One Fin Energy Basket

Last week the One Financial Energy Basket, which tracks the performance of US Crude, Natural Gas, Heating Oil and RBOB Gasoline, finished the week up on supply concerns.

Crude Oil

Crude oil prices moved higher last week for the largest gain in almost two months as hurricane Gustav, forecast to be the largest hurricane in the Gulf of Mexico, approaches oil refineries.

Royal Dutch Shell and ConocoPhillips has moved staff from Gulf of Mexico platforms and cut production in a region that pumps 26 percent of U.S. crude oil. Louisiana officials said they will evacuate residents in two counties around New Orleans that house refineries owned by Exxon Mobil and Valero Energy Corp.

Hurricane Katrina, which reached Category 5, the strongest grade of hurricane, closed 95 percent of offshore output in the Gulf of Mexico. Almost 19 percent of U.S. refining capacity was idled because of damage and blackouts caused by hurricanes Katrina and Rita in 2005.

Prices were supported by concerns over increasing tensions between Russia and the West. Russia may curb oil shipments to Western Europe in retaliation for the threat of European Union sanctions and NATO’s naval actions in the Black Sea. Supplies may be cut as early as Monday. The cut would come at the same time as an emergency EU summit in Brussels to discuss sanctions against Russia.

Prices dropped after the International Energy Agency said it would tap strategic stockpiles if Tropical Storm Gustav disrupts energy production in the Gulf of Mexico. The IEA coordinated the release of crude oil and fuel supplies after hurricanes Katrina and Rita struck the U.S. Gulf Coast in 2005.

Prices also fell following data that showed U.S. stockpiles of natural gas, a competing fuel, increased more than analysts forecast. Supplies rose 102 billion cubic feet to 2.757 trillion cubic feet last week, the U.S. Energy Department said today. A gain of 84 billion was expected.

Crude oil may rise this week on forecasts that Tropical Storm Gustav will strike production platforms in the Gulf of Mexico. Eleven of 29 analysts surveyed by Bloomberg said prices will increase through 5 September. Nine of the respondents said crude oil will drop and nine said prices will be little changed. Last week 55 percent expected futures to increase. The Gulf of Mexico is home to 26 percent of U.S. oil output and 14 percent of the country’s gas production. In 2005 Hurricane Katrina closed 95 percent of offshore output in the region.

The U.S. will be celebrating the Labour Day holiday on Monday 1 September and floor trading on the Nymex will be closed. Traders will still be able to carry out electronic deals.

Natural Gas

Natural gas prices gained last week on concern hurricane Gustav will hit production in the Gulf of Mexico, however gains were limited after prices plunged as much as 10 percent on Thursday, the most in a year, after U.S. supplies rose nearly twice the average for this time of year.

Inventories advanced 102 billion cubic feet in the week ended 22 August, to 2.757 trillion cubic feet, said the U.S. Energy Department, the largest increase since 11 July.

Analysts expected stockpiles to increase 84 billion cubic feet. The average change for this time of year over the past five is an increase of 57 billion. Stockpiles are 71 billion cubic feet above the five-year average for this time of year, the department said today. The injection is the largest ever for the same week of the year, based on department data dating to December 1993.

Gas also declined as domestic production is expected to rise 8 percent this year on higher output from such fields as the Barnett Shale in Texas, the department said in its monthly Short- Term Energy Outlook on 12 August.

Production is surging as seasonal temperatures limit the need for gas to produce electricity to power air conditioners.

