." Keane website

- $301 million IPO with proposed market cap of $1.8 billion, 15,300,000 shares of common stock anticipated in between $17.00 and $19.00 per share.
- Greater than 3 times larger than last year's oilfield services IPO Mammoth Energy $TUSK
 
- Footprint located in the Permian Basin, Marcellus Shale/Utica Shale, the SCOOP/STACK Formation, the Bakken Formation and other active oil and gas basins.
- Acquired by Cerberus in 2011, positioned to take advantage of a rebound in E&P spending.

From the companies Press release:

The Company intends to use the net proceeds from the offering received by it to repay certain outstanding debt, to pay fees and expenses related to the offering and the remainder for general corporate purposes. The Company will not receive any proceeds from the offering of the common stock by the selling stockholder.

Citigroup, Morgan Stanley, BofA Merrill Lynch, and J.P. Morgan are acting as joint book-running managers for the proposed offering. Wells Fargo Securities, Piper Jaffray & Co. and Houlihan Lokey are acting as senior co-managers for the proposed offering. Guggenheim Securities, Scotia Howard Weil and Stephens Inc. are acting as co-managers for the proposed offering.



via Keane Group S-1 with SEC> https://www.sec.gov/Archives/edgar/data/1688476/000119312516792429/d256111ds1.htm

Keane Group Acquired the U.S. Assets of Trican Well Service Ltd in January 2016

Keane group press releases 11 months ago

Quote
Houston, Texas (January, 26, 2016) –Keane Group, a privately-held U.S. based well completion services company, has agreed to acquire the majority of Canada-based Trican Well Service Ltd.’s (TSX: TCW) U.S. assets for total consideration of U.S. $247 million, comprised of U.S. $200 million in cash plus a minority interest stake in Keane Group. With the acquisition, Keane will triple its frac capacity, acquire access to proprietary technology, add applied engineering capabilities and further expand the Company’s service offerings and geographic reach in the U.S. Learn More

Keane Group Website:

http://keanegrp.com/company/

IPO Press Release:

http://investors.keanegrp.com/press-releases/2017/01-09-2017-132305760

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From TradersCommunity Research

14
Oil deals have been going at a breakneck pace since Non-OPEC countries joined OPEC in global oil production cuts to reduce output by nearly 1.8 million bpd started Jan 1.  With producers finding more demand for their customers, particularly with Iran back in the game  we are seeing more long term deals as a result.

Japan's second-largest supplier of crude oil after Saudi Arabia is the United Arab Emirates and on Sunday in Abu Dhab they agreed to extend Japanese oil concern Inpex's concessions on two small oil fields for another 25 years.

Daily production at these two fields totals 35,000 barrels.
- Inpex stake 40% against ADNOC 60% amounts to a daily 14,000 barrels of oil.

 
Japan's minister of economy, trade and industry Hiroshige Seko met Sunday with Sultan Ahmed al-Jaber, CEO of Abu Dhabi National Oil Co. (ADNOC) and reached a basic agreement on the extension.

Inpex's concessions on the Umm al-Dalkh and Satah fields off the coast of Abu Dhabi were originally set to expire in March 2018. It would appear Abu Dhabi appears to have granted the 25-year extension in consideration of Japan's contributions to UAE health care.

It makes smart commercial and strategic sense for both sides as India and China seek to tie up oil supply and since the agreement with Iran, Libya and Nigeria not party to it UAE has an incentive to retain Japan as a buyer for it's oil.

Why concession or license agreements ?

Concession or license agreements grants an oil company exclusive rights to explore, develop, sell, and export oil  extracted from the specified area for a fixed period of time. (In this case 25 years). The advantages from UAE’s point of view are the concessions are more straightforward than other types of agreements, especially if a public bidding system is used. An acceptable and reliable legal infrastructure, including a judiciary capable of interpreting complex agreements, is also necessary.

With a well-developed legal system, as in Japan in this case a concession agreement can focus on the commercial
terms without the burden of devising contractual provisions to fill in gaps in the legal system of the UAE.  The costs of exploration are absorbed by the successful bidder (INPEX). This takes off some financial for the host government UAE   with a financially strong and technically competent bidder to smooth out oil prices and bankruptcy risk.

The main disadvantage from both the country’s point of view and the bidder is commercial. The bidding documents specify a minimum work program and other benifits. This means a prescribed period of time within which to make the corresponding investments or run the risk of forfeiting the license. It is understtod in this agrrement that Abu Dhabi appears to have granted the 25-year extension in consideration of Japan's contributions to UAE health care.

