What We're Saying About. Oil
  • Bloomberg, July 1, 2009: Gasoline futures tumbled after the U.S. government reported that stockpiles rose a third week as refiners kept rates at a six-month high and demand fell to the lowest in four weeks. Gasoline inventories increased 2.33 million barrels, or 1.1 percent, during the week ended June 26, the Energy Department reported today, more than the 2 million gain projected in a survey by Bloomberg News. Demand dropped a second consecutive week to the lowest since May 29. The difference between gasoline and crude oil, or the crack spread, based on August futures contracts, lost approximately 92 cents to $9.07 a barrel. “Consecutive weeks of stock builds in the middle of gasoline season and fairly boring demand points to refiners having to cut back runs to protect margins, but at least they’re doing their patriotic duty to keep gasoline cheap for the July 4 Independence Day holiday,” said Sander Cohan, an analyst with Energy Security Analysis Inc in Wakefield, Massachusetts.
  • Bloomberg, June 25, 2009: Stockpiles at Cushing, Oklahoma, where New York-traded West Texas Intermediate crude is delivered, fell 733,000 barrels to 28.2 million last week, the lowest since the week end Dec. 26. “The big drop in supplies at Cushing will definitely be felt on Nymex,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. Gasoline supplies rose 3.87 million barrels to 208.9 million last week, the Department of Energy said. Refineries operated at the highest rates this year and fuel demand fell 5.5 percent, the biggest drop since January.
  • Bloomberg, June 23, 2009: The Energy Department is expected to report that supplies of crude oil dropped 950,000 barrels, according to the median of 14 analyst responses in the Bloomberg News survey. Stockpiles fell 3.87 million barrels in the week ended June 12, the department said last week. “We had a very bullish crude oil number last week and may get another in tomorrow’s Energy Department report,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. The industry-funded API released its weekly numbers at 4:30 p.m. today. Iran’s top electoral body ruled out annulling President Mahmoud Ahmadinejad’s disputed re-election on June 12. Crude oil more than doubled in 1979 when the regime of Shah Mohammed Reza Pahlavi was toppled, slashing the nation’s oil exports. “There is creeping concern about the situation in Iran,” Mueller said. “When there was last a revolution in the country, back in 1979, prices soared.”
  • Associated Press , June 18, 2009: The U.S. Environmental Protection Agency's proposed renewable-fuels standards call for a jump in ethanol production from nine billion gallons last year to 36 billion gallons by 2022. Under those standards, 15 billion gallons must be corn-based and the other 21 billion gallons from other biofuel sources such as willows or sugar cane. That provision will effectively freeze the number of corn-ethanol plants that can be built and then used to apply toward the federal blending standard, said Sander Cohan, an alternative motor fuels analyst with Energy Security Analysis Inc. in Boston. Plants already built like Northeast Biofuels are grandfathered into the standard, he said. "Basically, they get a share of what is now a limited market, and as ethanol demand increases, these plants will get more valuable," Cohan said.
  • Bloomberg, June 17, 2009:Crude oil rose for the first time in four days after a government report showed a bigger-than-forecast inventory decline and an increase in fuel demand. Crude oil stockpiles fell 3.87 million barrels to 357.7 million, the Energy Department said today. The drop was more than twice the size forecast by analysts surveyed by Bloomberg News. Fuel consumption climbed 1.3 percent to 19 million barrels a day last week, the highest since March. Refineries increased operating rates and gasoline output, the report showed. “There have been several multimillion-barrel inventory declines recently,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “Imports have been in the 8-to-9 million-barrel- a-day area, which is just not enough to maintain stockpiles during this period of high refinery runs.”
  • Christian Science Monitor , June 9, 2009: Rising gasoline prices are set to keep rising during the next month. But they may not continue to rise as fast as they have been, and they’re not expected to approach prices from last summer, which hit $4.06 a gallon. Oil prices also received a little help with reports that demand for gasoline rose during the Memorial Day weekend. That week, gasoline demand rose to 9.5 million barrels a day, its strongest level in quite a while, says Sander Cohan, a gasoline analyst at Energy Security Analysis, Inc. in Wakefield, Mass. “But, it’s come right back down again to 9 million barrels a day,” he says. The EIA will release new production and consumption statistics Wednesday.
  • Bloomberg, June1, 2009: The Organization of Petroleum Exporting Countries increased oil output by 1.5 percent in May, the biggest gain since 2007, a Bloomberg News survey showed. Saudi Arabia, the United Arab Emirates, Kuwait and Qatar were the only OPEC members to produce less oil than their respective targets during both April and May. The countries that are adhering to quotas “feel less fiscal pressure than other members such as Iran and Venezuela,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “Their oil is cheaper to produce and they have an easier time balancing their books and paying for social services for their population.”Venezuela reduced output by 25,000 barrels to 2.1 million barrels a day, the only production decline. The country pumped 114,000 barrels a day in excess of its target of 1.986 million last month, the survey showed. “It’s hard to believe that the Venezuelans are producing as much as they say,” Mueller said. “They have really mature fields that have not seen much-needed investment as funds have been diverted to social programs.”
