Type to enter text RBOB Report 011116.pdf · 16/11/2001 · count from 1608 in October 2014 to 605 October 2015, which equates to a 62% decline. It is our opinion that this will

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Refor mulated Blendstock for Oxygenate Blending (RBOB)

When the history of the contemporary auto

industry is written, 2014 will go down as a year

of contrasts. Deluged by safety recalls, auto

manufacturers faced the ire of regulators and

consumers. Yet buyers did not stay away and

instead gave the American auto industry its

best sales year in nearly a decade.

The result, announced in January, was a

crushing sales success: Nearly one million

more vehicles were sold in the United States

last year than in 2013. According to the

tracking company Autodata, 16.5 million new

autos hit the streets, the highest number since

the record of 16.94 in 2006, and it looks like

2015 could surpass those numbers. As of end

of September U.S. Auto sales are on pace for

18 million motor vehicle sales, which would be

another record .

Analysts cited a host of reasons for the growth;

a rebounding economy, increasing consumer

confidence, falling gas prices and cheap leases

all helped unleash pent up demand that sent

Americans into dealers’ showrooms last year.

Global Oil demand seemingly bottoming in

the second quarter of 2014, has since been

steadily rising, with year over year gains.

Global oil demand is forecasted to grow by 1.3

mb/pd according to the International Energy

Agency in 2016. Product markets, meanwhile

have proved unexpectedly strong. Not only

have product prices lagged those of crude

during the selloff we experienced, but have

moved ahead in the recovery. Because refining

margins have been remarkably firm, this has

supported unexpectedly strong throughputs.

CONTENTS

PAGE 1DEMAND

PAGE 3PRODUCTION DECLINE?

PAGE 4REFINERY TO THE WORLD

PAGE 5GLOBAL MISHAPS

PAGE 6 SOURCES

TEMPLETON FINANCIAL GROUP 2016

Demand

FUTURES AND OPTIONS TRADING INVOLVE SIGNIFICANT RISK OF LOSS AND MAY NOT BE SUITABLE FOR EVERYONE. OPTIONS, CASH AND FUTURES MARKETS ARE SEPARATE AND DISTINCT AND DO NOT NECESSARILY RESPOND IN THE SAME WAY TO SIMILAR MARKETS STIMULUS. A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES & OPTIONS CONTRACT BEING OFFERED. SEASONAL DEMAND AND CURRENT NEWS IN COMMODITIES ARE ALREADY REFLECTED IN THE PRICE OF THE UNDERLYING FUTURES.


Increased drilling and improved drilling efficiency have led to significant crude oil production increases in the Eagle Ford region in southern Texas. These increases have occurred despite the region's relatively high well decline rates. However, by offsetting the natural declines through the use of new recovery techniques, further production increases are possible.Horizontal drilling combined with an increasing number of hydraulic fracturing stages in tight formations like the Eagle Ford typically enhance initial

production rates when compared to past results. These higher initial production rates are often accompanied by initially larger decline rates, before gradually leveling off to a consistent level of decline for the remaining years of the well life.While initial production rates have steadily increased since 2009, first-year decline rates in the Eagle Ford have fluctuated between 60% and 70%. Most notably, decline rates over the second year of production have steadily increased from 30% for wells drilled in 2009 to nearly 50% for wells

drilled in 2011 and 2012. Since the fall of 2014 we have seen a significant drop in rig count from 1608 in October 2014 to 605 October 2015, which equates to a 62% decline. It is our opinion that this will eventually have a heavy impact on crude oil supplies domestically, which could make the cost of crude more expensive, and in turn the refined products as well. If this trend of rig counts continues this price change could happen rapidly.

Food For Thought: In an interview with Jim Rogers

in Singapore October 1, 2015,

Rogers stated “When there’s

bad news and something

doesn’t decline, it usually

means it’s at a bottom and will

be turning”. Jim Rogers, who

correctly predicted a

commodities rally in 1999 also

stated. “Whether we’re at a

turning point or not, I don’t

know yet, and I’m watching this

very closely.”


Production Decline?

