We all have a lot to be thankful for especially if you are a commodity news junkie. It seems we have had a cornucopia of news and it keeps giving and giving. The petroleum markets were giving thanks for Secretary of State Hillary Clinton's trip to the Middle East and the perhaps premature report of a cease fire deal. In fact it almost seemed that the markets gave up more than they got as they took a sharp drop. Yet as the day wore on it became less clear that a deal had been reached.
After reports of a deal the rockets continued to flay and overnight a disturbing report of an bus bomb. The AP reported that 'A bomb ripped through an Israeli bus near the nation's military headquarters in Tel Aviv on Wednesday, wounding at least 10 people, Israeli officials said."
Oil also rebounded on what was a very bullish American Petroleum Institute supply report. The API sent prices spiking on a monstrous 4.8 million barrel drop in gasoline stocks. The biggest drop came in the Gulf Coast as refiner problems in Texas City and Borger City and supply displacement as the US waved to Jones act to get more gasoline to the East Coast. The East Coast saw the next largest drop in supply as refiners and import terminals were struggling to get back to normal.
We did get some news on the refining front. Bloomberg News reported that Phillips 66's Bayway plant in New Jersey, the largest single refinery on the U.S. East Coast, will start producing fuel next week at the earliest, a person with direct knowledge of operations there said. The refinery may take until early December to return to full rates as equipment is brought back online sequentially, said the person, who asked not to be identified because the information isn't public. The plant was restoring cooling system water pumps yesterday and working to bring back steam before returning process units to service, the person said. The Bayway refinery was one of seven plants that halted production or cut rates as Hurricane Sandy struck the U.S. Northeast last month, shutting fuel terminals, pipelines and gas stations in its path. Bayway is the only refinery that remains shut since the storm. Dennis Nuss, a Phillips 66 spokesman at the company's headquarters in Houston, said the company still expects the plant to return to normal operations "before the end of the month." He declined to comment on when it will be producing at full capacity. Sandy, which went ashore near Atlantic City, New Jersey, on Oct. 29, primarily damaged electrical equipment at Bayway, Phillips 66 said in a statement on its website on Nov. 5. Process units at the plant were "in good condition," the company said at the time. The plant can process 238,000 barrels a day of feedstock, data compiled by Bloomberg show. Sunoco Inc.'s Philadelphia refinery, made up of two plants known as the Girard Point and Point Breeze sections, can run 355,000 barrels a day. Bloomberg also reported that Phillips 66 has extended work at its Borger, Texas, refinery at least a week and as long as two weeks because repairs were more difficult to make than anticipated, a person with knowledge of the situation said. Startup of the production units will take another two to three days after maintenance is complete, said the person, who declined to be identified because the information isn't public. The work, which began on Sept. 22 after being delayed about 30 days, was scheduled to be completed this week, the person said.
The API also saw crude supply fall by 1.9 million barrels and distillates by a disturbing 4.1 one million barrels. This was especially disturbing consider the forecasts that predict much colder weather. Markets like Gasoil and heating oil and even orange juice soared as reports that old man winter might make his presence known. Not only did the NOAA raise the possibility of colder than normal temperatures in Florida where the oranges might be at risk to a frost it could take a toll of heating oil supply that is already below normal. Those fears gain more momentum when as Bloomberg News reported that -- Commodity Weather Group LLC said December may be colder than predicted in its initial seasonal outlook, which would mean greater demand for energy to heat U.S. homes and businesses this winter. Temperatures for the month are expected to be lower than last year and below the 10-year average, according to the Bethesda, Maryland-based company's new forecast.
The EU agave the Euro a hiccup as well as the euro zone's finance ministers could not agree to another Greek bailout. This comes ahead of more rough negotiations of an upcoming battle of EU fiscal spending over the next few years. Buckle up as the EU merry-go-round will spin. It is amazing the Euro held up as well as it did. Perhaps it is because of the looming fiscal cliff. Federal Reserve Chairman Ben Bernanke begged s and the Obama administration to strike a budget deal to avert tax increases and spending cuts that could trigger a recession next year over what he called the "so called fiscal cliff". Hey Ben , you named it the fiscal cliff!
We should also be very thankful for Fraccing that has the potential to reinvigorate our economy, create jobs and lead us to energy independence. Yet, Reuters News reports that "Governor Andrew Cuomo said New York will probably miss a Nov. 29 deadline to issue regulations on hydraulic fracturing for natural gas, restarting a public review that may delay drilling for months. The state, which has been studying fracking for more than four years, issued a moratorium in 2010 so regulators could conduct an environmental survey and develop rules. In September, the Cuomo administration said Health Commissioner Nirav Shah would further analyze the issue with the help of an outside panel, whose members were chosen last week. "We want a proper process," Cuomo said today on Albany radio station Talk 1300. "We want it as expeditiously as possible. I don't see how we get it done by next week." Cuomo, a 54-year-old Democrat who has been mentioned as a potential presidential candidate in 2016, has been under pressure from energy companies and some municipalities in the state's Southern Tier to allow drilling. They say it would encourage the type of economic development seen in states from Wyoming to Pennsylvania. Environmental groups and residents opposed to fracking sent 80,000 messages to the Environmental Conservation Department during the last comment period. It may already be too late for New York to cash in on the boom that led natural-gas companies to spend $20 billion on leases, drilling rigs and royalty payments in Pennsylvania from 2008 to 2010, and the $5 billion in additional economic output that Ohio is forecast to get by 2014."
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