14
Sep

Stormy Friday

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Commodity Watch:

  • Crude down $0.50  to about $79.60 early in active trading as OPEC's Secretary General says fundamentals don't support $80 oil (see OPEC Watch below)
  • NG is bucking oil's reversal and is rebounding after successfully holding $6 yesterday, up a whopping $0.30 early this morning to $6.33 pre market (Hello Tropical Storm Ingrid!). This early excitement could turn quickly to disappointment as Ingrid may be short lived due to shear (see below).

In today’s report:

A) Tropics Watch

B) OPEC Watch

C) Review of Yesterday’s Gas Storage Report

D) Changes in Holdings

E) Stocks We Care About Today

F) Odds & Ends including a stock review request on (TXCO)

 

Tropics Watch: Busy Season Approaches.

  • Humberto Watch: Lingering impact at Port Arthur. Three, count 'em three refineries (Valero, Total, Motiva) shut down by electrical outages. Usually it takes a squirrel in a transformer to to accomplish such a feat but this time all it took was the fastest forming hurricane in recorded history. A total of 842,000 barrels of refining capacity remain offline.  This represents 5% of U.S refining capacity.
    • Total's Port Arthur Status - restarting and expect to back to full capacity of 232,000 bopd by September 18.
    • Valero's Port Arthur Status - restarting and expect to back to full capacity of 325,000 bopd by September 17.
    • Motiva (Shell) Status - accessing damage, have not confirmed when the 285,000 bopd site will be back up.
  • Houston Ship Channel Shut / Reopened. Guess it's a good thing those refineries are down. The HSC shutdown Wednesday but was back in business later Thursday. Probably causes yet another large draw in next week's report. 
  • Tropical Storm Ingrid. Ingrid, a weak tropical storm, formed just to the east of the lesser Antilles. Here's the track. Here's the IR Loop. It's a compact storm but it's headed into an area of exceptionally dry air and wind shear. If it survives that (and I think it will) and reaches the warm waters of the Caribbean then we may have something to worry about. This may or may not support oil product and NG prices into the close today. 

OPEC Watch: OPEC is talking down oil this morning with these quotes:

  • fundamentals don't support $80 oil,
  • $80 oil isn't a permanent factor,
  • OPEC doesn't like a high oil price (whatever dude, you run a Cartel!),
  • and Angola will have a production quota by Jan.1. This last one kind of runs contrary to the whole, "prices are too high" tone of the Secretary Generals ramblings as Angola is the fastest growing emerging oil country on the planet and you say you're gong to reign that growth in?
  • OPEC sees world oil consumption growth unchanged from prior forecast at 1.6% in 2008.
  • sees slight reduction to growth forecast for Non-Opec supplies
  • "downside risks to world economic growth have risen considerably"
  • and my personal favorite, they raised production in "a clear demonstrations of the Organization's concern about the continued health of the world economy." It's good to know that this openly price fixing group is looking out for us all.

Huge Watch: Production Envy? Venezuela says the number is 3.2 mm bopd. Dow Jones, Platts, EIA and IEA say it's more like 2.4. OPEC is holding a special meeting to "narrow the discrepancy" between Venezuela's numbers and those of the third party sources. If true, Chavez tumbles in the pecking order from 3rd to 5th in the OPEC 12. Come on Hugo, stop lying, size isn't supposed to matter fella. 

The Worst Run Oil Country On The Planet

venezuela-prod-2.jpg

 

Natural Gas Inventory Report Review: Storage Is FLAT With Year Ago Levels

Week Ended September 7, 2007: 64 Bcf Injection. Consensus Was 61. My number was 50 to 55.

  • Storage as of September 7, 2007: 3,069 Bcf (updated September 13, 2007).
  • Max storage for this week in history: 3,069 Bcf (2006).
  • We are now FLAT with year ago levels, down from 4% four weeks ago.
  • We are now 9.3% (260 Bcf) above the 5 year average which includes 2006's record levels (see third chart below). We were 28% above the five year average back in April and I know we're producing more gas now so you've got to ask yourself if we've seen a little industrial demand creation, either attributable to low prices or increased consumption from ethanol producers. 

