Monday -- Could Light Sweet Oil Drop Below $85 In First Six Months Of 2014?

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RBN Energy: could light sweet oil drop below $85?

If the flood of new crude arriving at the Gulf Coast during the first six months of 2014 overwhelms refiners in the region, then the pricing consequences may very well be quite radical. Could prices at the Gulf Coast flip to trade at a discount to West Texas Intermediate (WTI) crude delivered at the Cushing hub that is home to the CME NYMEX contract? Even if Gulf Coast crude retains its premium over WTI, deep discounts may be required to encourage refiners to process increasing quantities of light sweet crude. A downward spiral of crude prices could ensue.  Today we lay out possible price scenarios.

The Wall Street Journal

Lead story, front page: rule change (singular) on health insurance rattles industry. The rule change being referred to, no doubt, is the one in which President unilaterally delayed the individual mandate  for one year. The corporate mandate was delayed until 2015 some time ago. In effect, the entire law has been delayed one full year, though the insurance companies revamped policies to comply with the law.

The number of Americans enrolling continues to fall short of the goals the Obama administration has laid out, which is a problem for the White House.

It also represents a problem for the insurance industry, which calculated that the prospect of millions of new customers brought their way by the Affordable Care Act and its coverage requirements would make up for any disruption that came along with the law.

Karen Ignagni, the industry's top representative in Washington, spent the weekend managing the fallout after the administration overhauled its approach to people who buy coverage on the individual market. The insurers Ms. Ignagni represents as head of the industry's main lobbying group, America's Health Insurance Plans, got late notice Thursday night of the new rules: People dumped by their insurers could buy bare-bones "catastrophic" plans or get a hardship exemption from having to buy health insurance at all.

Those were customers Ms. Ignagni's members were counting on to buy fuller coverage. In an interview Friday at AHIP's offices, Ms. Ignagni expressed concern about any erosion of the "individual mandate" requiring most Americans to carry health insurance or pay a penalty.

Bottom line: the insurers are on the hook for unlimited liability and the president just told the under-30 crowd to wait a year before buying ObamaCare policies.

What's not to like.

By the way, after I posted the above, this was posted over at Yahoo!Finance echoing what I just posted:

At the same time, the Obama administration continues to amend, if not water down, its name-sake policy in a bid to shore up confidence and stave off criticism.  The most recent example came just last week, when the so-called individual mandate (that requires everyone to have insurance or face a fine from the IRS) was waived for anyone who had a policy cancelled or can show any of a dozen other approved reasons to qualify for an exemption.

“I think it’s actually going to drive costs up,” Cote says of the formally named Affordable Care Act, predicting that young healthy enrollment will be too low and insurance companies will end up saying "we got all the sick people."

Insurers are in deep trouble. We'll start to see that in the earnings reports in 3Q14.

The health care system will be inundated with folks new to the system; the heath care system has not adjusted to this influx. In the Grapevine, Texas, area (northwest of Dallas, suburb of Ft Worth) at least four new stand-alone emergency centers have opened in the past year. This is how "they" see this developing: existing clinics, hospitals, and emergency rooms will be inundated; the overflow will will visit these stand-alone emergency centers. My hunch: these new emergency centers will be the "new" clinics for many folks, especially the under-30 who are now allowed to purchase catastrophic insurance policies previously not allowed under ObamaCare.

Meanwhile, The Hill is reporting that ObamaCare is polling LOWEST numbers ever: 35% support the law.

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Hell is beginning to freeze over. The Obama administration will not tighten pipeline rules.

The U.S. Transportation Department doesn't plan to change regulations to better protect underground pipelines from riverbed erosion, a year after Congress ordered it to evaluate its policies in the wake of pipeline breaks that spilled hazardous liquids into waterways.

The department's Pipeline and Hazardous Materials Safety Administration said its review found that over the past two decades, riverbed erosion contributed to just one in every 200 significant hazardous-liquid incidents involving pipelines.

The agency, which oversees pipeline safety, said in a recent letter to Congress that its "existing legislative authority is adequate to address the risks of hazardous liquid pipeline failures at major river crossings." The agency said that after its review, it sees no need to change existing regulations.

The letter could spell the end of efforts by pipeline-safety advocates to enhance protections against "scouring," in which flooding or rapid currents strip away layers of earth from a river's bed and damage pipes buried underneath.

On-line retailers with huge problem: returns. Up to one-third of all products sold over the internet are returned due to easy shipping policies. 

Stock to watch today: AAPL. The Chinese effect. It's up almost $20 in pre-market trading. Merry Christmas.

Target traffic down significantly over the weekend, compared to other retailers, and considering this was the busiest shopping weekend of the year.

Boeing's largest union will vote on new contract to guarantee that the 777X would be built in Washington State. This contract was voted down by the "union leaders," not the rank and file. The rank and file have read Sun Tzu.

Lights flicker for utilities. Fortunately, the utilities saw what happened in Germany and will take steps to prevent this from happening in the US.

Gasoline prices take off in the US. Regular readers know why.

The Los Angeles Times

Thirteen biggest political blunders of 2013: the president's "You Can Keep Your Doctor" did not make the list, but nine obscure Republican actions did. Talk about slanted. I don't even know how #13 made the top 13 list.

CarpeDiem

Some Sunday links:

• The US now watches the majority of its online porn on mobile phones. 
• Cuba opens up sale of new cars for the first time since 1959 revolution.
• Bad news for people who like bad news: the economy is showing signs of serious growth.
• Economic death with: DC city council votes to increase minimum wage to $11.50 by 2016.