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December 21, 2011 Energy Data Highlights Crude oil futures price 12/19/2011: $93.88/bbl down$3.89 from week earlier up$5.86 from year earlier Natural gas futures price 12/19/2011: $3.096/mmBtu down$0.158 from week earlier down$0.970 from year earlier Retail gasoline price 12/19/2011: $3.229/gal down$0.057 from week earlier up$0.247 from year earlier Retail diesel price 12/19/2011: $3.828/gal down$0.066 from week earlier up$0.580 from year earlier Weekly coal production 12/10/2011: 21.664 million tons down0.442 million tons from week earlier down0.112 million tons from year earlier

Natural Gas/ Power News

EIA Storage Release 12/15/11 (Actual): -102 Bcf Previous Week: -20 Bcf +4.3% Change from 1 Year Ago +10.3% Change 5-year Average ERCOT congestion rights value falls in latest auction Congestion revenue rights acquired in the Electric Reliability Council of Texas auction for January totaled $14.6 million, about 7% less than the December total, results posted Tuesday show. The total January capacity acquired in the auction was 143,480 MW, about 2.2% more than the December auction's total. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/ElectricPower/6787471

Gas Pipeline would run through region A Texas company is maneuvering to construct a pipeline to carry Marcellus Shale natural gas across Pennsylvania on a path that would pass through Somerset and Bedford counties. The Atlantic Access Project, a proposed 258-mile pipeline using 36-inch pipe, would move fuel from the rich Marcellus gas fields of western Pennsylvania and the panhandle of West Virginia to eastern gas-hungry markets. http://tribune-democrat.com/local/x1243759042/Company-seeking-to-transportnatural-gas U.S. Natural Gas Stockpiles Probably Fell 2.8%, Analysts Say .S. natural-gas supplies probably fell by less than the seasonal average last week amid above- normal temperatures and rising production, according to analyst estimates compiled by Bloomberg News. Inventories dropped 105 billion cubic feet, or 2.8 percent, to 3.624 trillion cubic feet in the week ended Dec. 16, based on the median of 10 estimates. The five-year average stockpile change for the week is a decrease of 140 billion, according to Energy Department data. Supplies fell 181 billion cubic feet a year earlier. As much as we bemoan the lack of winter and the impending growing storage surpluses, there is little that can be done at this stage to save the winter, Martin King, an analyst at FirstEnergy Capital Corp. in Calgary, said in a note to clients today. http://www.businessweek.com/news/2011-12-20/u-s-natural-gas-stockpilesprobably-fell-2-8-analysts-say.html

Green/ Alternative Energy News

How will renewable energy fare in 2012? Renewable energy is considered the future. The best way for us to combat climate change, survive the decline of oil and generally provide cheap, safer, secure energy. However the industry is still in its infancy and relies heavily on government subsidies and tax incentives. http://www.commodities-now.com/commodities-now-reports/environmentalmarkets/9378-how-will-renewable-energy-fare-in-2012.html

Crude Oil News

OPEC Daily Basket Price 12/20/2011- $105.05 (OPEC Daily Basket Price 12/19/2011- $102.91) Oil Climbs a Third Day on U.S. Economy, Shrinking Supplies, Iran Sanctions Oil rose a third day in New York on signs that the U.S. economy will be spared a recession and amid growing pressure on Iran to curtail its nuclear program. Futures advanced as much as 1.3 percent after data from the American Petroleum Institute showed crude inventories dropped to the lowest in almost two years.

