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DOE Highlights Collapsing Energy Demand

Tyler Durden's picture




 

Some charts courtesy of the DOE demonstrating just how deep the energy, and by implication, the overall economy slump is, relative to prior years:

Implied Demand of Total Products: we are now essentially at the level just after the economic cataclysm that was Lehman's collapse, and trending lower.

Distillates are significantly below a 5 year average, and far below anything seen in 2008.

Jet demand demonstrates why all expectations for an aerospace revival are still far too premature.

Full presentation below:

 


h/t Geoffrey

 

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Thu, 09/24/2009 - 16:11 | 78793 AR
AR's picture

And... NatGas is up 150+% in 2 weeks (with vol up 140%). The November could retest the 5.20/40 breakdown area from early August, but, with storage supplies at record highs, probabilities are it can easily retrace and retest the lows set on September 4th of 3.30/60 area.  Good luck everyone.

Thu, 09/24/2009 - 17:03 | 78895 SteveNYC
SteveNYC's picture

Yes, Goldman and the boyz pushing commodity prices up again.

Interesting, is it not, that all of their hard-earned "Profit" on commodity speculation comes from the pockets of either:

1) Citizens

or

2) Companies

 

in the form of higher prices. When will people catch on? When will we stop these leaches, parasites from stealing the nation's wealth?

Thu, 09/24/2009 - 17:34 | 78942 Anal_yst
Anal_yst's picture

You forgot 3) Governments.

 

Where the hell else do you expect them to earn "profit," preytell?  By pulling it out of thin air? 

Thu, 09/24/2009 - 19:33 | 79051 cougar_w
cougar_w's picture

That's what they're doing. It's not like they are producing anything of value, ever.

Oh wait, I didn't see your sarcasm light was lit.

cougar

Thu, 09/24/2009 - 20:20 | 79084 Rusty Shorts
Rusty Shorts's picture

   cougar

 

     "It's not like they are producing anything of value, ever."

 

 - thats a damn good point, what tha hell does a "bank" produce?

Thu, 09/24/2009 - 20:22 | 79087 Rusty Shorts
Rusty Shorts's picture

... value out of thin air ..?

Thu, 09/24/2009 - 21:03 | 79110 Hephasteus
Hephasteus's picture

For revealing magician secrets the ghost of Houdini will come and gut punch you. LOL

Thu, 09/24/2009 - 21:23 | 79121 Anonymous
Anonymous's picture

Dexter comes to wall st. New episode next week.

http://i37.tinypic.com/2mdi3ki.jpg

Fri, 09/25/2009 - 00:46 | 79234 Anonymous
Anonymous's picture

LOL. Don't we all wish...

Thu, 09/24/2009 - 23:28 | 79183 bulldung
bulldung's picture

Government = taxpayers=employed citizens[endangered species]

Thu, 09/24/2009 - 17:39 | 78946 Bam_Man
Bam_Man's picture

Yes, good point on the Nat Gas insanity.

I have said many times before and I will re-iterate now that it is NOT POSSIBLE to properly plan and run a business in this type of environment where commodities markets are nothing more than casinos. It simply cannot be done.

Countless businesses have and will continue to go bust for no other reason than they "guessed wrong" on which way the price of their key raw material inputs would move.

There can be no real economic recovery under these conditions. Period.

Thu, 09/24/2009 - 19:36 | 79054 cougar_w
cougar_w's picture

Recovery re-shmuvery. There ain't no economy, it blew up a year ago last week. It's short-term profits or get the f*ck out.

I hate it when people don't get with the program.

/sarcasm

cougar

Thu, 09/24/2009 - 21:44 | 79133 Steak
Steak's picture

"it is NOT POSSIBLE to properly plan and run a business in this type of environment where commodities markets are nothing more than casinos."

Sure its possible.  You just have to play their game.  The hedging contracts that are necessary operate very much like a tithe to the financial overlords.  For every Gary Kelly you have thousands of CEOs who know nothing about hedging pouring money into complex products.  And even Kelly got hosed late 08.

Any free marketeer worth their salt would see that the financial industry exacts an enourmous tax on the broader economy.  Counting the bezzle the average folk's tax burden is enormous.

Thu, 09/24/2009 - 23:58 | 79210 Anonymous
Anonymous's picture

Bam_...
You are correct. Market\financial bifurcations "change the rules" so that the price signals that consumers, businesses, retirees, even govt's rely on to make decisions don't function they way they used to, if at all. Add to that the crowding in by governments and you have a recipe for a mess. This will end badly, sooner or later, I suspect. The powers that be will do what they can to perpetuate the (former) status quo, but if they are successful, it will only delay the inevitable.

digilante

Thu, 09/24/2009 - 20:13 | 79080 Anonymous
Anonymous's picture

A headline oil buy signal if ever there were.

