Showing posts with label consumption. Show all posts
Showing posts with label consumption. Show all posts

Wednesday, April 3, 2013

Is Investing in Electric Cars the Best Way to Invest in Crude Oil?

The United States alone consumes 18.9 million barrels of oil every day, rain or shine. And China's appetite grows more ravenous by the minute, with daily consumption doubling from 5.5 million barrels in 2003 to nearly 9.8 million in 2011.

Aside from a brief downturn during the recession, global oil consumption has been moving inexorably higher.

Worldwide oil consumption passed its pre-recession 2007 peak in 2010 and continues to rise. It is projected to reach 90.2 million barrels per day this year. Meanwhile, the world's oil companies will only produce 90 million barrels per day.

In other words, demand will outstrip supply by 200,000 barrels per day, or by about 73 million barrels this year.

We can barely feed our energy appetite today. And we're getting hungrier. Per-capita consumption in China and India is still less than one-tenth that of the United States, but these growing middle classes are catching up fast. In fact, 18 million new cars hit the road in China last year -- compared with 14.5 million in the United States -- stretching oil supplies even thinner.



Meanwhile, most production grounds have been in a steady decline for decades. Future oil exploration activity will be focused in deep offshore basins, which are expensive to tap.

That's why I'm advising readers to invest in the "Oil of the 21st Century."

I call it this because no other precious resource in the world can do what it does. Businesses are willing to pay hundreds of millions a year for its unique qualities -- it is a key ingredient in a wide range of products, from pharmaceuticals to rocket fuel. But its real magic is that, pound for pound, this featherweight metal can store more electric energy than just about any other material.

I'm talking about lithium.

You see, lithium is the battery maker's best friend. Rechargeable lithium-ion batteries have twice the energy density of yesterday's outdated nickel-cadmium technology, making them indispensible in everyday products from digital cameras to portable video game consoles.

You've probably got some lithium within reach right now. If you own an iPad, iPod or iPhone, you definitely do.

But electronic gadgets aren't why I'm so excited by lithium.

The real action is in cars -- electric cars, to be specific.

President Barack Obama wants to put 1 million electric cars on the road by 2015, and 10 times that amount by 2018. The government is bankrolling the transition with some heavy incentive dollars.

GM is going electric with the Volt. Ford is planning a battery-powered car based on the Focus. And, of course, Toyota has the Prius... Honda the Insight... and Nissan the Leaf.

But car makers won't be the biggest winners from the craze for electric vehicles. Instead, I think there's another way to make even more money from the transition to battery power.

Unlike gold, silver and other metals, it is virtually impossible to invest directly in lithium. The Global X Lithium Exchange Traded Fund (NYSE: LIT), however, is the next best thing.

The fund's three largest positions, or roughly half its portfolio, is invested in companies engaged in lithium mining and refining. These companies have diverse business lines, so these aren't pure plays. But collectively, this trio accounts for the majority of the world's lithium production. The rest of the fund's assets are invested in a well rounded mix of battery makers.

Click here to get your FREE Trend Analysis for LIT

Risks to Consider: In many respects, this industry is still in its infancy. So it's difficult to say which technologies will emerge victorious and which will become historical footnotes. That means there will be some spectacular winners in this field, but also some big losers.


The 2 Energy Sectors You Should Invest in This Year

Monday, August 6, 2012

Biodiesel demand Estimates Now Provided in Petroleum Supply and Demand Balances

Test drive our video analysis and trade idea service for only $1.00

Biodiesel production data were reported for the first time in U.S. and regional petroleum supply and disposition balances as published by the U.S. Energy Information Administration (EIA) in the Petroleum Supply Monthly (PSM) in May 2012. The biodiesel production data in the PSM will allow EIA to more completely account for biodiesel when calculating demand (measured as product supplied) for distillate fuel oil. Biodiesel production and other biodiesel data are now included in the item "Renewable Fuels Except Fuel Ethanol" in PSM supply and disposition tables.

In addition, previously published PSM data for January-April 2012 were revised to include biodiesel production. Similar revisions will be reported for 2011 when the Petroleum Supply Annual is released at the end of August 2012.

graph of U.S. Distillate fuel demand, as described in the article text

Product supplied is a widely followed measure of demand for petroleum products. For finished petroleum products (including distillate fuel oil), product supplied is calculated as the sum of production, imports, net receipts (only for regional data), and adjustments minus the sum of stock change, refinery and blender input, and exports. While not a measure of actual consumption, product supplied has proven to be a useful approximation of demand for petroleum products.