Date (GMT) Country Event Actual Survey Previous

Sep 100:00 United States Labor Day Holiday
01:30 Australia Current Account Balance (2Q) -12774M -19492M
01:30 Japan Labor Cash Earnings (YoY) (Jul) 0.3% -0.6%
05:00 Japan Vehicle Sales (YoY) (Aug) -14.9% 5.4%
06:00 Germany Retail Sales (YoY) (Jul) 0.0% -2.2% -3.9%
06:00 Germany Retail Sales (MoM) (Jul) -1.5% -0.4% -1.4%
06:30 Australia RBA Commodity Index SDR (YoY) (Aug) 41.1%
07:30 Switzerland SVME – Purchasing Managers’ Index (Aug) 52.5 54.1
07:55 Germany Purchasing Manager Index Manufacturing (Aug) 49.7 49.9
08:00 European Monetary Union Purchasing Manager Index Manufacturing (Aug) 47.6 47.4
08:30 United Kingdom Index of Services (Jul) 0.4%
08:30 United Kingdom M4 Money Supply (MoM) (Jul) 0.9%
08:30 United Kingdom M4 Money Supply (YoY) (Jul) 11.2%
08:30 United Kingdom M4 Sterling Lending (Jul) £51.4B
08:30 United Kingdom Mortgage Approvals (Jul) 36K
08:30 United Kingdom Net Consumer Credit (Jul) £0.9B
08:30 United Kingdom Net Lending to Individuals (Jul) £4B
08:30 United Kingdom Purchasing Manager Index Manufacturing (Aug) 44.3
23:30 Japan Monetary Base (YoY) (Aug) -0.7%
Sep 2 01:00 Japan BoJ’s Governor Shirakawa Speech
04:30 Australia RBA Interest Rate Decision 7.00% 7.25%
05:45 Switzerland Consumer Price Index (MoM) (Aug) -0.4%
05:45 Switzerland Consumer Price Index (YoY) (Aug) 3.1%
05:45 Switzerland Gross Domestic Product (YoY) (2Q) 3%
05:45 Switzerland Gross Domestic Product s.a. (QoQ) (2Q) 0.3%
08:30 United Kingdom PMI Construction (Aug) 36.7
09:00 European Monetary Union Producer Price Index (MoM) (Jul) 0.9%
09:00 European Monetary Union Producer Price Index (YoY) (Jul) 8%
14:00 United States Construction Spending (MoM) (Jul) -0.4%
14:00 United States ISM Manufacturing (Aug) 50
21:00 United States ABC/Washington Post Consumer Confidence (Aug 31) -50
23:01 United Kingdom Nationwide Consumer Confidence (Aug) 51
23:30 Australia Gross Domestic Product (QoQ) (2Q) 0.6%
Sep 3 01:30 Australia Gross Domestic Product (YoY) (2Q) 3.6%
03:00 New Zealand ANZ Commodity Price (Aug) 1.8%
07:55 Germany Purchasing Manager Index Services (Aug) 53.1
08:00 European Monetary Union Purchasing Manager Index Services (Aug) 48.3
08:30 United Kingdom Purchasing Manager Index Manufacturing (Aug)
08:30 United Kingdom Purchasing Manager Index Services (Aug) 47.4
09:00 European Monetary Union Gross Domestic Product s.a. (QoQ) (2Q) 0.7%
09:00 European Monetary Union Gross Domestic Product s.a. (YoY) (2Q) 2.1%
09:00 European Monetary Union Retail Sales (MoM) (Jul) -0.6%
09:00 European Monetary Union Retail Sales (YoY) (Jul) -3.1%
09:30 United Kingdom BRC Shop Price Index (YoY) (Aug) 3.2%
11:00 United States MBA Mortgage Applications (Aug 29) 0.5%
13:00 Canada BoC Interest Rate Announcement 3%
14:00 United States Factory Orders (Jul) 1.7%
18:00 United States Fed’s Beige Book
Sep 4 01:30 Australia Trade Balance (Jul) 411M
10:00 Germany Factory Orders n.s.a. (YoY) (Jul) -6.1%
10:00 Germany Factory Orders s.a. (MoM) (Jul) -2.9%
11:00 United Kingdom BoE Interest Rate Decision 5%
11:45 European Monetary Union ECB Interest Rate Decision 4.25%
12:15 United States ADP Employment Change (Aug) 9K
12:30 United States Continuing Jobless Claims (Aug 23) 3423K
12:30 United States Initial Jobless Claims (Aug 30) 425K
12:30 United States Nonfarm Productivity (2Q) 2.6%
12:30 United States Unit Labor Costs (2Q) 2.2%
14:00 United States ISM Non-Manufacturing (Aug) 49.5
15:30 United States EIA Crude Oil Stocks change -0.1M
Sep 5 06:30 Australia Foreign Reserves (Aug) 35.9B
10:00 Germany Industrial Production s.a. (MoM) (Jul) 0.2%
10:00 Germany Industrial Production s.a. w.d.a. (YoY) (Jul) 1.7%
11:00 Canada Net Change in Employment (Aug) -55.2K
11:00 Canada Unemployment Rate (Aug) 6.1%
12:30 United States Average Hourly Earnings (MoM) (Aug) 0.3%
12:30 United States Average Hourly Earnings (YoY) (Aug) 3.4%
12:30 United States Average Weekly Hours (Jul) 33.6
12:30 United States Nonfarm Payrolls (Aug) -51
12:30 United States Unemployment Rate (Aug) 5.7%
14:00 Canada Ivey Purchasing Managers Index (Aug) 65.5

About the author

Content provided by One Financial (onecfd.com) Disclaimer: The information given in this message is provided on an information-only basis for marketing purposes and may not be construed as constituting the making of any recommendation or giving of advice on the part of One Financial. This information has not been prepared in accordance with any legal requirement to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. This information may have been prepared by firms other than One Financial and One Financial may not be held responsible for the accuracy or otherwise of its contents.

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.