As Supply Glut Eases, Gulf Refiners Likely to Benefit

The expanded Seaway Pipeline, along with other new crude shipping capacity, marks a new era for the U.S. oil industry, soon flooding the Gulf Coast with light, sweet grades and signaling the region's impending disconnect from the North Sea benchmark Brent, according to Platts Oilgram News.

Earlier this month, the Seaway Crude Oil Pipeline Co. completed an expansion that boosted crude capacity to 400,000 barrels a day, nearly triple previous levels, between the Cushing, Okla., storage hub and the Texas Gulf Coast. Last May, the pipeline's inland flow was reversed amid efforts to address a glut in the central U.S.

The Seaway Pipeline expansion "allows Gulf Coast refiners to participate in the raw material advantage that we’ve seen in the Midwest," industry consultant Andy Lipow told Platts Oilgram News. "I anticipate seeing Gulf Coast refiners running high operating rates, [which will] translate the crude oil surplus into a petroleum products surplus, given the stagnant demand for refined products in the U.S.," he added.

Refining margins along the Gulf are expected to improve with the influx of "advantaged" crudes, but eventually regional crude prices will come under pressure from the new supply, analysts said. The WTI-Brent spread narrowed sharply earlier this month, as the Seaway expansion renewed market optimism that additional export capacity will help cut heavy stockpiles at Cushing.

Read the entire report
 

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Kinder Morgan Reports 4th Quarter Earnings KMP KMR KMI

Kinder Morgan Energy Partners (NYSE: KMP) today increased its quarterly cash distribution per common unit to $1.29 ($5.16 annualized) payable on Feb. 14, 2013, to unitholders of record as of Jan. 31, 2013.

This represents an 11 percent increase over the fourth quarter 2011 cash distribution per unit of $1.16 ($4.64 annualized) and is up from $1.26 per unit ($5.04 annualized) for the third quarter of 2012. KMP has increased the distribution 46 times since current management took over in February 1997.

Chairman and CEO Richard D. Kinder said, “KMP had a strong fourth quarter and a very successful year overall. We will distribute our budget of $4.98 per unit for the full year, which represents an 8 percent increase over the 2011 distribution of $4.61 per unit.

KMP also produced cash in excess of our distribution target of approximately $30 million. For 2012, all five of KMP's business segments recorded higher results than in the previous year and generated $4.384 billion in segment earnings before DD&A and certain items, a 20 percent increase from $3.639 billion in 2011.

Summary: Quarter 4 EPS of $0.61 misses by $0.03. Revenue of $2.51 billion beats by $0.06.

Read the entire Kinder Morgan earnings report


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Is it an MLP that Icahn is Really After in Transocean?

Carl Icahn’s new stake in Transocean Ltd. (RIG) may raise pressure on the world’s largest offshore driller to put some of its rigs into a tax advantaged partnership as the billionaire seeks to boost his investment’s value.

Transocean’s announcement this week that Icahn bought 1.56 percent of its shares and sought regulators’ permission to own more than 3 percent stirred a debate in the investment community as the activist investor known for shaking up companies remained silent about his intentions. He’s jumping in less than two weeks after Transocean agreed to pay the U.S. $1.4 billion to settle its liability in the 2010 Gulf of Mexico oil spill.

With the company already in turnaround mode, the shares have led peers with a 34 percent gain over the past year, some investors and analysts said they expect the 76 year old to push for Transocean to create a master limited partnership, or MLP, to raise cash for the parent company and spur growth with its tax free structure.

It would be the second drilling rig partnership after Stavanger, Norway based Seadrill Ltd. (SDRL) spun off assets to create Seadrill Partners LLC (SDLP) in October.....Read the entire Bloomberg article.


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Progress Energy Chooses TransCanada to build new LNG Pipeline

A $5.1 billion natural gas pipeline that will transport liquefied natural gas off Canada's West Coast will be built by TransCanada Corp., the builder of the Keystone XL oil pipeline. Bloomberg reported the Prince Rupert Gas Transmission project could transport up to 2 billion cubic feet of LNG a day from the Montney region in Alberta and British Columbia to an export facility Port Edward, B.C. The pipeline still needs to be approved by the government.

