15
Mar

Thursday – OPEC Meeting & Natural Gas Storage

Print Friendly

Today's topics

  1. Intro w/ oil and gas price action
  2. Natural gas
  3. Opec Meeting Watch
  4. Gasoline picture show
  5. Stock action (inaction in this case)
  6. Odds & Ends

What a whipsaw! All determined by the broad markets with neither the downdraft nor the updraft determined by oil which actually closed at $58.16 after a brief dip below the $57.50 level (my initial target for a pullback from last week). In fact oil trailed around in lockstep after the DJI most of the day which seems normal for an important sector in a choppy until you look at that same chart for the last year. Some credit also has to go to natural gas which retook the $7 level and inspired a small rally in the gassier E&Ps.

I said this in comments yesterday: It [natural gas] did so after the heating oil number came out which was bigger than expected. The expectation is that a big HO draw today means a big gas draw tomorrow. Not always true. The HO relationship with temps is not as linear as is the relationship between gas and temps. I think this rally in nat gas gets reversed tomorrow. Comment: I stick by that.

Natural Gas Inventory Day

  • My expectations: 90 Bcf. Degree days were roughly identical to the prior week (in aggregate) when we got a 102 Bcf withdrawal. Of that number 12 Bcf was a database adjustment.
    • Note: the EIA's file ng_stor_wkly_s1_w.xls located here does not yet reflect year ago figures from the weekly natural gas report here. I have emailed them to update the database. When they do I'll update the gas storage page.
  • Street: range of 80 to 140 Bcf, consensus was unknown at the time of this post. I'd bet the over under is 100 Bcf. Below that and you slip towards $7 immediately. Above it and gas may get a small reprieve...say a day or two at most before it again heads toward $6.50.
  • The reason is simple: degree days are expected to fall by nearly half this week. I won't surprised to see another burst of cold make for choppy trading but I still expect to see lower prices in the second half of March and early April setting up a good buying opportunity in the quality, gassy E&P names prior to summer's heat and hurricanes.

If we get a 100 Bcf number today and average withdrawals for the remainder of March we're likely to bottom out with more than 1,400 Bcf in storage. Well above the five year average of 1,232 Bcf but well below last year's 1,692 Bcf number.

OPEC Watch: The ministers begin the first of a two day meeting today in Vienna. I'll update in the comments section.

Gasoline Picture Show. We received little help from yesterday's inventory report in hobbling the 3 legged stool upon which high gasoline prices rest. Utilization continued to slide although according to the companies that's about to reverse, imports ticked up but only just, and demand ebbed but also only just. Hey, if demand and imports move in the same direction next week (down and up respectively) the stool should start to wobble a bit under the weight of $0.40 of gain in RBOB prices since mid January.

Extended maintenance and snafus are keeping utilization low

gaso-utilization-031407.JPG

Imports may be trending lower but this is after running high to historic norms.

gaso-imports-031407.JPG

From EIA's comments yesterday: gasoline imports have also dropped, falling below 1 million barrels per day the last six weeks after averaging 1.15 million barrels per day in 2006. After receiving a lot of gasoline imports earlier in the season, gasoline stocks are relatively low in Europe and refinery maintenance has begun there as well, just as other parts of the world see an increasing need for gasoline. As a result, the arbitrage for shipping marginal gasoline supplies from Europe to the United States diminished considerably, further limiting imports.

Demand actually fell slightly from a week ago but remains elevated for this time of year.

gaso-demand-031407.JPG

Two charts straight from the EIA's weekly are very telling of just how much of a rise we've seen in gasoline prices this season:

gaso-driving-season-run-up-031407.JPG

gaso-jan-to-mid-march-031407.JPG

Wow...With Price Action Like That Inventories Must Be Very Low. No, they're still above average. So what do you think happens if we've gotten the pre driving season rally already out of the way and refineries start coming back into service?

gaso-storage-031407.JPG

Holdings Watch: I took a little TSO put position yesterday - May 90s puts between $3.40 and $3.60 (average is close to the top unfortunately).

Odds & Ends

STEO Watch: If you don't read the EIA's short term energy outlook you should. Here's the link. The price estimates move around as oil and gas prices do and I've found them to be utterly worthless beyond the next few weeks in predicting price. No offense meant but they stick pretty close to current prices with an eye towards what's happened in terms of direction over the past month. However, the data they keep up with is phenomenal.
Briefly, they expect the OPEC surplus to increase in 2007 and 2008 to 2.0 mm bopd from 2006 levels of 1.3 mm bopd yet they expect oil prices to be up relative to last year on higher demand in 2007 and again in 2008. This is inspite of the fact that early year demand came in lower than expected and that non-Opec supply is growing faster than expected (Caspian Sea, Russia, Africa, Brazil, and even the United States). That's a head scratcher. Growth in demand is expected to slow as well. Hmmm.