  • Christian Science Monitor, May 22, 2009: Gasoline prices, which surprised many by jumping 27 cents a gallon in the past month, may be within 10 to 15 cents from topping out, some energy experts say. The argument for gasoline prices stabilizing or declining goes like this: The US economy is still not out of the woods. In fact, demand for gasoline remains moderate. And, if gasoline prices continue to rise for whatever reason, refiners will step up production since they have plenty of spare capacity. “We’ll see supplies start to come back and that will take edge off,” says Sander Cohan, an energy analyst at Energy Security Analysis Inc. in Wakefield, Mass. “Prices usually peak after Memorial Day, perhaps sometime in June.” But for this Memorial Day weekend, the rising prices - now at $2.36 a gallon according to AAA - mean it will cost more to get to Uncle Joe’s annual backyard barbeque.
  • Bloomberg, May 21, 2009: Stockpiles dropped 2.11 million barrels to 368.5 million in the week ended May 15, according to the Energy Department. A 400,000-barrel decline was forecast, according to a Bloomberg News survey. Gasoline supplies plunged 4.34 million barrels, more than three times what was forecast, to 204 million. Three other forces pushing oil higher: The dollar has been sliding in recent weeks, which underpins commodity prices by making hard assets look more attractive; new unrest in Nigeria is threatening oil supplies there; and at least two U.S. refineries have been disrupted by minor fires in recent days. All of this is taking the pressure off OPEC to make additional output cuts, despite still-weak global demand. The cartel’s leaders will meet May 28. "The price is telling OPEC that they don’t have to make a further cut," Rick Mueller, a director of oil markets at Energy Security Analysis in Wakefield, Mass., told Bloomberg. At the same time, he said, "High prices may lead more OPEC members to exceed their production quotas."
  • Bloomberg, May 20, 2009 : Valero Energy Corp., the largest U.S. oil processor, agreed to buy Dow Chemical Co.’s 45 percent stake in a refining venture with France’s Total SA for about $725 million to gain a foothold in Europe. The Total venture may allow Valero to benefit from a diesel shortfall in Europe and an excess of gasoline supply on the continent, said Andrew Reed, an analyst at Energy Security Analysis Inc. in Wakefield, Massachusetts. More than half of Western Europe’s new cars last year had diesel engines, according to the European Automobile Manufacturers’ Association. That compared with 2.3 percent in the U.S. “If Valero has a way to make sure that refinery’s gasoline makes it into the U.S. market, that will give it a competitive advantage,” Reed said.
  • Wall Street Journal , May 20, 2009 : The Obama administration's toughening of fuel-efficiency standards is poised to knock U.S. gasoline demand lower in coming years and could help steer oil supplies to faster-growing economies in the developing world. The new regulations, unveiled late Monday, are part of a broader policy to curb emissions of greenhouse gases and cut dependence on foreign-oil imports. The rules have vast implications not only for refiners, which have long faced the specter of falling U.S. demand, but also for global energy markets. The U.S. consumes about a fourth of the world's petroleum supply. Energy Security Analysis Inc., or ESAI, estimates that the new standards will curb U.S. demand by 350,000 barrels a day by 2016 and 750,000 barrels a day by 2020. Although the impact on the demand will be substantial, "it won't put anyone out of business," said Sander Cohan, a transportation fuels analyst at ESAI in Wakefield, Mass.
  • Reuters, May 19, 2009 : President Barack Obama's tough fuel economy program for vehicles could put another damper on the struggling ethanol business, because the alternative fuel packs a lower energy content than gasoline. Over the past year ethanol distillers have battled record prices for corn, their main input; overcapacity; tight credit; and anemic fuel demand. This week, subsidiaries of Pacific Ethanol became the latest in a long string of ethanol plants to file for Chapter 11 bankruptcy protection. "It looks like they are going to lose out," Sarah Emerson, director of consultant group Energy Security Analysis Inc in Boston, said about the effect on the ethanol industry of the Obama program. "I think the fuel economy (plan) trumps the biofuels." She said ethanol should remain popular near its Midwest production center and be one of a portfolio of alternatives for cars. Those include alternative fuels such natural gas and biodiesel as well as new technologies such as hybrid cars, plug-in hybrids, and battery-powered vehicles. But, she said: "We may see less movement" for vehicles that use 85 percent ethanol. Federal mandates for mixing more ethanol into gasoline also may need adjustment because of the slow pace of developing next-generation cellulosic ethanol, which can be made from non-food crops like grasses and fast-growing trees.
