Trade Deficit for April 2011 - $43.7 Billion

The April 2011 U.S. trade deficit decreased -$3.1 billion to $43.7 billion. This is a -6.7% monthly drop in the trade deficit and the largest since October 2010. Exports were the highest on record. Oil imports were the highest on record and the drop in imports from Japan also was the largest decrease on record. The tsunami hit Japan on March 11th.


Trade Deficit for February 2011 - $45.8 Billion

The February 2011 U.S. trade deficit decreased $1.2 billion to $45.8 billion. The January 2011 monthly trade deficit was $47 billion, revised up from $46.3 billion. $26.7 billion of this deficit is oil related, $0.9 billion less than 1 month ago, and 44.1% of the total goods trade deficit. Both imports and exports dropped, with imports declining $3.6 billion, or 1.7% and exports dropping $2.4 billion, or 1.4% for February.

Groundhog Day as Obama "Probes" Oil Speculation

We have another non-action action by the Obama administration, this time in the form of a probe on oil speculation:

Obama said he’s asked his attorney general and U.S. government agencies to work with state attorneys general to monitor for gasoline-price gouging, “to make sure that nobody is taking advantage of working families at the pump.”

Obama also said he’s willing to tap into the U.S. Strategic Petroleum Reserve “should the situation demand it” but declined to answer a question of what price would trigger a release.

Earlier France proclaimed oil speculation is unacceptable and Senator Nelson (D-FL), is calling for a hearing as well as a Congressional coalition on derivatives and oil speculation.

This is like 2008 Ground Hog Day. Back then we also had congressional testimony on oil speculation as well as bills introduced in Congress.

But then the financial crisis and recession happened, global oil demand collapsed, yet derivatives were never addressed. There is supposedly the ability for the CFTC to act, yet....this regulatory agency never does.

A portion of Senator Nelson's letter to the CFTC:

Oil Prices Spiking on Middle East Protests and Overthrows

Oil Futures are spiking due to Libya and the Middle East's March to Freedom. While food inflation is cited as an Egyptian revolutionary spark, for the United States it might just be oil.

Oil jumped to the highest in more than two years as violence intensified in Libya, stoking concern crude supplies will be disrupted as violence escalates around the Middle East and North Africa.

New York futures for April delivery rose as much as 9.8 percent from the close on Feb. 18, while London-traded Brent surged to the highest since September 2008, as soldiers deserted Libyan leader Muammar Qaddafi’s government and diplomats resigned. The country, holder of the largest crude reserves on the African continent, pumped 1.6 million barrels a day of oil in January, equivalent of about 8 percent of U.S. consumption.

“Oil is being bought on the risk that this contagion will spread through the Middle East,” Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, said by telephone today. “This effect is a knee-jerk reaction to the fact that this could spread.”

Crude for April delivery rose as high as $98.48 and was at $96.50 a barrel in electronic trading on the New York Mercantile Exchange at 11:37 a.m. Singapore time. It settled at $89.71 on Feb. 18. Floor trading was closed yesterday for the Presidents Day holiday and electronic trades will be booked today for settlement purposes.

China Becomes #1 Energy Consumer

China just became the largest energy consumer, another sign China is well on their way to surpassing the United States. The Wall Street Journal:

China is now the world's biggest energy consumer, knocking the U.S. off a perch it held for more than a century, according to new data from the International Energy Agency.

The Paris-based agency, whose forecasts are generally regarded as bellwether indicators for the energy industry, said China devoured 2,252 million tons of oil equivalent last year, or about 4% more than the U.S., which burned through 2,170 million tons of oil equivalent. The oil-equivalent metric represents all forms of energy consumed, including crude oil, nuclear, coal, natural gas and renewable sources such as hydropower.

One might think that's great the U.S. is using less energy than China, but it's not. Industrial enterprise and manufacturing are the biggest consumers of energy and this reflects, once again, on how China has captured U.S. manufacturing ...and jobs.

Credit Suisse Estimates BP costs to be $37 billion

Credit Suisse has released an initial estimate on the costs to BP and it's $37 billion.

More details from Business Week:

Cleanup costs may be $15 billion to $23 billion if the well leaks until relief drilling is completed in August, analysts led by Kim Fustier in London said. Claims may rise to $14 billion

Note, the two major components to this estimate. The first is the spill rate. Credit Suisse clearly is using 75 million gallons total.

By early August when the relief wells are drilled, Macondo could have spilled 45 to 75 million gallons of oil into the Gulf, four to seven times Exxon Valdez.

That is quite low of an spill rate estimate. Using a recent top estimate of 4 million gallons per day, we calculate by August, the total amount spilled would be 360 million gallons. The spill rate is an estimate, there is no meter actually measuring it. Spill rates were revised to the high end of 25,000 barrels a day.

Using a longer and clearer video clip of the oil leak for the USGS analysis, Wereley said the figure from his team was reduced to the 12,000-25,000 per-barrel range because of the amount of methane gas and other natural gases consistently gushing out of the pipe.

Spillonomics - Some Job Loss Estimates on the Gulf Oil Spill

The Atlanta Federal Reserve gives some estimates on the jobs at risk from the Gulf Oil Spill disaster. They are saying it's 132,000. That said, there are 2.8 million jobs in the region associated with tourism in 2008. In 2003, 71% percent of the jobs in the region are associated with tourism and recreation along the Gulf.

The Oil Slick From Hell - Why isn't this an Immediate Federal Direct Jobs Program?

As the oil spill from hell looks to coat all of the Gulf coast and kill every breathing thing that cannot run or fly away, why isn't the Federal Government immediately setting up a direct jobs program to clean up and deal with the disaster?

Some jobs are appearing:

Hundreds stood in a line that wrapped around Workforce Escarosa in Pensacola this morning to apply for positions on a cleanup crew for the oil slick in the Gulf of Mexico.

Brittany Bailey, business services outreach representative, said Escarosa is recruiting 300 to 500 Gulf Coast workers for a Texas-based workforce development company called Advanced Employment Solutions.

"They need the manpower immediately," she said.

Fishermen in Louisiana are being contracted by BP to help with the mess:

Oil Demand to Exceed Supply by 2014?

A U.K. former scientist is saying Oil reserves are exaggerated by 1/3:

The scientist and researchers from Oxford University argue that official figures are inflated because member countries of the oil cartel, OPEC, over-reported reserves in the 1980s when competing for global market share.

Their new research argues that estimates of conventional reserves should be downgraded from 1,150bn to 1,350bn barrels to between 850bn and 900bn barrels and claims that demand may outstrip supply as early as 2014. The researchers claim it is an open secret that OPEC is likely to have inflated its reserves, but that the International Energy Agency (IEA), BP, the Energy Information Administration and World Oil do not take this into account in their statistics.