20
Jul

Friday – Another Fun Week Bites The Dust

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Oil: Look for a little early bullishness as we close in on records and news that production from (TOT)'s Dalia field offshore Angola was cut in half from normal levels of 220,000 bopd due to pump problems. Production is expected to be back to normal in a day or two but in this bullish market, any spark is a fire. Speaking of sparks and fire Husky's 147,000 bpd Lima Ohio refinery is operating at 25% of capacity following an electrical fire. Crews are assessing damage to an electrical substation prior to determining when the refinery will return to full capacity. Other potentially "bullish" items:

  • Weather Watch: Same as yesterday, a couple of tropical waves moving about in the Atlantic but no serious development yet.
  • Nigeria Watch: Lebanese business was killed in an apparent botched kidnapping attempt.

Natural Gas Inventories Are Now 16% Above The Five Year Average, and Only 3% Below Last Year’s Record Levels.

  • Storage as of July 13, 2007: 2,692 Bcf (updated July 19, 2007).
  • Max storage for this week in history: 2,763 Bcf (2006). At present gas storage is easily at it’s 2nd highest level in history for this date.
  • We are now down 3% (71 Bcf) relative to year ago storage levels. As you can see from the charts below, the YoY deficit has fallen pretty sharply from its early March peak when it stood at a bulging 17%.
  • We are now 16% (374 Bcf) above the 5 year average which includes 2006’s record levels (see third chart below).

Looking Ahead:

Here’s some quick stats for the period running from the middle of July through the end of October (the traditional end of the injection season).

gas-table-071907.jpg

As you can see in the table, average injections from now through the end of the traditionial injection season get us to very comfortable levels of storage. Even the minimum level of injections, which occured last year and is therefore in both the 3 and 10 year scenarios gets us to a quite comfortable level just under 3.3 Tcf which by historic standards is “full”.

The record short interest on the part of the non-commercials will be supportive of prices but apparently only once covering is induced by either sharply lower injections or a storm.

Where we are now:

gas-graphs-071307.jpg

 

Stocks of Interest:

COP Watch: Conoco is considering modifying it's gulf coast to process heavier crude from Canada. Makes a lot of sense when you notice that the more important light oils like Louisiana Light Sweet and Nigerian Bonny Light are already trading over $80/barrel.

(END) - Drills another duster at its Emu prospect. This was said to be riskier than the last dry hole and true to expectations, it was. Dead money until earnings when they could raise production guidance for the year but I'm not counting on it.

(APC) starts production from massive Independence Hub. On time, on budge. This will be a huge plus for Gulf of Mexico volumes which have recently begun to arrest years of falling levels. The world's largest offshore gas producing facility, Independence will ramp towards ultimate capacity of 1 Bcfgpd by year end.

IPO's Of Interest: Will wrap Concho Equity Holdings and SanRidge Energy over the week.

Holdings Watch:

CALLS

  • (HAL) Sold the 4x position in the July $35s for $1.05, up 36%. Could have held out for much better gains by afternoon (would have been a double) but a weird gas number would have wrecked the position. I''ll looking to add August calls here on  any weakness.
  • (EOG) Bought July $75s for a trade at $1.00 as the smallish gas injection report hit. This wasn't as risky as it sounds. Last bid: $1.45. On the PSW site at 10:32 with regard to the 65 Bcf injection I wrote:

right in line with expectations but that’s probably short term bullish. APC, EOG, KWK SWN to rally. Man did they ever.

PUTS: No Action.

Odds & Ends

Analyst Watch: (SPR) several price target increases.

 

 

 

108 Responses to “Friday – Another Fun Week Bites The Dust”

  1. 1
    zman Says:

    HAL on fire again. This time without me. Wow.

    At least I have OII and EOG calls on the books on the books.

  2. 2
    Sambone Says:

    Watch this blob I was watching yesterday, get ripped up.
    http://www.orbit.nesdis.noaa.gov/smcd/opdb/aviation/loops/realtime/atlwv_loope.html

  3. 3
    zman Says:

    S – that’s a pretty cool shot!

  4. 4
    zman Says:

    A little profit taking going in favorite names.

    Surprised the Nigeria stuff isn’t having a little more pull on crude and RBOB this morning but of course it’s early.

    Natural gas not happy with Sambone’s picture.

    OII and EOG reversed nice gains this morning and I watching both for add points.

    WNR is also getting a bounce and if it’ll get a little bigger I go in for puts.

