Natural Gas Price-Fixing Suits Revived by Appeals Court

Duke Energy Corp. (DUK), CMS Energy Corp. (CMS), American Electric Power Co. (AEP) and other energy companies must face antitrust lawsuits by natural gas buyers alleging they manipulated prices during California’s energy crisis more than a decade ago, a federal appeals court ruled today.

The U.S. Court of Appeals in San Francisco today reversed a lower court’s dismissal of claims against companies and reinstated a group of antitrust lawsuits, saying the allegations weren’t pre-empted by federal law. The energy firms are accused in the cases, consolidated in federal court in Las Vegas, of manipulating prices from 2000 to 2002.

The appeals court concluded in its ruling that the U.S. Natural Gas Act, which provides the Federal Energy Regulatory Commission with jurisdiction over certain rates practices, doesn’t stand in the way of buyers pursuing state-law antitrust cases over energy prices. During the power crisis, prices rose 10-fold, businesses and consumers endured rolling blackouts, and California’s two largest utilities became insolvent. Read more

Republicans Seize What They See as Keystone Momentum

House Republicans said President Barack Obama is taking too long to decide on the Keystone XL pipeline as they defended a bill that again seeks to force a decision on one of the nation’s most-political energy debates.

The House Energy and Commerce Committee’s panel on energy and power held a hearing yesterday on legislation that would allow the pipeline to be built without Obama’s approval. The committee may vote on the bill next week. The Senate isn’t considering a similar measure.

TransCanada Corp.’s (TRP) $5.3 billion pipeline, which would carry tar-sands oil from Canada to U.S. refineries near the Gulf of Mexico, has been among the most prominent energy fights for the past two years. The hearing shows the issue probably will remain so until the Obama administration makes a final decision. Read more

IEA Cuts Oil-Demand Forecast Because of European Demand

The International Energy Agency reduced its forecasts for global oil demand in 2013 for a third consecutive month and predicted the weakest consumption in Europe since the 1980s.

The IEA reduced its estimate by 45,000 barrels a day, predicting that world consumption will increase by a “subdued” 795,000 barrels a day, or 0.9 percent, to 90.58 million barrels a day this year. European demand will slump by 340,000 barrels a day. Still, an imminent recovery in refinery operations after maintenance and political threats to supply mean “it may be too early to call a bear market,” the IEA said.

“Europe remains by far the worst affected of all the large oil consumption regions, as the ravages of the bleak macroeconomic backdrop continues to take its toll,” the Paris- based group said in its monthly oil market report. Read more

WTI Halts Three-Day Gain as IEA Cuts Oil Demand Forecast

West Texas Intermediate halted a three-day advance as the International Energy Agency lowered its forecast for oil demand and U.S. crude inventories climbed to a 22-year high.

Futures were little changed in New York, paring an earlier loss of as much as 0.5 percent. The IEA downgraded its estimate for global consumption for a third month and predicted the weakest demand in Europe since the 1980s. Citigroup Inc. said today that downward pressures on crude prices have grown. U.S. stockpiles increased last week to the highest level since July 1990, a government report showed yesterday.

“Demand remains subdued and supplies are adequate,” said Andrey Kryuchenkov, an analyst at VTB Capital in London, who predicted that WTI will struggle to climb above $98 a barrel this month. Read more

Iran Says Nuclear Plan Can’t Be Slowed as Facilities Open

Iran, celebrating its annual National Nuclear Technology Day amid pressure to curb its program, said it opened a uranium processing facility in the central Yazd province.

The complex is designed to process yellowcake — uranium in its raw form — and is located in the city of Ardakan, state television said. Named Shahid Rezainejad, it will produce about 60 tons of yellowcake annually, Press TV and other state media reported. The country also started operations in the Saghand mines, where it will extract uranium from a depth of 350 meters (1,100 feet), according to the reports.

“Western nations want to have a monopoly on science and technology, they didn’t want our nuclear technology to flourish,” President Mahmoud Ahmadinejad said in today’s ceremony at the Atomic Energy Organization of Iran in Tehran. “You couldn’t stop us from developing the technology,” he said. “Nobody will be able to put the brakes on Iran’s nuclear progress.” Read more

Killing Keystone Seen as Risking More Oil Spills by Rail

A rejection of the Keystone XL pipeline by President Barack Obama would push more of Canada’s $73 billion oil exports onto trains, which register almost three times more spills than pipelines.