Looking Ahead:Still On Track For Record Storage. There are roughly 2 months left in the traditional injection season. The Street is still for the most part modeling peak storage at a record smashing 3.6 Tcf.I think that's a stretch but we're in the shoulder season (that period where both cooling and heat related demand are slack). If go back and look at previous posts you'll note that the projected end of October numbers have been inching lower over the last several weeks.

gas-table-091307.jpg

 

For All the pretty tables and graphs click here.

 

Holdings Watch:  I spent the day yesterday lightening up on September positions into the market's strength and thinking about the coming, almost inevitable retreat in oil prices. 

CALLS

  • (HAL) - exited the second half of my September $35 call position for $1.90, up 111% (first half was sold Wednesday for a 89% gain). Will reposition long in a later strike in the next few days.
  • (VLO) - exited the September $65 calls (had a double helping) for $4.10, up 41% to my average cost of $2.90. Not terrible considering the recently volatility. Still holding the September $67.50s, last bid $2.00 up nicely from my Wednesday post EIA entry of $1.20. I'll be out of this one today.

PUTS

  • (ESV) - bought the October $50s for $1.35. Small entry but rates and utilization seem to be stacking up (pun intended) against them. Last  bid $1.20. While demand for their rigs continues to show signs of weakening they are subject to the occasional takeout rumor which may support the stock more than I'd obviously like and it, like most oil service stocks is exceedingly cheap. I'm counting on further deterioration in earnings estimates to carry it lower however. Or in other words, it's cheap for a reason.

Stocks We Care About Today:

  • (PBR) signs strategic deal with Norway's Statoil covering exploration and biofuel development. Statoil gets in bed with the undisputed leader in ethanol production. PBR gains a strong partner for E&P work in both Brazil and abroad.
  • (OII) - chartered a multi-service subsea support vessel for five years beginning in 2008.  The ship will be outfitted with 2 of OII's ROVs and initial be employed for construction, inspection and repair work in the ultra deepwaters of the Gomex. Comment: Financial terms weren't disclosed probably because they will no doubt seem high and these guys don't want the same "choke" reaction the Street gave to GSF/RIG over their record priced newbuild drillship on Tuesday. To me this acquisition aloing with the RIG rig and another pricey drillship announced last night to be built by Daewoo speaks volumes about coming deepwater activty levels and the surrounding construction market. I just can't say enough about how much the activity in the DW is increasingly globally over the next three years. If you've got a kid nearing graduation you might suggest ROV or deepsea diving school as there will be no shortage of demand for those careers any time soon.
  • Drybulk Shippers Watch: I'm pushing this back until I do a little more reading. It's out of my comfortability zone and my interest in primarily in shipping coal to China. With that said the first thing I do is look at recent performance (stellar) and that's troubling, then I look at the day rates. Drybulk rates have been very strong (Capesize, Panamax, Handy's all up). The forward curve is less bright once your reach 1Q08 though due to a combination of weaker global economy expectations and ship construction (more ships = lower rates). Lots of moving pieces in an industry I know only peripherally, especially in front of the Fed next Tuesday and I back off and read some more.

Odds & Ends

Analyst Watch: (BBEP) upped to outperform at Wachovia.(KOG) started at outperform at BMO, (ESLR) picked up as a hold at Jefferies.

(TXCO) - Bottom Line: Not Yet If Ever. I was asked to look at this one yesterday in comments. Is it a bird, a plane, an oil play play, a gas shale play, an oil sands play? Now, I don't mind a bit of play diversification and it makes a lot of sense in larger companies where management has gotten one play type right and is busy transferring expertise and lessons learned to another play. But these guys seem to have a lot of irons in the fire and few shoes on the horse.