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From TradersCommunity Research

15
Gas Storage / EIA Reports Weekly - 151 Bcf Draw Natural Gas Storage
« on: January 11, 2017, 06:50:06 PM »
EIA's Weekly Gas Storage Report Report Date: 1/12/17

Natural gas has been more of a head scratcher than normal lately, with weather-driven algorithm volatility and last week's 49-Bcf draw way below expectations. This seemed more than the south-central region. One of our favorites Gabe Harris of WoodMac was closest at -58 Bcf. "The large injection was driven by the largest salt dome injection to be recorded for a week ending in December of 19 Bcf.” Bentek offered.

Last week’s weather was 7 percent warmer than last year and 14 percent warmer than the five-year average. Since September, weather has been 7 percent colder than last year but 9 percent warmer than five-year average.

Actual -151 Bcf Prior -49 Bcf
Consensus Forecast  - 139 Bcf
Cons. Range: -127.8 to -160 Bcf
EIA swap: -135 to -136 @ CT 15.13

 




Bentek says that its Flow Model is at 138-Bcf draw this week and the SD Model at -133 Bcf.

Quote
“Inventories seem likely to continue bordering the five-year average line as current supply and demand daily
estimates show an estimated withdrawal of 242 Bcf for the week ending Jan. 12, 72 Bcf stronger than five-year average levels and a withdrawal of 133 Bcf for the next week out, 43 Bcf weaker than the five-year average withdrawal. A withdrawal of 138 Bcf for the current storage week would take reported inventories to 3,173
Bcf, 9 Bcf higher than five-year average levels and 345 Bcf below inventory levels at this time last year.

Week over week, the largest change in storage activity is estimated to have occurred in the EIA south-central region, where a withdrawal of 25 Bcf is expected, compared to a reported injection of 14 Bcf the week prior. “However, the salt dome sample remained at a net injection, measuring 4.6 Bcf of activity compared to 11.3 the week prior, when the EIA announced the facilities had injected 19 Bcf into storage. Non-salt sample activity increased from a net withdrawal of 6.4 Bcf the week prior to a net withdrawal of 13.6 Bcf this week.”

Analysts Forecasts
Tim Evans, CITI Futures: -160 Bcf
Raymond James: -152 Bcf
Donnie Shgarp, Huntsville Utils: -152 Bcf Bcf
Schneider Electric: -150 Bcf
Dow Jones Survey: -145 Bcf
SNL Survey: -145 Bcf
Bentek S/D Model: -133
Robry825: -132 Bcf
Genscape: -129 Bcf
Bloomberg Flow Model: -127.8 Bcf

Natgas storage draw to return to triple digits but to remain below average http://bit.ly/2jFpIML via @SNLEnergy ‏@PeterMarrin



Brynne Kelly @BrynneandRic
Natural Gas Storage Futures weekly EIA storage futures 1/10 (EIA Swap)



Current Storage Level vs. Last Year & 5-Yr

Current Storage Level: 3,311 Bcf
Storage 2015/same week: 3,675
(Delta: -364 Bcf or 9.9%)
Storage 5-Yr Avg/same week: 3,332
(Delta: -21 Bcf or 0.6%)

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From the Traders Community News Desk

16
U.S. Energy Information Administration (EIA) data for the week ended January 6, 2017

Crude +4097 vs exp Build +600k Prior -7051K API +1530k
Cushing -579k vs exp Draw - 784k Prior+1070k API -187k
Gasoline +5023k vs exp Build+1500k Prior +8307K API +1690k
Distillate 8356k vs exp Build +700k Prior +10,051K API +5480k
Refinery utilization  1.60% vs exp -0.4% Prior +1.0%
Weekly production +0.176 mbpd to 8.946 mbpd, currently -0.281 mbpd lower YOY.
Imports Prior 7.18 -.984
Note in in bbls *exp = Reuters poll est except Cushing

View Prev Week Report & Analysis.
 