    Morning Nicky – thanks re Dalia. That wasn’t around long enough to boost crude today.

  5. 5
    Brian08 Says:

    Z: Re #6…Would you be looking at the HOC AUG 75s as well as the WNR 60s?

  6. 6
    zman Says:

    Brian – yes but that’s pretty risky. Closer to moving on the HOC and as always, scale in. On WNR I’ll wait for another pop up as it already came to flat while I was typing earlier.

  7. 7
    MMarkkk Says:

    I would expect the additional 1 BCF/day from Independence Hub to impact NG prices some as that’s a lot of gas hitting the market. And unlike the unconventional gas wells in the Barnett, et al, this won’t decline at 50-70% the first year.

    Of course, it is susceptable (sp?) to those storms!

    Love the pictures from the weather sat’s. I watch Dr. Neal Frank each evening for his tropics prediction. He ran the Hurricane center for a while and he’s usually pretty good. He’s on vacation this weekend but his last report on Wednesday was ho hum. Things will be heating up in the tropics as we near high school football season (for those of us in Texas; for others, you call it core Hurricane Season!).

  8. 8
    zman Says:

    TSO as well for the August $55 puts.

  9. 9
    zman Says:

    N – they killed a lebanese businessman in a failed kidnap attempt.

  10. 10
    Brian08 Says:

    Z yeah I definitely wouldn’t want to go both barrels into those WNR 60s as they had such a huge pop yesterday, no sense in chasing all the way up at $5…

  11. 11
    zman Says:

    Marrk — agreed. They got that thing online and if not mistaken a little earlier than year ago estimates. That’s a big boon for local players who can tie in but it should be factored into this market.

    If you’re like me and failed to dump the SWN puts when profitable, you may be getting a 2nd chance soon.

  12. 12
    zman Says:

    TRADE: In TSO August $55 puts @ $3.

  13. 13
    codydog Says:

    z–with CAT tanking, do you follow others, like CMI who supplies stuff?

  14. 14
    codydog Says:

    SLB on call says they have $2.1 bln of net debt as of 6/1. They have bought back a total of 20.9 mln shares out of a 40 mln share buy back program at an avg price of $62.90. SLB says lower nat gas prices are weighing on recovery in Canada market. Co remains convinced that the international market will continue to increase. Co says they have some pricing leverage for contracts in 2008 for seismic pricing. Co is not concerned by any patent claims made by competitors. Analyst asks how SLB performed better in N. America than its peers (co said they are not as affected by generic nat gas prices as much; co says they are bringing technology to nat gas market that improves efficiency). SLB on call says they don’t know if Canada market will turn up this year or next (seems like they are moving away from Q1 expectations for sooner Canadian turnaround). Co says they will be amazed if margins did not come in a little more b/c of Canada based on their pressure pumping unit. Co says they don’t think they took market share in N. America. SLB says they are very happy in Venezuela w/ PDVSA relationship and will participate in new deals if possible. Co thinks 2nd half seismic will be better than first half. Co does not see overcapacity in other areas outside of pressure pumping

  15. 15
    zman Says:

    Cody – great info. I had some technical issues this morning and hadn’t gotten to them yet but for anyone out there contemplating a short on the OIH know that I am not. Pieces of it sure but I think it goes higher.

    Before my trip I with it at 170 I said it goes to 180 by the time I get back. It did, not because I be smart. It did b/c business is so strong aside from some land drilling.

    SWN getting crocked.

  16. 16
    zman Says:

    TRADE: WNR August $55 puts.

  17. 17
    codydog Says:

    hightower out saying pullbacks are buying opps………neg on NG due to new pipeline opening which is int eh wsj today and no bad weather, sept-nov higher than normal temps

  18. 18
    zman Says:

    when have pullbacks not been buying opps? lol.

  19. 19
    Popeye Says:

    SLB 2nd Q profit up 47%!

  20. 20
    MMarkkk Says:

    Z – I bailed on them yesterday. between the two sets of trades I think I treaded water…better than drowning I guess. A couple of COP put trades made me some money although I got greedy and ended up having to sell a couple of them yesterday at a loss. Could have sold them at $4.30 but waited and ended up getting $2.30 for them. as the old saying goes…pigs get slaughtered!

    NFX calls earlier made lots of moolah; will look for some add’l opportunities with NFX. But at this point, its going to be all about the weather, or lack of same. Here in H’town, we’re on our 1 millionth day in a row with heavy rain. Ugghhhhh.

