cera monthly summary for june 2000 - cera monthly summary listed below are the items cambridge energy distributed during the month of
june . a summary of
each is provided below .
cera monthly summary
title : cera monthly summary for june 2000
author : cera
e - mail category : monthly summary
product line : monthly summary ,
url : http : / / www . cera . com / cfm / track / eprofile . cfm ? u = 5526 & m = 1260 ,
table of contents
1 ] bonn climate change meeting : treading water
2 ] hitting retail energy over the net : e - commerce companies join the game
3 ] the turkish parliament votes on the blue stream tax protocol
4 ] more oil is coming into the black sea : will it cause a bosphorus crisis ?
5 ] european green energy : let the market decide
6 ] pastrana : facing the sunset ?
7 ] anp round two : brazil ' s upstream auction ?
8 ] brazilian power markets : demand recovery gathers steam but supply
questions remain
9 ] mexico after the elections : the real battle begins
10 ] colombia : weary of war , wary of peace
11 ] argentine power markets : winter constraints push prices higher in may
12 ] us gas markets reach new heights : where will it stop ?
13 ] monthly briefing - - the pressure cooker
14 ] western canada supply growth : getting nowhere faster
15 ] north american gas watch : reaching new heights
16 ] closing the utility stock valuation gap : does strategy matter ?
17 ] the summer 2000 spot electricity markets outlook : divergent trends in
price volatility
18 ] atlantic basin gasoline markets soar
19 ] refined products line - - us markets
20 ] refined products line - - european markets
21 ] recent actions signal progress toward mtbe elimination
22 ] refined products : market update
23 ] new peaks , new prices
24 ] oil market turmoil : opec seeks a short - term fix
25 ] the state of the oil market : market supported , psychology enhanced , and
opec driven
26 ] opec ' s cautious new agreement
cera alert : 06 / 22 / 2000
title : bonn climate change meeting : treading water
author : kaplow
e - mail category : alert
product line : climate change and environment
url :
summary :
the recently concluded 12 th session of the subsidiary bodies in bonn , the
next - to - last negotiating session before the details of the kyoto protocol are
scheduled to be finalized in november , made little progress on key issues .
but the meetings did serve to highlight divisions within the three
negotiating blocks and identify the most contentious areas for future
discussion .
cera private report : 06 / 22 / 2000
title : hitting retail energy over the net : e - commerce companies join the game
author : robertson , behrens , biehl
e - mail category : private report
product line : retail energy forum , energy the establishment of a
method for guaranteeing a renewable origin for energy lays the foundation for
green energy markets in the medium term .
cera decision brief : 06 / 05 / 2000
title : pastrana : facing the sunset ?
author : puyana , scott
e - mail category : decision brief
product line : latin american energy
url :
summary :
colombia is expected to begin an economic recovery in 2000 after a
contraction of over 5 percent in 1999 . despite this expansion , unemployment
levels will remain stable at 19 percent , and losses incurred by companies , by
individuals , and by the government through lower tax revenues during the last
nine quarters of negative economic growth will not be recovered this year .
the administration of andr , s pastrana arango faces the difficult challenge of
getting the economy back in shape at a time when his popularity is waning .
cera alert : 06 / 09 / 2000
title : anp round two : brazil ' s upstream auction ?
author : scott , mattos
e - mail category : alert
product line : latin american energy
url :
summary :
the opening of brazil ' s upstream oil sector has taken another step forward
this week following the successful anp auction of 21 blocks . this bidding
round comes one year after anp ' s first round , held in june 1999 . the bid was
well subscribed by 44 companies that were qualified to participate and bid
for the 10 onshore and 13 offshore blocks throughout nine basins in brazil .
although the anp collected lower participation fees than in the first round
( us $ 9 . 0 million compared with us $ 9 . 8 million in the first round ) , the second
round was generally considered a success .
cera alert : 06 / 16 / 2000
title : brazilian power markets : demand recovery gathers steam but supply
questions remain
author : bailey , mattos
e - mail category : alert
product line : latin american energy
url :
summary :
brazil ' s power demand grew rapidly throughout the first quarter of 2000 .