DOE Estimates via @EnergyBasis

NB: Based off of 11-Yr Avg this is the last week Distillate stocks draw, then build through the beginning of January
also "Historically" #Gasoline stocks build now through end of February





EIA Prep via @DigStic


API via Marketwatch

Quote
The American Petroleum Institute late Tuesday reported a rise in U.S. crude supplies that was slightly below some market expectations, along with a hefty, unexpected jump in distillate inventories, according to sources. Data revealed a rise of 1.5 million barrels in U.S. crude supplies for the week ended Jan. 6. Analysts polled by S&P Global Platts forecast a climb of 1.75 million barrels. Sources also said gasoline supplies rose by roughly 1.7 million barrels and distillates jumped by a more-than-expected 5.5 million barrels.

"A big build in distillate may be because of weather impacting exports last week," said Price Futures Group's Phil Flynn. Supply data from the Energy Information Administration will be released Wednesday morning. February crude CLG7, +0.22% was at $50.82 a barrel in electronic trading, unchanged from the contract’s settlement on the New York Mercantile Exchange.

http://www.marketwatch.com/story/api-data-show-rise-in-us-crude-supplies-unexpected-jump-in-distillates-sources-2017-01-10

Ahead of API crude oil futures CL_G7 settled at at $50.82/bbl⬇-$1.14. -2.19% on volume: ~550k

** Note with the unreliability of the API numbers highlighted by its constant debacles we offer you the bare bones of that report.

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From TradersCommunity Research

17
Australia / Australia and East Timor to Negotiate New Maritime Oil Treaty
« on: January 09, 2017, 09:35:38 AM »
Big news out of Australia there has been a breakthrough in the East Timor oil treaty dispute that has bubbled along for ten year and is the crux of bitter vitriol between the two closest neighbors.

Our Australian editor, Lee Corporal @fa078a2f38c645d reports that Australia has agreed to negotiate permanent maritime boundaries with East Timor. In a time where Indonesia has dropped out of OPEC this is a significant advancement. The dispute is over the Greater Sunrise oil and gas reserve in the Timor Sea where an estimated US$40 billion worth of oil and gas lies.

- Australia Agrees to Negotiate Maritime Boundaries with East Timor
- Oil Treaty at Crux of dispute
- East Timor likely to drop spy charges
- Decision Likely to cause uproar in Indonesia
 


Australia had ­stood by the the 50-year moratorium on negotiating permanent maritime boundaries with Timor Maritime Arrangements on the Timor Sea treaty was stands. East Timor is now expected to drop its damaging spy case against Australia. The dispute reminds us of the South China Sea controversy. In 1979 Australia became the only western nation to offer de jure recognition of Indonesia’s forced annexation, so the two countries could begin negotiations over the Timor Sea’s resources.

The big bifurcation here is any affect on Australia’s 1972 maritime boundary with Indonesia. Previously this had been the main stumbling block to Australia opposing the ­dissolution of CMATS.

Joint statement by Foreign Minister Julie Bishop and East Timor’s Foreign Minister Hernani Coelho

Quote
“The government of Timor Leste has decided to deliver to the government of Australia a written notification of its wish to terminate the 2006 treaty on Certain Maritime Arrangements in the Timor Sea,” adding Australia would not contest the move.

Quote
“The parties recognise the importance of providing stability and certainty for petroleum companies with interests in the Timor Sea and of continuing to provide a stable framework for petroleum operations and the development of resources in the Timor Sea.”

The Australian reports Swinburne University East Timor expert Michael Leach says the UN conciliation panel’s finding last October that the CMATS treaty did not ­extinguish Australia’s obligation to negotiate maritime boundaries with East Timor was likely a major factor in Canberra’s climb-down.

Quote
“Once CMATS could no longer be used to delay this process for 50 years, it (the treaty) was a lot less value to the Australian side,” Professor Leach told The Australian.

Another major consideration could have been the impending espionage case against Australia, which was central to Timor’s ­argument that CMATS had not been negotiated in good faith, as required under the UN Convention on the Law of the Sea, he said.

The spying allegations come from 2013 that Australia eavesdropped on the Timorese CMAT negotiating team. Australia was subsequently ­ordered by the International Court of Justice to stop spying on Timor.

The Boundary Differences

- Australia argues that its maritime boundary with Timor should be drawn along its continental shelf
- Timor claims it should be an equidistant line between the two nations

The Timor view gives more of the oil assets  from the Timor Sea to Timor.

The key going forward is how this affects Indonesia relations. Australia had successfully negotiated a continental shelf maritime boundary with Indonesia.

Indonesian Maritime Minister Luhut Pandjaitan told The Australian:

Quote
“Australia and East Timor are having a dispute and we don’t want to intervene. Let them ­resolve it and we will see what our positions are. We do have a ­position but we don’t want to ­intervene.”

Source: The Australian, ABC

Read More: http://www.theaustralian.com.au/national-affairs/foreign-affairs/australia-yields-on-east-timor-oil-treaty/news-story/cdfdb6e3bc263e87d6c71bfb56e47335?login=1

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From TradersCommunity Research

18
Italy / Is Stagflation a Lurking Threat to Italy and Europe ?
« on: January 09, 2017, 08:53:24 AM »
Early days but a word that has popped up in the last New Year is 'Stagflation'. In a world where we have more uncertainties daily it seems it is worth a revisit.

Stagflation Definition: Persistent high inflation combined with high unemployment and stagnant demand in a country's economy.

Italy is the potential poster child here.
- Italy November Jobless Rate Rises to 11.9%
- Inflation 0.5% in December, the highest reading since May 2014 accelerating from November’s 0.1%.
- Italy December Retail PMI Recedes to 47.9
 
Central banks have done every thing to promote inflation, what happens if they succeed? At the same time unemployment has been rigid in many countries. In the US Fed speakers say we are nearing full employment but on a dismal participation level.  When we look to Europe is where their maybe threat exists.

Italy November Unemployment Report

ISTAT data showed that after seasonal adjustment, Italy's unemployment rate rose 0.2 pts monthly to 11.9% in November 2016, exceeding market expectation of 11.6%.

Italy December Inflation Report

Inflation 0.5% in December, the highest reading since May 2014 accelerating from November 0.1%.

The National Statistical Institute (Istat) on January 4 said consumer prices grew 0.4% from December after November’s 0.1% drop were the highest since February 2015. It reflected higher prices for services related to transport, non-regulated energy and for unprocessed food.

Core inflation was 0.6% in December, up from November’s 0.4%. Finally, harmonized inflation came in at 0.5%, up from November’s 0.1% print and the highest reading since April 2014.

Core consumer prices excludes more volatile categories such as unprocessed food and energy increased 0.3% in December on a monthly basis compared to November’s 0.3% fall.

Italy December Retail PMI

Markit data showed that after seasonal adjustment, Italy's retail PMI for December retreated to 47.9 from November's nine-month high of 48.8.


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From TradersCommunity Research

19
The effect of the strong US dollar coupled with a supply and demand equation is perfectly illustrated by gasoline (petrol) prices in Europe and the United States. While ECB remarks on an inflationary threat from higher oil prices in the U.S. regular retail gasoline prices averaged $2.14 per gallon (gal) in 2016, 29 cents/gal (12%) less than in 2015 and the lowest annual average price since 2004.

The EIA reports that lower crude oil prices in 2015 were the main cause of lower gasoline prices. In 9 of the 10 cities for which EIA collects weekly retail price data, gasoline prices did not exceed $3.00/gal. This is also at a time when US exports have risen exponentially in liquids. One would envisage this would help Europe. Thus when can conclude outside of tax effects currency conversion is the main factor here.
 



From the EIA:

East Coast (Boston, New York, and Miami). In Boston, New York, and Miami, regular retail gasoline prices reached yearly highs during the summer driving season in June and were lowest in February. In September and October, disruptions to the Colonial Pipeline caused gasoline prices to increase approximately five cents and two cents across the region, respectively. Weekly reporting of Monday average prices for the entire East Coast region moved within a range of $1.73/gal to $2.31/gal over the year.

Midwest (Chicago and Cleveland). Retail gasoline prices in Chicago peaked in mid-June during the summer driving season. The Midwest covers a large geographic area consisting of multiple semi-connected markets. Prices in Chicago were slightly above prices in Cleveland and the Midwest regional average during 2016.

Gulf Coast (Houston). Gulf Coast retail gasoline prices tend to be the lowest in the country. The region is home to half of U.S. refining capacity and produces substantially more gasoline than it consumes. Additionally, gasoline taxes in the region are among the lowest in the country. In 50 out of 52 weeks in 2016, retail gasoline prices in Houston were the lowest of the 10 cities for which EIA collects Monday price data each week. Houston prices ranged from a high of $2.10/gal in mid-June to a low of $1.45/gal on February 22. After the summer driving season, gasoline prices in Houston only rose above $2.00/gal once, for the week ending October 24.

Rocky Mountains (Denver). Denver retail gasoline prices were the second lowest of the 10 cities surveyed for 28 weeks of 2016. Limited planned refinery outages this fall and gasoline inventories above the five-year average placed downward pressure on prices. At $2.02/gal as of December 12, Denver gasoline prices were significantly below their five-year average of $2.78/gal.

West Coast (Los Angeles, San Francisco, and Seattle). Gasoline prices on the West Coast tend to be higher than in other parts of the country because of strict fuel specifications in California, the region's relative isolation from other markets, and higher state and local taxes. During 2016, retail prices in Los Angeles were the highest of the 10 cities for which EIA collects Monday price data for 32 weeks of the year. Los Angeles prices reached $3.11/gal, their highest point in 2016 in early January following a series of refinery outages along the West Coast.

Principal contributor: Matthew French

The deal where Non-OPEC Countries Join OPEC in Global Oil Production Cut is to reduce output by nearly 1.8 million bpd starting Jan 1 affects the US and Europe in different ways given America's shale position.

Source: EIA

http://www.eia.gov/todayinenergy/detail.php?id=29452

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From TradersCommunity Research

20
OPEC / Iran Empties Tankers To New Customers in OPEC Output Deal Opening
« on: January 06, 2017, 08:41:36 AM »
Iran is doing a tremendous job flogging its stored oil and utilizing its space in the new OPEC output deal. Jonathan Saul from Reuters reports. Saul said Iran have sold more than 13 million barrels of oil that it had long held on tankers at sea, capitalizing on an OPEC output cut deal from which it is exempted to regain market share and court new buyers, according to industry sources and data.

Quote
In the past three months, Tehran has sold almost half the oil it had held in floating storage, which had tied up many of its tankers as it struggled to offload stocks in an oversupplied global market.

- Iranian oil held at sea has dropped to 16.4 million barrels, from 29.6 million barrels at the beginning of October.  - - -- Prior to October the level had barely was stagnant; it was 29.7 million barrels at the start of last year
 

More from Exclusive: Iran capitalizes on OPEC oil cut to sell millions of barrels - sources

Quote
Unsold oil is now tying up about 12 to 14 Iranian tankers, out of its fleet of about 60 vessels, compared with around 30 in the summer, according to two tanker-tracking sources.

The oil sold in recent months has gone to buyers in Asia including China, India and South Korea and to European countries including Italy and France, according to the sources and data. It was unclear which companies bought the oil.

Iran is also looking to use the opportunity to push into new markets in Europe, including Baltic and other central and eastern European countries, said separate oil industry sources, though it was not clear if any oil had been sold there.

The state-run National Iranian Oil Company (NIOC) could not be reached for comment. Tanker group NITC, which operates most of the country's fleet, could also not be reached.

Tehran scored a victory when it was exempted from the OPEC deal agreed in November to reduce production by 1.2 million barrels per day for six months, an accord aimed at addressing the global oversupply and bolstering low oil prices.

The country successfully argued it should not limit its production which was slowly starting to recover after the lifting of international sanctions in January last year.

While the deal did not come into effect until the beginning of 2017, industry sources said Tehran had already been offering aggressive discounts, aiming to coax buyers globally into stocking up for winter in anticipation of the OPEC cut.

Iran lacks enough land storage facilities for its oil and, to enable it to keep pumping crude, has relied on its tanker fleet to park excess stocks until it can find buyers. The tanker-tracking sources said it was unclear how much of the oil stored at sea was condensate, a very light grade of crude.

In another sign of the rising activity, Iran's oil ministry news agency SHANA reported in late December that the number of tankers able to berth at major terminal Kharg Island had reached a record in 2016 of 10 vessels at the same time.

Quote
"Iran got its way at OPEC and the Saudis agreed not to limit their capabilities. Iran will go ahead and look to export whatever they can for winter demand (globally)," said Mehdi Varzi, a former official at NIOC who is now an independent global industry consultant.

"This is a commercial policy of trying to get rid of a lot of their crude oil on tankers as holding oil on tankers is very expensive."

Many foreign ship insurers have resumed providing cover for Iranian vessels in recent months, which has also given Iran more scope to use its tankers to make deliveries or carry out ship to ship oil transfers rather deploying them for storage.

Complete article: http://www.reuters.com/article/us-iran-oil-tankers-idUSKBN14Q1ON?feedType=RSS&feedName=topNews&utm_source=twitter&utm_medium=Social

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From the Traders Community News Desk

21
Gas Storage / EIA Reports Weekly - 49 Bcf Draw Natural Gas Storage
« on: January 04, 2017, 04:36:19 PM »
EIA's Weekly Gas Storage Report Report Date: 1/5/17

Natural Gas Futures have been crushed in the New Year by over 10% as weather forecasts were horribly wrong. The sell-off was the largest one-day decline in two years. Estimates have had to have been adjusted accordingly. Forecasting has been off in both the south-central region and the the residential-commercial sector. So as always keep that in mind.

This week's consensus is for a draw of -71 Bcf with a wide range of -58 to - 106 Bcf. Bentek’s Flow Model is at a 67 Bcf-pull this week and the S/D Model is lower at -66 Bcf.

Actual -49 Bcf Prior - 237 Bcf
Consensus Forecast  - 71 Bcf
Cons. Range: -58 to -106 Bcf
EIA swap: -62 to -63 @ CT 15.13

 

Quote
Bentek’s Flow Model is at a 67 Bcf-pull this week and the S/D Model is lower at -66 Bcf. Bentek says that week over week, total US demand from res-comm, power burn and industrial uses dropped by 176 Bcf, or roughly 25 Bcf/d, as temperatures on a US population-weighted basis averaged 47 degrees, or roughly 6 degrees above normal.

The largest week-over-week swing in storage activity is estimated to have taken place in the south-central region at a forecast 1-Bcf withdrawal this week compared to an impressive 91-Bcf withdrawal the week prior. The next largest week-over-week change in storage activity is forecast to have taken place in the EIA Midwest region, where a withdrawal of 24 Bcf is forecast for the week compared to an EIA-announced withdrawal of 61 Bcf for the previous week.”

Inventories in the East region now measure 66 Bcf below five-year average levels and 124 Bcf below inventory levels at the same time last year. In the south-central region, inventories are 3 Bcf below five-year average levels and 166 Bcf below inventories last year. Meanwhile, the Pacific region is 42 Bcf below five-year average levels, 57 Bcf below
inventories last year at this time, and 4 Bcf below the five-year minimum inventory level for the same time period.

Analysts Forecasts
Tim Evans, CITI Futures: -106 Bcf
Raymond James: -98 Bcf
UBS: -85 Bcf
Robry825: -82 Bcf
Reuters Survey: -82 Bcf
The Woz, ICAP: -63 Bcf
Charlie Fenner, Macquarie: -62 Bcf
Kyle Cooper, IAF Advisors/ION Energy: -61 Bcf
Genscape: --59 Bcf
Gabe Harris, WoodMac: -58 Bcf

Brynne Kelly @BrynneandRic
Natural Gas Storage Futures weekly EIA storage futures 1/3 (EIA Swap)



Current Storage Level vs. Last Year & 5-Yr

Storage 2015/same week: 3,856
(Delta: -50 Bcf or 1.3%)
Storage 5-Yr Avg/same week: 3,620
(Delta: +186 Bcf or +5.1%)

Working natural gas in storage now stands at 3,360 Bcf, or 413 Bcf less than this time last year and 79 Bcf below five-year average of 3,439 Bcf

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From the Traders Community News Desk

22
Canadian Energy producer Encana Corp shares jumped 8.5% after it raised its guidance on Wednesday. They have cut costs further and have boosted oil and gas production volumes. At the same time we have seen a rise in oil and gas prices.

Reaction: Encana NYSE ECA Jan 4 2017 4:10 PM EST 12.95 +1.01 +8.46%

Encana is based in Calgary, Alberta sais their cash-flow measure has improved by near 25% higher than previously anticipated. Drilling and completion costs are now expected to be flat or down year-over-year.

Quote
“We’re just seeing continued better performance in our core plays, the cost to drill wells is coming down as we improve our execution and performance.” Encana Chief Executive Doug Suttles said in an interview.
 


ECA expects cash flow per barrel of oil equivalent of production to be $10, up from $8 it expected previously. It also reaffirmed guidance of reporting a corporate margin of $13 per barrel in 2018.

Encana said it started rigs faster than expected, reaching its projected 2017 operational activity and rig count levels in December.

