*~1Best~*
15 years ago
Deutsche Bank, one of the largest issuers of commodity ETFs, has announced that it will liquidate its PowerShares DB Crude Oil Double Long Exchange Traded Notes (DXO), noting in a press release that “limitations imposed by the exchange on which Deutsche Bank manages the exposure of the Notes have resulted in a ‘regulatory event’…which has caused Deutsche Bank to redeem the notes.”
As part of the winding down process, within the next two weeks, DXO investors will receive the cash equivalent of the net asset value of their holdings in the ETN. As Morningstar’s Scott Burns notes, it is important to note that investors will be receiving the NAV of the note assets, rather than the market value. DXO, like other commodity exchange-traded products, has stopped issuing new shares in recent weeks, resulting in shares of the fund trading at a premium to NAV. “So if you bought this fund at a premium, you are out of luck unless you can sell it at the same premium,” notes Burns. Burns suggests that investors sell their holdings in DXO as soon as possible, but notes that most of DXO’s premium evaporated shortly after the announcement. In an extreme example of supply/demand imbalance for commodity funds, the U.S. Natural Gas was recently trading as high as 20% above its net asset value.
So what sunk DXO?
The fact that the Commodities Futures Trading Commission (CFTC) is expected to place position limits on commodity ETPs later this year certainly didn’t help. The fear in the ETF industry is that many funds are already over the position limits that will ultimately be imposed, and that such funds will be forced to liquidate a portion of their holdings to come into compliance
http://etfdb.com/2009/crude-oil-etf-shuts-its-doors/
*~1Best~*
15 years ago
Deteriorating 3x DTO 97.54 1.30 1.35% 545,360
Deteriorating 3x Russell ETF values, e.g. FAZ/FAS
Charts & PDF
http://trend-signals.com/Analysis/090525FASFAZ.htm
As previously, noted FAS/FAZ prices are both deteriorating as shown on the price charts. To briefly comment on the price impact, there are several contributing reasons such as 1) loss of values from rebalancing, 2) manipulation of market makers, and 3) competition among market markers, and other factors. The aforementioned stated speculations are based on what I have observed. Fact is that prices are dramatically deteriorating since its inception, however, when we compare the banking indexes, the dramatic price actions are within the context which we are considering even though the FAS/FAS have been around only about 7 months since Nov 2008. The 3x price action is much like that of financial indexes performance in a much shorter period.
Based on the short life span of 3x, especially the FAS and FAZ price actions, can we conclude that the 3x ETF by Direxion would fail to live up to the longevity of SPY, DIA, and IWM as example. FAS and FAZ, among 3x ETFs, look to be exceptions and the price actions are exaggerated by the recent banking industry volatility. Furthermore, the exploding trading volumes and the management fee do not help to retain the value of the stocks.
*~1Best~*
15 years ago
DTO 97.54 1.30 1.35% 545,360
Deteriorating 3x Russell ETF values, e.g. FAZ/FAS
Charts & PDF
http://trend-signals.com/Analysis/090525FASFAZ.htm
As previously, noted FAS/FAZ prices are both deteriorating as shown on the price charts. To briefly comment on the price impact, there are several contributing reasons such as 1) loss of values from rebalancing, 2) manipulation of market makers, and 3) competition among market markers, and other factors. The aforementioned stated speculations are based on what I have observed. Fact is that prices are dramatically deteriorating since its inception, however, when we compare the banking indexes, the dramatic price actions are within the context which we are considering even though the FAS/FAS have been around only about 7 months since Nov 2008. The 3x price action is much like that of financial indexes performance in a much shorter period.
Based on the short life span of 3x, especially the FAS and FAZ price actions, can we conclude that the 3x ETF by Direxion would fail to live up to the longevity of SPY, DIA, and IWM as example. FAS and FAZ, among 3x ETFs, look to be exceptions and the price actions are exaggerated by the recent banking industry volatility. Furthermore, the exploding trading volumes and the management fee do not help to retain the value of the stocks.
frenchee
15 years ago
China: The Ramifications of Fuel Exports and Refining Capacity
Stratfor Today » February 25, 2009 | 2130 GMT
LIU JIN/AFP/Getty Images
A car leaves a Sinopec service station in Sichuan province
Summary
China Petroleum & Chemical Corp. reportedly has told eight of its refineries to prepare to export gasoline and diesel in March. If China substantially increases its fuel exports onto markets that are already depressed, the effects could be global.
