Oil 101 gives you a perspective right from the top of the value chain to the lowest in the oil industry. It also provide the common oil prices management options that are available in the financial market. Thus for a beginner, one is able to understand more on both the physical and financial movement of oil in the economy. This book build the basic foundation of entering and understanding the industry, so I recommend it to anyone who is like me a “new bird” in the industry. Most importantly it is easy to read and understand.

Verdict: 10/10

It was about 3 months ago when I first heard “Finger On It”, a song from the album Routes To Riches by the brilliant British Soul Funk band Mama’s Gun. There is just something about these funk songs which makes you want to listen it completely, unlike most Indie or Rock which can get extremely boring. It’s optimism, cheeriness and the ability to get anyone grooving makes it the best music genre ever, and this album right here is the epitome of everything funk is. They may have not received a lot of the international attention they deserve, but anyone with a decent taste in music (Sadly, not a lot of the world today) would realize the talent in this band.

Combining elements of authentic soul, which includes keyboards and high pitched harmonies well-managed by lead Singer Andy Platts, as well as elements of Funk, including dry guitars, both edgy slap bass and pick bass and crisp drum beats, and a little bit of psychedelia, including obscure keyboard effects and often electronic beats, the band has not only revived that funk sound we all love, but has made it contemporary enough for more of today’s listeners such as myself.

Within the album itself, the band experiments with different types of funk rock and soul. For example, “Supa Sneakers”, a fast paced disco-esque track which  uses muted bass and a chorus which resembles an anthem of sorts, is vastly different from “Bitch” which uses a very loud, funky slap bass riff accompanied by an off-tune piano riff while Platts sings “Ain’t your life, a bitch screaming”. Another radically different type of song is “Pots Of Gold” which was the album’s first single. Using mostly falsetto vocals throughout the song, the song is formed around a very jazzy slow-paced guitar riff and relaxed bass and drums. It’s a very beautiful song, to say the least, and again shows their diversity on this album.

The best song the album is by far “Finger On It”, for the simple reason that the first time I heard it on TV, I rushed to find a piece of paper and pen to write it down before I forgot. The moment I got my hands on a laptop, I heard it 20 times. In half an hour, I knew most of the words and couldn’t stop thinking about it. The bluesy vocals, almost hilariously cheesy lyrics atypical of any funk/blues laden with stories of women using men and clichéd sexual innuendo, the unforgettable whistle riff, the random “Ow!”s and the continuous “Lemme put my finger on it” at the very end of the song make it one hell of a song.

In short, music today is, let’s admit, quite sucky, and I seriously don’t know what I would do if I hadn’t found this.

I started this blog at the suggestion of one of my sisters and my old old friend, editor, consigliore, Richard Taliaferro, who started his blog three years ago for a creative outlet, outside of his daily adventures at his newspaper.

I, on the other hand, realized I needed a home for all my stories, findings, thoughts on energy developments, after I got laid off a month ago. I was a TV and print reporter for Clean Skies News for a year. They hired me out of Platts, where I had covered energy for five years under some of the industry’s best journalists.

When I became a casualty of the Clean Skies News reorganization, the managers promised good recommendations and help finding another job. But I’ve been living in this economy, working as a journalist for more than ten years and I didn’t need sugar coating. It was going to be rough.

But I also realized that in this multimedia age, that didn’t mean I had to stop doing what I love. In fact, it was more important to me than ever to continue immersed in energy and reporting.

I’ve been meeting with all my mentors in the business from journalists to energy gurus and those in other professions too…for insight, for support, which I must say has been overwhelming.    

I’ve found that knowing about energy and how to communicate what’s actually happening and what it means is valuable to any organization. This catharsis has certainly opened my eyes and already some doors.  

The truth is unemployment has given me a chance to evaluate my career path. I get to wake up…a little later in the mornings…but I get to wake up, jump off the mouse wheel and follow my bliss.

For the time being I’ve decided to build my linguistics business, a back-up career I started years ago, and to build this blog.
  
I hope you enjoy it, gain some insight, offer some thoughts, improvements. This is for readers interested in the energy world, those immersed in it and for those that want to learn about it in plain English. It’s a look at what’s going on from the perspective of a journalist out of a job but still very much in the game.

The River Room at the Asian Civilization Museum (or ACM for short) has one of the most amazing acoustics for a function hall. With full carpeted flooring, high ceiling, it was simply a breeze to equalize the sound of the instruments.

An appreciation night for a Mcgraw&Hill company, we have been performing for Platts for 5 years! Hands down, we knew exactly what they were looking for.

