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October 21, 2011

Energy Data Highlights

Crude oil futures price 10/19/2011: $86.11/bbl up$0.54 from week earlier up$6.62 from year earlier

Natural gas futures price 10/19/2011: $3.586/mmBtu up$0.097 from week earlier up$0.076 from year earlier Weekly coal production 10/15/2011: 21.386 million tons down0.216 million tons from week earlier down0.345 million tons from year earlier Natural gas inventories 10/14/2011: 3,624 Bcf up103 Bcf from week earlier down46 Bcf from year earlier Crude oil inventories 10/14/2011: 332.9 mmbbl down4.7 mmbbl from week earlier down28.3 mmbbl from year earlier http://www.eia.gov/

Natural Gas/ Power News

EIA Storage Release 10/20/11 (Actual): +112 Bcf Previous Week: +103 Bcf -1.3% Change from 1 Year Ago +3.2% Change 5-year Average Gas Futures Climb on Inventory Data, Weather Natural-gas futures settled higher after a government report showed inventories of the fuel grew less than expected last week and after colder weather was predicted for much of the country...The U.S. has 3.624 trillion cubic feet of natural gas in storage, not far from its all-time high of 3.840-tcf, reached last year. The massive amount of supply, coupled with lower demand during mild weather, have depressed prices, which have fallen more than 25% since June. In its weekly

inventory report, the U.S. Department of Energy said an increase of 103 billion cubic feet in natural-gas storage. Analysts were expecting growth of about 110 bcf, on top of last week's build of 112 billion bcf. http://online.wsj.com/article/SB1000142405297020448530457664301412355012 4.html?mod=WSJ_Commodities_LEFTTopNews Development of Canadian LNG projects welcomed by Asian buyers The development of LNG projects in Canada's west coast has gained traction as Asian buyers seek to diversify LNG supply and secure more competitively priced cargoes relative to those from Australia, Bernstein Research said Friday. The boom in LNG demand from Japan following the March 11 earthquake as well as from emerging markets encouraged a wave of Australian LNG projects. However, as Australian projects became increasingly costly, Canada's entry into the LNG export market "offers supply security, diversity and may over time help ensure competitive LNG prices in the Pacific," analysts from Bernstein Research said. "The rise of North American LNG will increase competition for Asian market space with Canadian exporters potentially displacing some of the more marginal Australian LNG projects," the analysts said. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8492218 US EPA to issue national shale wastewater rules in 2014 The US Environmental Protection Agency will issue pre-treatment standards for flowback water from shale gas extraction by 2014, the agency announced on Thursday. The move is sure to frighten a gas production industry that has resisted almost all forms of federal oversight of hydraulic fracturing and horizontal drilling in favor of regulation by individual states. The EPA's action is separate from its ongoing study of hydraulic fracturing's effects on drinking water. That study is supposed to conclude in 2014 as well. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6602809 Noble Energy boosts earnings on Israels growing gas demand
Houston-based Noble Energy, Inc. announced Thursday that its profits jumped 90 percent in the third quarter, boosted largely by rising demand for natural gas in Israel and unrealized gains on commodity derivatives. http://fuelfix.com/blog/2011/10/20/noble-energy-boosts-earnings-on-growing-israel-gas-demand/

Encana quarterly profit falls 80% on Canadian dollar decline Encana Corp., Canadas biggest natural-gas producer, said third-quarter profit declined 80 percent as the decline in the Canadian dollar resulted in currency losses. Net income slumped to $120 million, or 16 cents a share, from $606 million, or 80 cents, a year earlier, Calgary-based Encana said today in a statement. Excluding currency losses and gains from contracts used to lock in commodity prices, the company earned 23 cents a share, more than double the 11-cent average of 16 analysts estimates compiled by Bloomberg. http://fuelfix.com/blog/2011/10/20/encana-quarterly-profit-falls-80-on-canadiandollar-decline/

Eni finds its largest natural gas field Eni, the Italian oil company, has made the biggest natural gas discovery in its history, locating 15-20 trillion cu ft of new resources off the coast of Mozambique. Paolo Scaroni, chief executive, said the Mamba South 1 well had not reached target depth and would be drilled for another 500m. It is possible this number of

