The recent defection by Arlen Specter certainly has much impact on the energy business as now Obama has the potential 60 votes in the Senate to repel potential filibusters.
In other political news it seems Bush prosecutions seem ever more likely.
Morever, we hear the presentation by Alec and Glenn went over very well for Professor Rogoff.
Pork Belly prices have fallen over 7 percent since the news of the Swine Flu erupted into a 24 hour news cycle panic. The market reaction is irrational according to agricultural economist Ronald Plain, who told the Financial Times that you cannot get inluenza through consumption of pork. Israeli health officials have called for a modification in the flu’s adopted name. The deputy health minister of Isreal, Yakov Litzman, has said that the term swine flu is upsetting to both Jews and Muslims who are forbidden to eat pork products. He suggested that instead it should be referred to as the Mexican Flu. That shouldn’t offend anyone.
Here is a great read from everyone’s favorite, NPR. It’s about the electrical grid.
From the article:
The U.S. electric grid is a complex network of independently owned and operated power plants and transmission lines. Aging infrastructure, combined with a rise in domestic electricity consumption, has forced experts to critically examine the status and health of the nation’s electrical systems.
Very interesting news today in Bloomberg about ICAP and the mortage bond trading market.
According to Yahoo news via ICAP Energy’s Market Update Watch, we at the Pork Belly just discovered Sempra Generation, a subsidiary of Sempra Energy (NYSE:SRE - News), today announced its intention to construct a new 48-megawatt (MW) expansion of its existing photovoltaic power-generation facility near Boulder City, Nev., about 40 miles southeast of Las Vegas.
Icap Energy has posted a great report on their site regarding the mandatory CO2 program and the Obama Administration.
The New American recently posted an informative article about this important EPA report as well.
This article explains options and why they may have an advantage over regular trading. Of course, options are volatile too, so the downside can be extreme.
In the end, John Suma suggests: Even though we suggest that the data understates the case for selling because it does not tell us how many of the options that expired in the money were winning rather than losing trades, the data should say enough to encourage you to think of developing selling strategies as your primary approach to trading options. Having said that, however, we should emphasize that selling strategies can involve substantial risk (buyers, by definition, face limited losses), so it is important to practice strict money management and to trade only with risk capital when deploying selling strategies.
This piece makes a great attempt at explaining the ins and outs of electronic trading, especially the part about small order execution systems and trading desks. I liked their quote too by Warren Buffett, “Time is the friend of the wonderful company, the enemy of the mediocre.”
Really interesting market brief from ICAP’s Gary Hart about the impact, players and options surrounding the inevitable CO2 legislation. It can be found for free here. Whatever form the policy takes, the end result will be that both utilities and large scale commercial consumers of energy will have to find as many ways as possible to reduce emissions. Carbon capture and storage, will no doubt be investigated by the utilities. The process, where emissions are trapped before they leave a plant’s smoke stacks and then rerouted to a deep geological formation or below the ocean floor, is expensive and energy intensive. Think of it as an enormous dutch oven. An affordable solution may be found in algae. For the past decade, MIT’s Isaac Berzin has been developing photobioreactors that can be attached to power-plant smoke stacks. The algae in the reactors feed on the flu gasses and grow rapidly. The algae can then be harvested for an end use as bio-fuel or even a dietary supplement. in this video clip Berzin demonstrates the process to Scientific American Frontiers’ Alan Alda. Watch as Hawkeye Pierce actually drinks a smoothie made from the harvested algae. Not shown, however, was the deadly dutch oven that Mrs. Alda was subjected to later that night.
Apr 13th, 2009 | SIOUX FALLS, S.D. — Oil prices fell below $49 a barrel Monday as investors reacted to slipping stock markets and an International Energy Agency report forecasting a drop in global crude demand.
In late morning trading benchmark crude for May delivery dropped $3.24 to $49 a barrel on the New York Mercantile Exchange, as U.S. stock markets began the week lower. Crude dipped as low as $48.84 earlier in the day.
Traders were able to ignore weak demand last week, “but that was only when the stock market was doing as well as it did,” said Phil Flynn, an analyst at Alaron Trading Corp.
Oil had last settled at $52.24 on Thursday, finishing the week early because of the Good Friday holiday.
The Paris-based IEA, an energy policy adviser comprised of 28 countries, said Friday that demand this year will likely fall by 2.4 million barrels a day to 83.4 million barrels, or 2.8 percent lower than last year.
“In other words, the IEA lowered its estimate the equivalent of the daily output of Iraq,” analyst and trader Stephen Schork said in his daily Schork Report.
Flynn said the IEA report put a damper on the mood because the agency usually underestimates demand. The report hails from a consuming nation, so the agency tends to err to the slower-demand side to pressure producing countries and keep prices in check.
“So when they come out with such a bearish number, it really puts pressure on the market,” he said.
“The natural gas glut is another sign of what’s been happening with the slowing economy, Flynn said.
On Sunday, Iran’s oil minister Gholam Hossein Nozari told state television that a price of between $75 and $80 dollars a barrel is desirable for both Tehran and oil consumers.
Iran is a member of the Organization of Petroleum Exporting Countries, which has announced production cuts of 4.2 million barrels a day since September.
In other Nymex trading, gasoline for May delivery fell 6.45 cents to $1.4165 a gallon and heating oil dropped 7.81 cents to $1.3507 a gallon.
In London, Brent prices fell $3.12 to $50.94 a barrel on the ICE Futures exchange.
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