  • This company is essentially a conventional oil play in the Maverick Basin, 2 science projects, and an analogue for the Maverick in the Fort Trinidad field in E. Texas:
    • Heavy oil sands play in Texas. Drilled two horizontals and 5 verticals and procuring steam in preparation for SAGD, (steam assisted gravity displacement) - nothing concrete to report yet and
    • A potentially emerging gas shale play (Pearsall) in West Texas near the border with Mexico. Results so faqr of . Partner here is ECA and their acreage is in close proximity to APC interests directly to the South. 
  • Back on August 5th I said I'd watch the headlines on this one and make a judgement. For plays like this virtually no time has passed. Jury is still out; stock is off since then. I will say that alarm bells go off when I see mention of big $ valuations and charts annotated with the date and price of the stock when coverage by a broker was initiated. Just do your job. Do one of thing well and you'll be rewarded. Take a shotgun approach and you may miss all the targets. Again, its early and success in one of these plays could be very rewarding. But right now it's like a biotech with cash flow off an old drug and dreams of new cures.
  • They also have managed to ratchet up debt to over 50% DtTC (acquisition earlier this year) and have attracted a significant interest from the shorties (14% short interest which could actually be a good thing if you can shove good Pearsall results down their throat).

129 Responses to “Stormy Friday”

  1. 1
    zman Says:

    NG up 39 to 6.415. Stormy Friday indeed!

    ESV – low bidder on 900+ day job to PEMEX. Don’t know the price but I’ll bet it’s lower than the rate the rig is getting now in the GOMEX

  2. 2
    Sambone Says:

    Watching 70W, 25N at the moment. No convection. Probably nothing, but low shear and moving into moisture.
    http://www.ssd.noaa.gov/goes/east/carb/loop-rb.html
    Ingrid stalled.

  3. 3
    Sambone Says:

    Crude Lower But Weather Keeps Highs In Sight

    By David Elliott
    Of DOW JONES NEWSWIRES

    LONDON — Crude oil futures eased back from the previous session’s record highs Friday morning in London as speculators sold, but continued concern over the Atlantic hurricane season is expected to limit further losses.

    Traders said another push up through the key psychological resistance of $80 a barrel is possible as buyers take cover ahead of any further Hurricane developments over the weekend

    “It’s going to be a very interesting session,” said a trader at a bank in London. “We’ve got a rally that a technician would tell you is looking a bit tired, but the fundamentals tell you is only bound for higher levels. My advice is to hold onto your hat.”

    At 1125 GMT, the front-month November Brent contract on London’s ICE futures exchange was down 39c at $76.73 a barrel, just shy of the all-time high of $78.40 a barrel.

    The front-month October contract on the New York Mercantile Exchange was trading $0.47 lower at $79.62 a barrel, back from Thursday’s all-time high at $78.77 a barrel.

    ICE’s gasoil contract for October delivery was up $1.50 at $691.25 a metric ton, while Nymex RBOB gasoline for October delivery was down 115 points at 222.10 cents a gallon.

    The market’s heightened sensitivity to Atlantic weather follows the unexpected after-affects of Hurricane Humberto which passed over Texas Thursday.

    Initial predictions suggested Humberto wouldn’t interfere with oil facilities in the region but in the event the storm caused a widespread power outage which led to the closure of three refineries with a total capacity amounting to 842,000 barrels a day.

    Valero Energy Corp. said it expected a restart of its 325,000 barrel-a-day refinery early Friday but the other two producers had yet to give an indication of when they would be back up and running.

    The upshot of Humberto’s unexpected reverberations are that traders are taking a cautious approach to incoming weather disturbances.

    Latest forecasts from the National Hurricane Center placed Tropical Storm Ingrid 805 miles east of the Lesser Antilles in the Caribbean and, although maximum sustained winds are only around 40 miles an hour at present, further strengthening is expected later in the day.

    But it’s still too early to get overly worried about Ingrid.

    “Current calculations are showing no great intensification and a path too northerly to be of a strong and immediate concern,” said Olivier Jakob, head of consultancy Petromatrix in Switzerland.

    Refinery outages are a mixed blessing for crude oil. The resulting cut in gasoline supply and ramp up in gasoline prices offers support to crude, but a closed refinery doesn’t use crude so the resulting drop in crude demand drags crude prices down.