Alexandra Hsieh, Ramon Francis and the Compass Duet.
Piano: Parry Yap
Drums: Bobby Singh
Male Vocals: Ramon Francis
Female Vocals: Alexandra Hsieh
Sound: Lee Kwong Seng Music Studios

The Band:

Alexandra Hsieh

One of the best drummer in Singapore: Bobby Singh

Standing cocktail for guests:

The 219-212 roll call Sunday by which the House passed the Patient Protection and Affordable Care Act (or you can also read the full text of HR 4872 here.)

First, I want to officially go on record in saying, I’m thankful for the pickers. They’re scattered all across our fruited plain. Their job- scurry through the yard sales looking for “things” of value to resale. Usually they broker to dealers, but now with the web, they can sell directly to collectors too.

This important occupation hasn’t always been looked upon favorably. In fact, here’ a definition straight from Zen in the Art of Yardselling-

Pickers- A term that the yardsale community commonly uses to refer to [unscrupulous] people who turn a profit from reselling yardsale-bought goods. Pros resent being classified as pickers seeing as how it puts them in the same category as lawn gypsies.

You know me I’m all for capitalism. I’m glad someone is up at the crack of dawn sifting through boxes of junk. So what they make a dollar…..or thousands when they score a find.

Pickers have now even been elevated in stature- there’s a TV Show promoting this worthwhile activity called American Pickers.

Why are pickers on my mind today? Cause I’m the proud benefactor of a picker’s discovery.

Recently a gentleman in California contacted me. He is a friend of this particular picker- my hero- who had found a big old odd knife. The friend was helping research the knife and they found my Elephant Toenails website.

The friend wanted me to help give “some details” about it, as well as wanting to know if I’d be interested. Long story short, it was an elephant toenail, as you probably guessed. But it wasn’t just the run of the mill old toenail, instead it was of the Jumbo Swellcenter variety- my favorite.

Now my appreciation for this under-appreciated occupation is at an all-time high. Had this gentleman not recognized my knife as potentially having significance (to me anyway), it easily could have ended up being purchased for what it was originally intended- a hard-core work knife- thrown in a toolbox never to be seen again.

I know you knife collectors are nodding with me on this. I can hear your “Amen” all the way down here in the Heart of Dixie.

Now allow me to introduce my sentimental favorite Jumbo Swellcenter- the fruit of a picker’s labor:

Jumbo Swellcenter- C. Platts' Sons Cutlery Company of Eldred, Pa. 1900- 1905

Oh, I forgot to tell you the kicker- the Picker only paid $14.00 for it.

Kinda makes you want to pick a little, now doesn’t it?

I’m an incredibly gullible person, so it could be just that 6 people in a row have consistently lied to me, but apparently my building (there are three in KCH) used to be a psychiatric ward. Apparently two people committed suicide in a room in the basement before King’s took over the building, and then a student committed suicide in the same room so they blocked off the room completely.

Guess what’s also in the basement? That’s right, the washer and dryer. Guess who really has to do laundry soon?

Working gas in storage was 2,607 Bcf as of Friday, January 15, 2010, according to Energy Information Adminsitration (“EIA”) estimates. Stocks were 22 Bcf higher than last year at this time and 6 Bcf below the 5-year average of 2,613 Bcf.  At 2,607 Bcf, total working gas is within the 5-year historical range.

Natural gas futures slumped 3% on Thursday, after the  reported a drop of 266 billion cubic feet in storage of natural gas. The drop was slightly more than the 258 billion expected by analysts polled by Platts. But traders had bid up natural gas since Wednesday on expectations of a big drawdown in supplies. Natural gas for February delivery was recently down 18 cents, or 3.2%, at $5.55 per million British thermal units.

That’s right. I spent my entire Sunday afternoon trying to determine the handle material on my new C. Platts’ Sons Jumbo Swellcenter. Yeah, I know they are over 100 years ago and the likelihood of “discovering” exactly what these handles are, well let’s just say- remote. But you know it is driving me crazy.

In addition to exploring the web, I also posted for help. Then I got my other two black handled C. Platts Jumbos to contrast and compare- and yes, one is the same material, but the other I’m almost positive is ebony. I even got out my super duper magnifying glass to look at this mystery material close-up.

The knife dates between 1900 and 1905. So grabbing a Platts catalog from a book shelf won’t get it. Nope- I can find little info about their particular handle materials going that route- very little info remains about the Platts operations to help me. Instead, I ran every rabbit I could think of relating to handle materials, foreign substances and the history of plastic.

Here is where I am-

1. They ain’t glass (there’s a pin crack). That was a joke….
2. Not celluloid either (no shrinkage or chemical smell when tested).
3. They look like a rubber substance (like Gutta Percha). They are hard and yet, sound like bone or wood when tapped.
4. Don’t think they are Bakelite cause the knife was made before that patent was granted, but who knows.

