Natural Gas Draw Puts Storage At 11-Year Low; Prices Jump; Ethanol Shippers Mad (As In "Upset/Angry")

Active rigs:

	4/4/2014	04/04/2013	04/04/2012	04/04/2011	04/04/2010
Active Rigs	190	186	207	172	102

RBN Energy: continuation of the series on diesel and gasoline exports.

Increased refined product exports from US Gulf refineries are being driven by diesel refining margins but a lot of by-product gasoline is being produced as a result.  Domestic demand for diesel and gasoline has declined over the past 5 years. Fortunately for refiners there is strong demand for diesel and gasoline in Latin America as well as for diesel in Europe. Important cost advantages stemming from the shale revolution are helping Gulf Coast refiners secure these markets against international competitors. Today we conclude our analysis of booming Gulf Coast exports.

This blog is the second in a two part series looking at the drivers behind increased US exports of refined products from the Gulf Coast region. In Part 1 our analysis showed that the volume of Gulf Coast diesel exports is generally correlated with refinery operations. That means that the more crude Gulf Coast refiners process the more diesel exports increase. And because refineries typically produce more gasoline than diesel then ramping up diesel supplies brings with it an increase in by-product gasoline supplies. But diesel is the primary driver because diesel margins at the Gulf Coast have remained consistently robust even when gasoline margins turned negative. This time we look at the impact of domestic demand for diesel and gasoline on exports, where US exports are headed and how US refineries are competing to win export market share.

The Wall Street Journal

Fort Hood officials focus on suspect's mental health. Yeah, that's a good place to start. Or, to quote, Hillary, "what does it matter?"

US trade gap widens, spurring downshift in GDP projections; US exports fell 1.1% in February. "What does it matter?" -- Barack

Dems shift debate on minimum wage: raise tipped workers' minimum wage to $7.10 from $2.13.

Health-law tweak proposed; bipartisan: 40 hours instead of 30 hours; nice headlines, but the article says it won't happen anytime soon. Dems are pumped with excitement now that more than 7 million enrolled.

States grapple with fixing problem-plague health exchanges.

Young workers not signing up for ObamaCare. "Take-up rates under 30 show unexpected decline."

Companies had been bracing for a big bump in the number of workers signing up for workplace plans because of the new government mandate that most American adults buy health insurance or pay a penalty. But new data on worker behavior for the 2014 coverage year from payroll-services company Automatic Data Processing Inc. suggest that surge of enrollment never happened, at least broadly across large companies. 

That Democratic excitement will last until October, 2014, when the new premiums come out. 

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Oooohhh, say it ain't so -- ethanol and railroad groups clash over shipment snarls.

U.S. ethanol and railroad industry groups clashed Thursday over transportation constraints that have triggered soaring prices for the biofuel in recent weeks.

Renewable Fuels Association President Bob Dinneen said in a letter to the Association of American Railroads that the "sheer chaos" of the rail system has pushed up prices for ethanol—a corn-based biofuel that is blended into gasoline—and caused consumers to pay more at the pump.

The higher costs, he argued, have damaged the image of the ethanol industry. Ethanol prices have jumped in recent weeks as supplies have declined amid transportation snarls.

A bitterly cold winter and rising crude-oil shipments have slowed rail traffic in the Midwest.

Most ethanol is made from corn grown in that region. The backup of railcars has prevented ethanol from making it to coastal refineries that blend ethanol into gasoline, analysts say. Ethanol futures at the Chicago Board of Trade on Tuesday reached a nearly eight-year high, but have tumbled over the past two sessions. 

Hey, ethanol folks -- call Mr Obama -- he started this by delaying for six years his decision on Keystone XL. Six years is a long, long time to get oil and gas industry switched over to rail. The tipping point was probably in March when Canada shipped its first western sands oil all the way to the Texas coast by rail. Previously posted. 

Warren is laughing all the way to the bank. When he gets home he will write a thank you note ot his friend in the White House.

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Don said this was gonna happen -- he told me this yesterday: natural gas prices rise on concerns about dwindling supplies.

Natural-gas prices rose for a second day on concerns about producers' ability to replenish stockpiles that were depleted over the winter. Thursday's gains came after government data showed U.S. gas inventories dropped to an 11-year low last week. The decline also was unusually large for late March, when warmer temperatures typically reduce demand for the heating fuel. 

The operative word in the previous sentence? "Typically." I still need to wear a  heavy jacket when I ride into Starbucks. It should be shirt-sleeve weather by now in the Big D.

Don sent me this link to show me how big the natural gas draw was this past week.

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The Los Angeles Times

I'm always negatively impressed with the LA Times. It's mostly sports, a little Hollywood, and almost no news. The only news today: something about Brazilian music (that was the headline story, if you can believe it); meningitis among the alternative lifestyle folks; and two separate stories on two very, very small earthquakes in California, that would never have made the news had it not been for all the tectonic action along the Pacific Rim this past week. 

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The Dickinson Press: News You Will Nowhere Else

The UN weighs in on CBR derailments.

International rules for handling the kind of petroleum shipments involved in several recent fiery derailments may need to be revised, the United Nations said, in a move that could rattle the fast-growing oil-by-rail sector.

"This is massive," said Lawrence Bierlein, a veteran transportation lawyer in Washington.

"If it succeeds, this is going to change the definition of flammable liquids in a way that is going to hit the oil industry and many others."

Yes, massive. For the lawyers. 

My hunch: you won't find this story anywhere except in The Dickinson Press. [A quick google search did not reveal this story in the NY Times or The Washington Post, but The Dickinson Press had it.]