    Of more support to crude is concern over the tightening global fundamental situation in the fourth quarter of 2007 and in 2008, something that has been brought to the fore by recent sharp drawdowns in U.S. crude inventories. This despite the Organization of Petroleum Exporting Countries’ decision to raise output by 500,000 barrels a day.

    A tight supply and demand balance is keeping the fund buyers interested in crude and traders said this sector of the investment community can be attributed for much of the recent rally from below $70 a barrel.

    But funds are also followers of technical indicators and, while these will have been bolstered by Thursday’s rally to a fresh all-time high and close above $80 a barrel, a more significant push higher is needed to prevent a double top being formed at $80.18-$80.20 a barrel. Such a formation is generally viewed as a sign the market has “topped” and is due a correction lower.

    Also of concern is the longer-term demand picture, a factor that again deserves addressing following concerns the U.S. credit market woes may have spread.

    This stems from news U.K. mortgage lender Northern Rock has had recourse to emergency funds and subsequent losses of the European equity markets.

    For now the market remains caught in an uptrend and few are willing to sell.

    “The combination of these extreme weather conditions in the Gulf of Mexico with OPEC’s “modest” increase in output this week, record low product demand cover in the US, the low dollar and continued geopolitical unrest in Nigeria and the Middle East has fueled the recent hike in oil prices,” said James Neale of Citigroup.

    —By David Elliott; Dow Jones Newswires

  4. 4
    sane Says:

    http://money.cnn.com/2007/09/14/news/companies/goldman_alpha_fund/index.htm

    Goldman alpha fund lost 22.7% last month

  5. 5
    zman Says:

    That story leaves out the OPEC statements from this morning and it got the refinery restarts completely wrong.

    Alpha wow. Knew it was bad, but down 37% TTM, ouch. You’d think they were trading options.

    Traders are trying to walk crude back up before the open. HO almost flat now from down over a cent early. Refiners and energy looking to take a hit at the open if indications stay down here.

  6. 6
    zman Says:

    HO rallying into the green now. Oil only down .15 vs .50 off 20 minutes ago.

  7. 7
    zman Says:

    never mind…fickle traders

  8. 8
    Sambone Says:

    Going to be an ugly open. This market is going to be very stormy going into Tuesday, with Tuesday being the big one.

  9. 9
    Sambone Says:

    Treasuries are up, flight to safety.

  10. 10
    Sambone Says:

    VIX up, TRIN up

  11. 11
    zman Says:

    Kilduff permabull on CNBC now, sees major upside due to probability of Cat 5s popping in the Gomex. What a poof

  12. 12
    Denise Says:

    Z-Thank you for the TXCO analysis

  13. 13
    zman Says:

    Kramer says OII no #1 storm play, lol

    Kilduff says big oil, big and mid cap E&P including APA

    CNBC weathergirl adds now is the time refiners start producing more distillate than gasoline. WRONG: U.S. refineries SOMETIMES produce more distillate in winter than summer but they NEVER produce more dist than gasoline.

    Distillate production: 3.8 to 4.2 mm bpd in winter.

    Gasoline production: 8.6 to 9.0 mm bpd

  14. 14
    zman Says:

    Denise – not sure I was much help on that one but you’re welcome.

  15. 15
    zman Says:

    NFX back up to 46
    CHK back up to 35

  16. 16
    BigJim Says:

    Zmsn:

    I saw the same CNBC oil interviews. Just can’t help to believe they are encouraging these stocks to eventually sell them. Just not comfotrable with all the bullishness. I do believe lots of fund managers are into energy. So they will come out slowly at some point.
    Thoughts from anyone is appreciated.

  17. 17
    Sambone Says:

    Big Jim – The “Crowd” doesn’t exit slowly.

  18. 18
    zman Says:

    BigJim,

    Some of their points were valid but the unmitigated gall of Kilduff to lay higher prices on nat gas over storm fear is just flooring and frankly irresponsible.