The March 29 rupture of an Exxon Mobil Corp (XOM). oil pipeline in Mayflower, Arkansas, provided the latest evidence for opponents citing the risk of environmental contamination in their efforts to scuttle the Keystone XL project, an almost 2,000-mile pipeline linking Alberta’s oil sands with the world’s largest refining market on the U.S. Gulf Coast. The alternative, hauling crude by rail, may be worse, said Charles Ebinger, director of the Brookings Institution’s energy security initiative.

A U.S. denial of Keystone XL this year would “undoubtedly” result in more oil spills by trains, Ebinger said in a phone interview. Trains’ higher accident rate comes mainly from leaking rail car equipment, spill records show. Read more

WTI Crude Rises for Second Day; Goldman Forecast Changes

West Texas Intermediate rose for a second day after China reported inflation eased more than forecast last month. U.S. crude stockpiles probably increased to the highest level in 22 years, a Bloomberg survey showed.

Futures gained as much as 0.5 percent in New York after advancing the most in almost two weeks yesterday. Goldman Sachs Group Inc. (GS) forecast that supplies at the U.S. delivery hub in Cushing, Oklahoma, will shrink at the end of next month, and pushed back its recommendation for trading the discount on WTI versus Brent. U.S. crude inventories climbed by 1.5 million barrels in the week to April 5 to 390 million, according to a Bloomberg survey before the Energy Department releases data tomorrow.

“Any healthy demand for oil will have to come from Asia or the Middle East,” said Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark. “Hopes for a Chinese money bazooka have increased.” Read more

Technical Report

MAY WHEAT Resist: 700 1/4-705, 710 1/2* ST Trend: Down
(699) Supprt: 677 1/2, 664-659, 648 Obj: 655- TRP: 710.50
Comment: Despite last week’s rebound, the market retains a bear trend alignment and signals for a selling
wave to 655. Near term trade may try to extend corrective consolidation around 700+, but only a close over
710 1/2* signals a reversing upturn. Stalled near term rallies at 700-710 1/2* imply a failing rebound and
pending flip back to selloffs. A close under 664 will highlight washouts to 655 and possibly 625-.

MAY CORN Resist: 640 1/2, 647, 669 1/2* ST Trend: Down
(629) Supprt: 620, 590 Obj: 603- TRP: 695.50
Comment: The dramatic washout selloffs have opened up the formation to potential declines around 620-
590, matched with the starting levels of the last major bull advance from mid 2012. Friday’s tight congestion
leaves trade positioned for selloffs today. Corrective recovery trade contained within last Wednesday’s
range under 647 keeps aggressive bear trend forces intact. Read more

Friday Afternoon Oil Recap

Energy futures continued its tumble today as buyers refused to see much value at current levels in light of the poor government payroll report that fell far-short of expectations.   Buyers attempted to bid up RBOB, WTI, and Brent early in the session, but the disappointing employment data assured that no such pre-weekend profit taking would be had in the energy complex.  Loss leaders on the day continue to be the ICE/Europe-based energy contracts (Brent and gasoil) for obvious reasons but RBOB and heating oil were right there with similar percentage losses.  WTI again tried to maintain its level around $93 as crack spreads continue to breakdown with more and more demand coming from mid-continent/Canadian crude (aka crude that is benchmarked to WTI/Cushing based oil).  Overall, energy is still in correction mode as values continue to reflect a weakening global economy even if we are not seeing the same type of “risk-off” price action in equities.  This concerns me because at some point, we will see the stock market correct… but will energy follow it considering it is has already been putting in the leg work over the past few weeks? Read more

Morning Technical Analysis- Oil is Bearish

APR CRUDE OIL Resist: 9320-21, 9420+/-, 9509-22 ST Trend: Down
(9286) Supprt: 9190?, 9040- Obj: None TRP: 96.15
Comment: The market is bearish, slipping under weekly support and suggesting further declines along
9040-8970. Sustained action under 9200-9190 will motivate continuation selloffs. Any minor corrections
should stay contained under Monday’s high if bear forces are in control. A pop over Monday’s high could
spark a near term recovery to 9509-50. However, a close over 9615* is needed to rekindle bull trend forces.

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