And here's their thoughts on gasoline inventories:

Total motor gasoline stocks are projected to be at the upper end of the normal range throughout the forecast period. Nevertheless, continued demand growth pushes inventories (measured in terms of days‐of‐supply) steadily lower, setting the stage for an increase in gasoline margins and retail prices. Comment: Who do these guys work for? I mean, steadily lower? That's the red line in the last graph. Does that look steadily lower, especially given the season? These are smart guys but sometimes you've got to stop contradicting yourself or trying to make the data fit the scenario and just say things don't make sense, are irrational, overblown etc, etc.

Analyst Watch: I'll update in comments.
END Watch: Back down to $2.11 after 2 days of very little volume. To me this one is fire and forget (or at least check infrequently). Either way I hate to be that guy at the poker table who only points to his recent gambles when they've immediately paid off.

29 Responses to “Thursday – OPEC Meeting & Natural Gas Storage”

  1. 1
    nltd Says:

    Ok Z, I got this part done. What else?

    N

  2. 2
    nltd Says:

    We gonna be able to change our password?

    I’ll never remember that…

    N

  3. 3
    zman Says:

    whoa…did you need a password to comment?

  4. 4
    zman Says:

    N – it sent you like 10 rss notices?

  5. 5
    nltd Says:

    Z

    Yes. To reply had to be logged in. To log in had to have password. To get password had to register and receive password in email.

    RSS feed:

    I clicked on “Subscribe in a reader” (with orange logo) above left. It popped up a new screen in this same window. There I clicked on “View Feed XML” with same orange logo (without choosing anything else that I remember from that screen, kinda scared to as I’m in murky water here as far as understanding what I’m up to, as I’m no techie). I believe that resulted in getting what I cut, pasted, mailed to you. I can try that again or whatever you need. By memory that’s the best I can do.

    N

  6. 6
    zman Says:

    N – I think that’s bit onerous (sp?)

    Thanks a lot. I’ll see if I can get rid of that password stuff. Don’t think we need that.

    As far as RSS, it just serves whereever you want quickly. You can click on my yahoo or google home page and have them sent there if you like.

    Anything else bother you or any suggestions please let me know.

  7. 7
    nltd Says:

    Z

    zman’s Energy Brain ~ oil, gas, stocks, etc… is is proudly powered by WordPress
    Navigation Theme by GPS Gazette

    Just noticed this immediately below this box. When you get moved, do you still want to be:

    “proudly powered by WordPress
    Navigation Theme”???

    No longer on WordPress here, right?
    N

  8. 8
    zman Says:

    thanks but that’s ok. it refers to the guy who actually came up with the look and feel of the site and he designs for wordpress. I gotta leave that it.

    Nice catch though…you must really want that T-shirt ;->

  9. 9
    nltd Says:

    I just did RSS thing again. I described correctly how I did before, and yes got all of the posts you’ve made here so far. It doesn’t work like the subscribe thing on PSW, there it saves subscription on favorites center under feeds, and it only feeds the comments, and only from the post you subscribed from. (I subscribe over there each morning when he gets the day’s post up, from the fine print [blue I think] at the top of the comments)

    Here, when I did this, did not save to favorites, showed exactly what I emailed to you. When I click on comments button on that result, it brings me back to this page at the bottom of your post, right where we are now.

  10. 10
    nltd Says:

    And hey tshirt great if you want, but just want to help. You’re so patient with us and have taught me much at no charge…I’m not just giving lip service when I say I appreciate it.

    N

  11. 11
    zman Says:

    My pleasure. I sure if you followed my picks you’ve taken a few lumps along the way as well ;-<

  12. 12
    zman Says:

    Thanks for the RSS feedback. I’ve been testing the yahoo and google feeds and they work pretty well. You get 3 or 4 of the last posts, not the comments on your my yahoo or google home pages.

    I take it you don’t want to get an update everytime there’s a comment do you?

  13. 13
    nltd Says:

    Sorry to be so tech illiterate Z. Only experience I have with RSS is that described here…wouldn’t necessarily not want update with each comment if it doesn’t goof everything else up. Having to refresh is a pain, but not as big a pain as having everything slowly grind to a near standstill like yesterday on PSW chat…

    I don’t know how to get an update every time there’s a comment. Might be great if not TOO intrusive when busy…

    N

  14. 14
    zman Says:

    ok thanks, there’s a comment rss I can add that should hit your homepage (or whereever you want it) with each comment.

