Founded in 1962 and a public company since 1983, Raymond James is a diversified financial services holding company with subsidiaries engaged primarily in investment and financial planning, in addition to investment banking and asset management. Our stock is traded on the New York Stock Exchange (RJF).
Sector Overview and Highlights
Crude
In June, WTI crude bucked the bearish trend it had set in the previous month by posting a 3.5% gain to close at $96.56,
despite a three-day pullback (-4.8%) in the middle of the month. The mid-month correction was concurrent with a decline
in broad asset classes, as Fed chairman Bernanke suggested that strong economic signals could result in QE tapering
occurring earlier than expected. Offsetting the negative sentiment, WTI benefitted from expectations of additional pipeline
takeaway capacity from the bottlenecked
本帖隐藏的内容
Cushing hub as progress on the southern leg of the Keystone pipeline and the
reversal of the Seaway pipeline enhanced its Gulf Coast refinery availability. While Brent cr ude experienced the same intra-month volatility as WTI, without the tailwind of Cushing de-bottlenecking, it was unable to make a significant push higher,
ending the month at $102.16/bbl, up a mere $0.10 from the start of the month. WTI’s outperformance of Brent reduced
the price differential between the two grades from $8.61 to $5. 60 over the course of the month, a reduction of 35%. While
this spread has decreased even further so far in July, we belie ve the spread will eventually widen out again to $15/bbl in
2014, as additional pipeline capacity away from Cushing will likely be met by the lim its of Gulf Coast refining capacity.
Rather than being eliminated, we believe the bottleneck at Cushing will simply move to the Gulf Coast, restoring the heavier
WTI-Brent discount. So far in July, WTI and Brent have advanced 8.8% and 6.1%, respectively, as unrest in the Middle East
drove prices higher early in the month and domestic equity markets continue to post all-time highs.
Natural Gas
The month of June was almost a carbon copy of May as the shrinking y/y deficit and bearish injections numbers had gas
prices moving considerably lower (-11%) for the month of June. At the beginning of the month, the y/y storage deficit
stood at 625 Bcf and now sits at 448 Bcf as reverse coal-to-ga s switching and larger injections have led to some bearish
sentiments around natural gas. Storage levels are relatively in line with the five -year average and it appears that ending
storage will be closer to the five-year average assuming normal weather going fo rward. As expected, once gas prices
approached the $4.50/MMbtu mark, reverse coal-to-gas switchin g began to set in, resulting in the price drop experienced
during the month of May and June. Thus far in July, gas prices have remained relatively range bound between the $3.50
and $3.75/MMbtu level. However, most impo rtantly, we forecast that the gas market must maintain ~4 Bcf/d looser y/y in
order to fill storage.
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