“From a trading perspective, we view today's announcement as an unexpected positive development that should provide support for [TransCanada] shares,” said Pierre Lacroix, an analyst at Desjardins Securities Inc., according to Bloomberg.

Read the entire PennEnergy.com article

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Carley Garner Gives Cramer the Numbers for Natural Gas

One of our favorite people to follow in the commodities sector is Carley Garner. You may know her best as the author of "A Trader's First Book on Commodities".

Well she has set us up a nice trade over the next 4 to 6 weeks, watch it here as Jim Cramer lays out the numbers and the trade. Carley tells us, "If you are interested in bullish strategies in natural gas, you will likely be better served waiting for more favorable entry levels".




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Statoil Leads the way in Norway Energy Auction

Statoil (STO) was the biggest winner in Norway's energy auction today, receiving 14 licenses including seven operatorships spread across the North, Norwegian and Barents seas.

Shell (RDS.A) and Total (TOT) received the most operatorships among non Norwegian firms, with four each; they received five and eight licenses, respectively. XOM, CVX and COP also picked off a few licenses.




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Learn from the Master...."Live Options Strategy Webinar"

This Thursday, John Carter from "Trade The Markets" is conducting a free "Live Options Strategy Webinar"

John's agreed to teach YOU the strategies he plans on using in 2013...no matter what size your account or level of activity.

Here are the details:

Date: Thursday, January 17th Time: 8:00pm Eastern Time (New York Time)

Click Here To Register

In this webinar John will show you ...

... His 3 favorite options trading strategies,
... How to find high probability trades,
... How to manage options trades,
... His trading rules for doubling his $500,000 account ......and more.


So mark your calendar for Thursday night, January 17th at 8:00pm Eastern Time (New York Time).

Click Here To Register Now

The Technical Traders Morning Charts

Yesterday’s trading session played out exactly as posted in the morning chart update. Today will be a different story from the looks of it as the dollar index looks to be putting in a bottom and that has the SP500 down 0.40% this morning. It may trigger our first entry point to let long stocks today.

Crude oil has been trading sideways/higher the past week but the on balance volume clearly shows sellers are unloading contracts at the $94 level. Yesterday we talked about how crude oil was walking a fine line up its support trend line and once that breaks look out! Price is holding up but be aware it could drop fast and hard any day here....Check out all of this mornings charts for the U.S. Dollar, crude oil, natural gas, SP 500 futures, gold, silver and bonds.

The Technical Traders Morning Charts


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Trends & Trading Signals: Gold, Miners, Crude Oil and the SP500

Gold and gold miner stocks have underperformed in 2012 disappointing most traders. That being said it has traded in a large sideways range since September 2011 and remains stuck in this range as of this week. Investments trading sideways are not my preferred investment of choice because some commodities and stocks for that matter can trade sideways for years before making another bull market rally.

That being said in the last six months gold has started to show life that a new bull market may be starting. 2013 is starting to look as though gold, silver and precious metals miners could lead the market higher if they can break out of their basing patterns. Until we get more bullish price action I am not planning to get long.

Let's take a look at the gold ETF and Gold Miner charts


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Icahn Seeking Approval to Acquire Voting Securities in Transocean RIG

Pursuant to Article 20 of the Swiss Federal Act on Stock Exchanges and Securities Trading, which requires the disclosure of securities positions at various thresholds in excess of 3% of the voting rights of a listed company, Transocean has reported with the SIX Swiss Exchange that it has been notified by Carl Icahn that Mr. Icahn [together with certain of his affiliates] holds shares of Transocean in an amount totaling 1.56% of the issued shares and has a synthetic long position in shares of Transocean (including options to acquire shares) representing 1.70% of the issued shares.

Additionally, pursuant to the Hart-Scott-Rodino Antitrust Improvements Act, Mr. Icahn has notified Transocean that Icahn is seeking approval to potentially acquire voting securities of Transocean in an amount exceeding the $682.1 million Hart-Scott-Rodino threshold, but less than that Act's threshold of 25% of the outstanding voting securities, depending upon various factors.

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