february demand was 6 . 8 percent over february 1999 levels , and march demand
grew a further 7 . 6 percent above the previous year . the industrial sector
continued to lead the recovery with year - to - date demand growing 9 . 8 percent
over 1999 , and commercial sector demand growth remained strong at 7 . 5 percent
over a similar period . as demand growth strengthened , hydro power generation
increased while thermal generation levels declined steadily from a peak in
january . hydro stored energy levels had begun to decline in all regions by
the end of april , signaling the end of the wet season . with rapidly
increasing demand , particularly in the south and southeast regions , brazil
could experience power shortages during the coming dry season if capacity
additions that are currently scheduled to come online in the next several
months are delayed .
cera decision brief : 06 / 20 / 2000
title : mexico after the elections : the real battle begins
author : puyana
e - mail category : decision brief
product line : latin american energy
url :
summary :
for the first time in many decades , the presidential and parliamentary
campaigns are highly competitive , and the results of these democratically
conducted elections will have a large impact on the effectiveness and future
of the new administration . however , the real political battle begins after
the elections . indeed , the winning party will have to exercise all its
political skills to create coalitions and advance negotiations in order to
take control of the government . three different scenarios are portrayed in
this cera decision brief .
cera decision brief : 06 / 26 / 2000
title : colombia : weary of war , wary of peace
author : puyana , scott
e - mail category : decision brief
product line : latin american energy
url :
summary :
july 2000 marks the second anniversary of the widely publicized visit of then
president - elect andres pastrana to elderly guerilla chief of the armed
revolutionary forces of colombia ( farc ) , manuel marulanda . two years later ,
the country is no closer to peace , and resolution of the ongoing negotiations
is uncertain at best . this prolongation and stagnation of the peace process
has had a direct negative impact on energy sector investment in colombia . the
government will likely proceed with formal negotiations , but time - - and
pastrana ' s remaining term in office - - is running out .
cera alert : 06 / 30 / 2000
title : argentine power markets : winter constraints push prices higher in may
author : bailey
e - mail category : alert
product line : latin american energy
url :
summary :
prices in the argentine power market were significantly higher in may owing
to the combination of continued low hydro output , strong demand growth , and
periodic constraints on natural gas deliveries to power plants in the buenos
aires region . spot power prices ( energy component only ) averaged $ 18 . 24 per
megawatt - hour ( mwh ) in may . although average power prices declined from last
year , price volatility increased , with several short - duration episodes of
prices over $ 60 per mwh as gas unavailability in the buenos aires region
forced several midcost units offline during peak hours . in june , prices are
expected to continue strengthening to the $ 24 - $ 28 per mwh range on average .
beyond june , price pressures are expected to remain negative as increasing
hydro output , new and returning low - cost thermal capacity , and the end of gas
constraints push average prices back toward $ 15 per mwh or below by august or
september .
cera alert : 06 / 01 / 2000
title : us gas markets reach new heights : where will it stop ?
author : n . american gas team
e - mail category : alert
product line : north american gas
url :
summary :
the us gas market enters the month of june with prices at the highest level
since deregulation . at the henry hub prices have surged to as high as $ 4 . 50
per mmbtu - - up from less than $ 3 . 00 per mmbtu during april . behind this has
been a building and serious shortfall of supply , the result of disappointing
gas production levels and surging gas demand for power generation . the gap
between these two forces has been met through storage inventories , with
injections so far this spring running between 1 . 5 and 2 . 0 bcf per day below
last year ' s rate . the continued tension between these two forces will keep
the pressure on prices this summer , and the need to inject gas into storage
will price out increments of demand .
cera alert : 06 / 15 / 2000
title : monthly briefing - - the pressure cooker
author : n . american natural gas team
e - mail category : alert
product line : north american gas
url :
summary :
pressure remains extremely strong in the united states gas market as three
factors - - the increasing power generation demand , lower storage inventories ,
and us wellhead supply still struggling to rebound - - call into question the
ability to build storage to a level adequate for next winter . prices are
being supported also by concurrent strength in oil and liquids markets ,
making traditional alternatives to gas much more expensive than in recent
years . in this environment intense competition between power generation
demand and storage injections will continue throughout the summer - - with
pressure increasing into july as temperatures rise - - with the result that gas
will continue to price at the high levels necessary to discourage end - use
demand . cera expects a july average price of $ 4 . 45 per mmbtu .