Analysis
Chinese state-owned energy company China Petroleum & Chemical Corp. (Sinopec) told eight of its refineries to prepare to export fuel in March, Reuters reported Feb. 25, citing the Oriental Morning Post. Sinopec sent the order to eight refineries with a combined capacity of 2 million barrels per day (bpd). At the moment, the amount Sinopec intends to boost its fuel exports remains unclear. The Oriental Morning Post claims that total Chinese fuel exports could reach up to about 106,000 bpd in March. This is about a 12,000 bpd increase from January.
Though in itself this does not represent massive dumping onto global markets, it could signal the beginning of a trend.
Refiners like Sinopec are looking to export their products due to the fact that domestic consumption is low and stockpiles are building up. The government stimulus plan for the petrochemical industry provides for 22.5 million barrels (62,000 bpd) of fuel inventories to be stockpiled in 2009, and 75 million barrels by 2011. With stockpiles mounting fast, refiners could turn to exports as a way of making a quick buck on their surplus product.
Chinese fuel exports have already increased significantly in January, with gasoline exports up by 243 percent and diesel up 496 percent compared to a year earlier, according to China’s General Administration of Customs.
These percentage increases are misleading because in January 2008 exports were extremely low. Refiners reduced exports by about 80 percent that month (to merely 23,000 bpd), and also cut back on refining. Inflation was raging and refiners were suffering budget crunches due to the combination of soaring prices for crude oil inputs on the global markets and government-mandated price caps on the domestic sale of their refined products. The state refiners were expected to buy oil high, pay taxes on it, and sell it low. Instead they opted to cut their refining activity and import fuel to sell to the domestic market. This allowed them to save on production costs, dodge taxes on importing crude, tap government subsidies for fuel imports and come closer to breaking even. Thus, compared to January 2008, that China’s refiners are exporting much at all marks a dramatic change.
China’s fuel exports are still lower than 2007 levels, but they have been climbing since September 2008, when demand first began to fall. In great part this is because refining capacity is increasing. In recent years China has embarked on a far-reaching strategy to boost capacity in order to accommodate surging domestic demand, hoping to prevent shortages, lower prices and reduce the amount the government pays in fuel subsidies to consumers. Chinese refiners have 21 projects currently under way, expecting to boost capacity by an estimated 4.9 million bpd, with 1 million bpd of new capacity to be available by the end of 2009. This is in addition to the country’s pre-existing refining capacity of more than 7.5 million bpd in 2007. Sinopec alone has 14 projects under way that will add an estimated refining capacity of 3.3 million bpd in the next few years, including building new refineries and capacity expansions for existing refineries at the cities of Maoming, Wuhan, Shanghai, Nansha, Ningbo, Tianjin, Guangzhou and Yanshan.
Beijing’s best-case scenario for these projects was thwarted when demand plummeted amid the global recession. The problem is that China cannot afford to leave its new refineries lying idle. It has debts it must pay for their construction, while maintenance alone is costly. Most important, China cannot risk exacerbating its unemployment problem, which has been greatly worsened by the current recession. Nor can Beijing abandon its long-term plans for increasing capacity or refineries already under construction. China is wary of following the path of the United States, which saw its refinery construction grind to a halt in the 1970s due in large part to regulatory impediments, resulting in too few refineries and higher domestic gasoline prices for the following 40 years.
Sinopec’s proposed fuel export increases are not grandiose. But if there is more to come — or if other major refiners like PetroChina follow Sinopec’s lead — the result could be an influx of Chinese gasoline and diesel onto world markets where demand is already at a relative low. This would put further downward pressure on prices at a time when a good part of the world is already on the verge of deflation.
*~1Best~*
15 years ago
re 'Green Collar Jobs' report forecasts 37 million jobs from
renewable energy and energy efficiency in U.S. by 2030
~~~
We have very good news on energy prospects.
~~~~
Three massive gas reservoirs have been discovered 80 kilometers off the Haifa coast, at the Tamar prospect, Noble Energy Inc. announced on Sunday.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=34904639
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
'Green Collar Jobs' report forecasts 37 million jobs from
renewable energy and energy efficiency in U.S. by 2030
ASES / MISI study reveals opportunities, warnings in nation's first update
of groundbreaking study; hottest sectors: solar, wind, biofuels, fuel cells
Click here to download the report >
NOTE TO MEDIA: Join research leaders in a national news teleconference TODAY, 1/15 at 11:30am ET / 9:30am MT about this Green Collar Jobs report to learn more about the industry's most in-depth analysis of the green economy. Dial: 1.888.850.5066, code 90497703# (open to media & news professionals only).