What I’ve learned though is-

1899 Gutta Percha & Rubber Co

1) Gutta Percha dates back to at least the 1600s. It was used in a crude form by the natives of Malaysian Archipelago for making knife handles, walking sticks and for various other purposes. A John Tradescant noticed the natives putting it on the handles of their machetes and took it back home in 1656. He called it “mazer wood.” Its Malay name is gutta percha and as a resin, it is plastic and mouldable, yet hard, making it suitable for the manufacture of knife handles.

2) Bakelite (a plastic-like substance) was patented in 1907. Just about anything made of it is a sought after collectible today, like radios and jewelry. “Bakelite” molding compounds incorporate other filler materials, like wood, powdered glass or asbestos.

3) Celluloid and its predecessor Parkesine have been around for a long time. As early as the mid-1800s Celluloid served as a replacement for tortoise shell.

4) In 1851, N. Goodyear was granted patent on Ebonite, a hard thermosetting material. Ebonite was a man-made substitute for ebony wood.

5) And all this stuff is called the history of the Polymer Industry, particularly as it relates to synthetic polymers, but in the end, I’m still no closer to knowing what my knife’s handles are than when I started.

And after all of this- I’m not sure they aren’t simply jigged wood or bone dyed black either.

Most energy commodities traded are settled on the basis of a third-party price report.  I used to be a price reporter. It’s not a terrible job…except for having to deal with people blatantly trying to manipulate where you end up placing the price all day every day. Your part in the process is to talk to enough people who actually participated in the market (be it gasoline, vacuum gasoil, LPG, benzene, crude oil, natural gas… whatever) on that particular day to be able to throw out the bad data points and post a price accurately reflecting where trades occurred.

Ah, the smirk of repentence. Michelle Valencia, sentenced to 57 months in August 2008

Some days went by quick and easy: no contention, lots of activity = clear price. Other days you’d spend the entire time being threatened, belittled, cajoled, flattered, etc., by people obviously on the ‘wrong’ side of whereever the market was moving. And that’s the thing they never got: how transparent and desperate they were. Anybody doing the price reporting job reasonably well KNOWS where the market is, and no amout of tom-foolery is going to make it anywhere else.

Because of this, when I read Tom Fowler’s article in the Houston Chronicle today and see things like former managing director James Brooks saying: “I am a sinner. If I have caused anyone pain or suffering I pray in the name of my Lord Jesus Christ they forgive me. I made a mistake of listening to another man. I trusted him blindly,” my reaction is “Fuck you. Happy you found ‘Jesus’ because you obviously were unacquainted with him at the time. Maybe he’ll save your ass in the hereafter, but in the meantime go rot in jail. You were a greedy son-of-a-bitch and got what you deserved. You were trying to maximize YOUR paycheck asshole.”

Another El Paso employee, Wes Walton was also found guilty of market manipulation and cried about how long he was going to have to go away for (11 years). Boo-f-ing-hoo. Prosecuters played phone conversations in which Walton used profanity in his attempts to maniupulate price reporters. His post-sentencing response? “I am a good person. I was very embarrassed by the way I sounded on those the tapes. I’m a good father. I believe if you had a chance to meet my sons you’d see I’m not the raving lunatic on those tapes.”

Oh yes you are fuckhead. I never talked to you, but I talked to plenty like you. You’re not being persecuted. Your crime was not victimless. In your attempts to do whatever it took to enrich yourself you artificially inflated the price us common folk you so disdain pay for the energy we need to stay warm and cook our food. Looks like Jr.’s about to join the real world asshole.

He continues: “But I’m a trader, and a trader can’t be successful if they don’t have a lot of confidence in themselves.”  I dunno…maybe a trader can be successful by managing his book properly, or keeping something other than his OWN bottom line in mind? Just kind of thinking out loud here. 

I like the fact these fucks signed up for substance abuse programs in prison in order to get their sentences shortened. I’m sure if the state offered them the ability to lop off another year for denouncing the evils of the market they abused they’d do that too. After all, being willing to say or do anything to advance themselves is what got them where they are.

In an earlier blog entry Mr. Fowler reported the CFTC had gathered $445 million in fines from dozens of companies that took part in the false reporting.

False prices were reported to Platts’ Inside FERC’s Gas Market Report.

Platts wants to know: the biggest oil stories of ’09

They will publish the results shortly after Christmas. Scanning the list and comparing to my rough draft of the Top 10, I see one story that isn’t currently on my list that I missed: The Valero Foray into Ethanol. Other than that, all of the stories that I have tentatively in my Top 10 are on their list except for two (and I bet people who take the survey will suggest both of them).