cera decision brief : 06 / 15 / 2000
title : western canada supply growth : getting nowhere faster
author : eynon , small
e - mail category : decision brief
product line : north american gas
url :
summary :
as us supply declines and demand grows , current high gas prices are
reinforced , but western canadian gas supply growth appears to be faltering
when it is needed most . both transitory factors and enduring trends underlie
the disappointing production growth results . the largely weather - related
transitory factors have had a near - term impact on drilling and connection
activity . the underlying trends have been developing slowly over time . more
shallow gas wells have been drilled in the past three to four years and
created a shift to higher average basin declines and lower average per well
production rates . thus more shallow wells are needed just to replace
production . with a shift to more exploration and deeper drilling , higher
supply growth rates are possible , but if that does not occur , other potential
supply sources may step in . significant arctic reserves in the mckenzie delta
and the alaskan north slope are once again entering the spotlight . coal bed
methane has become a str !
ong source of us supply . although now ignored in canada , it may become a
future source of canadian gas .
cera watch : 06 / 20 / 2000
title : reaching new heights
author : n . american natural gas team
e - mail category : watch
product line : north american gas
url :
summary :
fundamentals have taken center stage , as building demand pressure accompanies
us supply declines . storage inventories have been significantly reduced , and
the pressure for storage injections is likely to intensify as we head into
the summer months . demand - driven growth continues , as completions of
gas - fired power generation plants accelerate to a pace above 10 , 000 megawatts
per year and economic growth stimulates electricity demand . the result is a
higher - price playing field for natural gas , with the average henry hub price
likely to reach $ 3 . 67 per mmbtu for 2000 - - its highest level since the
development of spot markets .
cera private report : 06 / 21 / 2000
title : closing the utility stock valuation gap : does strategy matter ?
author : parshley
e - mail category : private report
product line : north american power
url :
summary :
the stock market has been delivering an unsettling message to the utility
industry . traditionally undervalued in the market , the sector is trading at a
historically wide 50 percent discount to standard and poor ' s s & p 500 . the s & p
utility index over the past 18 months gained only 5 percent , with huge gains
by some energy companies offset by a 15 percent drop in stock price for 29
electric utilities . yet early this year , the spu outpaced all other industry
groups . how should constantly evolving utilities in this wide - open sector
form a strategic plan to maximize shareholder value while achieving success ?
the value of electric utility merger and acquisition deals for 1999 - - a record
$ 50 billion - - was double the 1998 value . but are these choices ahead of the
curve ? and when will the market catch up ? three groups of new companies with
distinctive strategies may provide clues to the new strategic landscape :
multiservice and technology providers , superregionals , and global power and !
energy companies . three other strategic choices are considered in evaluating
responses to these challenges .
cera decision brief : 06 / 23 / 2000
title : the summer 2000 spot electricity markets outlook : divergent trends in
price volatility
author : makovich , sannicandro
e - mail category : decision brief
product line : north american power
url :
summary :
while several regional power markets are likely to see a repeat of price
spikes this summer , other markets are likely to see a reversal in price
volatility as supply - demand balances improve dramatically . one way to
interpret forward markets is as a consensus of market expectations .
therefore , forward prices for on - peak wholesale power reflect the common
expectation that prices will spike as high as - - or even higher than - - in 1999 .
a significant disconnect exists between the forward market prices and market
fundamentals for the upcoming summer in some regional markets .
cera alert : 06 / 02 / 2000
title : atlantic basin gasoline markets soar
author : meyers
e - mail category : alert
product line : refined products
url :
summary :
spurred by supply concerns at the start of the summer driving season , spot
gasoline - to - crude oil price differentials on both sides of the north atlantic
have soared to the highest levels seen since the gulf war . in cera ' s view ,
this strength in margins is attributable to the convergence of three factors :
very low inventories , tightening gasoline specifications , and legal
uncertainty .
cera alert : 06 / 13 / 2000
title : refined products line - - us markets
author : refined products team
e - mail category : alert
product line : refined products
url :
summary :
the us gasoline market exhibited exceptional strength during may . us gulf
coast unleaded gasoline surged to $ 8 . 40 per barrel measured against wti , up
$ 3 . 58 per barrel over the strong april value of $ 4 . 82 . apparent demand for
gasoline skyrocketed to 8 . 64 million barrels per day ( mbd ) in response to the
start of the summer driving season . despite increases in the reported demand
for distillate and jet / kerosene , these markets did not experience the same
month - over - month strength in differentials , dropping to $ 1 . 58 and $ 2 . 58 per
barrel versus wti , respectively .