In the case of biodiesel, EIA assumes that any biodiesel that is produced is blended with diesel fuel, adding to the diesel fuel pool. This biodiesel production amount adds to the distillate fuel product supplied level, as shown on the graph. Including biodiesel production in the distillate fuel production volume added between 50 to 70 thousand barrels per day over the first five months of 2012.

Get our Free Trading Videos, Lessons and eBook today!

Saturday, May 19, 2012

Natural Gas Consumption Reflects Shifting Sectoral Patterns

Get Today's 50 Top Trending Stocks

U.S. natural gas consumption since 1997 reflects shifting patterns. Total U.S. natural gas consumption rose 7% between 1997 and 2011, but this modest growth masks bigger changes in individual sectors. Electric power is now the largest natural gas consuming sector and it shows perhaps the greatest sensitivity to price changes. The graphics below highlight key factors that influence natural gas consumption.

The electric power sector has the flexibility to shift some amount of baseload power generation, much of which has traditionally been fueled by coal, to underutilized natural gas generators without requiring additional investments in infrastructure.

graph of Annual natural gas consumption by sector, as described in the article text

Natural gas consumption for power generation is expanding. An earlier Today in Energy article noted that consumption of natural gas for electric power (or "power burn") has exceeded natural gas consumption in the industrial sector since early 2009. The power sector added a significant amount of new natural gas fired generating capacity over the last decade, much of which was in the form of efficient combined cycle units.

For many years, while coal fired generation was less expensive, those natural gas fired combined cycle units were used at relatively low rates. Recently, with natural gas prices declining and coal prices rising, dispatching natural gas generators in some parts of the country has become increasingly competitive with running coal generators. Competition between natural gas and coal appeared first in the Southeast, where coal fired power was more expensive due to the cost of transporting coal over long distances.

graph of Factors affecting natural gas consumption in the electric power sector, as described in the article text

In the industrial sector, natural gas consumption increased in 2010 and 2011, reversing a trend of declining consumption that lasted from the mid-1990s to 2009. Natural gas is used in the industrial sector and manufacturing subsector for process heating, steam generation, onsite electricity generation, space heating, and petrochemical processing.

graph of Factors affecting natural gas consumption in the industrial sector, as described in the article text


The downward trend in natural gas prices has lowered the cost of a key input for some industries. However, the short term flexibility to take immediate advantage of low natural gas prices is limited in this sector, because many manufacturers that relied heavily on natural gas as fuel or feedstock closed down or moved abroad in the late 1990s and early 2000s in the face of rising natural gas prices. For various reasons, some of the remaining firms may switch fuel to natural gas, and others may never switch regardless of fuel costs, leaving a wide range of dependencies on natural gas prices (see Tables 10.15 and 10.21 from EIA's Manufacturing Energy Consumption Survey).

Domestic and global macroeconomic trends affect industrial activity, which is often tracked by industrial indices. However, some U.S. manufacturers (e.g., petrochemicals) that use natural gas derived feedstocks (e.g., ethane) are enjoying a competitive advantage while international competitors consume more expensive, oil derived feedstocks.

Residential and commercial consumption of natural gas is primarily for space heating, water heating, and cooking; the most influential short term factor for these sectors is weather (quantified here as heating degree-days).

graph of Factors affecting natural gas consumption in the electric power sector, as described in the article text

The residential and commercial sectors have limited short-term flexibility to take advantage of inexpensive natural gas, as heating systems can be expensive to modify and are replaced infrequently. Over longer timescales, the number of households using natural gas for space heating has increased, for example, in the Northeast, households are switching their heating fuel from heating oil to natural gas. However, the increasing efficiency of home heating systems (lower average gas use per customer) masks some of the effect of the increasing number of natural gas customers, even when normalized for weather.

Seasonal patterns in natural gas consumption appear in all sectors. Colder winter weather means more natural gas consumption for space heating, and warmer summer weather leads to increased consumption in the power sector with increasing demand for air conditioning.

This should create some controversy, when is the best time of day to profit?

Friday, October 21, 2011

EIA: Libya Resumes Natural Gas Exports to Italy

On October 13, 2011, Libya resumed natural gas exports to Italy via the 340-mile, Greenstream Pipeline (Greenstream), which is jointly owned by the Eni S.p.A. and the National Oil Company of Libya. Natural gas  delivery imports to Sicily, Italy, at the Gela receipt point, are now about 150 million cubic feet per day (MMcf/d).