I will post my list prior to Christmas, and hope that we don’t see another big year end story like the XOM acquisition of XTO. That is a Top 10 story that came in right at the end of the year. Here is how I ranked the stories Platts had listed, but this was off the top of my head and very subjective. I may decide later on that #3 should really be #8, or that something that didn’t make the list should really be on there. My Top 10 will be a bit different because I have combined some topics that they treated separately.

1. Prices (basis WTI) comes roaring back to the $80 level after almost hitting $30
2. Full-year decline in demand heads toward biggest drop since 1981
3. Natural gas-crude spread in US blows out to unprecedented levels
4. Refinery woes: Valero shuts Delaware City , Sunoco shuts Eagle Point, Repsol shuts Cartegena, Japan cutbacks underway (RR: related to Reliance news)
5. Valero makes big foray into ethanol with multiple ethanol plant purchases; Sunoco follows on smaller scale
6. EU slaps duties on US sales of biodiesel into Europe
7. OPEC holds to its 24.845 million b/d ceiling all year
8. US EPA rules greenhouses gases are a threat to public health, plans on using authority to regulate them
9. ExxonMobil gets into bidding war with Chinese, others over Ghana stake (RR: more for what it signals for the future).
10. Exxon buys XTO for $41 billion

Salt cavern underground natural gas storage reservoir configuration (Source: EIA)

HRN has been stating that natural gas inventories must maintain weekly net deliveries below 65 billion cubic feet (“Bcf”) in order to avoid reaching its ~4.0 trillion cubic feet storage limitation. This past Thursday, the Energy Information Administration reported U.S. natural gas inventories increased 69 Bcf  for the week ended Oct. 2 to hit a new record high Analysts polled by Platts expected net deliveries to be between 59 Bcf and 63 Bcf. After the data, November natural gas futures increased by 2.1% to $5.011 per million British thermal units.

Today, natural gas futures climbed on rising crude oil prices and forecasts of colder weather in the major gas-consuming regions of the U.S.

One analyst with Tradition Energy, was quoted;

“I think the gas market’s getting some support with oil going above $73. With the approach of winter, the market seems to be keying on to anything that seems supportive.”

On the weather front MDA EarthSat, a Rockville, Md., private forecaster, forecasts;

“colder-than-normal temperatures across the Northeast and Midwest this week, with temperatures as much as 16 degrees below normal in some areas. Below-normal temperatures are expected the Northeast, Southeast and Great Lakes regions next week, while colder-than-normal weather should reach the Midwest later in the month.”

Given the net weekly increases in natural gas inventories the cold weather could not come fast enough. Hitting physical storage capacity still leaves downside risk to the price of natural gas with the long term still moving towards an average of $6.50 per unit for 2010. With prices pushing $5.00 has the price of natural gas come up too far too fast? Time will tell. Natural gas will increase in consumption with colder weather. But with record levels of natural gas in inventory at the beginning of the winter heating season, and a overall moderate winter forecast, it will start to raise concern as to how much these record high inventories will ultimately draw down, and where will inventory levels be at the end of the winter heating season.

HRN however has been stating for some time that production cuts will come into full effect late October or early November. With lower net deliveries and increased demand the rule of thumb “inventories always fall faster then demand” will again come into play. In other words, it will not take much to draw down the inventories once net deliveries have been cut substantially. With colder-than-normal temperatures and lower weekly deliveries natural gas inventories will be drawn down rapidly and will put further upward pressures on natural gas prices. Add to this a global interest in increasing natural gas consumption in most countries as a way to meet energy demands and lower carbon emissions. Perhaps the $6.50 average price for 2010 will prove to be a little low.

New analysis from Frost & Sullivan, Strategic Analysis of Oil and Gas Sector in India, finds that the output of the Indian oil and gas sector was 184.3 million tonnes oil equivalent in 2008 and expects this to reach 339.6 million tonnes oil equivalent in 2015.

“To meet this considerable demand, the oil and gas sector is expanding its refining capacity to drive output and export of petroleum products,” says Frost & Sullivan Industry Analyst Siddhartha Saha. “However, this is likely to widen the gap between domestic demand and supply of crude oil.”

A substantial increase in the domestic supply of natural gas and reduced prices of liquefied natural gas (LNG) are likely to encourage gas consumption in power, fertilizer, city gas distribution, and other industrial segments. Owing to the rising consumption of oil and gas, the Government has framed favorable policies to promote exploration and production. This move has caused a quantum leap in domestic natural gas supply. Government policies have also supported the growth of export-oriented refining capacity in the country.