cera alert : 06 / 20 / 2000
title : refined products line - - european markets
author : refined products team
e - mail category : alert
product line : refined products
url :
summary :
as higher crude oil prices started to reduce the high product differentials
to brent and thus lower refinery margins , refiners attempted to prevent this
situation from worsening by reducing throughputs . however , very tight markets
for gasoline and to a lesser extent for automotive diesel helped to limit the
fall in those products ' values . meanwhile , fuel oil discounts to crude oil
widened in may , driving down simple / hydroskimming margins .
in recent weeks , the combination of lower primary products inventories and
reductions in operations at some refineries has helped differentials to
recover . this has pushed margins to above may ' s averages , although still
below april ' s peaks .
cera alert : 06 / 26 / 2000
title : recent actions signal progress toward mtbe elimination
author : stackpole
e - mail category : alert
product line : refined products
url :
summary :
the close scrutiny that federal reformulated gasoline ( rfg ) now faces from
the media and public officials owing to midwestern market price spikes has
not stopped the inexorable political progress toward eliminating methyl
tertiary butyl ether ( mtbe ) use in the us gasoline pool . additional
signposts , including heightened congressional debate over legislation
eliminating mtbe use and state actions to ban mtbe , continue to emerge that
point the way toward mtbe - free gasoline in the united states .
cera alert : 06 / 29 / 2000
title : refined products : market update
author : refined products team
e - mail category : alert
product line : refined products
url :
summary :
refined products markets continue to display marked regional differences . in
the atlantic basin , low gasoline inventories in both the united states and
europe , which resulted from many months of opec production restraint ,
continue to dominate the market , and gasoline differentials above crude are
at their highest level in over ten years . although signs are emerging of a
possible correction in the north american market in the coming month , the
2000 gasoline season will almost certainly be the strongest experienced by
atlantic basin refiners in many years . in contrast , asia pacific spot
refining margins were weak through most of june , until the recent accident at
kpc ' s mina al - ahmadhi refinery prompted a quick strengthening in prompt
singapore margins . however , with ample unused refining capacity available
east of suez and the likelihood of a partial restart of the kpc refinery in
july , cera ' s outlook is for that strength to be of short duration .
cera alert : 06 / 23 / 2000
title : new peaks , new prices
author : zenker , moritzburke , snyder
e - mail category : alert
product line : western energy
url :
summary :
in the west , july typically marks the start of the summer cooling season and
steadily rising power prices . cera expect the west to be the only region in
north america with a year - over - year increase in peak electricity demand .
power prices already established new record highs in june , suggesting that as
demand reaches its peak in the coming months western power markets will
continue to experience increased volatility compared with last year ' s levels .
the convergence of higher gas prices , growing power demand , and reduced
hydroelectric energy production compared with 1999 levels is pushing up
western power prices . greater utilization of gas - fired generators within the
west has supported western differentials and contributed to high gas prices
throughout north america . western gas prices should continue to be strong ,
boosted by continuing increases in regional gas demand for power generation
and pressure across north america to inject gas into storage in anticipation
of summer !
power loads .
cera alert : 06 / 15 / 2000
title : oil market turmoil : opec seeks a short - term fix
author : world oil team
e - mail category : alert
product line : world oil
url :
summary :
driven by strong demand - - especially in the recovering asian economies and the
united states - - oil prices ( both wti and brent ) have again broken the $ 30
level - - a mark that is of particular significance in this us election year . in
turn , the oil market ' s attention is again fixed on opec , as it prepares for
its june 21 meeting , but its members are deeply divided over how to respond .
cera alert : 06 / 16 / 2000
title : the state of the oil market : market supported , psychology enhanced ,
and opec driven
author : world oil team
e - mail category : alert
product line : world oil
url :
summary :
the key ingredient in the volatile oil market is the new opec - - and its
successful implementation of a strategy to keep supply one half step behind
demand - driving inventories down for crude , with the side effect of lowering
stocks for several products in markets such as the united states and europe .
three features of the current oil market are supporting prices :
* market supported
* psychology enhanced
* opec driven
cera alert : 06 / 22 / 2000
title : opec ' s cautious new agreement
author : world oil team
e - mail category : alert
product line : world oil
url :
summary :
opec ' s agreement to raise its production quota beginning july 1 by 708 , 000
barrels per day to 25 . 4 million barrels per day is consistent with its
strategy of restraining supply to maintain oil inventories at relatively low
levels . the gain in supply is a short - term fix meant to alleviate political
pressure for increased production and to push prices below $ 30 but keep them
in a mid - to upper $ 20 s range .
