Making money on Yellen's remarks: yesterday it was reported that the Fed chairman will keep rates low. Denbury is making money on that. If I understand the press release correctly, Denbury has about $1 billion in notes (loans) that it pays 8.25% to those who hold them.
Denbury plans to offer new notes at 5.5% which will pa off the higher-interest notes. It looks like investor interest was so high, Denbury had to increase the size of the offering. on $1 billion, the company would save $27.5 million/year. To put $30 million in perspective, the company has less than $15 million in cash on hand (
Yahoo!Finance).
Active rigs:
| 4/17/2014 | 04/17/2013 | 04/17/2012 | 04/17/2011 | 04/17/2010 |
|---|
| Active Rigs | 184 | 185 | 206 | 175 | 108 |
RBN Energy:
normal butane exports have tripled, year-over-year. See also
the post from yesterday.
Propane has received a lot of airtime in recent months given the
Polar Vortex and heavy crop drying demand anomalies coinciding with
growing propane export volumes. Now it’s time to show normal butane a
little love as normal butane exports almost tripled from this time last
year. In January 2013, 22 Mb/d of butane was exported; that number was
63 Mb/d in January 2014, as reported by the EIA. All indications are
that butane export volumes will be experiencing an astronomical growth
rate over the next five years, reaching 300 Mb/d by 2019. What are the
factors driving this rate of growth, and what are the implications for
refiners and petrochemical companies? In today’s blog, we assess the
rapid growth in normal butane exports.
For more on the propane demand anomalies that occurred over the past six months see A Perfect Storm – Polar Vortex Turns Propane and other NGL Markets Upside Down. We also covered more detail on growing propane exports in Sail Away – Propane Exports Exceed 400 Mb/d for the First Time.
Growing volumes of NGLs, as a result of the shale gas revolution is
also not a new story, and it’s one we have covered in-depth. Most
recently we talked about overall production trends resulting from the
Shale Revolution in The Future’s So Bright I’ve Gotta Wear Shades – Crude, NGLs and Natural Gas Outlook. Normal butane is riding that wave of increasing production along with the other NGLs.
Most normal butane is used in the blending of motor gasoline. As a
gasoline blendstock, butane has a high octane number (91), which is
good, but it also has a high Reid vapor pressure (RVP) level, which is
not so good, especially in the summer. During the winter, refiners
blend greater amounts of butane into gasoline because it is cheap, has
high octane, and because government Clean Air regulations permit the
sale of gasoline with a higher RVP. But in the summer, those same
regulations specify lower RVP maximums in gasoline, which dramatically
reduces how much butane can be blended in. When that happens, many
refiners produce more butane than they can use. Thus butane inventories
tend to swing widely from the winter season (low inventories) to the
summer season (high inventories). All things being equal, butane prices
work in the inverse – higher in the winter and lower in the summer. We
discussed butane blending in gasoline in Wasted Away in Butane Blendingville and Regulatory Gas Pressure Party.
Smaller volumes of normal butane are also used in the petrochemical
industry as an olefin unit feedstock and as a feed for butamer
(isomerization) units to produce volumes of its sister NGL product,
isobutane (see You Can Just Iso my Butane).
The Wall Street Journal
Top story: Syrian-scenario begins to play out in the Ukraine. Initial Ukraine thrust begins with a sputter. Ends with a sputter?
For the Nobel-winning president, a stand-off with Moscow, and yet another war.
************************************
Top investing story yesterday: Yellen's speech. More on that later.
In particular, Ms. Yellen said she was more worried about inflation getting too low than too high. The Fed is "well aware" that inflation could shoot above its 2% goal, she said. "At present, I rate the chances of this happening as significantly below the chances of inflation persisting below 2%." In answer to a question posed after her speech, she added the Fed's focus should be on lifting inflation to the 2% goal, not holding it down.
The setting provided the Fed chief's first opportunity in her new role to field questions in public from economists, instead of reporters or lawmakers as she had done in prior months. Ms. Yellen canceled an appearance before the group last October as the White House weighed nominating her for the job.
Stocks rose in the hour before her luncheon address and were little changed in its aftermath, with the Dow Jones Industrial Average ending the day up 1% at 16424.85. Yields on 10-year Treasury notes ticked up slightly, to 2.637%.
***************************************
Economy improving: The economy strengthened across a broad swath of the country in recent weeks, further evidence of the recovery springing back to life after a winter lull.
Retailers reported better traffic coinciding with improved weather, manufacturers saw fewer disruptions and banks found stronger demand for business loans, according to the Federal Reserve's survey of regional economic conditions released Wednesday. Comment: I commented on this some days ago. The tea leaves were right.
Unions want federal funds to bolster Detroit pensions. Union leaders want federal money originally slated for struggling Michigan homeowners to help plug a pension hole in Detroit as officials work to resolve the nation's largest municipal bankruptcy. They will get it; it's an election year.
That GM ignition switch that killed at least 13 people? It turns out test drives for GM recognized the problem as far back as 2006.
RadioShack is mired in negotiations with is lenders over plans to close up to 1,100 stores, complicating the struggling consumer electronics retailer's turnaround.
Sonic will add 1,000 restaurants over the next ten years.
The Los Angeles Times
After posting
The Wall Street Journal, going through the
LA Times day-after-day is a real disappointment.
The Dickinson Press
I cannot make this up: headline story "Church reports couple kissing in car." C'mon. I expect better than this, even in
The Dickinson Press.
Hillside Baptist Church reported a Honda Civic
at approximately 6:45 p.m. that was parked at its facility, claiming a
male and female were kissing in the car, Oestreich said.
Police officers responded to the incident but were unable to locate the vehicle or couple, he added.
I confess. My wife and I were stopping through Dickinson on our way to Rugby.