15-20 tcf might grow. We dont know yet, but every indication is in that direction, he said, adding that three further wells would then be drilled. http://www.ft.com/intl/cms/s/0/b2a5793e-fb21-11e0-bebe00144feab49a.html#axzz1bPqFTJuv

Green/ Alternative Energy News

Texas set another record for wind power Texas wind farms hit a new peak generation record earlier this month, hitting 7,400 megawatts at 3:06 a.m. on Oct. 7. That beat the previous record of 7,355 MW set June 19, at 10:26 a.m. At the time of the new record, wind was supplying 15.2 percent of the total system load of 48,733 MW, according to the Electric Reliability Council of Texas. Texas leads the nation in installed wind power capacity with 9,452 MW. The 1999 law that deregulated much of Texas electric markets included a renewable energy mandate that requires electric retailers to purchase a certain percentage of their power from renewable sources. http://fuelfix.com/blog/2011/10/21/texas-set-another-record-for-wind-power/

Crude Oil News

OPEC Daily Basket Price 10/20/2011- $107.19 (10/19/2011- $108.65)

Oil Advances Amid Speculation European Rescue Fund May Ease Debt Crisis Oil advanced in New York as European leaders prepared for talks on how to bolster a rescue fund that will ease the debt crisis threatening the regions economy. The fundamentals are far tighter than they were in 2008, said Amrita Sen, an oil analyst at Barclays Plc in London. The current geopolitical context creates significant tail risks in a world with such limited spare capacity. The death of the former Libyan leader will expedite the return to normal output levels, according to the state-run National Oil Corp. http://www.bloomberg.com/news/2011-10-21/oil-heads-for-weekly-loss-beforeeurope-summit-libya-sees-output-return.html

Brent crude oil steady above $109 before EU summits Brent crude held above $109 per barrel on Friday as financial markets awaited two key summits of European leaders to agree a solution to the euro zone's debt crisis.France and Germany said European leaders would examine in detail a global

solution to the crisis on Sunday and aim to adopt the plan on Wednesday at the latest. http://www.reuters.com/article/2011/10/21/us-markets-oilidUSTRE7922QH20111021

Angola returns to the oil markets The west African country, which joined the Opec oil cartel in 2007, has seen its output fall significantly in 2011. In 2010 it pumped an average of 1.85m barrels a day, but so far this year it has managed just 1.65m b/d. Yet oil production is now starting to recover after lengthy repairs and the start up of new. Angola is far more important to the oil market than appears at first glance. The country produces a mere two per cent of global output but the headline figure is deceptive. Angola pumps a particularly low-sulphur crude, sought after by Chinese and Indian refineries to produce high-quality gasoline and diesel. Beijing bought about 45 per cent of Angolas output last year. The US and India are the second and third largest buyers, accounting for another third of its exports. http://www.ft.com/intl/cms/s/0/146948a2-fb32-11e0-8756-00144feab49a.html? ftcamp=rss#axzz1bPqFTJuv

Brazilian, Colombian fuel oil premiums rise on weaker NYH: traders Premiums for Colombia and Brazilian fuel oil barrels have increased recently due to a relatively weak New York Harbor 1% sulfur fuel oil benchmark, Latin American market fuel oil traders said Thursday. "I think the New York 1% fuel oil market is currently under valued, so premiums to that benchmark are increasing to make up for that," one Latin American fuel oil market trader said. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6602798

Norway's Statoil announces doubling of Aldous discovery up to 1.5 bil boe Norway's Statoil Friday announced a doubling of recoverable reserves at its already huge Aldous Major South discovery in PL265 in the North Sea to 900 million-1.5 billion barrels of oil equivalent. It had previously said that PL265 volumes were between 400 million boe and 800 million boe. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8492199

Recent Rig Counts Area Last Cou Change Date of Change Date of

Count U.S. Canada 14 Oct 11 14 Oct 11

nt 2023 512

from Prior Count +11 -10 -9

Prior Count 7 Oct 11 7 Oct 11 August 2011

from Last Last Year's Year Count +353 +89 +54 15 Oct 10 15 Oct 10 September 2010

Internatio Septemb 1174 nal er 2011

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

Weather

6 to 10 Day Outlooks Temperature

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8 to 14 Day Outlooks Temperature

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