  21. 21
    codydog Says:

    Valero (VLO) reports malfunction at Port Arthur, Texas plant

  22. 22
    zman Says:

    Cody – it’s like clockwork.

    WNR and TSO looking weaker.

  23. 23
    codydog Says:

    BQI Oilsands Quest: LBO chatter making the rounds again

  24. 24
    zman Says:

    Still like the NBR short here.

  25. 25
    Brian08 Says:

    Z would you scale in any more to those NBR AUG 32.50s or let them sit for now? To my noobish eyes that chart looks so good for a run down to $30 (or a little lower) if they can ever hold below that stinkin’ 200 DMA…

  26. 26
    zman Says:

    Brian 08. I have not added but only b/c I was distracted at the time. May do a little bidding there now. Just don’t get too much as they’ve got earnings 7/24 and you never know. Estimates have been coming down. Maybe they beat, maybe they miss – they have a history of doing both. lol.

    Interesting to see VLO getting chewed on so much given that it’s a much better company by far than the other indie refiners save TSOl. Still a better one, just not a much better one in that case.

    Things look like they’re settling down a bit. July trades, if any should be gotten rid of very soon. Don’t get pinned!!!

  27. 27
    codydog Says:

    Sep gas cracks trading off 66 cents to $14.03

  28. 28
    Brian08 Says:

    Z knowing my luck if I scale in another 1/2 they’ll beat and I’ll bring everybody down with me!! I’ll keep a close eye out…

  29. 29
    zman Says:

    Nicky – got any new levels for us?

  30. 30
    scoop006 Says:

    Z- Cramer sold his remaining position in HAL and said he does not expect a good report from them on Monday.

  31. 31
    codydog Says:

    z–any view if talking heads will roll Poole’s comments about slowing consumer spoending into rbob mkt?

  32. 32
    zman Says:

    Thanks Scoop – He said they sucked two days before they announced the additional $2B buyback at $34. I’m glad I didn’t listen him then as apparently he was 12th man on the deal team on that one!

    As to saying this today did he fess up to having completely blown his call as the stock has now broken out of the trading range which he disparaged it for being in.

    He said he didn’t care that is was cheap and for him to say they’ll miss Monday is pretty easy since he’s got a 50/50 chance of being right and no one will hold him accountable if he’s wrong. CNBC is a joke.

  33. 33
    zman Says:

    Cody – didn’t you hear, food and energy don’t count b/c they’re too volatile!!! Gotta love the logic there. I think RBOB comes in on the fundamentals alone but storms can and will delay/fragment the decline.

  34. 34
    scoop006 Says:

    Z He referrenced SLB conf. call. He also declared victory with a 20% profit.

  35. 35
    zman Says:

    Scoop – what a guy.

    TSO getting tossed
    FTO getting flogged
    WNR avoiding the whip
    VLO/SUN getting downright beaten to pulp.

    SWN down heartily
    NRB drifting lower.

  36. 36
    Nicky Says:

    Distillates – bumping up against resistance at the 21200 area and not being able to break through. Interesting as this is the underside of a previously broken trendline.
    10 dma is at 209.49. Major support at 20530 and 20400.

  37. 37
    scoop006 Says:

    Z RE # 41 any new positions?

  38. 38
    Nicky Says:

    WTI – tedious low volume day. Next upside target is 77.45. 20 dma is at 72.19.

    I have an uptrend line coming in just above 75.00. May set the alarm bells going if it falls through that.

  39. 39
    zman Says:

    Thinking of selling my SWN puts.

    Thinking about adding EOG to my now crushed position. That’s options. Missed selling for a 70% gain this morning with this turn and now down that much. :-(. Added the TSO and WNR puts this am, see TRADE posts. I think VLO is probably over done but I’m not going long yet either. FTO is sort of tempting but I bet it gets pinned and I’m short enough there for now.

  40. 40
    jimbo Says:

    Quest Resources (QRCP) is running. Probably due to IPO to switch to MLP. This pony is in Carl Ichan’s stable. Williams Bros. announces $1B buyback and plans to switch to MLP.

  41. 41
    zman Says:

    Did world peace just break out or is this just opex selling.

  42. 42
    Nicky Says:

    RBOB – Again 22000 held this morning and it looks weak and leading the pack to me.