Analysts in a Bloomberg News survey predicted the Energy Department will say today supplies fell 2.13 million barrels. The February contract surged 3.4 percent yesterday on U.S. housing data that beat estimates, unexpected growth in German business confidence and concern that shipments from Iran may be curbed. Oil has been strengthening as we get more positive U.S. economic data, such as housing starts, along with a recovery in the euro and the possibility of Iranian reprisals, said Robert Montefusco, senior broker at Sucden Financial in London. http://www.bloomberg.com/news/2011-12-21/oil-climbs-a-third-day-on-u-seconomy-shrinking-supplies-iran-sanctions.html Supply Tensions Boost Oil Prices Oil prices jumped more than 3% amid concerns over the reliability of supplies from two big producing nations. Encouraging economic data from the U.S. also gave crude-oil futures a boost. Light, sweet crude for January delivery finished up $3.34, or 3.6%, at $97.22 a barrel on the New York Mercantile Exchange. Traders were worried that supplies from Iran, the world's third-largest exporter, and Kazakhstan could be crimped by separate developments. In Kazakhstan, 15 people reportedly have died in an oil-producing region amid antigovernment clashes between laidoff oil workers and security forces. The nation exported 1.5 million barrels of oil a day in 2010. Possible sanctions against Iran, in retaliation for its development of a nuclear program, were the focus of Tuesday's meeting of representatives from 11 nations, including the U.S. and Saudi Arabia. Iran supplies about 2.2 million barrels a day to global markets. http://online.wsj.com/article/SB1000142405297020405840457711096349766430 8.html?mod=WSJ_Commodities_LEFTTopNews Oil Rises a Third Day; Copper Price Gains: Commodities at Close CRUDE OIL -- Oil climbed for a third day in New York as investors bet that fuel demand may increase amid signs of an economic recovery and declining stockpiles in the U.S., the worlds biggest crude consumer OIL PRODUCTS -- High-sulfur fuel oil swaps for January rose $23.50, or 3.7 percent, to $661 a metric ton at 11 a.m. Singapore time, according to PVM Oil Associates Ltd., a broker. Prices increased the most since Feb. 24. PRECIOUS METALS -- Gold advanced to the highest level in a week. Cash bullion rose for a second day, gaining as much as 0.8 percent to $1,628.30 an ounce, the highest price since Dec. 14. Immediate- delivery metal gained 1.4 percent yesterday as the euro strengthened 0.7 percent against the dollar. The Februarydelivery contract climbed 0.7 percent to $1,628.40 on the Comex GRAINS, OILSEEDS, LIVESTOCK -- Corn for March delivery lost as much as 0.5 percent to $6.04 per bushel on the Chicago Board of Trade. It has slipped 3.8 percent this year. Wheat for delivery in the same month fell 0.3 percent to $6.0575 a bushel, taking the annual loss to 24 percent. http://www.bloomberg.com/news/2011-12-21/oil-rises-a-third-day-copper-pricegains-commodities-at-close.html

Oil above $98 in Asia as report shows US crude supply drop Oil rose above US$98 a barrel Wednesday in Asia after a report showed U.S. crude supplies fell more than expected, a sign demand may be improving. http://www.canadianbusiness.com/article/62805--oil-above-98-in-asia-as-reportshows-us-crude-supply-drop Political shadows darken outlook for Iraqi oil The last US troops left Iraq only three days ago after eight years of occupation and political relations among the countrys groups are already disintegrating. The political climate in Iraq is crucial for the oil market in 2012. http://www.ft.com/cms/s/0/16f4c5b2-2bb9-11e1-b19400144feabdc0.html#axzz1hApSqzcS 'Over the top' gas line would shortchange Alaskans Article VIII, Sections 1 and 2 of Alaska's Constitution mandate that Alaska's resources are to be developed to the maximum use and benefit of its people. Following the discovery of oil on Alaska's North Slope in the late 1960's, we Alaskans held our breath watching the daily progress of the ice breaking oil tanker, the SS Manhattan, as it carried a single barrel of North Slope crude oil towards the New York Harbor. Although it ultimately reached its destination, we cheered at the announcement that this route was a non-commercially viable option for moving Alaska's oil off the North Slope. http://www.alaskadispatch.com/article/over-top-gas-line-would-shortchangealaskans US crude stocks fall 4.574 million barrels, outpace market expectations: API US crude stocks fell 4.574 million barrels to 330.027 million barrels for the week ending December 16, outpacing analyst expectations as imports declined, data released by the American Petroleum Institute showed Tuesday. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6787574