  • Reuters, May 19, 2009 : The White House said Tuesday that President Barack Obama will announce the most aggressive proposal for increasing auto fuel economy standards ever, requiring an average efficiency of 35.5 miles per gallon by 2016. The measure would cut some 1.8 billion barrels of oil consumption by 2016, the White House said, representing a big drop in the gasoline demand outlook that could hit refiner profitability and force companies to review costly plans to increase production capacity. The outlook could lead refiners to cut more deeply into their investment plans, already sharply reduced since the economic downturn hit profits and darkened the outlook for world energy demand, analysts said. "It's not a time I would necessarily be building big new refineries," said Sarah Emerson, director of consultancy Energy Security Analysis Inc in Boston. Among the biggest refinery projects on the books are Motiva Enterprises LLC's (RDSa.L) plan to more than double the size of its plant in Port Arthur, Texas, and Marathon Oil's (MRO.N) plan to expand its plant in Garyville, Louisiana. The refining sector, however, remains more concerned about the effects of looming climate regulation.
  • Bloomberg, May 18, 2009 : Ethanol for June delivery settled at $1.678 a gallon on May 15 on the Chicago Board of Trade. Refiners also receive a 45 cent-a-gallon tax credit for each gallon of ethanol they blend with gasoline, so the effective price of ethanol is $1.228.
    U.S. gasoline imports are likely to rise this summer, after falling earlier this month because of lower European refinery production and increasing West African demand. Gasoline imports fell 18 percent in the week ended May 8 from a year earlier to 747,000 barrels a day, government data show.  “Europe will export to the U.S. as much gasoline as the U.S. will take,” said Andrew Reed, an analyst with Energy Security Analysis Inc. in Wakefield, Massachusetts. “Regardless of price, they will be looking to unload in the U.S.” His group projects an 845,000 barrel-a-day gasoline surplus between April and September in Europe, which means more shipments to the U.S. n addition to the flow from Europe, new refineries in Asia will be looking for customers, he said. India’s Reliance Industries Ltd. in December started a 580,000-barrel-a-day refinery in Jamnagar, with plans to export gasoline to the U.S. “Reliance and other new refineries will lead to a surplus of gasoline in Asia and they will have to find new markets,” said Reed.
  • Bloomberg, May 14, 2009 : Crude oil rose after U.S. equities increased and the dollar dropped against the euro, bolstering the appeal of energy futures as an alternative investment. The 11 members of the Organization of Petroleum Exporting Countries bound by production targets implemented 77 percent of planned cuts of 4.2 million barrels a day in April, down from a revised 82 percent for March, a monthly report from the group showed yesterday. “The slide in demand may be coming to an end, but it isn’t reversing,” said Sarah Emerson, managing director of Energy Security Analysis Inc. in Wakefield, Massachusetts. “If OPEC doesn’t better adhere to the quotas, they won’t be able to whittle away surplus inventories.” OPEC ministers will meet May 28 in Vienna to review the group’s production quotas.
  • Bloomberg, May 12, 2009 : Oil rose to a six-month high after China, the world’s second-biggest energy-consuming country, increased crude imports by 14 percent in April.
    Deliveries reached 16.17 million metric tons last month, or 3.9 million barrels a day, a statement on the Chinese customs department’s Web site showed today. Oil also climbed as the dollar fell to the lowest level against the euro since March, bolstering demand for commodities as an alternative investment. OPEC output averaged 27.58 million barrels a day last month, down 75,000 from March, according to a Bloomberg News survey. It was the ninth straight monthly production decline. The 11 OPEC members with quotas, all except Iraq, pumped 25.255 million barrels a day last month, 410,000 more than their target of 24.845 million. “The April OPEC production numbers show that they are adhering pretty well to their targets,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “Production is certainly lower than it was last year. Prices will remain supported until the cartel cheats more.” OPEC ministers are scheduled to discuss output levels at a May 28 gathering in Vienna.
  • Dow Jones , May 11, 2009 : Crude oil backed down Monday after last week's strong climb as negative world stock indexes discouraged would-be buyers. Oil watchers will gain a more comprehensive view of supply and demand this week, as the U.S. Energy Information Administration, the Organization of Petroleum Exporting Countries and the International Energy Agency issue monthly market updates on Tuesday, Wednesday and Thursday, respectively. The IEA currently sees world oil consumption shrinking by 2.4 million in 2009, marking a second straight annual decline."Folks are feeling last week's rally was a bit overdone," said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Mass. "There are some glimmers of hope in the economy....But in the meantime we have a tremendous volume of oil in storage and the fundamentals don't look all that strong." Nymex crude rose 10.2% last week.
  • Bloomberg, May 8, 2009 : Crude oil rose to the highest level since November after a report showed that the U.S. cut fewer jobs than forecast in April, a signal that the worst of the recession has passed and fuel demand may rebound. “It appears that U.S. refiners are ending maintenance programs and are getting ready for the summer driving season,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “If that’s the case, crude oil demand will rise.” OPEC agreed at three meetings last year that the 11 members with quotas would reduce output by 4.2 million barrels a day. The 11 cut production by 65,000 barrels a day to 25.255 million in April, 410,000 more than their target of 24.845 million, according to a Bloomberg News survey. “OPEC compliance to the production targets has been pretty good,” Muller said. “If the economy starts to recover and OPEC continues to limit output, supplies may tighten later this year.”
  • Bloomberg, May 1, 2009 : Crude-oil supplies rose 4.05 million barrels to 374.7 million last week, according to an Energy Department report earlier this week. The gain left inventories at the highest level since September 1990 and 15 percent above the five-year average for the period. “Oil is surprisingly strong with what inventories are doing in the U.S.,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “There is a financial-market component to the strength we are seeing. When you look at other asset classes, oil appears to be a good bet.” Gasoline supplies declined 4.7 million barrels to 212.6 million last week, the biggest reduction since September, the report showed. Refineries operated at 82.7 percent of capacity, down 0.8 percentage point from the prior week. “The crude-oil market is probably gaining strength from gasoline today,” Mueller said. “Gasoline supplies had a big inventory decline last week. Refiners are going to have to step up and increase operating rates before demand picks up this summer.”
  • Bloomberg, April 28, 2009 : Crude oil fell for a second day on concern that fuel demand will drop as the swine-flu outbreak curtails travel and delays a recovery from the global recession. “There’s a potential that a swine-flu outbreak will crimp economic growth,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “There’s also recognition that the recent rally was overly optimistic. Demand isn’t recovering and more negative economic surprises are probably in store.” Crude oil for June delivery fell $1.29, or 2.6 percent, to $48.85 a barrel at 9:10 a.m. on the New York Mercantile Exchange. Prices are up 9.5 percent this year.
  • Dow Jones, April 28, 2009 : Valero Energy Corp. (VLO) is poised to grow again, taking advantage of low asset values as it did 10 years ago. But the European refining market has experienced the same downturn as the U.S., as it has seen an oversupply of gasoline and weak profits for refiners, forcing some to temporarily shutter plants. For Valero, entering the European market could still have strategic advantages, said Chris Barber, an analyst with Energy Security Analysis Inc. Buying a European refinery would give the company more access to the market, which is weighted toward diesel use. A lot of Valero's upgrading projects are geared toward producing large volumes of diesel and other distillates, so making inroads into the European market could be a good move, he said.
  • Reuters, April 24, 2009 : California's newly adopted low-carbon fuel standard may mark the beginning of the end of ethanol's coveted status as the sole U.S. alternative motor fuel. "The ruling is the first sign that the ethanol industry could be brought out of its honeymoon phase," said Sander Cohan, an alternative motor fuels analyst with Energy Security Analysis Inc in Boston."First-generation ethanol, especially corn ethanol, is a poster child for who might be put at a disadvantage." To give fuel producers time to adjust, the bulk of the carbon limits required under the regulation do not go into effect until 2015. But analysts said California has fired the first shot in a battle that could widen in coming years. At least 11 other states in the U.S. East are considering adopting a low-carbon fuel standard for cars by the end of the year. In addition, the main climate bill being considered in the U.S. Congress seeks to regulate greenhouse gas emissions from fuels.
  • Bloomberg, April 14, 2009 : Crude oil fell after a report showed that retail sales in the U.S., the world’s biggest energy-consuming country, unexpectedly declined in March.
    “The retail sales numbers today are worrying,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “There were glimmers of hope in some recent consumer data. This is a sign that things might not be improving.” OPEC agreed at three meetings last year to cut output by 4.2 million barrels a day, or 14 percent, to 24.845 million. The group produced an average 27.395 million barrels a day last month, down 345,000 barrels from February, according to a Bloomberg News survey of oil companies, producers and analysts.“Prices will probably stay in the $50 area unless the economy gets a lot worse,” Mueller said. “OPEC has succeeded in putting a floor under prices with their production cuts.”
  • Dow Jones, April 13, 2009 : The laws of supply and demand signal some U.S. oil refineries may be forced to shut down soon. This may leave the country with more refining capacity than it needs. Chris Barber, an oil market analyst for Energy Security Analysis Inc. in Wakefield, Mass., said he's recently taken up the task of figuring out which facilities will be shuttered. "We haven't nailed down any specific refineries yet," Barber said. Analysts scrutinize several factors to determine a refinery's health. Can a plant run on high-sulfur, cheaper crude and can it meet new environmental regulations without a costly upgrade? Size and location are very important, too. Many are looking at small refineries, which are typically less complex. However, just because a refinery is petite doesn't necessarily make it a more likely candidate for closure, Barber said. A few tiny plants have very niche markets, either for geographical reasons or because they process a specific crude no one else can run, he said.
