As soon as the autumn equinox comes in, Summers is gone. Rising political opposition to Lawrence Summer’s appointment means the odds on favorite to replace Ben Bernanke is QE happy Janet Yellen... It is a bit pathetic how the markets sold off on the rumor that Summers was in and rallying like crazy when it is reported that Summers is out.
Of course today with energy it is more focused on this weekend’s agreement on Syria that the AP said was being called a diplomatic breakthrough Saturday on securing and destroying Syria's chemical weapons stockpile, thus averted the threat of U.S. military action for the moment and could swing momentum toward ending a horrific civil war.
Whether you believe that this deal will avoid war or not, the petroleum market (NYMEX:CLV13) is taking it as a victory. Risk premium is coming out in a way. Sure it could be in part because weekend hurricanes will only slow imports and not do damage and World War III is now put back at least a little. Hurricane Ingrid is on land and other storms that posed a potential threat to supply dissipated.
Readers of the Energy Report once again ahead of the curve! Loyal readers of my report know that we have stated that the U.S. will become energy independent and that natural gas exports will happen much faster than people think were bold calls that few agreed with at the time. Yet it is clear that we were on the right track and now the mainstream media is finally picking up on it. When I first started talking U.S. energy independence and the fact that we would be moving toward a natural gas economy, people were dumbfounded and thought I was crazy. Such is the price of having an original thought and being ahead of the curve. Must read stories are making my case for me and even the skeptics are starting to believe.
Jon Kemp at Reuters wrote “Based on regulatory approvals so far and sales contracts already signed, the United States will export much more liquefied natural gas (LNG) by the end of the decade than most analysts thought possible even a year ago.” In late 2011, the U.S. Department of Energy commissioned NERA Economic Consulting to study the impact of exports on the U.S. economy under a number of scenarios. NERA was asked to analyze the effects of LNG exports limited to a relatively low level (6 billion cubic feet per day) or a high one (12 bcf/d), with exports ramping up to full volume slowly (1 bcf/d per year) or rapidly (3 bcf/d per year). NERA was also asked to examine the case in which there was no limit on the volume of gas exported. Publishing its finding in December 2012, NERA found there would be a net benefit to the economy under all scenarios, and the more LNG exported the bigger the net benefit would be. "Scenarios with unlimited exports always had higher net economic benefits than corresponding cases with limited exports," NERA concluded. While NERA argued unlimited exports would be best for the economy, the inclusion of the 6 bcf/d and 12 bcf/d scenarios strongly implied the government thought volumes would be in this range, and perhaps should be limited to it through the approval process.