Still short NG with Big4...

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3251493

Thu, 09/24/2009 - 16:18 | 78805 Screwball
Screwball's picture

RIMM missed, down big after hours.  Could sanity finally find its way into this market?

Thu, 09/24/2009 - 16:31 | 78832 pivot
pivot's picture

hopefully.  i would think that with the bulls fully entrenched, there should need to be a couple more whipsaws back and forth here at the top... lots of people still want to buy the dips which is a hard mentality to sell through.  it will happen though, just need "enough" top-tick bagholders to pile in trying not to "miss it".

Thu, 09/24/2009 - 19:38 | 79057 cougar_w
cougar_w's picture

[can sanity...] Um, no.

When the Dow starts blowing 700 point chunks, then we'll talk about sanity.

cougar

Thu, 09/24/2009 - 16:25 | 78817 Anonymous
Anonymous's picture

NATy is up , the same way other commods had their run, GS, MS, and other taxpayer dollars chasing speculation trades in a self fulfilling circle jerk to 96% success rates...

get mine before you get yours...

Thu, 09/24/2009 - 16:45 | 78855 Anonymous
Anonymous's picture

Wow, that cash for clunkers must have really worked! Gasoline demand is so much lower becasue of all those fuel efficient cars

Thu, 09/24/2009 - 23:32 | 79187 bulldung
bulldung's picture

+ 10, ROFL

Thu, 09/24/2009 - 16:58 | 78890 Anonymous
Anonymous's picture

They packed enough nat gas to fill storage to the brim and they did this on 6 & 7 year lows in prices. Guess what they do to this market to sell this cheap gas to you suckers and make a mint? yes, you guessed it. Market manipulation 101 and class is in sesh. 10 bucks says nat gas goes to 10 bucks by Christmas and the folks sitting on the storage make 3x their cash in about 6 months.

the timing is too perfect. cool summer means less electricity demand means cheap nat gas for storage until winter. Then we will get some stupid weather predictions that say this winter will be super cold (this has already happened)and "demand" will pick up. fucking front month was at $2.50 and the price your going to buy it this winter will be $10.

someone will be a billionaire in about 6 months and it aint gonna be you!

Thu, 09/24/2009 - 19:44 | 79061 cougar_w
cougar_w's picture

Reports are that the NG delivery systems are current awash in supply. For the price to go up any time soon there will have to be Enron-esque manipulations of both perceived supply and actual delivery. Maybe a wee terrorist threat to some facility to justify a 6 month shutdown, eh? Or how about mysterious delivery issues in the NorhtEast? Or how about they misplace the keys to the switchroom somewhere? Damn, where did I put them this time?

Way too easy. And the sheeples won't think to question it.

cougar

Thu, 09/24/2009 - 19:47 | 79063 PBS
PBS's picture

I have to disagree.  The soft prices will continue through the winter.  Most of this ramp up over the last two weeks has been based on a couple of factors.

1) The storage injections in the last month have dropped enough that it doesn't look like produces will need to shut in their gas.  This is providing some confidence and speculation that maybe there will be a floor under prices.

2) A lot of traders were playing the spread on the October and January contracts and needed to cover shorts on the front month.

Don't get me wrong; some of this is good old fashioned speculative mania, but I don't see prices hitting double digits any time soon.

Thu, 09/24/2009 - 17:12 | 78910 Anonymous
Anonymous's picture

Glad to see you appreciate my posts.www.crudewire.com
DOE Stats Highlight Weak Economic Recovery
U.S. Avg prices for Gasoline -$1.17 vs. last year, Diesel -$1.34 vs.last year.
Demand is particularly grim for distillates. Not much better for gasoline.
The persistence of demand destruction despite lower prices vs. last year, highlights the weak condition of the economy and consumer frugality. Consider at this time last year, Lehman had failed and the world financial system was paralyze

How about a little credit. I credit Zero Hedge.

Thu, 09/24/2009 - 23:48 | 79199 Anonymous
Anonymous's picture

$3.12/gal reg in Susanville...80 miles from Reno or 100 from Redding. No rest for the wicked here.

Thu, 09/24/2009 - 17:40 | 78949 Anal_yst
Anal_yst's picture

Yes, short TXT and friends, esp with el President of the company stepping down.