  • Wall Street Journal, April 8, 2009 : An ethanol oversupply will continue through the year's end, even if Aventine Renewable Energy Inc. (AVRN) shutters its plants while it tries to reorganize under bankruptcy protection. "Aventine closing would cause the price to bounce, but VeraSun's plants ramping up production will probably cancel it out," said Sander Cohan, an analyst at Energy Security Analysis Inc., a Wakefield, Mass.-based consultancy. Eventually, Cohan said, the start-up of the former VeraSun facilities will likely force less competitive producers out of business.
  • Christian Science Monitor, April 7, 2009 : Gasoline inventories are higher than normal by about 7 million barrels. But they are also starting to come down as Americans begin to drive more. “Gasoline demand has firmed up,” says Sander Cohan, an energy analyst at Energy Security Analysis Inc. in Wakefield, Mass. “We’re getting a bump from lower retail prices.” Despite an uptick in demand, refiners are still operating at 82 percent of capacity, estimates Mr. Cohan. “There is tons of spare capacity,” he says. For example, diesel demand has fallen so sharply that “you have to go back to 2000” to find similar numbers, Cohan says. Only a year ago, diesel demand was so strong that it was a factor in rising prices. “Now, with industrial demand low, no more need for heating oil, and the economy in recession, there is no place for the supply to go.” Two years ago, the price of ethanol was also booming, reflecting tight supply and demand factors. Today, ethanol prices are very low. “It’s a nonfactor,” Cohan says.
  • Bloomberg News , April 2, 2009 : Wholesale gasoline prices slid after a government report showed that demand declined and refiners cut production rates, indicating skepticism that consumption would rebound as the summer driving season approaches. Comparing the current four-week average to weekly data for the same period last year, gasoline demand this year is 1.4 percent lower than in 2008, the agency said. "You can get as optimistic as you want about the economy improving, but if the demand numbers aren't there, what good is all that optimism?" said Sander Cohan, an analyst with Energy Security Analysis Inc in Wakefield, Mass. Gasoline for May delivery fell 4.96 cents, or 3.5 percent, to settle at $1.3717 a gallon on the New York Mercantile Exchange. It was the lowest close for a front-month contract since March 18.
  • Bloomberg News , April 1, 2009 : OPEC cut oil output by 1.2 percent to an average 27.395 million barrels a day last month, according to a Bloomberg News survey of oil companies, producers and analysts. The 11 OPEC members with quotas, all except Iraq, pumped 25.06 million barrels a day, 215,000 more than their target of 24.845 million. “OPEC compliance is excellent,” said Sarah Emerson, managing director of Energy Security Analysis Inc. in Wakefield, Massachusetts. “They have a lot at stake and are doing what they have to.” OPEC, in a meeting March 15 in Vienna, decided against cutting production targets further because of concern higher prices might harm an ailing global economy. Ministers pledged to tighten compliance with their quotas after crude oil fell more than $100 a barrel from a record in July. “There is a two-month time lag before the OPEC cuts will really hit and be reflected in inventories,” Emerson said.
  • Wall Street Journal , March 31, 2009 : Oil refiners have objected to low-carbon fuel standards, saying they are concerned about being put into double-jeopardy. The companies fear that they could be forced to cut carbon emissions from their manufacturing operations, and to simultaneously produce cleaner fuels, leading to a large financial burden. Valero Energy Corp. (VLO), the largest U.S. refiner, declined to comment on the new standard, saying it's too preliminary. Valero is among the refiners that could be hardest hit by such a standard. The company has a network of plants that process thick, sludgy grades of crude oil. While Valero has made a name for itself processing these cheap grades of crude, a low-carbon fuel standard could add costs for companies that specialize in refining this gunky oil, which releases more carbon when processed. "If a refiner is taking a relatively dirty petroleum, they might be at a disadvantage to somebody with a cleaner production process," said Sander Cohan, an analyst with Energy Security Analysis Inc. a Wakefield, Mass.-based consultancy.
  • Bloomberg, March 26, 2009 : Crude oil rose to the highest in almost four months and gasoline gained as an advancing U.S. stock market signaled that fuel demand will increase. Consumption of fuels rose 2.2 percent to 19.2 million barrels a day last week, yesterday’s report showed. Total daily fuel demand averaged over the past four weeks was 19.1 million barrels, down 3.2 percent from a year earlier. “Fuel demand is going to pick up even if it remains below year-ago levels,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “Refineries are eventually going to have to raise runs and that will eat away at the crude oil in storage.”