* * end * *
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cera monthly summary for june 2000 - cera monthly summary
listed below are the items cambridge energy distributed during the month of
june . a summary of
each is provided below .
cera monthly summary
title : cera monthly summary for june 2000
author : cera
e - mail category : monthly summary
product line : monthly summary ,
url : http : / / www . cera . com / cfm / track / eprofile . cfm ? u = 5526 & m = 1260 ,
table of contents
1 ] bonn climate change meeting : treading water
2 ] hitting retail energy over the net : e - commerce companies join the game
3 ] the turkish parliament votes on the blue stream tax protocol
4 ] more oil is coming into the black sea : will it cause a bosphorus crisis ?
5 ] european green energy : let the market decide
6 ] pastrana : facing the sunset ?
7 ] anp round two : brazil ' s upstream auction ?
8 ] brazilian power markets : demand recovery gathers steam but supply
questions remain
9 ] mexico after the elections : the real battle begins
10 ] colombia : weary of war , wary of peace
11 ] argentine power markets : winter constraints push prices higher in may
12 ] us gas markets reach new heights : where will it stop ?
13 ] monthly briefing - - the pressure cooker
14 ] western canada supply growth : getting nowhere faster
15 ] north american gas watch : reaching new heights
16 ] closing the utility stock valuation gap : does strategy matter ?
17 ] the summer 2000 spot electricity markets outlook : divergent trends in
price volatility
18 ] atlantic basin gasoline markets soar
19 ] refined products line - - us markets
20 ] refined products line - - european markets
21 ] recent actions signal progress toward mtbe elimination
22 ] refined products : market update
23 ] new peaks , new prices
24 ] oil market turmoil : opec seeks a short - term fix
25 ] the state of the oil market : market supported , psychology enhanced , and
opec driven
26 ] opec ' s cautious new agreement
cera alert : 06 / 22 / 2000
title : bonn climate change meeting : treading water
author : kaplow
e - mail category : alert
product line : climate change and environment
url :
summary :
the recently concluded 12 th session of the subsidiary bodies in bonn , the
next - to - last negotiating session before the details of the kyoto protocol are
scheduled to be finalized in november , made little progress on key issues .
but the meetings did serve to highlight divisions within the three
negotiating blocks and identify the most contentious areas for future
discussion .
cera private report : 06 / 22 / 2000
title : hitting retail energy over the net : e - commerce companies join the game
author : robertson , behrens , biehl
e - mail category : private report
product line : retail energy forum , energy the establishment of a
method for guaranteeing a renewable origin for energy lays the foundation for
green energy markets in the medium term .
cera decision brief : 06 / 05 / 2000
title : pastrana : facing the sunset ?
author : puyana , scott
e - mail category : decision brief
product line : latin american energy
url :
summary :
colombia is expected to begin an economic recovery in 2000 after a
contraction of over 5 percent in 1999 . despite this expansion , unemployment
levels will remain stable at 19 percent , and losses incurred by companies , by
individuals , and by the government through lower tax revenues during the last
nine quarters of negative economic growth will not be recovered this year .
the administration of andr , s pastrana arango faces the difficult challenge of
getting the economy back in shape at a time when his popularity is waning .
cera alert : 06 / 09 / 2000
title : anp round two : brazil ' s upstream auction ?
author : scott , mattos
e - mail category : alert
product line : latin american energy
url :
summary :
the opening of brazil ' s upstream oil sector has taken another step forward
this week following the successful anp auction of 21 blocks . this bidding
round comes one year after anp ' s first round , held in june 1999 . the bid was
well subscribed by 44 companies that were qualified to participate and bid
for the 10 onshore and 13 offshore blocks throughout nine basins in brazil .
although the anp collected lower participation fees than in the first round
( us $ 9 . 0 million compared with us $ 9 . 8 million in the first round ) , the second
round was generally considered a success .
cera alert : 06 / 16 / 2000
title : brazilian power markets : demand recovery gathers steam but supply
questions remain
author : bailey , mattos
e - mail category : alert
product line : latin american energy
url :
summary :
brazil ' s power demand grew rapidly throughout the first quarter of 2000 .
