Commodity Corner: Oil Falls Amid Softer Demand Outlook

- Commodity Corner: Oil Falls Amid Softer Demand Outlook

Friday, September 02, 2011
Rigzone Staff
by Matthew V. Veazey

Light sweet crude oil for October delivery lost nearly three percent Friday after the U.S. Department of Labor announced that the U.S. economy added zero jobs last month.

The WTI settled at $86.45 a barrel, a $2.48 day-on-day decline, after the Labor Department reported that the loss of 17,000 government jobs in August offset the addition of the same number of private-sector jobs during the period. According to media outlet MSNBC, the government last reported zero job growth 66 years ago. The Labor Department also announced that the unemployment rate held steady at 9.1 percent.

The unimpressive employment figures support the view that the U.S. economy is experiencing a double-dip recession, lowering expectations for oil demand.

Brent futures also ended the day lower, losing 1.7 percent to settle at $112.33 a barrel. The benchmark traded within a range from $111.57 to $113.51. The WTI peaked at $88.99 and bottomed out at $85.42.

By noon Friday, one-third of Gulf of Mexico natural gas production had been shut-in as Tropical Storm Lee ambled toward the Louisiana coastline. That was not enough to counter the aforementioned dismal economic prospects, however; October natural gas lost more than four percent Friday to settle at $3.87 per thousand cubic feet.

Front-month natural gas fluctuated from $3.85 to $4.065 during floor trading. Reformulated gasoline for October delivery lost a nickel to end the day at $2.84 a gallon after trading within a range from $2.795 to $2.90.

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Dow Chemical Awarded $12.8 Million by Department of Energy To Develop Photovoltaics

- Dow Chemical Awarded $12.8 Million by Department of Energy To Develop Photovoltaics



Sep 2, 2011

As part of the U.S. Department of Energy's SunShot initiative, Dow Solar, a business unit of The Dow Chemical Company (NYSE:DOW), has been awarded a $12.8 million, 3-year grant to fund a program to dramatically reduce the cost of building integrated solar products. The program's goal to ensure that solar power is a viable source for the nation's power needs and economic growth, and accelerate widespread solar adoption.

The Department of Energy grant will help fund a $22.4 million program that brings together leaders from across the entire value chain, including solar solutions providers, national laboratories, universities, leading electronics companies and national home builders to create a new solar technology that reduces the total installation costs and provide reliable, low cost solar energy to residential consumers.

Dow Chemical (NYSE:DOW) has a potential upside of 53.4% based on a current price of $26.83 and an average consensus analyst price target of $41.15.

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Economic Data Reveals Positive Outlook in Jobs and Unemployment

- Economic Data Reveals Positive Outlook in Jobs and Unemployment



Jul 7, 2011

Exciting news in economic data today....

The Labor Department reported that people applying for unemployment benefits fell last week to the lowest level in seven weeks. Applications for benefits dropped by 14,000 to a seasonally adjusted 418,000.

Claims for the prior week were revised up to 432,000 from an original reading of 428,000. Economists had expected new requests for jobless benefits to drop to 424,000. The average of new claims over the past four weeks fell by 3,000 to 424,750.

Continuing claims fell 43,000 to 3.68 million in the week ended June 25. Overall, 7.46 million people received some form of state or federal benefit in the week of June 18, down 61,327 from the prior week.

Not only were jobless claims down in the month but private sector jobs were up.

Private sector companies in the U.S. increased adding 157,000 jobs in the month of June, according to the Automatic Data Processing Inc. (ADP) report.

The job reading in June is higher than what analysts had expected of a increase of 70,000. The ADP announced that the goods-price sector totaled 27,000 jobs in June along with 24,000 in manufacturing. As for the service sector, it added 130,000 jobs.

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First Solar Wins $4.5 Billion in Conditional Loan Guarantees from the DoE

- First Solar Wins $4.5 Billion in Conditional Loan Guarantees from the DoE



Jun 30, 2011

First Solar Inc (NASDAQ:FSLR) is trading up big today after it was reported that the world's largest manufacturer of thin-film solar modules had won $4.5 billion in conditional loan guarantees from the Department of Energy for three California projects.

The company's Topaz and Desert Sunlight projects, which will have 550 megawatts of capacity each, and its 230-megawatt Solar Ranch project, were each offered low-cost financing needed for construction to commence, the agency said today in an e-mailed statement.

The agency must distribute all of the funds authorized for the loan guarantee program before it expires at the end of September. The agency has offered conditional loans or loan guarantees for 40 clean energy products totaling $38 billion, including $16 billion for solar energy.

First Solar said the construction projects approved today will add 1,400 jobs and that all of the 20 million plus cadmium telluride glass panels used in the projects will be manufactured at its plants in Ohio and in Arizona.

Shares of First Solar are trading up 6.3% at $137.57.

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May Federal Budget Deficit Comes in at $58 Billion

- May Federal Budget Deficit Comes in at $58 Billion



Jun 10, 2011

The Federal Government's budget deficit came in at $58 billion in May, down 58% from May 2010, the Treasury Department reported today in its monthly budget statement.

In a once a year revision, the Treasury also said it now expects the Troubled Asset Relief Program to cost a total of $48 billion. That's down from an estimate in August of 2009 that the total cost of the program could reach as high as $341 billion.

The government is getting more back for its investments in banks than it originally estimated it would, an official said. The downwardly revised re-estimate doesn't represent money in or out. It is essentially an accounting change.

