EIA Reports Says Energy Bills to Soar this Winter

In more bad news for the Obama administration, which has refused to pursue the rich resources of natural gas and oil in the United States, the Energy Information Administration said due to an expected colder winter, the price of fuel will jump almost 20 percent for those using heating oil as their heating source.

This will be especially true in the Northeast portion of the United States, where most consumers use heating oil. Higher demand will be the major driver of heating oil prices.

For those heating with the less expensive natural gas, prices are still expected to rise an estimate 15 percent.

Adam Sieminski, an administrator from the EIA, said, “it is going to be colder than last year and as a result of that, heating bills are going to be higher.”

“There has been a trend towards warmer weather so if we end up with somewhat above normal temperatures rather than just slightly below, that would reduce fuel oil needs and presumably would lead to better balance in the markets and somewhat lower prices.”

Approximately 80 percent of those using heating oil are located in the northeastern part of the country.

With Obama's faltering economy, this could easily turn even more voters against him at a time when they're hurting the most from higher energy costs.

Anadarko (NYSE:APC), Total SA (NYSE:TOT) Might Bid on Black Sea Drilling Permit

Anadarko Petroleum (NYSE:APC) and Total SA (NYSE:TOT) are among a growing number of international oil companies being invited by Bulgaria to bid on drilling permits for the Black Sea region off its coast.

The particular area being looked at is called the Silistar bloc, which is an area of approximately 4,313 square miles.

This is the first time Bulgaria has offered deep-water drilling permits for its waters.

Higher energy prices and better technology have made it much more interesting for countries in need of energy and job creation.

This region of the Black Sea is largely unexplored, making it very attractive for the possibilities it offers.

Occidental Petroleum (NYSE:OXY) Drops on Inflation, EU Fears

Occidental Petroleum (NYSE:OXY) fell, along with other energy and commodity companies, as increased inflation in China and major concerns over the fallout from the sovereign debt crisis in Europe, and whether or not the almost $1 trillion will do much to stop it, has investors wandering if demand can hold up under these economic circumstances.

With austerity measures tied to the sovereign debt bailout of some European countries, along with China battling inflation and attempting to ward off a potential bubble, thoughts are demand will start to decrease for raw materials, and adding Europe and China together could result in significant cutbacks, which could devastate countries and companies counting on Chinese demand to grow their economies.

One positive Occidental Petroleum does have in general, is they have no exposure in the Gulf of Mexico, which could have created many headaches and problems for them.

So while demand is a major issue going forward, at least they can focus primarily on economic issues and not legal ones, along with uncertainty about the future off deepwater, offshore oil drilling.

Occidental does have some offshore exposure, but that's in working with Libya and Qatar, but in the Americas it's all onshore drilling, which makes them a more predictable company than those with major offshore exposure at this time, especially those in the Gulf.

Exxon (NYSE:XOM) CEO's Pay Drops

Exxon Mobil CEO Compensation

Chairman and CEO of Exxon (NYSE:XOM) Rex Tillerson got a pay cut in 2009, in line with the slower earnings of the company, which dropped by 9 percent during that time.

In 2008 Tillerson received $23.92 million in overall compensation, while in 2009 that dropped to $21.7 million.

Most of the loss in pay came from his bonus, which was based on performance. Most of the $21.7 million came from stock awards, and his salary did get a 10 percent bump up to $2.057 million, according to a filing by Exxon Mobil with the Securities and Exchange Commission.

Similar to other energy companies in 2009, Exxon Mobil was savaged by low gas prices earlier in the year and a drop in demand for gasoline as recession-weary consumers stayed home because of the lack of money and concerns over what was going to happen.

Scana (NYSE:SCG) and Mandated Environmental Improvements

Scana Electric Rate Increases

The need for Scana (NYSE:SCG) to increase its electricity rates by a huge 9.5 percent underscores the outrageous environmental requirements mandated by law which the consumer always has to pay for.

Hearings are set in this case with a subsidiary of Scana, South Carolina Electric and Gas Co. (SCE&G), which serves the South Carolina market

Politicians always try to hide behind their radical environmental agendas at times like these, transferring the pressure to the providers of energy who are perceived as the culprits in the situation when rates are raised, when if fact it's politicians with their agendas who are harming the average person on the street who has to pay for their endless regulations and folly.

Scana Electric Rate Increases

Coals Future Looks Great

The future of coal

Even though it has become politically correct to malign coal, and media loves to cover its so-called "clean" energy alternatives, which are anything but real alternatives, coal will continue to be a major force in generating electricity for decades to come.

The thing to understand with coal, is even if it's not as important in western countries, in general it's going to be a ongoing force around the world for emerging and developing nations for a long time, as they hunger for sources of energy that are affordable and minimally meet their needs.

So don't believe the majority of what you read in the media about the demise of coal. It's not even close to going away or becoming irrelevant, and it is well worth the time to check out the numerous companies still having a major presence with coal, as demand will only increase and not decrease, no matter what the mainstream media tries to convince you of.

The future of coal

Commodities: Oil Prices Drop on Warmer Weather

Warmer Weather Drives Oil Prices Down

Cold weather has been driving the price of oil, and that seems to have come to an end for now, at least until another possible cold trend comes through in February.

If you can trust those forecasting the weather, the next month should be a much warmer one, and that should have a major impact on the price of oil during that time, as it should drop after running up for some time as the cold weather continued to linger.

With China's central bank increasing its reserve ratios, it's hard to tell if that's a statement that they're going to cut back on commodity imports at this time, as in 2009 they grew by about 56 percent for the year.

With that combination, we again, would see significant downward pressure on light sweet crude over the next month. Other energy sectors and gas should also have a similar price movement.