february demand was 6 . 8 percent over february 1999 levels , and march demand
grew a further 7 . 6 percent above the previous year . the industrial sector
continued to lead the recovery with year - to - date demand growing 9 . 8 percent
over 1999 , and commercial sector demand growth remained strong at 7 . 5 percent
over a similar period . as demand growth strengthened , hydro power generation
increased while thermal generation levels declined steadily from a peak in
january . hydro stored energy levels had begun to decline in all regions by
the end of april , signaling the end of the wet season . with rapidly
increasing demand , particularly in the south and southeast regions , brazil
could experience power shortages during the coming dry season if capacity
additions that are currently scheduled to come online in the next several
months are delayed .
cera decision brief : 06 / 20 / 2000
title : mexico after the elections : the real battle begins
author : puyana
e - mail category : decision brief
product line : latin american energy
url :
summary :
for the first time in many decades , the presidential and parliamentary
campaigns are highly competitive , and the results of these democratically
conducted elections will have a large impact on the effectiveness and future
of the new administration . however , the real political battle begins after
the elections . indeed , the winning party will have to exercise all its
political skills to create coalitions and advance negotiations in order to
take control of the government . three different scenarios are portrayed in
this cera decision brief .
cera decision brief : 06 / 26 / 2000
title : colombia : weary of war , wary of peace
author : puyana , scott
e - mail category : decision brief
product line : latin american energy
url :
summary :
july 2000 marks the second anniversary of the widely publicized visit of then
president - elect andres pastrana to elderly guerilla chief of the armed
revolutionary forces of colombia ( farc ) , manuel marulanda . two years later ,
the country is no closer to peace , and resolution of the ongoing negotiations
is uncertain at best . this prolongation and stagnation of the peace process
has had a direct negative impact on energy sector investment in colombia . the
government will likely proceed with formal negotiations , but time - - and
pastrana ' s remaining term in office - - is running out .
cera alert : 06 / 30 / 2000
title : argentine power markets : winter constraints push prices higher in may
author : bailey
e - mail category : alert
product line : latin american energy
url :
summary :
prices in the argentine power market were significantly higher in may owing
to the combination of continued low hydro output , strong demand growth , and
periodic constraints on natural gas deliveries to power plants in the buenos
aires region . spot power prices ( energy component only ) averaged $ 18 . 24 per
megawatt - hour ( mwh ) in may . although average power prices declined from last
year , price volatility increased , with several short - duration episodes of
prices over $ 60 per mwh as gas unavailability in the buenos aires region
forced several midcost units offline during peak hours . in june , prices are
expected to continue strengthening to the $ 24 - $ 28 per mwh range on average .
beyond june , price pressures are expected to remain negative as increasing
hydro output , new and returning low - cost thermal capacity , and the end of gas
constraints push average prices back toward $ 15 per mwh or below by august or
september .
cera alert : 06 / 01 / 2000
title : us gas markets reach new heights : where will it stop ?
author : n . american gas team
e - mail category : alert
product line : north american gas
url :
summary :
the us gas market enters the month of june with prices at the highest level
since deregulation . at the henry hub prices have surged to as high as $ 4 . 50
per mmbtu - - up from less than $ 3 . 00 per mmbtu during april . behind this has
been a building and serious shortfall of supply , the result of disappointing
gas production levels and surging gas demand for power generation . the gap
between these two forces has been met through storage inventories , with
injections so far this spring running between 1 . 5 and 2 . 0 bcf per day below
last year ' s rate . the continued tension between these two forces will keep
the pressure on prices this summer , and the need to inject gas into storage
will price out increments of demand .
cera alert : 06 / 15 / 2000
title : monthly briefing - - the pressure cooker
author : n . american natural gas team
e - mail category : alert
product line : north american gas
url :
summary :
pressure remains extremely strong in the united states gas market as three
factors - - the increasing power generation demand , lower storage inventories ,
and us wellhead supply still struggling to rebound - - call into question the
ability to build storage to a level adequate for next winter . prices are
being supported also by concurrent strength in oil and liquids markets ,
making traditional alternatives to gas much more expensive than in recent
years . in this environment intense competition between power generation
demand and storage injections will continue throughout the summer - - with
pressure increasing into july as temperatures rise - - with the result that gas
will continue to price at the high levels necessary to discourage end - use
demand . cera expects a july average price of $ 4 . 45 per mmbtu .