The deficit has totaled $927 billion through the first eight months of the year, down $8 billion from the $935 billion reported over the same period in 2010.

The government spent $233 billion in the month, while total receipts were $175 billion. $30.9 billion was spent on interest payments to service the national debt, while receipts increased 19% from last May.

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U.S. Employment Rose Far Less than Expected

- U.S. Employment Rose Far Less than Expected



Jun 3, 2011

Reuters reported that the US employment climbed less than expected in May to record its weakest reading since September. The unemployment rate increased 9.1 percent as cost of energy prices are higher and the impact of the Japan earthquake and tsunami bogged down the economy.
In a poll conducted by Reuters, economists had expected payrolls to increase 150,000 and private hiring to improve. The government even adjusted employment figures for March and April to confirm that 39,000 fewer jobs were created than previously estimated.

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Unemployment Rate Jumps to 9% In April, Economy Adds 244,000 Jobs

Unemployment Rate Jumps to 9% In April, Economy Adds 244,000 Jobs



May 6, 2011

The American economy added 244,000 jobs in April, the largest increase in almost a year, but the unemployment rate actually rose to 9% from the reported 8.8% in March, as more people actively looked for work, the U.S. Bureau of Labor Statistics reported today.

The private sector added 268,000 jobs, with state and local governments continuing to make cuts in an effort to balance their budgets.

Economists had expected just 175,000 jobs to be added in the month. The change in total nonfarm payroll employment for February was revised up to a gain of 235,000 from 194,000 and the change for March was also revised up, from 216,000 to 221,000.

Since the low in February 2010, total payroll employment has grown by 1.8 million in the U.S. Private sector employment has increased by 2.1 million over the same period.

Employment gains for the month were led by hiring in the retail (57,000), professional and business services (51,000), health care (37,000), and leisure and hospitality (46,000). Manufacturing employment grew 29,000, and mining grew 11,000 in the month.

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The Labor Department Reported Jobless Claims Rose 27,000 To 412,000, Wholesale Costs Up 0.7%

The Labor Department Reported Jobless Claims Rose 27,000 To 412,000, Wholesale Costs Up 0.7%



Apr 14, 2011

The Labor Department reported that applications for jobless benefits rose 27,000 in the week ended April 9 to 412,000. Economists had expected that claims would be little changed at 380,000, according to a Bloomberg News survey.

The labor market is showing signs of strengthening as payrolls increase, which could help to sustain gains in consumer spending.

The average of new claims over the past four weeks rose by 5,500 to 395,750. The Labor Department also reported that wholesale costs in the U.S. rose 0.7% in March, led by higher prices for energy, light trucks and passenger cars. Economists had expected a 1% gain on average for the producer price index.

The increase was smaller than forecast as food prices unexpectedly dropped. The core measure, excluding food and energy costs, rose 0.3%.

Murphy Oil climbs after receiving deepwater drilling permit

Murphy Oil climbs after receiving deepwater drilling permit



The Interior Department yesterday granted a deepwater drilling permit to Murphy Oil (MUR) for a sidetrack well, according to a press release issued by the Interior Department's Bureau of Ocean Energy Management, Regulation and Enforcement. A sidetrack well is drilled to a new geologic target or a new location within the original target from the existing wellbore.

The company had a rig on location when drilling preparation activities were halted due to the temporary drilling suspensions imposed following the Deepwater Horizon oil spill. In early afternoon trading, Murphy gained $2.41, or 3.21%, to $77.48.

Gas Driller Citations to Be Reviewed

Gas Driller Citations to Be Reviewed

Thursday, March 31, 2011
Knight Ridder/Tribune Business News
by  Timothy Puko, The Pittsburgh Tribune-Review

Every Marcellus shale drilling citation will need a review from the new Department of Environmental Protection chief before final approval, said an agency spokeswoman.

All violation notices for gas drillers and the enforcement actions the agency plans must be e-mailed to Acting Secretary Michael Krancer, spokeswoman Katherine Gresh said. The department's six regions each enforce rules differently, and Krancer is trying to improve consistency across the state, she said, noting the policy may be temporary.

But putting a political appointee in a position to micromanage regulatory enforcement could lead to unfair interference on behalf of campaign donors, said Myron Arnowitt, state director for CleanWaterAction.org. Gov. Tom Corbett received $835,000 in campaign contributions from gas companies, according to MarcellusMoney.org, a website run by Common Cause Pennsylvania and Conservation Voters of Pennsylvania.

"Krancer has talked a lot about being scientifically-based, factually-based and implementing the law," Arnowitt said. "It's not clear how what he's doing does any of that."

Corbett has promised he will give no special consideration to the industry because of the donations he has received.

The DEP has spent much of the past three years playing catch-up with the gas drilling industry, going on a hiring spree to ensure it had enough employees to match the plethoraof permit requests statewide. There were 1,200 violations last year, and adding another layer of bureaucracy to enforcement raises more questions about how quickly the agency can stop lawbreakers, Arnowitt said.

Gresh said the effort won't be time consuming, but she didn't know how much time it might add to Krancer's day or how many more documents he might need to review. Ultimately, it will make the agency more efficient by ensuring new staffers received proper training and are enforcing regulations consistently, she said.

"We have communications like that around the department all the time. This is one aimed at achieving a goal that is very important to Secretary Krancer," Gresh said. "We'll take whatever time is necessary to ensure the consistency to improve efficiency, protect the environment, and, you know, which will benefit all Pennsylvania."