Warmer Weather Drives Oil Prices Down

Crude Oil Prices Going Up

Crude oil prices

Crude oil prices continue to hold at above $80 per barrel, as cold weather continues to plunge America, and other parts of the world in freezing temperatures.

Fridays' close was at $83 a barrel on the New York Mercantile Exchange, as the cold front continues to linger and shows no signs of leaving any time soon.

Over the last couple of weeks since the cold front has moved down the country, light sweet crude oil prices have continue to go up in response to the cold.

Some other energy prices have gone up as weel, with heating oil increasing to over $2.2 a gallon, while reformulated gasoline prices rose to $2.16 a gallon. One bright spot for consumers was natural gas, which lost 0.06 cents to $5.746 per million British thermal units.

Gasoline prices have shot up to $2.727 a gallon recently for unleaded for a national average.

Crude Oil Prices Going Up

Commodities Driving Canadian Dollar Up

Canadian dollar price going up on commodities

The Canadian dollar continues to strengthen against the U.S. dollar as commodity prices going up helped Canada's exports increase to their strongest level in about a year.

Against 13 of the 16 most traded currencies, the Canadian dollar price went up as a number of commodities like natural gas, crude oil and copper continue to go up in price.

Oil may be the best driver of the loonie, as it continues to rise in price in the midst of the cold spell hitting the world.

Crude oil for February delivery increased in price by 4.3 percent this week to $82.75 a barrel on the New York Mercantile Exchange. It went as high as $83.52, the top level since October 2008. Crude is Canada’s largest export.

Copper for March delivery topped at $3.544 a pound on Jan. 7, the largest price since August 2008.

Natural gas for February delivery soared to a one-year intraday high, $6.108 per million British thermal units.

About half of all export revenue from Canada comes from raw materials, making the long-term prospects of the Canadian dollar somewhat bullish.

Commodity currencies should do well over the next several years unless an unforeseen situation arises.

Canadian dollar price going up on commodities

CME Offers Commodity Speculation Recommendation

In an effort to curb the influence of speculation in the commodity markets, CME Group offered up some of its own recommendations, among which is a stronger role for the Commodity Futures Trading Commission in reference to energy products in hard singel exchange positions, specifically those at exchanges that are regulated.

"We recognize that misperceptions can undermine confidence in well-functioning markets, which is why we support the CFTC's mission to provide regulatory certainty and to ensure that the energy markets can operate efficiently," said Terry Duffy, CME Group executive chairman. "Regulatory parity, however, must be given to all markets under the CFTC's jurisdiction."

But as CME's Donohue states, a number of studies have disproven the idea that commodity speculators have been the force behind driving commodity prices and energy prices up, and rather it's the supply and demand factors which drive prices, and not commodity speculators.

Donohue also, probably rightly, added, that if there are limits imposed on index funds, that will more than likely simply move the funds to invest in markets that are unregulated.

The government needs to simply stay out of attempting to be the central planner for the economy, it hasn't worked anywhere in the past, and it won't work now or in the future. Supply and demand drives commodity prices, not speculators.

Commodities Mixed as U.S. Dollar Strengthens: Is Party Over?

Even though commodities increased some on Friday, the overall drop in prices during the week, especially with gold, silver, rice and wheat, has some investors starting to wonder if the party is over.

The U.S. dollar had a decent week, and that always takes its toll on commodities; especially from institutional investors.

Another factor influencing the downturn in some commodities has been the credit market may be showing some signs of regaining some of its health, and that has investors starting to be willing to assume more risk.

One sign institutional investors are leaving commodities is the pullback from gold ETFs.

"That's an indication that the credit market tightness is being alleviated," said Tom Pawlicki, commodities analyst with MF Global Research in Chicago. "At this point I think we're probably in the early stages of a weakening commodities market, a strengthening dollar and more risk appetite."

Gold is down from its all-time high of $1,038.60 an ounce it achieved on March 17 by 20 percent.

The drop in price of grain futures this week also seems to point to investors looking elsewhere, as wheat, rice and soybeans dropped in price. That's even with gains on Friday. Corn did lose 3.75 cents for July on Friday, dropping to $6.135 a bushel.

On the CBOT, rice futures increased by 31 cents to finish at $20.945 a hundred pounds.

Other precious metals making some gains were silver and copper, with copper rising by 12.60 cents to finish at $3.8205 a pound, while silver grew by 26 cents to end at $16.465 an ounce on the Nymex.

Is the commodities party over?

I don't think so. Demand for food will continue from China and India, problems in Chile with copper will probably continue, and investors are always one weakening of the U.S. dollar away from plowing their money back into the commodity market.

Concerning the end of the commodity bubble, Elaine Kub, a grain analyst in Omaha said, "I wouldn't say it's the end of the bubble. We're talking about widespread global demand (for food). Just because the dollar is higher doesn't necessarily stop that growth."

My thought is it won't be as predictable as it has been, and it'll take a little more work to separate the chaff from the wheat. We'll probably see less institutional money in the market, but those that follow and understand commodities should have some good opportunities to make money for some time ahead.

Poll Says Commodity Price Surge Largest Economic Threat

Those responding to a Financial Times/Harris poll said the greatest economic threat to American and European economies is the rising price of commodites.

Out of people responding from six countries, only those from Italy didn't name commodity prices as the biggest economic threat. Other countries included in the poll were the United States, France, Spain, Germany and Britain.

A large number of participants in the survey also concluded they didn't have confidence their governments would be able to handle the economic challenges.

In America, 50 percent said they were "not confident at all."

This is of course the right thing to think, as government interference always brings unintended consequences that linger for years, many times creating new problems or exasperating the old.