cera decision brief : 06 / 15 / 2000
title : western canada supply growth : getting nowhere faster
author : eynon , small
e - mail category : decision brief
product line : north american gas
url :
summary :
as us supply declines and demand grows , current high gas prices are
reinforced , but western canadian gas supply growth appears to be faltering
when it is needed most . both transitory factors and enduring trends underlie
the disappointing production growth results . the largely weather - related
transitory factors have had a near - term impact on drilling and connection
activity . the underlying trends have been developing slowly over time . more
shallow gas wells have been drilled in the past three to four years and
created a shift to higher average basin declines and lower average per well
production rates . thus more shallow wells are needed just to replace
production . with a shift to more exploration and deeper drilling , higher
supply growth rates are possible , but if that does not occur , other potential
supply sources may step in . significant arctic reserves in the mckenzie delta
and the alaskan north slope are once again entering the spotlight . coal bed
methane has become a str !
ong source of us supply . although now ignored in canada , it may become a
future source of canadian gas .
cera watch : 06 / 20 / 2000
title : reaching new heights
author : n . american natural gas team
e - mail category : watch
product line : north american gas
url :
summary :
fundamentals have taken center stage , as building demand pressure accompanies
us supply declines . storage inventories have been significantly reduced , and
the pressure for storage injections is likely to intensify as we head into
the summer months . demand - driven growth continues , as completions of
gas - fired power generation plants accelerate to a pace above 10 , 000 megawatts
per year and economic growth stimulates electricity demand . the result is a
higher - price playing field for natural gas , with the average henry hub price
likely to reach $ 3 . 67 per mmbtu for 2000 - - its highest level since the
development of spot markets .
cera private report : 06 / 21 / 2000
title : closing the utility stock valuation gap : does strategy matter ?
author : parshley
e - mail category : private report
product line : north american power
url :
summary :
the stock market has been delivering an unsettling message to the utility
industry . traditionally undervalued in the market , the sector is trading at a
historically wide 50 percent discount to standard and poor ' s s & p 500 . the s & p
utility index over the past 18 months gained only 5 percent , with huge gains
by some energy companies offset by a 15 percent drop in stock price for 29
electric utilities . yet early this year , the spu outpaced all other industry
groups . how should constantly evolving utilities in this wide - open sector
form a strategic plan to maximize shareholder value while achieving success ?
the value of electric utility merger and acquisition deals for 1999 - - a record
$ 50 billion - - was double the 1998 value . but are these choices ahead of the
curve ? and when will the market catch up ? three groups of new companies with
distinctive strategies may provide clues to the new strategic landscape :
multiservice and technology providers , superregionals , and global power and !
energy companies . three other strategic choices are considered in evaluating
responses to these challenges .
cera decision brief : 06 / 23 / 2000
title : the summer 2000 spot electricity markets outlook : divergent trends in
price volatility
author : makovich , sannicandro
e - mail category : decision brief
product line : north american power
url :
summary :
while several regional power markets are likely to see a repeat of price
spikes this summer , other markets are likely to see a reversal in price
volatility as supply - demand balances improve dramatically . one way to
interpret forward markets is as a consensus of market expectations .
therefore , forward prices for on - peak wholesale power reflect the common
expectation that prices will spike as high as - - or even higher than - - in 1999 .
a significant disconnect exists between the forward market prices and market
fundamentals for the upcoming summer in some regional markets .
cera alert : 06 / 02 / 2000
title : atlantic basin gasoline markets soar
author : meyers
e - mail category : alert
product line : refined products
url :
summary :
spurred by supply concerns at the start of the summer driving season , spot
gasoline - to - crude oil price differentials on both sides of the north atlantic
have soared to the highest levels seen since the gulf war . in cera ' s view ,
this strength in margins is attributable to the convergence of three factors :
very low inventories , tightening gasoline specifications , and legal
uncertainty .
cera alert : 06 / 13 / 2000
title : refined products line - - us markets
author : refined products team
e - mail category : alert
product line : refined products
url :
summary :
the us gasoline market exhibited exceptional strength during may . us gulf
coast unleaded gasoline surged to $ 8 . 40 per barrel measured against wti , up
$ 3 . 58 per barrel over the strong april value of $ 4 . 82 . apparent demand for
gasoline skyrocketed to 8 . 64 million barrels per day ( mbd ) in response to the
start of the summer driving season . despite increases in the reported demand
for distillate and jet / kerosene , these markets did not experience the same
month - over - month strength in differentials , dropping to $ 1 . 58 and $ 2 . 58 per
barrel versus wti , respectively .