  • Indianapolis Star , March 24, 2009 :Gasoline for April delivery climbed to a 2009 high for the fourth day in a row on speculation that stockpiles fell and refineries kept production rates at a 17-year low for March. Gasoline stockpiles probably dropped 650,000 barrels last week, according to the median estimate of 14 analysts in a survey by Bloomberg News. They were 7.2 percent lower than a year earlier in the week ended March 13, according to the Energy Department. "We’re heading into driving season, you have refineries down and you still need to make springtime gasoline," said Sander Cohan, an analyst with Energy Security Analysis Inc. in Wakefield, Mass. "This is a very forward-looking market, and at some point it will be substantiated by actual demand numbers," Cohan said.
  • Wall Street Journal, March 23, 2009 : Oil prices have drawn continuing strength from a string of output cuts from the Organization of Petroleum Exporting Countries. Last week, the cartel chose not to tinker with the 4.2 million barrels a day in cuts it announced last year. Oil prices have been "surprisingly strong," said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Mass. "I think the success that OPEC has had in forcing discipline within the cartel has really impressed folks." Front-month April reformulated gasoline blendstock, or RBOB, rose 1.70 cents, or 1.2% to $1.4740 a gallon. April heating oil rose 1.19 cents, or 0.9%, to $1.3953 a gallon.
  • Wall Street Journal, March 20, 2009 : Margins on such distillate products as diesel, which kept oil refiners in the black last year, have crashed. But refiners are still investing in projects that will ramp up diesel production in the long run, as they believe their future is linked to that fuel. These low profit margins, however, won't deter refiners from continuing to invest in infrastructure that will allow them to make more diesel, said Andrew Reed, an oil analyst with Energy Security Analysis Inc. in Wakefield, Mass. "In the Atlantic basin markets, the distillate demand growth will pick up again and will outpace gasoline," Reed said.
  • Middle East Economic Survey Vol LII No 12 23 , March 20, 2009 : Boston-based Energy Security Analysis, Inc (ESAI), in its recently released Atlantic Basin Stockwatch Marketview, forecast low refinery runs over the next six months in the US and Europe. ESAI said it sees a 300,000 b/d year-on-year decrease in US refinery throughput levels to 14.7mn b/d over the next six months, with New York Harbor refining margins averaging $8/B during this period. For Europe, it predicted that throughputs would plummet, with Rotterdam notional refining margins averaging $6/B and throughput at 11.8mn b/d in the next six months, down 700,000 b/d on the three-year average.
  • Platts, March 19, 2009 : European refiners face the prospect of having to make more run cuts in the coming months in the face of the most prolonged spell of low margins in the last five years, Boston-based consultancy Energy Security Analysis Inc. (ESAI) said March 18. In an outlook for the Atlantic Basin refining sector, ESAI said it expected Rotterdam refining margins to average less than $6/barrel over the coming six months. If this happens, it would be the first time margins have been that low for that long since 2004, the ESAI report said.
  • Bloomberg, March 19, 2009 : Crude oil rose above $51 a barrel to close at a three-month high after the U.S. Federal Reserve announced plans to spend $1 trillion buying back debt.
    Oil climbed 7.2 percent after the Fed said it was seeking to purchase U.S. Treasuries, mortgage-backed bonds and other debt, raising expectations that efforts to end the global recession will boost fuel demand. The dollar traded at a two- month low against the euro, prompting investors to purchase oil and other commodities as an alternative investment.
    “This is a pretty bold move that should stimulate the economy,” said Rick Muller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “There may be an earlier economic recovery, which will increase oil demand. The dollar is getting hammered because of increased inflation fears, which makes oil look like a safe haven.”
  • Reuters, March 18, 2009 : Refinery runs in the United States and Europe should remain low over the next six months as distillates prices remain weak, Energy Security Analysis Inc. (ESAI) said in a report on Wednesday. "Refiners' main incentive to sustain throughput volumes in 2008, distillate strength, has now disappeared, pulling down their refining margins," Wakefield, Massachusetts-based Energy Security Analysis Inc. said in its latest Atlantic Basin oil products outlook. U.S. refinery utilization rates, which have recently been low, should begin climbing after March, the petroleum consultancy noted.But ESAI said it sees a 300,000 barrel per day year-on-year decrease in U.S. throughput levels to 14.7 million bpd in the next six months, with New York Harbor refining margins averaging $8.30 per barrel during this period, down from $8.80 per barrel a year ago.
  • Platts, March 17, 2009 : The bullish momentum of the light ends seen in February is losing steam starting this month, while the regional gasoil market comes under pressure, according to Boston-based Energy Security Analysis' short-term forecast, released March 6. Naphtha and gasoline cracks in Singapore strengthened in February, but gasoil's spread to Dubai sank to a five-year low of nearly $6/barrel, weighed down by low demand and abundant stocks, ESAI analyst Vivek Mathur said in the Pacific Basin Stockwatch Marketview.