BOULDER, CO - 1/15/2009 - The renewable energy and energy efficiency (RE&EE) industries represented more than 9 million jobs and $1,045 billion in U.S. revenue in 2007, according to a new report offering the most detailed analysis yet of the green economy. The renewable energy industry grew three times as fast as the U.S. economy, with the solar thermal, photovoltaic, biodiesel, and ethanol sectors leading the way, each with 25%+ annual revenue growth.
The new 'Green Collar Jobs' report from the nonprofit American Solar Energy Society (ASES) based in Boulder, and Management Information Services, Inc (MISI), an internationally recognized economic research firm based in Washington D.C., provides a sector-by-sector analysis of where the opportunities are in the rapidly changing renewable energy and energy efficiency industries.
You can download the free report at: www.ases.org/greenjobs
"There's a new sense of optimism in the green economy," said Brad Collins, ASES' Executive Director. "But while the U.S. could see million of new jobs in renewable energy and energy efficiency, this will only happen with the necessary leadership, research, development, and public policy at the federal and state levels."
Key steps include a national renewable portfolio standard, long-term extension of the production tax credit, effective net metering policies, and improved access to electric transmission infrastructure.
According to the advanced scenario in the report, which represents the upper limit of what is technologically and economically feasible, RE&EE would generate about 37 million jobs and $4,294 billion in annual revenue by 2030. It's one of three forecast scenarios highlighted in this report. Under the base case (business as usual) scenario, which assumes no major change in policy or initiatives, the green job forecast is for more than 16 million jobs and $1,966 billion in revenue in the U.S. by 2030 - less than half the jobs and revenue than the advanced scenario. The third scenario assumes moderate policy improvements at the federal and state level and forecasts 19.5 million jobs and $2,248 billion in revenue by 2030.
Key conclusions from this report include:
· Renewable energy and energy efficiency currently provide more than 9 million jobs and $1,045 billion in revenue in the U.S. (2007). The previous year (2006) renewable energy and energy efficiency represented 8.5 million jobs and $972 billion in revenue.
· 95% of the jobs are in private industry.
· As many as 37 million jobs can be generated by the renewable energy and energy efficiency industries in the U.S. by 2030 - more than 17% of all anticipated U.S. employment.
· Hottest sectors include solar thermal, solar photovoltaics, biofuels, and fuel cells (in terms of revenue growth).
· Hot job areas include electricians, mechanical engineers, welders, metal workers, construction managers, accountants, analysts, environmental scientists, and chemists. The vast majority of jobs created by the renewable energy and energy efficiency industries are in the same types of roles seen in other industries (accountants, factory workers, IT professionals, etc).
· Renewable energy and energy efficiency can create millions of well-paying jobs, many of which are not subject to foreign outsourcing. These jobs are in two categories that every state is eager to attract - college-educated professional workers (many with advanced degrees), and highly skilled technical workers.
· The renewable energy industry grew more than three times as fast as the U.S. economy in 2007 (not including hydropower). Renewable energy is also growing more rapidly than the energy efficiency industry, but the energy efficiency industry is currently much larger than the renewable energy industry.
But while there is tremendous opportunity, there is also a real sense of urgency. Every year's delay by policy-makers (2009, 2010) has a highly disproportionate and negative impact on long range growth. The longer that policy-makers delay in implementing ambitious renewable energy and energy efficiency programs, the more difficult it will be to achieve the report's goals by 2030.
Unless quick action is taken, the U.S. risks losing millions of green jobs to other nations that offer a more serious and sustained commitment to growing its green economy. Consider the impressive results of Germany as an instructive example.
Germany's population is about one-quarter the size of the U.S., but Germany has more renewable energy jobs and generates new jobs faster the U.S. Germany has 5x the wind sector jobs and 4x the photovoltaic solar jobs as the U.S. Germany produces half the wind rotors in the world, one-third the solar panels in the world, and leads the world in biodiesel production.
The U.S. is in a global marketplace. If we fail to invest in renewable energy and energy efficiency, the U.S. runs the risk of losing additional ground in these industries to Germany and other nations. If we refuse to address policy and regulatory barriers to the sustained development of the new energy economy, other countries will lead and reap the economic and environmental benefits. For the U.S. to be competitive in a carbon-constrained world, the renewable energy and energy efficiency industries must be a critical economic driver.
You can download the report at: www.ases.org/greenjobs
About the American Solar Energy Society
For more than 50 years the American Solar Energy Society (ASES) has been leading national efforts to promote education, public outreach, and research about solar energy and other sustainable technologies. www.ases.org
About Management Information Services, Inc
Management Information Services, Inc (MISI) is an internationally recognized, Washington D.C.-based economic research and management consulting firm with expertise in economic forecasting, analysis of energy, environmental and electric utility issues, and labor markets. www.misi-net.com
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