RBN Energy: nice analysis of the crude oil / natural gas price ratio, currently at 27 --
There are typically two ways to express the crude-to-gas ratio – the rule of thumb method that is simply crude price divided by natural gas price or the BTU ratio method that is gas price divided by (crude price /5.8) where 5.8 is the number of MMbtu in a barrel of crude. RBN Energy sticks to the rule of thumb method since it is more intuitive.
Conventional wisdom used to say that the crude-to-gas ratio should gravitate back to the 5.8 BTU ratio or its close approximation 6X (i.e. crude price = 6X gas price). In the 10 years from August 1997 to August 2007 the ratio averaged 7.5 X – fairly close to the ‘real” BTU ratio of 6X. Then, at the end of 2008 just after crude and natural gas prices had crashed in response to the financial crisis, the ratio began to climb. It reached around 20 X during 2009 through 2011 and then skyrocketed in 2012 as natural gas prices plunged to less than $2/MMBtu in April – leading to a crude to gas ratio of 54X. Gas prices recovered from those lows but the ratio still averaged 35 X during 2012.
The Wall Street Journal
Apparently the president IS negotiating.
China is overtaking the U.S. as a buyer of Middle East oil, adding fuel to tension between the nations over security in the region. Flashback.
The gap between the "haves" and the "have-nots" continues to widen. America's poverty rate has stabilized after rising during and right after the last recession—yet a greater share of the poor are poorer than they have been in years.
Jury sides with BP in Texas city case. A Texas jury found BP doesn't owe compensation to people who said they risked illness after the company's refinery emitted toxic gases in 2010, but it found the company was negligent for allowing the emissions after a fire.
Prospect of long closure worries workers. Many workers and businesses, including thousands with no direct government funding, are now bracing for a stark reality: protracted financial pressure if the federal government remains closed for longer.
Previously reported, but this is the top story in the second section: North Dakota pipeline spills 20,000 barrels. A Tesoro Logistics crude pipeline spilled about 20,000 barrels of oil in a rural field in northwest North Dakota, in what appears to be the largest spill in the Bakken shale formation to date. It appears The Dickinson Press missed scoop on the top North Dakota story of 2013. I think it was reported first in The Bismarck Tribune but could be wrong. [Update, October 31, 2013: it appears the pipe spill was due to a lightning strike.]
Energy companies drill for IPO dollars. U.S. oil-and-gas exploration and development companies such have raised $12 billion this year in IPOs and secondary offerings, according to Dealogic, placing 2013 on track to be the biggest year since at least 1993 for such offerings by U.S. energy companies.
Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read at this site or what you think you may have read. I put the disclaimer here becasue "heard on the street" has a nice post on XOM:
Still, Exxon's lackluster performance this year has left it looking cheap relative to both the market and its smaller E&P rivals. And if a debt limit debacle rears up, what will matter most is this: Exxon retains a triple-A rating, and net debt at the end of June was equivalent to about one-fifth of forecast 2013 earnings before interest, taxes, depreciation and amortization.
Compare that with an exuberant E&P sector that, on J.P. Morgan Chase's estimates, is carrying an average net debt load of 2.2 times 2013 Ebitda and looks set to outspend cash flow by 28% this year. Built for speed, yes, but not for big waves.
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And now, this is the big story for the day: the movie review of "Gravity," starring Sandra Bullock and George Clooney. The review was posted September 30, 2013, but I just saw the movie yesterday. I can't recall the last movie I saw in the theater, but my wife wanted to see this one (she is a regular movie-goer) and I thought I owed her one. I figured I could handle this one. Wow, incredible. I can't get the images out of my mind. We were given 3D glasses but they should have also given us straps to tether ourselves to our seats. If you get a chance to see this movie, do not pass it up. The photography, of course, is incredible. The special effects don't appear to be anything other than real footage. The story line is great. It's hard to believe, if the movie is 90 minutes long, Sandra was on her own -- the only actor on screen for 60 of those minutes. She is incredibly believable in her role.
I never thought of Sandra Bullock as necessarily on the A-list among Hollywood actresses, close but not quite there. This movie puts her over the top. I'm not sure anyone -- maybe Uma Thurman -- could have done better. (No, this is one movie Meryl Streep could not have been in -- in any role.) George Clooney is starting to get a reputation of being a bit too smug in movies -- playing himself and not the role -- but in this movie, he is incredible. He IS a seasoned astronaut/commander/fighter pilot/at home in his skin, having the time of his life, perhaps his last trip to space and he is enjoying it.
If you get a chance to see this movie on the big screen in 3D, don't pass it up; but remember to bring a strap totether yourself to your seat.
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