cera alert : 06 / 20 / 2000
title : refined products line - - european markets
author : refined products team
e - mail category : alert
product line : refined products
url :
summary :
as higher crude oil prices started to reduce the high product differentials
to brent and thus lower refinery margins , refiners attempted to prevent this
situation from worsening by reducing throughputs . however , very tight markets
for gasoline and to a lesser extent for automotive diesel helped to limit the
fall in those products ' values . meanwhile , fuel oil discounts to crude oil
widened in may , driving down simple / hydroskimming margins .
in recent weeks , the combination of lower primary products inventories and
reductions in operations at some refineries has helped differentials to
recover . this has pushed margins to above may ' s averages , although still
below april ' s peaks .
cera alert : 06 / 26 / 2000
title : recent actions signal progress toward mtbe elimination
author : stackpole
e - mail category : alert
product line : refined products
url :
summary :
the close scrutiny that federal reformulated gasoline ( rfg ) now faces from
the media and public officials owing to midwestern market price spikes has
not stopped the inexorable political progress toward eliminating methyl
tertiary butyl ether ( mtbe ) use in the us gasoline pool . additional
signposts , including heightened congressional debate over legislation
eliminating mtbe use and state actions to ban mtbe , continue to emerge that
point the way toward mtbe - free gasoline in the united states .
cera alert : 06 / 29 / 2000
title : refined products : market update
author : refined products team
e - mail category : alert
product line : refined products
url :
summary :
refined products markets continue to display marked regional differences . in
the atlantic basin , low gasoline inventories in both the united states and
europe , which resulted from many months of opec production restraint ,
continue to dominate the market , and gasoline differentials above crude are
at their highest level in over ten years . although signs are emerging of a
possible correction in the north american market in the coming month , the
2000 gasoline season will almost certainly be the strongest experienced by
atlantic basin refiners in many years . in contrast , asia pacific spot
refining margins were weak through most of june , until the recent accident at
kpc ' s mina al - ahmadhi refinery prompted a quick strengthening in prompt
singapore margins . however , with ample unused refining capacity available
east of suez and the likelihood of a partial restart of the kpc refinery in
july , cera ' s outlook is for that strength to be of short duration .
cera alert : 06 / 23 / 2000
title : new peaks , new prices
author : zenker , moritzburke , snyder
e - mail category : alert
product line : western energy
url :
summary :
in the west , july typically marks the start of the summer cooling season and
steadily rising power prices . cera expect the west to be the only region in
north america with a year - over - year increase in peak electricity demand .
power prices already established new record highs in june , suggesting that as
demand reaches its peak in the coming months western power markets will
continue to experience increased volatility compared with last year ' s levels .
the convergence of higher gas prices , growing power demand , and reduced
hydroelectric energy production compared with 1999 levels is pushing up
western power prices . greater utilization of gas - fired generators within the
west has supported western differentials and contributed to high gas prices
throughout north america . western gas prices should continue to be strong ,
boosted by continuing increases in regional gas demand for power generation
and pressure across north america to inject gas into storage in anticipation
of summer !
power loads .
cera alert : 06 / 15 / 2000
title : oil market turmoil : opec seeks a short - term fix
author : world oil team
e - mail category : alert
product line : world oil
url :
summary :
driven by strong demand - - especially in the recovering asian economies and the
united states - - oil prices ( both wti and brent ) have again broken the $ 30
level - - a mark that is of particular significance in this us election year . in
turn , the oil market ' s attention is again fixed on opec , as it prepares for
its june 21 meeting , but its members are deeply divided over how to respond .
cera alert : 06 / 16 / 2000
title : the state of the oil market : market supported , psychology enhanced ,
and opec driven
author : world oil team
e - mail category : alert
product line : world oil
url :
summary :
the key ingredient in the volatile oil market is the new opec - - and its
successful implementation of a strategy to keep supply one half step behind
demand - driving inventories down for crude , with the side effect of lowering
stocks for several products in markets such as the united states and europe .
three features of the current oil market are supporting prices :
* market supported
* psychology enhanced
* opec driven
cera alert : 06 / 22 / 2000
title : opec ' s cautious new agreement
author : world oil team
e - mail category : alert
product line : world oil
url :
summary :
opec ' s agreement to raise its production quota beginning july 1 by 708 , 000
barrels per day to 25 . 4 million barrels per day is consistent with its
strategy of restraining supply to maintain oil inventories at relatively low
levels . the gain in supply is a short - term fix meant to alleviate political
pressure for increased production and to push prices below $ 30 but keep them
in a mid - to upper $ 20 s range .
* * end * *
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