  • Bloomberg News, March 17, 2009 :“There’s still uncertainty about what OPEC will do this weekend even though the Saudis have made it clear they’re not for a cut,” said Rick Muller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “The Saudis are already producing less than their quota and will want to see the others pull their weight before agreeing to another cut.”
  • Bloomberg News, March 3, 2009 : The New York Harbor market price for diesel dropped 14 percent in 2009 to within 14 cents per gallon of gasoline, which rose 9 percent, according to data compiled by Bloomberg. Andrew Reed, an Energy Security Analysis Inc. oil expert in Boston, sees diesel costing as much as 20 cents less from April until demand for heating oil, its distillate twin, increases in the fall. "By April, gasoline is going to cost more," Reed said. "Once we get past heating oil season, it's all up to diesel demand" to set distillate prices, he said. "The real weakness is going to be exposed."
  • Bloomberg News, February 23, 2009 : "By April, gasoline is going to cost more," said Andrew Reed, an Energy Security Analysis Inc., oil expert in Boston. "Once we get past heating oil season, it's all up to diesel demand" to set distillate prices, he said. "The real weakness is going to be exposed." The New York Harbor market price for diesel dropped 13 percent in 2009 to within 14 cents per gallon of gasoline, which rose 11 percent, according to data compiled by Bloomberg. Reed sees diesel costing as much as 20 cents less from April until demand for heating oil, its distillate twin, increases in the fall.
  • WBZTV News, February 12, 2009 : It just doesn't seem to compute. Gas prices hit a new high for 2009, while at the same time, the price of crude oil hit a new low for the year. This has several WBZ viewers curious, like Gordon from Sharon: "When gas prices were at $4, we were told it was because of high crude prices and demand. Now that crude prices have collapsed and demand is way off, prices are again climibng. Why?" We put that question to Rick Mueller, of Energy Security Analysis, Inc., who says it's because refineries are prdoucing less. "A lot of refineries are cutting back their production and their supplies of gasoline because the demand picture is so weak," he says. To make matters worse, he says some refineries are temporarily shut down for maintenance. The good news - Mueller says those refineries will be back on line in the next couple of months, and they're all starting to produce more auto fuel to get ready for the spring and summer driving season. That, he says, will drive those pump prices right back down.
  • The Guardian, January 30, 2009: "It's bad now because prices are low but I don't think there's a forecaster who doesn't think prices are going to go back up," said Sarah Emerson, director of Energy Security Analysis Inc (ESAI). "By the time all of this is implemented prices will be back up at $60 or $80 anyway.
  • St. Louis Post-Dispatch, January 18, 2009: The first two weeks of 2009 greeted consumers with more sobering economic news: layoffs, bankruptcies and foreclosures. Meanwhile, the price of crude oil fell more than $10 a barrel amid forecasts of sagging energy demand. So it's not surprising that motorists were bewildered as they watched the gasoline prices climb to near $1.70 a gallon. The average price of regular gasoline in St. Louis and surrounding Missouri suburbs has gained more than 30 cents a gallon since Jan. 1, according to AAA Missouri and the Oil Price Information Service. In the Metro East, where the fuel tax is higher, gasoline has likewise risen, to $1.76. "Refiners are looking at really weak demand numbers that are coming out and saying, 'We've got to reduce production,'" said Rick Mueller, senior oil analyst at Energy Security Analysis Inc. in Wakefield, Mass. "They're not going to stay in business for long making gasoline in that market." In some cases, refiners extended ongoing maintenance projects or accelerated the schedule for work planned for later in the spring. Others idled capacity for economic reasons. "Some have just said, 'With these margins we're not going to run that hard,'" Mueller said. "We're going to take our utilization rates down."…"If crude prices stay where they are now, then I expect you'll see the gasoline price dip back down again," Mueller said.
  • Bloomberg, January 13, 2009: Crude oil rose for the first time in six days in New York after Saudi Arabia said it will make deeper supply cuts than announced to bolster prices. February production will be "lower than the target" set at a Dec. 17 OPEC meeting, Saudi Oil Minister Ali al-Naimi said as he arrived for a conference in New Delhi today. The country is currently producing 8 million barrels a day, about level with its 8.051 million-barrel-a-day allocation. "There’s a lot at stake here," said Sarah Emerson, managing director of Energy Security Analysis Inc. in Wakefield, Massachusetts. "OPEC is worried about both their credibility and the price of oil. The Saudis are going to cut production until prices stop falling."
  • Boston Globe, January 9, 2009: "The very bearish DOE report yesterday is the main focus of the market despite the bombs that are falling on Gaza this week," said Rick Mueller, of Energy Security Analysis Inc. in Wakefield, Mass.
