11
Feb

Thursday Morning

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Market Sentiment Watch: Extreme fear market conditions persist in the wake of Yellen's first day of comments as investors see a Fed policy of rate normalization as likely to continue despite growth pressure and flock to bonds and other safe haven assets. Europe tumbled overnight sending U.S. market futures sharply lower and took oil futures with them despite a weaker dollar. In energyland, oil remains weak on demand fears and the well known storage overhang. Overnight word or a third refinery potentially cutting runs sent futures lower and while we note that the cuts are so far modest at two refineries for a total drop of about 65,000 bopd the fear is this will spread due to high gasoline and distillate stocks with the end result being more crude sent to storage than otherwise would have been (deepening and/or extending maintenance season). As previously noted, we continue to sit on our hands instead of adding to names that are crude price or natural gas price suppressed. There were certain aspects of the inventory report yesterday that were pleasing to the eye but they are, for bears, easy enough to continue to ignore. Similarly, there were items in the OPEC outlook that were positive but again, not obviously so.  Since we are in the middle of maintenance season near term pressure is expected and again, we wait. We do our homework and we wait.  In today's post please find the oil inventory review (mixed bag on the headline numbers but we like the move lower in crude production as modeled by EIA's weekly model and expect more drop in coming weeks), the natural gas preview (tiny withdrawal due to last week's hot weather), comments on OII's quarter, PXD's quarter (nice beat, nice efficiencies, but not running as fast as expected and as such estimates will come off), and some other odds and ends. 

Ecodata Watch:

  • We get jobless claims at 8:30 am EST (F = 280,000, last week was 285,000),
  • Yellen testimony begins at 10 am EST.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watc​h
  3. Oil Inventory Review 
  4. Stuff We Care About Today - OII, PXD
  5. Odds & Ends

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10
Feb

Wednesday Morning

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Market Sentiment Watch: Fed Chairman testimony day. Serious explanations in need. In energyland, sentiment yesterday took its cue from IEA's ongoing bearish commentary (see notes on this yesterday's post) and as expected 1Q16 and February in particular are turning out to be ugy ones for oil bulls.  As budgets are rolled out more certainty is gained and as more days pass, the closer we get to the end of refining maintenance season and likely traction for oil prices. In the meantime, we do our homework, steer clear of adding to names that are teetering (even if they look cheap as some do on a number of fronts) and wait. We have added to nothing this year so far. In today's post please find comments on EIA's STEO out yesterday (modest change to 2016 U.S. oil forecast, down 0.5% vs last forecast to reflect a 740,000 bopd drop YoY), OPEC's monthly out this morning, a wrap of thoughts on WPX in the wake of the Piceance sale, the oil inventory preview, natural gas inventory preview, and some other odds and ends. 

Ecodata Watch:

  • We get Janet Yellen testimony starting at 10 am EST,
  • We get the federal budget at 2 pm EST. 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watc​h - with oil and natural gas inventory previews, EIA STEO, OPEC MOMR,
  3. Stuff We Care About Today - WPX wrap, EXXI
  4. Odds & Ends

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09
Feb

Tuesday Morning

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Market Sentiment Watch: All ears on Janet Yellen's congressional testimony tomorrow. In energy land news flow remains at a trickle and we continue to monitor data and check up on various stories. Expect big market mood swings today and tomorrow around the Fed and around the oil inventory report. In today's post please find requested comments on JONE, WPX (he's a closer), and some other odds and ends.

Ecodata Watch:

  • The NFIB small business index came in at 93.9 vs 94.5 expected and a prior reading of 95.2, 
  • We get Job Openings at 10 am EST (no forecast, last read was 5.4 mm), 
  • We get Wholesale Inventories at 10 am EST (no forecast, last read was -0.3%).  

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Stuff We Care About Today – JONE, WPX
  4. Odds & Ends

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08
Feb

Monday Morning

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Market Sentiment Watch: All eyes on Yellen testimony this week but expect a slow day of trading with no eco data to sway the markets and the Chinese New Year.  In energyland, all eyes on OPEC chatter and on a number of energy agency comments due out this week (see The Week Ahead section below).  Expect continued slow increase in news flow as companies post 2016 budgets ahead of earning season that really gets started in the second half of the month. In today's post please find The Week That Was and a few other odds and ends. 

Ecodata Watch:

  • No economic data scheduled. EIA releases their latest Drilling Productivity Report, 

The Week Ahead:

  • Tuesday 2/9: NFIB small business index, job openings, wholesale inventories, EIA Short Term Energy Outlook,    OPEC ---
  • Wednesday 2/10: Janet Yellen testimony, federal budget, 
  • Thursday 2/11: Janet Yellen testimony, jobless claims, 
  • Friday 2/12: Retail sales, import price index, consumer sentiment, business inventories

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watc​h
  3. The Week That Was
  4. Stuff We Care About Today 
  5. Odds & Ends

Holdings Watch:   

ZLT (Zman Long Term portfolio)

  • The Blotter is updated.

Commodity Watch

Crude oil closed off 8% last week at $30.89 with the strip down 4% at $37.51 as OPEC emergency meeting chatter waned more than waxed and the EIA inventory report weighed on sentiment with another large crude build due to lower refiner utilization and a bounce in imports. Please see The Week That Was section below for additional detailed comments. We get a new version of the Drilling Productivity Report with shale production projected through March.  Expect it to continue to show a fairly sharp drop in production with a possible re-acceleration of the declines for the big 5 oil plays (see comments on the last report in The Week That Was section below).   This morning crude is trading near $30 with headlines blaming a lack of anything concrete coming out of a brief meeting between Saudi and Venezuela yesterday. Expect prices to remain choppy this week ahead of inventories which have a better chance of showing improved numbers vs the last couple of weeks as refiner maintenance should ease slightly and imports oscillate after a recent bounce. We welcom the return of a modest Brent / WTI premium as an import suppressing factor in coming months.  

Natural gas down 10% to close at $2.06 last week after EIA reported a slightly smaller than expected withdrawal and with the expectation of another smaller pull this week followed by a rebound with next week's report. Please see The Week That Was section below for additional comments. As noted above, we get a new version of the Drilling Productivity Report and we expect it to show continued strong declines for the Marcellus and Eagle Ford gassy production (see comments on the last report in The Week That Was section below). This morning gas is trading up a dime on another round of colder winter weather forecast for the northeast with some forecasts looking extreme cold (and coldest weather of the season) for NY and surrounding areas next weekend. 

Weather Watch: 

  • Last week's weather: Population Weighed Heating Degree Days were 170 vs 215 normal for this week of the year and 187 in the prior week. 
  • This week's forecast: HDDs are forecast to rebound to 204 vs 207 normal for this week of the year. 

 

The Week That Was

weekly wrap 020516 a

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weekly wrap 020516 b

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weekly wrap 020516 c

Stuff We Care About Today

Other Stuff

  • We get quarterly reports from EXXI tonight and names of interest PXD and OII later this week. The real pick up in earnings comes in the last week of the month as the majority of names we hold report within a few days time. Expect more 2016 guidance updates and 2015 reserve reports prior to the quarterly releases.
  • Look for unowned name requested quick looks this week.  

Odds & Ends

Analyst Watch:

  • TBA in comments. 

07
Feb

Wrap – Week Ended 2/5/16

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The ZLT D (our primary account) was off 6% last week vs XOP down 8%, prompt month oil down 8% and prompt month natural gas down 10%. Questions and comments under the Wrap will be addressed in he Monday post. 

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