    Looking for a move below 21589 and then 20750. Target after that will be 19898 which would be 50% retracement of this years rally.

  43. 43
    Lije Says:

    Z – what source are you using on the Natural Gas storage numbers

  44. 44
    p.wilmington Says:

    The only problem with my TSO short is trying to figure out where support is. Since, it has had this until now inexorable slope upwards, there is no real line that it has been bouncing off of. The only support would seem to be round numbers and just because they are round – 50 perhaps.

    Z- I hope I am on your list.

  45. 45
    zman Says:

    eia.doe.gov

    natural gas section. you can download the entire history into a spreadsheet. then it’s fun with numbers.

  46. 46
    Nicky Says:

    Nat gas – support is at 6488 and 6425. A move below Wednesdays 6226 low would find support at 5740. Sitting on fairly major support here at 6570.

  47. 47
    Nicky Says:

    FWIW – Nat gas – the big change in the year over year picture comes next week when last weeks date adjusted injection was a paltry 2 bcf. We will almost certainly overtake last years inventory levels next Thursday.

  48. 48
    zman Says:

    P – I hear ya. I said $50 a couple of days ago and I really think so. You’re definitely on the list. An email will go out this weekend with further instruction with a link to a site to reserve your spot. Looks like Sept 1 is roll out for going private in conjunction with taking this site into the fold at Philstockworld.com. The letter will give all the details on prices, terms, discounts for current PSW members etc…Thanks for your interest.

    Even WNR and FTO participating.

    I may take that EOG bet (and that’s exactly what it is on the July 75 calls in a minute) this doesn’t count as its pure gamble and everyone else just ignore this paragraph. I don’t do this and as many of you know my short game (timewise) is spotty.

  49. 49
    zman Says:

    Nicky- if we don’t we’ll come very close. The weather was hottest yet this week but again, very close as the delta is 71 to last year now. And might I add great point and something I should have touched in last nights post but alas, I was sleepy.

  50. 50
    zman Says:

    TRADE: EOG 75 CALLS taken at $0.35- Don’t try this at home!

  51. 51
    zman Says:

    NFX is overdone in my opinion.

    VLO/TSO still getting beaten

    USO trying to hold up. Nicky, do you think the weakness is the reaction to the sort of headfake at Dalia, “I’m down, wait, no production is back up” ?

  52. 52
    Brian08 Says:

    Z you are a true baller with that EOG trade!!! Hope it hits at least $0.70 for you…

  53. 53
    codydog Says:

    z–any view on selling the HK aug 15 call at 1.00 as i own HK anyways?

  54. 54
    Nicky Says:

    Z – at the moment I am not seeing a great deal of weakness but the lack of volume maybe an indicator of peoples reluctance to participate at these lofty levels. I suspect options expiry is going to play a part today.

  55. 55
    MMarkkk Says:

    Thinking about some Aug Calls in NFX. Too good a company to be beat about the head like that. Will evaluate over lunch and pull trigger…question is which gun…big gun or small one.

  56. 56
    MMarkkk Says:

    As usual, pulled trigger on SWN too early. I bailed out yesterday as I didn’t think I’d have time to watch it today. Lost a $1 per. Dangblasted!

  57. 57
    zman Says:

    M- You know better than I not to beat yourself up about it. 1st trade in the next 1000.

    TRADE: EOG out at $0.55 on all. Pretty much a wash with original piece taken for a buck yesterday as I tripled down but saved me from the trashing I would have taken!

  58. 58
    codydog Says:

    z–did you see the news story

    http://wcbstv.com/topstories/local_story_201113005.html

  59. 59
    zman Says:

    That could be bad for oil and people won’t want to get on plans. Damn that makes my skin crawl.

  60. 60
    codydog Says:

    z–I think its bearish for stocks, bullish oil. although no one will fly, unlike the movies, you dont just make those weapons in the basement and learn how to use them . You need training to use them and real industrial know how to manufacture

  61. 61
    zman Says:

    Re NFX – they’ve had a good run, especially for them. I’ll buy in a little lower but you’re right, they shouldn’t get beat about this much, just think it’s profit taking. That said, I may take a taste this afternoon. They have earnings on 7/26 and if I know Campbell, their IR guy, he won’t let the analysts be ahead of the mark three quarters in a row! More importantly, they get to talk about all the fun they’re going to have making something out of Stone’s Rockies stuff which if I know Stone had been underexploited. Plus there’s probably going to be a big fat @NFX publication full of good news from the Woodford Shale. Don’t think they’ll up the average EURs there again but they certainly won’t come down and they can probably give some more news on monster IPs they’re getting. Ok, just talked myself into a new position.