Natural and technological limitations in enhancing global oil production are likely to restrain supply from keeping pace with the demand. This, in turn, could lead to a continued increase in the base-level prices of crude oil.

“In India, the pricing of petroleum products and natural gas continues to be regulated by the government,” observes Saha. “Though international crude oil prices have come down in the short term, they are expected to rebound and rise in a sustained fashion in the long term.”

The oil and gas sector will have to strategize to deal with volatile prices on the supply side and government-regulated product prices in the coming years.

With margins under pressure, Indian refiners have begun to integrate with value-added products such as petrochemicals and invest in methods to improve distillate yields. Moreover, in response to the regulated product prices in the domestic market, the private sector refiners have moved to sell major shares of their products in the export market.

“As crude prices have increased, the spotlight is on widening the gross refining margins by up-grading heavy gas oils and vacuum residue to fuel products,” notes Saha. “To gain additional revenue, Indian refineries are also integrating horizontally to venture into the production of more value-added products.”

Strategic Analysis of Oil and Gas Sector in India is part of the Energy & Power Growth Partnership Services program, which also includes research in the following markets: APAC generator sets market, Chinese power plant market, European nuclear power sector, world alkaline battery market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

According to Platts, a leading global provider of energy and commodities information, China consumed 33.23 million metric tons of oil in May, up a strong 6% from the same month in 2008. The data means Chinese demand has shown a year-on-year increase for a second consecutive month, evidence that demand for fuel in the world’s second largest oil-consuming nation is in recovery. In April, Chinese oil demand rose for the first time in six months. However China’s own crude oil production slipped by more than 1% in May.

“Falling crude oil production in China means its rebounding demand is having a disproportionally large affect on international oil trading. China imported 17.09 million metric tons – about 4 million barrels a day of crude oil last month. That was the second highest month of crude oil imports into China, ever,” said Dave Ernsberger, senior editorial director for Asia at Platts.

According to industry market research firm IBISWorld, US crude oil production meets only about one-third of its oil requirements; the rest is imported. Despite overall growth, industry revenue is expected to slump by about 41% in 2009 –in response to much lower crude oil and natural gas prices. However industry performance is expected to gain ground during the outlook period in response to rising oil and gas prices and higher levels of output.

Recent iron ore freight business for Capesize ships from Brazil to China and or Southeast Asia iron ore continues to be fixed at around the USD 88.00 to USD 88.50 per tonne level for 160,000 tonne cargoes, having recovered from a dip to USD 82 per tonne in the second half of June. The latest business showed South Korea’s POSCO fixing a 170,000 tonne iron ore cargo from Ponta da Madeira to Kwangyang on an August 1-15 loading window at USD 88.50 per tonne on a Transfield ship that has yet to be nominated.

Market is off an all time high of USD 108.50 per tonne seen in mid May, but still remains at historically high levels, bringing little relief to charterers. The USD 108.50 matched the previous all time high achieved in the week of October 9th 2007.

Most of the action has centered around Southeast Asian destinations, other than China, especially South Korea, as Chinese charterers have scaled back some of their spot market activity, having finally agreeing to pricing on long-term iron ore contracts for 2008/2009. Ship brokers also expect imports into China over the next couple of months to be scaled back in order to clear the chronic port congestion at the main discharge terminals and to reduce stockpiles to more manageable levels.

Meanwhile, in the Pacific iron ore rates from Western Australia to China have seen freight rates fall by close to 50% since mid May, when the market peaked at around USD 48 per tonne.

A broker said that “The Western Australian iron ore trade to China, in so far as spot freight, has really slowed down since the end of May, but the market does at least seem to have found a floor for now.”

“This year’s incredible price rise in steelmaking raw materials spurred a shock wave of price increases throughout the steel products markets, the degree of which caught many by surprise,” said Francis Browne, Platts’ Global Director of Steel.  Finished steel prices have risen by nearly 100% since late 2007, fuelled largely by higher costs of iron ore, which is used to feed blast furnaces. “It’s our hope that daily price assessments from Platts will facilitate the industry’s need for more timely price information and help
mitigate such surprises in the future,” explained Browne.

The Platts iron ore price assessments will capture the value in U.S. dollars per dry metric ton ($/dmt) of iron ore fines normalized to 62% iron (Fe) content with standardized impurities shipped on a cost and freight (CFR) basis to main Chinese ports. The price assessments, which began June 2nd, are reported in Platts Steel Markets Daily, an online and print publication containing news, market commentary and price information aimed at the steel, construction, and auto industries as well as commodities-focused money
managers worldwide.