    Are you RSS being sent to your home page now?

  15. 15
    nltd Says:

    Z

    You dreamer! I’m such an antique, I don’t HAVE a home page. When using PSW RSS feed, I just have a tab open for it on the same window as I have a tab for your blog and PSW. I set a timer for 10 minutes, and run through and refresh and read at each place. If I read something on RSS that I wish to comment on, go to PSW tab and comment. Your site not so busy, have never messed with feed before. Is your own home page a big advantage somehow?

    N

  16. 16
    nltd Says:

    Nice thing about feed the way I use it for PSW, it has a search box. You type Phil or Zman or stock symbol (keyword of whatever you may remember from earlier comment), and it finds all associated comments right away. That’s really nice for no memory me to check back on stuff…without having to peruse 200-odd comments trying to find it.
    N

  17. 17
    zman Says:

    Ah sorry. I meant the home on your browser. Mine is yahoo.com

    They have a my yahoo tab you can click and then you set it up the way you want it. Stocks, news , movies in your area etc.

    The my yahoo rss on this site simply put zmansenergybrain in as section of that page. It’s instantaneous when a new post arrives.

  18. 18
    nltd Says:

    Z

    Not so nice: the way I use PSW feed, it does not auto-refresh, and if I forget to refresh (for too long a time,or too many comments), some comments are lost, and (I think) NEVER show up on that feed, even if closed out and reopened from favorites later. I do refer to comments on regular PSW page to catch up on those sometimes. I’ll take any suggestion you have to make me more efficient. I know I should have more than one screen, haven’t done that yet…
    N

  19. 19
    zman Says:

    N – first, are you using Firefox as a browser? I guess the new IE has mutiple tabs but firefox does it very efficiently. I have one browser open with 15 tabs on it now. one for oil, one for nat gas, rbob, my old site, my new site, phil’s site, yahoo, etc, etc.

  20. 20
    nltd Says:

    Cool with the Yahoo instantaeous post thing…I have a myYahoo account with portfolio I haven’t used in a while, have to see if I can get in there and try this idea out. Would be great to have one page with feeds from all the blogs. REALLY nice if they could refresh with each comment…although I found yesterday with using PSW chat that they would need to be enlargeable (it wasn’t) to see more comments at once. Also need to be able to freeze if you want at the rate comments pour in over there. If I was away few minutes and came back, couldn’t see all from while gone. Then scroll up to read, each new comment slammed you to the bottom. It were a modern day disaster…

    Anything else I can help you with here Z?

    N

  21. 21
    zman Says:

    I think I’m good for a bit. Plenty to work on getting this thing running more smoothly. Thanks for the help. I’ll hit you up later (maybe tomorrow ) for some more follow up. Thanks again.
    Z

  22. 22
    nltd Says:

    Z

    Using IE with multiple tabs. Used Firefox a bit on a friends computer. It’s just a familiarity thing…More comfortable with IE, but if Firefox is better, could switch. I use a couple windows with half-dozen or so tabs each. That way they don’t get so short I can’t read which is which…

    N

  23. 23
    nltd Says:

    OK, Z

    I still have a day job every second Friday, and tomorrow is it. I’ll check in once or twice, but little time to do much. Try to be available Sat some, is that sufficient?

    N

  24. 24
    zman Says:

    N – whatever you can do. You’ve already gone above and beyond.

  25. 25
    zman testing Says:

    test test test

  26. 26
    nltd Says:

    Hey Z

    Sorry, I was away for a while. Dutifully logged off, came back, clicked on “25 comments,” and here I am posting away with no login, no password. Voila, as long as it didn’t somehow remember me from before, we’re all set. Gotta run, it’s gourmet delight tonight with xyl, daughter and grandkids at the Golden Arches. Try to check back later.

    N

  27. 27
    nltd Says:

    Z

    Forgot to say:

    Site looks different (s’pose you knew). Not just Thurs post now when you come in, it’s like old site when you first come in you have to seek comments at bottom of top post. You can miss and end up in yesterday’s (or last week!) Before only Thursday’s showed…
    N

  28. 28
    geothermal heat pump Says:

    geothermal heat pumps prices…

    […]Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Thursday – OPEC Meeting & Natural Gas Storage[…]…

  29. 29
    Loodgieter Noord Holland Says:

    Loodgieter Noord Holland…

    […]Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Thursday – OPEC Meeting & Natural Gas Storage[…]…

Leave a Reply

You must be logged in to post a comment.

Zman’s Energy Brain ~ oil, gas, stocks, etc… is is proudly powered by Wordpress
Navigation Theme by GPS Gazette

s2Member®
Get Adobe Flash player
%d bloggers like this: