Market Journal

Last summer, US prices for ethanol and corn reached such an imbalance that production costs exceeded revenue at relatively simple ethanol plants, the US Energy Information Administration reported.

The rapid increase of North American crude production has resulted in pipeline bottlenecks in some areas, forcing more reliance on rail transportation to access some of the highest-value markets, said analysts with PIRA Energy Group in New York.

The fatal 4-day siege at the In Amenas gas production plant in eastern Algeria near the Libyan border that left 81 people dead “heightens concerns over protecting infrastructure in remote areas—a key factor for the planned $20 billion Trans-Saharan Gas Pipeline as well as other long-distance international energy infrastructure linking Africa, the Middle East, Central Asia, and Europe,” said analysts at KBC Market Services, a division of KBC Process Technology Ltd. in Surrey, UK.

New Year 2013 looks as though it will be much like the old one. There’s rioting in Egypt, confrontation with Iran, continued crisis in the Euro-zone, and Texas needs rain—as does most of the US Midwest where drought conditions are still in the severe, extreme, and exceptional ranges.

On Nov. 21, Egyptian officials announced a ceasefire agreement—which they helped broker—between Israel and Hamas leaders to end a week of fighting.

Hurricane Sandy was bearing down on the East Coast on Oct. 29, disrupting oil supplies, energy demand, and early voting in the last full week before the US presidential election.

Oil prices fluctuated widely in mid-September as analysts and traders tried daily to interpret market indicators from a flood of economic data. The result was an energy market responding to hopes and fears more than the fundamentals of supply and demand.

The front-month crude contract for North Sea Brent climbed through most of August from $104.92/bbl July 31 to as high as $116.90/bbl Aug. 16, hovering around $114/bbl through Aug. 24 as market optimism for solution of the Euro-zone financial crisis and increased demand “prevailed over hard facts and past experience,” said analysts at the Centre for Global Energy Studies, London.

Oklahoma, the 46th state admitted into the US, ranks 20th in size, 28th in population, 36th in population density, and 45th in median household income, according to various online listings. But it’s in first place this year as the top spot for oil and gas investment worldwide in the 6th annual global survey by the Calgary-based Fraser Institute think-tank that looked at 147 jurisdictions around the world.

The price of crude has fallen more than $35/bbl this year and could go even lower in the current environment of severe risk aversion and macroeconomic pessimism, said analysts with Barclays Commodities Research.

The 2012 tropical storm and hurricane season officially began June 1 and extends to Nov. 30, but it got off to an early start when Tropical Storm Alberto formed off the South Carolina coast and quickly weakened into a tropical depression in late May.

Changing circumstances in the Middle East and North Africa (MENA) are altering perceptions of potential developments in Libya and Iran.

When it comes to reducing prices and regulating supplies of crude, political leaders seem to produce more talk than action.

US House Minority Leader Nancy Pelosi (D-Calif.) called for Congressional action against speculators in the futures market, blaming them for the run-up in oil prices and cost of gasoline at the pump.

Industry analysts lately have been counting barrels—barrels of refining capacity lost as plants shut down on both sides of the Atlantic; barrels of crude flowing into the US Midwest and their impact on prices for West Texas Intermediate; and barrels of supply that may be lost if the European Union activates its proposed embargo on Iran in 6 months or if Iran beats them to the punch by stopping shipments.

In case you didn’t noticed, 2011 was “an odd year”—one of “volcanic change” that yet led to circumstances “conducive” to maintaining consistent oil prices, said Paul Horsnell, managing director of Commodities Research at Barclays Capital, London.

The “Arab Spring” that ousted four authoritarian leaders—including Ali Abdullah Saleh who in late November gave up the presidency of Yemen after 33 years in power—might evolve into a grimmer period with the possibility of a nuclear winter headed into 2012.

Oil and stock prices soared Oct. 27 in what one analyst described as “a monster market bounce” after Euro-zone members agreed to reduce Greece's sovereign debt, support European banks facing additional losses on Greek bonds, and increase the European Financial Stability Facility (EFSF) to €1 trillion.

A warning by the US Federal Reserve Bank that the global economy likely will remain at risk for years resonated like a voice of doom through world markets Sept. 21, stampeding traders away from high-risk investments such as crude oil.