20
Dec

Wrap – Week Ended 12/19/14 (in progress)

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Comments and questions under the wrap will be addressed in the Monday post. 

 

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A few notes:

Oil Rig drop. The drop in rigs has begun in the lower 48 although it's in part normal seasonality. Look for rig counts on the oil side to move lower through at least April.  We see deferred completions during winter having a more direct impact on 1Q15 US production with the lower rig counts helping with 2Q15 and beyond levels as well. Having been through 8 winters when shale operators were trying to grow with only mixed sequential growth results from 4Q to 1Q it will be interesting to see what happens to volumes when the companies are not trying as hard. 

Speculators increase net oil long position .  CFTC data showed another rise in the weekly net long position with both shorts and longs adding (with longs outpacing again) as speculators, well, speculated about a bottom.  The speculative net long position began falling in late June, roughly corresponding to the move in oil prices. This marks the 3rd week of modest increase in that position. 

CFTC oil 121914

12 Month Strip Flat on the week. Not that one week matters that much but wanted to point out that the 12 month strip was flat to the penny with the prior week's close (not a typo in the table below) despite a 5% further drop in the front month on the week as the contract close affected pricing more than what we saw in the strip. Meanwhile, the OPEC basket fell another 7%, another week of high double digit percentage drops there as the powers that be in OPEC (Saudi, UAE, Kuwait) all gave what amounts to shoulder shrug comments with regard to the recent drop.  

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19
Dec

T.G.I.F.

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Market Sentiment Watch: Three days in a row of green energy screens are far from a trend but are at least a nice change of pace. Look for a more boring session today as we have option expiry, a lack of fresh ecodata, and last minute holiday shopping or it won't be delivered on time deadlines to consider.   We see the E&P names as over done to the down side but this is nothing new and we will be making some changes over the next couple of weeks in terms of highgrading. In today's post please find the natural gas inventory slide show (in line but mild weather means the YoY storage overhang is now gone with the deficit to the five year average now contracted to 7%) and some notes on the ZLT names and other names of interest on the site in terms of budgets (what we've seen so far, and what we expect) that are meant to be a general reference piece as we look at planned spending reductions and growth in the new year.  And my apologies, but a belated Happy Hanukkah! 

Ecodata Watch: 

  • No economic data releases today. 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Inventory Review
  4. Stuff We Care About Today – E&P budget and thoughts to date 
  5. Odds & Ends

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18
Dec

Thursday Morning

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Market Sentiment Watch: Nice to have two whole green days in the same week but nervous market conditions will take time to wear off.   In today's post please find the natural gas inventory preview, the oil inventory review (mixed bag, watching crude inventory levels in light of slightly higher than expected 3Q and now 4Q14 import levels), comments on ROSE oil price sensitivity, and some other odds and ends.

 

Ecodata Watch: 

  • Jobless claims came in at 289,000 vs a forecast of 295,000 and last week's read of 297,000,
  • We get Philly Fed at 10 am EST (F = 25, last read was 40.8),
  • We get Leading Indicators at 10 am EST (no forecast, last read was +0.9%),
  • No economic release tomorrow. Likely a dull options expiry day but we may get more energy news flow. 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Oil Inventory Preview
  4. Natural Gas Inventory Preview
  5. Stuff We Care About Today – ROSE
  6. Odds & Ends

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17
Dec

Wednesday Morning – CRC

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Market Sentiment Watch: Yellen in focus with everyone asking whether or not the qualifier "considerable time" is out of time. We note that the expected avalanche of capital program and volume guidance for 2015 is taking longer than expected to hit the tape likely to due to the velocity of the drop in oil prices that is still in progress. In today's post please find quick comments on new oily name CRC (OXY spin out at an inopportune time), ROSE (budget), and AREX (budget). 

Ecodata Watch:

  • We get CPI at 8:30 am EST (F = -0.1% headline and +0.2% core), 
  • We get the FOMC statement at 2 pm EST with Janet Yellen's press conference at 2:30 pm EST. 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Oil Inventory Preview
  4. Stuff We Care About Today – CRC, ROSE, AREX
  5. Odds & Ends

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16
Dec

Tuesday Morning

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Market Sentiment Watch: Nervous market conditions persist with oil sentiment beginning to weighing on the broad markets. All eyes should be on the Fed and Yellen tomorrow and on conditions in Russia and China today. European PMI data was a mixed bag while China PMI highlighted the first contraction on the manufacturing side in 7 months.  Energy land continues to move lower on daily drops in oil prices (see comments Commodity Watch section) and the analysts continue to throw inthe towel with drastic and now repeated target price and rating cuts for anyone who has any debt and sells hydrocarbons.  In today's post please find thoughts on the plunge in WLL and some other odds and ends including more towel throws by analysts on the E&P sector (it's not often you see targets come off by 80% but it's becoming common of late).  

Ecodata Watch:

  • We get Housing Starts at 8:30 am EST (F = 1.035 mm, last read 1.01 mm), 
  • Markit Flash PMI – China shows contraction for first time in 7 months coming in at 49.5 vs 50.0 last month. 

In Today’s Post:

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

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