Source: U.S. Energy Information Administration, based on Bentek Energy, LLC.


Since February, unrest in Libya resulted in curtailed natural gas exports to Italy. Prior to the February curtailment, Libya supplied Italy with about 900 MMcf/d of natural gas, or 11% of Italy's average daily gas demand in 2010. Italy offset much of the reduced natural gas imports from Libya with increased imports of natural gas from Russia.



After natural gas flows resumed following the disruption, natural gas flowed from the onshore Wafa field about 300 miles southwest of Tripoli to Italy. Natural gas production at Wafa remained open during the crisis  and supplied natural gas to Libyan power plants. Most of Greenstream's natural gas usually comes from the offshore Bahr Essalam field (see map); only those volumes from Wafa in excess of domestic consumption are  available for export via Greenstream.

Thursday, September 22, 2011

It's a Simple Theory.... Lower Equity Prices, Means Lower Consumption of Crude Oil

The massive move down in the crude oil market today is largely reflected in what we have been saying about this market for the past several weeks. It only underscores just how powerful our longer term Trade Triangle technology is. As you may recall we are tying the crude oil market with the equity markets. As the equity markets go, so does crude oil at the moment.

The theory is lower equity prices, means lower consumption of oil. It’s not important whether we agree or disagree with that statement. What is important is how the market is acting. Pay attention to the MACD that is beginning to lose momentum and could be rolling over to the downside if we have any more negative closes. Short, Intermediate and Long term traders should continue to be short the crude oil market.

November crude oil closed sharply lower on Thursday as it extended this week's breakout below August's uptrend line. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If November extends this week's decline, August's low crossing at 76.61 is the next downside target.

Closes above the 20 day moving average crossing at 87.49 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 87.49. Second support is last Tuesday's high crossing at 90.60. First support is today's low crossing at 79.66. Second support is August's low crossing at 76.61.

Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 100

Recent articles.....

Gold Continues to Correct as Forecast in a 4th Wave Pattern

Recent Market Trends Remain in Place ..... Get Positioned!

Tuesday, September 22, 2009

The Chinese Oil Demand Teaser


One day China’s oil demand is bad and the next, good. Welcome to another mystery from The Middle Kingdom. Yesterday oil prices were pressured on reports of bulging inventories in China and weak demand. Platts reported that Chinese oil demand in August slid 5.4% from July. Platts said that China's implied oil demand totaled 33.02 million metric tons in August versus 34.92 million metric tons in July. Oil refiners in China are reporting that demand is still weak. Reuter’s news reported that Chinese oil company Sinopec had sales of refined oil products still lower than one year ago. Reuters says that despite a moderate inventory draw in August, China's diesel inventories had been building up faster than gasoline had in past months, reflecting the slower consumption for the main transportation fuel used by Chinese industry and trucks.....Read the entire article

Tuesday, September 15, 2009

Crude Consolidates Just Below $70 Barrel


Crude futures are returning earlier gains after failing to break through the psychological $70/bbl level following much better than expected Retail Sales data. The optimistic Retail Sales data is an encouraging development for battered U.S. consumption. A recovery in Retail Sales implies an improvement in broad based consumption, lifting the price of crude. However, the positive impact from the out performance of U.S. data is being countered by a collapse in the GBP/USD. BoE Governor King delivered another monetary shock today (refer to GBP/USD analysis), sending the Pound sharply lower against all of its major crosses. The negative performance of the GBP/USD is dragging on crude since it is a dollar denominated commodity. On the other hand, it is encouraging to see the EUR/USD and gold holding steady despite the.....Read the entire article

Monday, August 3, 2009

Oil Climbs Above $72, Gasoline Jumps on Prospect of Demand Gain

Crude oil rose above $72 a barrel for the first time in a month and gasoline surged as increasing industrial activity bolstered optimism that fuel consumption will rebound. Oil gained as much as 3.9 percent after reports showed that U.S. manufacturing shrank at the slowest pace in 11 months and factory output in China advanced to the highest level in almost a year. The Standard & Poor’s 500 Index climbed above 1,000 for the first time since November, also bolstering optimism that raw material demand and prices will increase.....Complete Story

Get your favorite symbols' Trend Analysis TODAY! Just Click Here
Stock & ETF Trading Signals