Thu, 09/24/2009 - 18:37 | 79011 Anonymous
Anonymous's picture

I Blame the Japanese. Those Prius have saved over a billion gallons of gasoline.

Thu, 09/24/2009 - 18:55 | 79026 Anonymous
Anonymous's picture

Oh good. Time to crank up the heat for the winter.

Thu, 09/24/2009 - 20:00 | 79073 Anonymous
Anonymous's picture

All you nat gas bears need to remember the relationship between commodities. Yes, spot nat gas fell 82% from the July 2008 highs. Yes, crude oil too fell hard dropping from 147 to roughly 32.50 per barrell from July 2008 to February 2009. The difference is, from the February crude oil low, it has nearly doubled while natural gas continued to decline 40% into early September 2009.

While nat gas and crude oil have no real fundamental attachment other than being energies, they do have an historical connection. Historically, the price of crude oil divided by natural gas has been near 9.10.

This spread (using the now expired Oct. crude oil versus October natural gas as reference) bottomed at 7.50 ish last December and went to an all time high of 27.80 on September 3rd of 2009. Nearly a 400% rise in 8 months.

The final blow off top for this spread has occurred over the past 3 weeks. Since breaking out over the 20 level to early August and topping on Sept. 3rd, it has collapsed. Using the November contracts, this spread has fallen nearly 50% in 11 trading days ftom the Sept 3rd high.

This rapid unwinding has spiked the October natural gas contract 60%+ percent from the early September low similarly pressing crude lower.

While crude prices have held somewhat firm, natural gas has been the primary beneficiary of this spread collapse.

So bottom line, while strength in the natural gas market may not last due to the above mentioned fundamentals, the near term trend is up with a strong possibility for October natural gas to rally up to the mid-4.500 area from today's 3.950 settle very soon.

Natural gas was down 80% from the July 2008 highs. Selling short at this level may be rewarding but the short squeezes will definately keep one awake at night.

Best to stay away from this beast. Nat gas is the most volatile commodity out there.

Just my two cents worth. Probably not worth even that.

Thu, 09/24/2009 - 20:33 | 79094 Anonymous
Anonymous's picture

Has ZH lost it's funding? Or operating with diminished fiscal resources? Do tell.

Thu, 09/24/2009 - 20:51 | 79100 digalert
digalert's picture

I can't believe anything these days. Corruption is thread so deep worldwide and the money at stake so great that nothing suprises me. Goes for uncle Bernanke also.

Fri, 09/25/2009 - 03:19 | 79277 Anonymous
Anonymous's picture

I'm wondering if this spike up in NG is short covering as most large traders are massively short positioned NG and we were approaching historical lows?

Could someone with access to historical Open Interest data look at the total open interest for the front month contracts and see if OI declined as prices shot up?

Thanks,

-Mark-

Fri, 09/25/2009 - 03:48 | 79287 TumblingDice
TumblingDice's picture

Production has been peaking for a long time. Peak oil is very close to 2009, if not earlir. The point is, in this deflationary environment, the asshole bankers have used the peak resource crisis as a means to maintain the prices at the current level. You would be a moron if you bet against oil after production has been going down for several years. Or you would be a idiot to bet against copper if you knew that the efficincy of mining is steeply declining.

Its a brilliant plan, to use resource scarcity to battle deflation. Bu we dont pay them to run our world. We shouldnt pay them. We run our own world, and if that world would include higher energy and comoddity prices then so be it. It would force us to be more efficient. Lower prices dont help if theyre creating the wrong incentive.

Fri, 09/25/2009 - 07:51 | 79338 Anonymous
Anonymous's picture

The mere whiff of US regulators poking their noses into energy markets is already sending speculator interest offshore. S&P is considering an excluding-US GSCI style index, citing interest from investors to freely access commodities exposure. United States Commodity Funds (proud owners of the market-moving USO oil and USG natural gas ETFs), have already filed for permission to create a Brent-related one. Platt's is looking into setting up an index that would give investors exposure to physical commodities, according to Reuters. Presumably if an investor has a physical position then he can play around with futures willy-nilly. None of this news is good for those who want to stamp out oil speculation. Just because speculation may be curtailed on Nymex (and to a lesser extent on ICE) doesn't mean that prices of US futures won't be affected by speculators elsewhere going forward. Asian and Middle Eastern exchanges have been trying unsuccessfully to break into the oil futures markets for decades. But they have always been beaten down by the dominant US and UK ones. Their day in the sun may have arrived. I have said it before and I'll say it again: there was a good reason that Goldman Sachs and Vitol bought 20% of the Dubai Mercantile Exchange. And it wasn't because they like wadi-bashing.

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