    USO screaming higher all of sudden.

    That EOG will play.

  62. 62
    zman Says:

    Cody – if you’ve been watching the nightly news of late and all the problems with govt contractors…it’s probably US issue.

  63. 63
    zman Says:

    SUBSCRIPTION NOTICE: If you haven’t emailed me or registered with this site and have an interest in the discount rate this is your last time to get the offer. There are 215 people who get RSS or email delivery and about 75% of them have expressed an interest in subscribing so far. The rest of you will not be eligible for the discount and I may close the site to new subs at that point because I do have a life and can’t service too many people until I get some back up with site mechanics which may not be until November. I know it sounds like a sales tactic but I don’t want this to become a yahoo message board of any sort. Everyone on here now gets my personal attention (good or bad as that might be) and I want to keep it that way. We’ve got a nice, very informed and helpful community started here and I’m very happy about it. My apologies for not getting the two IPO reviews out today that I promised to. They’ll be out on Sunday come hell or high water. Thanks for your attention. That is all

  64. 64
    codydog Says:

    z–haha, even contractors wouldnt leave a shoulder operated launcher in someone’s yard….I mean, it has to be some recycle value right?

  65. 65
    Nicky Says:

    Same old, same old! Daily pattern playing out yet again. Mid day weakness and then strong into the close.

  66. 66
    zman Says:

    Cody – hahaha. I just meant they sold it to some poor, brainwashed smuck. He probably got spooked by something and didn’t want to be seen running down a parkway with a bazooka on his shoulder. Kind of conspicuous.

  67. 67
    zman Says:

    Nicky – agreed but stocks aren’t buying into it just yet. E&P and refiners out to lunch on this rally.

  68. 68
    Sambone Says:

    Market – Wait til 3:30 and then we’ll see. Put my hedges back on today. I think next week will be down, but I’ve been wrong so far.

  69. 69
    Sambone Says:

    Here’s the one to watch over the weekend. If it holds up, it will be 97L. Shear going down along it’s path. Nothing else to watch at this point.
    http://www.ssd.noaa.gov/met8/eatl/loop-ir2.html

  70. 70
    Sambone Says:

    Watch the roll in the middle. It’s moving fast and has spin.
    http://www.ssd.noaa.gov/met8/eatl/loop-rb.html

  71. 71
    codydog Says:

    z–buddy of mine just pointed out that near newark airport where that rocket was found are large oil refiners, and storage tanks which are accessible from i95

  72. 72
    zman Says:

    WNR up $0.50 but TSO at LOD. hmmmm.

  73. 73
    Brian08 Says:

    Re #77…The Jersey Turnpike (I95 in NJ) is refiner alley from about exit 11 (rahway) all the way to exit 14 (newark airport)…Refiners as far as the eye can see…If you watch The Sorpranos intro you’ll see the refiners in their opening, that is along I95…

  74. 74
    Brian08 Says:

    Z very interesting…TSO getting hammered, HOC was getting hammered (making a small comeback) and WNR rallying…Interesting…Hoping that HOC rallys so I can buy some AUG 75s…

  75. 75
    zman Says:

    TRADE: out of SWN puts $1.00 to $1.05. Slight loss.

  76. 76
    zman Says:

    Brian – re Sopranos – yep, he passes a big SUN sign. Always makes me think of their lousy margins. SUN, not the Sopranos

  77. 77
    zman Says:

    Taking a little August WNR up here. USO trying to roll over again and it’s acting like it’s god’s gift after a string of downgrades and still a huge valuation to peers.

  78. 78
    zman Says:

    Cancel that thought. Spreads have been ripped open. That’s nuts.

  79. 79
    Brian08 Says:

    Yeah 2.25 to bid and 2.80 on the ask…Ask has come down a little, but jeez that was nuts…

    Any explanation on this one? The whole sector is rolling over and WNR is hitting close to a day high…Interesting yet again…

  80. 80
    zman Says:

    Best guess is a takeout rumor being floated by a hedge fund that’s long and scared. Logistically, that makes some sense if you could get it done (with the Feds) and (your shareholders who will be in for some steep dilution). Most likely you can’t get it by the feds for someone like TSO and I don’t think VLO would want them. Especially not at this level. Probably just bunk…like those spreads.

