Adnan, Agnes and I have been talking about the deviation between oil price and natural gas prices for some time. A few days Agnes pulled together the data to answer two basic questions a. How correlated are Crude Oil (Brent) and Natural Gas (Henry Hub) prices b. Is this correlation stable over history or are there periods…Read more
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Understanding oil production and oil consumption – step two
There are two primary classification of producers when it comes to crude Oil. OPEC and non OPEC. Total expected production for 2010 as per EIA is expected to range between 85 – 86.3 million barrels per day. EIA consumption estimate for 2010 is between 81 – 91.6 million barrels per day. US and OECD…Read more
5 killed from a blast at a power plant in Connecticut
The blast occurred due to a Nat Gas leakage at a soon to be opened power plant. At least 12 people were injured. The plant was scheduled to be open in the coming summer and was the largest Nat Gas power plant in New England. No info available on how much longer the plant will…Read more
Understanding the crude oil classification terminology – step one
The petrochemical industry classifies crude oil by the geographic location it is produced, its API gravity (an oil industry measure of density denoting the wax content of the oil), and by its sulfur content. light if it has low density or heavy if it has high density (higher specific gravity is better and lighter); sweet…Read more
Crude Oil and Inflation – Interesting framework and analysis
What is the impact of a change in crude oil prices on inflation? Two Thai analysts at TMB bank posted their insights and analysis based on the Thai economy at the Bangkok Post. An interesting article that walks through the framework used for the analysis and makes it possible for us to determine the…Read more
Understanding Oil – An analyst’s starting point
A year ago when we first started looking at oil, it was like a different world with a different language. To bring some sanity and order to our confusion we started with a list of very simple and basic questions to better understand the behavioral dynamics of oil. The first question dealt with supply. How…Read more
Is Natural Gas going up or down?
Thoughts, votes, reactions…
Crude Oil, Fuel Oil & Diesel Price Volatility update – December 2009
Four images that compare crude oil and refined product volatility over a period of 18 overlapping months starting March ’08 and ending October ’09. The first two show a steep dip in price volatility of Brent and WTI. The next two show a similar decline in Fuel and Diesel Oil but just as sharp…Read more
The Crude Oil Price debate…
An exceedingly well laid out piece on the direction of oil prices on the DesiBackToDesh blog. Reproduced the conclusion here with permission. To answer the directional question on crude oil prices one needs to form a view on the following drivers and the following countries: What is the outlook of the global economy? If you…Read more
Energy Review – The China Market
A.1. Overview Despite the economic downturn in 2007, which saw China’s GDP growth decline by more than half from around 13% in 2007 to around 6% in the first quarter of 2009, its demand for energy remains high. In 2006 China was the world’s third largest net importer of oil which is in stark contrast to…Read more