Declining middle distillate cracks pressure refining margins Declining middle distillate cracks have put pressure on refining margins across Europe in recent weeks, Platts data shows, despite slight recent improvement in light ends products. "Refinery margins aren't good anywhere in Europe at this moment," a Mediterranean based refiner said Wednesday. "We're suffering on diesel, naphtha and gasoline. Refining margins on all products aren't really in the best shape." http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8723403 Seaway pipeline reversal project announces open season Enterprise Products Partners and Enbridge Inc. will launch an open season next month for shipping contracts for their reversed Seaway pipeline, which will carry oil out of the oversupplied Cushing hub into the Gulf Coast refining market. Companies looking to ship crude oil over the pipeline will be able to commit to a capacity, or shipment load, between January 4 and February 10, the companies

announced Tuesday. Enterprise is headquartered in Houston and Enbridge is based in Calgary, Canada. http://fuelfix.com/blog/2011/12/21/seaway-pipeline-reversal-project-announcesopen-season/ US oil boom town prompts crude glut fears The boom in North American oil production has triggered a race to expand the USs main oil storage centre, raising concerns among some industry executives of potential glut in capacity. By next year, the capacity of tanks around Cushing, an Oklahoma town that calls itself the pipeline crossroads of the world, will equal to nearly a days of global oil production as refineries, trading houses, Wall Street banks and pipeline companies build or lease hundreds of thousands of barrels of new tanks.Climbing US and Canadian oil production and price patterns that have made it profitable to store oil underline the building boom in this remote town of 7,800. The town has seen the arrival of an army of workers from welders to tank inspectors in X-ray trucks. With apartments fully occupied, oil workers are living in temporary trailer parks. http://www.ft.com/intl/cms/s/0/055d816e-2807-11e1-a4c400144feabdc0.html#axzz1hAwptIy0 Political shadows darken outlook for Iraqi oil The last US troops left Iraq only three days ago after eight years of occupation and political relations among the countrys groups are already disintegrating. The political climate in Iraq is crucial for the oil market in 2012. Iraq is at least on paper set to be a bright spot of oil supply growth next year in an otherwise gloomy market haunted by production disruptions from Libya to Syria and from Yemen to Sudan. Baghdad aim to lift oil output to about 3.5m barrels a day by late next year, up from about 2.8m b/d last month, with the opening of a new export terminal offshore in the Gulf. The plans have faced substantial hurdles, chiefly delays in installing new pumps to clear the bottleneck in the link between the oil fields in the south, being developed by foreign companies such as Royal Dutch Shell, and the new export terminal. The International Energy Agency, the Western countries oil watchdog, has forecast that Iraq would be able to pump nearly 4.4m b/d by 2016, up from 2.5m b/d last year. http://www.ft.com/intl/cms/s/0/16f4c5b2-2bb9-11e1-b19400144feabdc0.html#axzz1hAwptIy0 Crude rallies on Kazakh supply concerns Oil prices on Tuesday rallied amid concern about turmoil in Kazakhstan following a series of deadly clashes between police and oil workers in the central Asian nation. Kazakh officials say 14 people were killed when protesting oilmen rampaged through the town of Zhanaozen in the oil-rich Mangistau region of west Kazakhstan, the worst unrest in the country since Soviet times.Tension has been building since last summer when KazMunaigas, Kazakhstans state oil company, sacked hundreds of striking oil workers. JBC Energy, the Vienna-based oil consultancy, said the oil workers strike was raising concerns of diminished exports from the central Asian country. Foreign oil companies in Mangistau have

not yet considered evacuating the region, but are watching developments closely. Our operations have not been impacted by the unrest, said Thomas Grondors, of Maersk Oil, the Danish energy group. ICE February Brent rose to a high of $107.27 a barrel and later traded $3.09 higher at $106.73. Nymex January West Texas Intermediate rose $3.19 to $97.24. http://www.ft.com/intl/cms/s/0/97f994f2-2b33-11e1-9fd0-00144feabdc0.html? ftcamp=rss#axzz1hAwptIy0 Recent Rig Counts Date of Last Year's Count 17 Dec 10 17 Dec 10 November 2010

Area U.S. Canada

Last Count

Cou Change from nt Prior Count +32 +27 -12

Date of Prior Count 9 Dec 11 9 Dec 11 October 2011

Change from Last Year +310 +31 +55

16 Dec 2019 11 16 Dec 11 531

Internatio Novemb 1185 nal er 2011

http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

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