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http://www.eia.gov/todayinenergy/detail.cfm?id=15351








1. The U.S. has become the world’s fueling

station, sending more

gasoline, diesel, and

other refined petroleum

products abroad than

ever before. Exports of

these fuels have almost

tripled in 10 years.

Unlike crude oil, which is

generally prohibited

from being exported to

overseas markets, refined

products are allowed to

be exported from the

U.S.

2. In 2011, the U.S.

became a net exporter of

refined oil products for

the first time since World

War II. While some

regions of the U.S. (such

as the East Coast) still

rely on imports of

refined products, in

aggregate the U.S. is now

exporting more refined

products than it is

importing, and these

trends are expected to

continue.

3. Exports are forecast to

keep rising as European

refiners close, domestic

crude production rises,

and demand swells in

emerging markets.

Export destinations for

U.S. refiners include

Mexico, Central and

South America, and

Western Europe.

TEMPLETON FINANCIAL GROUP

5300 West Atlantic Ave, Suite 612, Delray Beach, Florida 33484 866-413-2974


Refinery to the World

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Supply disruptions are a feature of world oil markets that cause substantial uncertainty and can immediately impact market prices. Supply disruptions can have an impact because there can be uncertainty surrounding how long the disruptions will last or how quickly other production can ramp up to replace the lost supply. In periods of low excess production capacity it is more difficult to absorb a loss of supply without increases in prices. Of all the factors that can move energy prices, there are perhaps none that are as sudden and potentially explosive as conflict and tension in the key producing areas. Over the years we’ve seen “Global Mishaps” move prices over very short periods of time. For example, in 1990 the invasion of Kuwait put Iraq on the hot seat and energy prices moved dramatically in a matter of months. Then, subsequent U.S. troop build up and eventual attack of Iraqi troops in Kuwait, sent prices on a ride. Both creating enormous opportunity and equal risks. We’ve seen Russia turn from a cold-war enemy and

communist country into a so-called democracy and now Putin is back in the headlines with his annexation of Crimea and fighting in Ukraine. We’ve seen overthrown governments in Egypt and Libya as well as a civil war in Syria.As of this writing, the ongoing terrorism of ISIS continues, while all along the U.S. and Russia are actively involved in Syria against the rebels,which is just another hot spot with refugees pouring into Europe by the thousands. These events could create a significant amount of instability in the region and potentially heat up the area where a significant amount of the world’s oil is produced. Although the next event in this is unknown, it seems fair to say that the conflicts will continue and could possibly get worse, which could make oil prices move significantly faster.

UNLEADED GAS (RBOB)

Trading Unit Futures: 42,000 U.S. Gallons Options: One NYMEX Division RBOB futures contract

Price Quotation In dollar and cents per gallon

Trading Hours Open Outcry 9:00 a.m. -2:30 p.m. EST

Trading Months Twelve consecutive months

Minimum Price Fluctuation $0.0001(0.01cents) per gallon


Global Mishaps


Sourcepagehttp://www.bloomberg.com/bw/articles/2013-11-14/2014-outlook-the-u-dot-s-dot-crude-oil-re<inery-to-the-world

http://www.cnbc.com/id/102381893


http://www.nytimes.com/2015/01/06/business/us-auto-sales-jump-for-2014.html?_r=0

https://www.iea.org/oilmarketreport/omrpublic/

http://www.businessinsider.com/baker-hughes-rig-count-october-16-2015-10

http://online.wsj.com/mdc/public/page/2_3022-autosales.html

http://www.bloomberg.com/news/articles/2015-10-02/jim-rogers-says-oil-ignoring-bad-news-usually-means-rebound-near

Source: Dr. Michael Izady at Columbia University and The Intercept)


http://www.bloomberg.com/bw/articles/2013-11-14/2014-outlook-the-u-dot-s-dot-crude-oil-refinery-to-the-world






















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5300 West Atlantic Ave., Suite 612, Delray Beach, Florida 33484 P: 866-413-2974 / F: 561-499-4018

Templeton Financial Group is a member of the

and a registered Introducing Broker with

Documents

Type to enter text RBOB Report 011116.pdf · 16/11/2001 · count from 1608 in October 2014 to 605 October 2015, which equates to a 62% decline. It is our opinion that this will