The Phil Flynn Energy Report!

The Energy Report for Thursday, November 29, 2012

 

By Phil Flynn 888.264.5665

Crucifying BP

 

The Environmental Protection Agency imposed what could be a devastating blow to BP and its ability to continue to function over the long run as a viable company. This is an agency where one of its formal officials explained the EPA likes do things like the old Roman’s used to do it. And that is you just crucify a few Christians and the rest of them will fall in line. Well right now it is BP that will get crucified.

The day that former BP employees entered their pleas surrounding criminal charges for the events leading up to the Deep Water Horizon disaster, the EPA wielded its incredible power basically playing with the future of BP. On its website the EPA announced that it has temporarily suspended BP Exploration and Production, Inc., BP PLC and named affiliated companies (BP) from new contracts with the federal government.

BP survival may depend on what the EPA’s definition of "temporary" is. While investors squirm and hope for the best, the EPA is showing that it is one all powerful government organization. The  EPA is taking this action due to BP’s lack of business integrity as demonstrated by the company's conduct with regard to the Deepwater Horizon blowout, explosion, oil spill, and response, as reflected by the filing of a criminal information. On November 15, 2012, BP agreed to plead guilty to eleven counts of Misconduct or Neglect of Ship Officers, one count of Obstruction of Congress, one misdemeanor count of a violation of the Clean Water Act, and one misdemeanor count of a violation of the Migratory Bird Treaty Act, all arising from its conduct leading to the 2010 Deepwater Horizon disaster that killed 11 people and caused the largest environmental disaster in U.S. history.

 

Of course that is the point! BP screwed up big time! They deserve the fines. They deserve to pay the price for what they did and they have and will continue to do so. Yet what worries me is that the EPA seems to be either exceeding its mandate or it is becoming as powerful as a branch of the federal government.

 

The rest of the world of course is watching in fascination. Our friends in the UK think we are going way overboard in our quest to sink a company that bears the name of their beloved motherland. They have much affection for this company that has many of their citizens savings invested in. They agree that BP has to pay the price but now they think that the US penalties are well out of bounds. Not to mention that they announce it on the day the trial starts for BP employees in a country where you are supposed to be innocent before proven guilty. In fact I think we got that from the UK in the first place.

 

Refineries continue to rock product prices.

Bloomberg News reported that futures rebounded as Hess said the 70,000-barrel-a-day refinery was shut, just a week after returning to full production for the first time since Hurricane Sandy. Prices slipped 1.8 percent earlier after the Energy Department reported that gasoline stockpiles rose the most in four months last week. “Knocking out Port Reading is a reminder that coming back from Hurricane Sandy is going to take some time,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. Inventories of the motor fuel rose 3.87 million barrels to 204.3 million barrels last week, the highest level since the week ended Aug. 3. Gasoline demand declined 5.3 percent to 8.43 million barrels a day, 3.9 percent below a year earlier. Inventories of the motor fuel rose 3.87 million barrels to 204.3 million barrels last week, the highest level since the week ended Aug. 3. Gasoline demand declined 5.3 percent to 8.43 million barrels a day, 3.9 percent below a year earlier. Demand has slipped for two weeks after jumping 7.2 percent in the seven days ended Nov. 9 as wholesalers restocked after Hurricane Sandy disrupted production and distribution in the Central Atlantic.

 

The largest increase in gasoline stockpiles was in the U.S. East Coast, or PADD 1 region. Inventories rose 1.25 million barrels to 47.4 million. All refineries the area had resumed normal production after Hurricane Sandy until Hess’s Port Reading plant shut.  “Distillate supplies, including heating oil and diesel, fell 800,000 barrels to 112 million last week, the lowest level since May 2008. Demand tumbled 8.7 percent to 3.84 million barrels a day, after rising the prior week to the highest level in 11 months. Stockpiles in the East Coast, or PADD 1 region, rose 1.92 million barrels to 36.4 million, after dropping the week before to the lowest level since May 2008. Inventories are 36 percent below year-earlier levels.

 

Don’t cry for me! Argentina downgrade! Fiscal Cliff is looking up and so is the market. Natural gas report today! I am hosting a new show called ‘Price Links”. I'll interview some of the top people in the financial industry! Make sure you go to the Price web site to check it out or request an email link. Check out Jack's call on coffee!! Talk about Timing! http://blog.pricegroup.com/index.php/2012/grains-markets-with-jack-scoville-price-links-video-series/

 

Make sure you are getting the Power to Prosper! Tune to the Fox Business Network where you can see me every day!  Also make sure you open your Price Futures account today and get a trial to my Daily Trade Levels! Just email me - Phil Flynn - at pflynn@pricegroup.com or call me at 888.264.5665. Open a Trading Account in 15 minutes! Make Sure You Open Your account today! Here is the link to apply online: https://newaccount.admis.com/?office=269  Here is the PDF version:http://www.pricegroup.com/ADMIS/ADMIS%20Account%20Application.pdf

 

Thanks,

Phil Flynn

 

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