Source: WSJ

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23
U.S. Energy Information Administration (EIA) data for the week ended December 30, 2016

Crude -7051K vs exp Draw -1715k Prior+614k API -7400k
Cushing +1070k vs exp Build +530k Prior+172k  API +482k
Gasoline +8307K vs exp Build+1700k Prior -1593K API +4250k
Distillate +10,051K vs exp Build +2125k Prior -1881K API +5240k
Refinery utilization +1.0% vs exp +0.5% Prior -0.50%
Weekly production +0.004 mbpd to 8.770 mbpd, currently -0.449 mbpd lower YOY
Imports 7.18 -.984
Note in in bbls *exp = Reuters poll est except Cushing

View Prev Week Report & Analysis.
 


DOE Estimates via @EnergyBasis

NB: Based off of 11-Yr Avg this is the last week Distillate stocks draw, then build through the beginning of January
also "Historically" #Gasoline stocks build now through end of February







EIA Prep via @DigStic



API via Marketwatch

Quote
The American Petroleum Institute late Wednesday reported a much bigger-than-expected drop of 7.4 million barrels in U.S. crude supplies for the week ended Dec. 30, according to sources. Analysts polled by S&P Global Platts forecast a stockpile decline of 1.7 million barrels. Supply data from the Energy Information Administration will be released Thursday morning, a day late due to the New Year's Day holiday. February crude CLG7, +1.80% was at $53.30 a barrel in electronic trading, up from the contract’s settlement of $53.26 on the New York Mercantile Exchange.

http://www.marketwatch.com/story/api-data-show-drop-of-74-million-barrels-in-us-crude-supplies-sources-2017-01-04

Ahead of API crude oil futures CL_G7 settled at $53.26/bbl +$0.93. +1.78%.

** Note with the unreliability of the API numbers highlighted by its constant debacles we offer you the bare bones of that report.

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24
Iran / Another Milestone for Iran Oil, Vitol does $1 Bln Pre-Finance Deal
« on: January 04, 2017, 12:38:36 PM »
News continues to flow around Iran oil. Reuters reports four sources confirm that Vitol has clinched a deal with the National Iranian Oil Co. (NIOC) to loan it an equivalent of US$1 billion in euros. The loan is to be guaranteed by future exports of refined products, familiar with the matter said. The deal adds further legitimacy to Iran new positioning given Vitol is the world's largest oil trader.

In another milestone for Iran this pre-finance deal is the first such major contract they have signed with a trading house since sanctions were lifted in early 2016. Privately held trading houses are more flexible and can negotiate deals quicker than listed firms given the myriad of US laws in particualar.
 

The Vitol Iranian deal was signed in October and will come into effect this month> Reuters quoted one of the sources of the terms;

Quote
"It is in euro...with the interest rate of around 8 percent in exchange for oil products," the source said.

Keep an eye out for traders looking at restarting the Caspian crude and product swaps with Iran but the process has been slow to pick up.

Source: Reuters

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25
Automakers were in the news yesterday with Ford announcing they are moving auto plants from Mexico to Michigan and the Peso taking a bath on it. President Elect Trump tweeted the news and asked the question to GM. Today we have US auto sales for December being released and US sales of new vehicles which set a record of 17.47 million in 2015 could be out to hit a a new high in 2016. Both LMC Automotive and Edmunds.com predict sales will reach 17.5 million in 2016. Is Donald Trump on to something to push auto sales through that plateau going forward?

December and 2016 Auto Sales
- General Motors sales down 1.3 percent from just over 3 million cars and trucks.
- Nissan sales rose 5 percent in 2016 to over 1.5 million, company record.
- Ford sales up less than 1 percent to over 2.6 million.
- Fiat Chrysler’s sales flat at 2.2 million.
 

- Volkswagen sales for 2016 saw a 7.6 percent decrease over 2015 to 322,948 units as the emissions scandal bit.



U.S. sales have had six straight years of sales gains but have a plateaued. The National Automobile Dealers Association expects U.S. sales to drop to 17.1 million vehicles in 2017 as interest rates and vehicle prices rise. The FOMC minutes will be telling here. Buyers are also opting for longer loans to lock in lower rates which also means they won’t be buying as soon.  Can the strong rise continue?

Low gasoline prices, rising employment and low interest rates buoyed buyers in 2016. There was also the lure of new technology such as backup cameras, automatic emergency braking and Apple CarPlay.

There was also new vehicles such as the electric vehicles like Tesla high end offerings and the Chevrolet Bolt. New vehicles like the Chrysler Pacifica minivan and the Honda Civic were also popular.

Rising incentives were also a factor, as automakers tried to boost demand with deals like zero-percent financing.

Source: Reuters, BBG

From the Traders Community Research Desk

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