  81. 81
    Brian08 Says:

    I hear you Z…I’ve only been trading options for a short time, never seen a 30% spread…Shenannigans sound like the only logical explanation as there really doesn’t seem to be a reason this guy should be up 1.5%…

  82. 82
    zman Says:

    TRADE: FTO August $45 puts. Much tastier spread although its FTO so it only goes down 3 or 4 days out of the month.

    USO sinking like a stone now.

  83. 83
    codydog Says:

    brian–wide spreads allow a dealer to hit trailing stops ,eg, he drops a bid way back and the low ball print allows him to trigger someone’s trailing stop

  84. 84
    Nicky Says:

    #71 – scrap that!

  85. 85
    Brian08 Says:

    Aaaaaaaaaaaah the ol’ fakeout Cody…Tricky, tricky…It’s like a daily game of cards!!

  86. 86
    zman Says:

    Thanks Nicky!

  87. 87
    zman Says:

    WTI – one…last…stand.

  88. 88
    Brian08 Says:

    Interesting that WNR is up $1+ and nobody is coming to offer the AUG 55 PUTS at better than $2.55…Does this mean that people aren’t exactly sold on this “rally”?

  89. 89
    codydog Says:

    the record NG short hasnt gone away, so whats really changed?

  90. 90
    zman Says:

    Cody – I’m sure it’s not gone but it may have deteriorated a little. We’ll see in an hour.

  91. 91
    codydog Says:

    z–did you see the buying volume at 2.10Pm of approx 800,000+ shares in CHK ?

  92. 92
    scoop006 Says:

    Z Any opinion on PDSAX

  93. 93
    zman Says:

    PDS – nothing really informed except that it falls into line with my thoughts on land drillers with exposure to canada. chart looks like crap,

    CHK – I do now. Fund buying no doubt. I’m long there but I’m with Nicky on very near term gas and will pick up some next week on weakness.

  94. 94
    MMarkkk Says:

    took some early small positions in NFX Aug calls. fishing a bit, looking for some strenghth via earnings

  95. 95
    zman Says:

    Here ya M. Waiting on Monday myself given pinning action through close and Nicki’s thoughts on gas for Monday. Probably smarter to get a little now but I’m just not feeling it…despite everything I said in 67. GLTY.

  96. 96
    zman Says:

    Nicky – that’s too cryptic for this late in the week.lol. you mean the opportunity to buy nat gas cheap?

  97. 97
    zman Says:

    TRADE: HAL: very rixky but taking a little HAL now that cramer beat it down on the long side for earnings. I don’t generally do earnings plays but it’s very small and the Street may like what they’ve got to say about go forward biz.

  98. 98
    zman Says:

    gas rigs off 4 to 1497, just shy of a 20 something year high.

  99. 99
    Sambone Says:

    3:30, let the games begin.

  100. 100
    Sambone Says:

    Is today a triple witch?

  101. 101
    Brian08 Says:

    Finally WNR starting to weaken…Geez, bout time!

  102. 102
    zman Says:

    UNG getting beat like a red headed step child.

  103. 103
    zman Says:

    WNR = reality check
    HOC / FTO = reality check in waiting

  104. 104
    Brian08 Says:

    HAHAHAHA, great line Z! But I love your thesis on these refiners…Its something that I learned this year in school…Either VLO comes up to be in-line with HOC, WNR, FTO, etc. on a multiple basis or those guys regress back to VLO…Somethin’s gotta give there…

  105. 105
    zman Says:

    net short nat gas position increased slightly…another new record.

  106. 106
    zman Says:

    Beer-Thirty achieved! See you this weekend or if not, have a great one!

  107. 107
    John G Says:

    Check out RRC – Potential buyout candidate, most likely by CHK. Well run company – HUGE NG reserves – low cost provider of NG mostly in Appalachian Mountains – currently STILL under the radar.

  108. 108
    John G Says:

    I have decent comprehension on the NG plays but COMPLETELY lost on the refiners. Can someone explain relationship between crude prices and refining stocks. It’s counterintuitive to me to see refinres rally on crude price increases. I look at crude as a “cost of goods sold” item…the higher the price the lower the profit. Obviously I’m wrong.
    Also interested in any shorting opportunity out there…HOC and FTO? Is it valuation that makes them a compelling short or some sort of fundamental reason…or both? tia.

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