  • Las Vegas Review-Journal, January 7, 2009: Agreed Rick Mueller, director of oil markets for Massachusetts research firm Energy Security Analysis: "Geopolitical and weather issues are certainly important, and in a normal year, they would be at the top of the list. But it's been such a horrible year for the economy, and there's been an unprecedented decline in oil demand, so the economy has really stepped forward as the No. 1 issue." Sluggish demand for petroleum has widened global crude surpluses and eased supply concerns that egged on prices in 2008, Mueller said. Among the Organization of Petroleum Exporting Countries, the spare capacity of unused crude has jumped from 1 million to 2 million barrels daily a year ago to about 5 million barrels a day now. That bigger margin should help international economies weather any supply disruptions, so traders no longer bid up oil prices by betting on potential price spikes….Mueller said oil should average about $50 a barrel in 2009, unless indications emerge that China or other growing economies will experience sharper downturns. If that happens, expect crude prices to drop to around $40 a barrel.
  • China Daily , December 31, 2008: "Once we get through the crisis, we will find that support is higher than $40 a barrel," said Sarah Emerson, managing director of Energy Security Analysis Inc. in Wakefield, Massachusetts. "The decline in demand has already occurred. A lot of analysts were late coming to realize that. By next summer this market should be turning around."
  • Forex Pros, December 29, 2008: To be sure, new supplies of heavy crude will become available to meet the increased demand and may dampen the surge of heavy grades' differentials. The Neutral Zone is one such source, others will come from Brazil and Saudi Arabia as well. "Ceteris paribus, this new buying interest would narrow the spread, but there are some new sources of heavy crude, too," said Sarah Emerson, director of Energy Security Analysis Inc. And although it remains to be seen whether all of OPEC's members fully implement their share of the 4.2 million bpd cuts agreed since September, those producing some of the heaviest grades have taken the most visible steps -- Saudi Arabia and the UAE have both informed refiners of significant cuts.
  • Bloomberg, December 16, 2008: Francisco Blanch, the Merrill Lynch & Co. analyst who called the $147.27 record crude-oil price nearly on the nose, sent markets into a tailspin with his forecast that the next move may be back to $25 a barrel in 2009. Such relief for consumers may be short-lived once the global recession ends, he said….His $25 prediction may have received more weight than it deserved, said Sarah Emerson, managing director of Energy Security Analysis Inc., a consulting firm in Wakefield, Massachusetts. "Sure, if the Chinese economy gets really bad, we could go below $25," she said. "It’s kind of like saying if the temperature drops, it will be cold outside."
  • Reuters, December 11, 2008: The next U.S. energy secretary, a long-standing champion of producing ethanol from non-food crops rather than corn, could face hurdles in moving the next-generation biofuel from the laboratory to the gasoline station. Steven Chu, Obama's pick for the head of the Department of Energy, is a steadfast supporter of next-generation biofuels such as cellulosic ethanol, expected to be made from the tough woody bits of crops like grasses and fast growing trees as well as plant and timber waste. A 2007 report co-chaired by Chu, and commissioned by the governments of China and Brazil, called for "intensive research" into production of cellulosic, which relies on technology like isolating microbes, or using large amounts of heat and steam, to break down the tough bits into fuel. Chu, the head of the Lawrence Berkeley National Laboratory and a Nobel physics laureate, also helped organize the Energy Biosciences Institute, a lab focusing on next-generation biofuels funded with $500 million from oil major BP Plc. He has been a staunch opponent of the current U.S. corn-based ethanol system, which was widely blamed for spiking food and grain prices this summer, calling it "not the right crop for biofuels," at a conference this spring in the country's agriculture heartland. Corn ethanol has also been criticized for environmental problems such as helping to lead to a "dead zone" in the Gulf of Mexico as the extra fertilizer the grain requires washes from fields to the Mississippi River to the ocean. But next-generation biofuels are no quick fix. They are more expensive than gasoline, a problem that was tricky when oil hit $147 a barrel over the summer, but even more difficult now as it trades under $50 a barrel….U.S. mandates call for the blending of 100 million gallons of cellulosic ethanol, or about the output of one of the roughly 170 U.S. corn-based ethanol plants, into gasoline by 2010. That compares to the mandate's requirement of blending 12 billion gallons per year of corn-based ethanol in 2010. "The heat is on to see if there is actually support behind the mandate," said Sander Cohan, a motor fuels analyst at Energy Security Analysis Inc, in Boston. He said Chu will likely find he has to convince Congress that cellulosic biofuels deserve more research and development money. Chu could also lead development of biofuels beyond cellulosic. The 2007 report he co-chaired also called for investments in development of butanol, "or other forms of biofuels that may be superior to ethanol." Butanol, a fuel touted as more efficient and more easily shipped than ethanol that can be made from corn or sugar cane, is being developed by chemicals maker DuPont Inc and BP.
  • Dow Jones, December 10, 2008: The regulations from Europe reflect a new consideration of how carbon emissions from biofuels begin to mount even before the seeds for energy crops are planted. The German regulation suggests that land management, farm