    I’m happy with gas around $6 but I don’t see anything but short lived spikes from storms unless there’s damage. Think we’ll be 7-7.50 average gas over the winter with higher spikes from time to time.

    The problem with CNBCs format are multifold:
    1)they don’t have enough time,
    2) to get attention they are forced to make rash irresponsible “holy crap” type statements (at least most of the guest they go for are that way…it’s entertainment, make no mistake)
    3) the people behind the desk don’t know the right questions to ask and are easily misled and are emotional.
    4) guest talk up their order book as you suggested.

    I’m not convinced there will be or should be an exodus from energy. Valuations are very reasonable. Long term fundamentals are solid, more in some segments than others but in general we’re in a low debt, high cash flow environment with demand that slowly creeps higher year after year.

  19. 19
    rammastr Says:

    ZMAN – RIG & others getting knocked around. Is this still a hangover from earlier this week?

  20. 20
    BigJim Says:

    Samebone – That is true.

  21. 21
    zman Says:

    RIG and DO recovering off lows …think it’s just a little profit taking …broker notes out this morning and yesterday say “oh, we get it now.” regarding the newbuild drill ship.

    TRADE: Out VLO 67.50s at $2.70 (up 125%) in 48 hours.

  22. 22
    Nicky Says:

    Morning all. Agree with your comments about Kilduff just being plain irresponsible Z. What are they going to find to ramp this with in a month when hurricane season is done? We have the mother of all hurricanes in the shape of Katrina into the Gulf and massive damage done and we saw this massive hyping crap before only to watch it plunge straight after. A poxy little tropical storm and some flooding from Umberto and they tell us we are in for Code 5’s??? Frankly its BS and makes me mad.
    Out of interest Z what makes you think Ingrid will survive the shear etc? Looks like it may well head too far north to present much problem although of course far too early to say. But it is also too early to say it is going to be a major problem. Rant over!

  23. 23
    Nicky Says:

    I also think if we only get a .25 cut next week the energy market will tank. In fact whatever happens next week the energy market is going to sell off!

    For once I agreed with my friend PF this morning who said this market could be in major trouble early next week if Ingrid comes to nothing.

  24. 24
    zman Says:

    Ingrid…just a feeling…have been watching the track for a day and it was few knots higher than they expected it would be when I wrote that. That and the amazing ability of two clouds to get together and form storms right now. I figure even if gets torn up it could still reform as it heads west.

    I think Ingrid is 5 days out from knowing much and you and your buddy Flynn are right if Ingrid tanks. When you say energy market, you’re talking the commodities, not the stocks, right?

    Gas is seeing more short covering and that’s driving these spiky up days. It’s what I’ve been harping on for months.

  25. 25
    zman Says:

    NFX moved is pie in the face to goldie sacks

  26. 26
    zman Says:

    Re irresponsible. I know I said that but I really think there is a lot of element 4) talking your book involved too.

    It’s a great stock, buy it til your head explodes. In fact you can have my shares. Here take them. No your head explodes.

  27. 27
    zman Says:

    broader leading energy lower

  28. 28
    TTupp Says:

    z is the rate cut decision tuesday?

  29. 29
    zman Says:

    yes

  30. 30
    TTupp Says:

    if we only get 25bpts there will be some negative consequences for the broad market correct?

  31. 31
    Sambone Says:

    N – I agree on .25 cut. Ben is under political/market pressure to cut. I think he will cut twice more (.25) and then end it, because it is very rare that the Fed messes with Fed funds during an election year. I don’t think he should for two reasons 1) Inflation 2)Rate cuts is his only Ace he has, and I believe we may have another Long term Capital lurking out there. Nobody knows who has what in this paper market.

  32. 32
    zman Says:

    I’ll leave that to those more in tune with the broad market. Last monday I thought we had gone from 50 bps to 0 so I really have no idea what to expect. I am lightening my Septembers in prep for nasty weather though.

  33. 33
    Sambone Says:

    In regards to the Talking heads on CNBC, I don’t watch it. It’s like Cramer, Entertainment

  34. 34
    TTupp Says:

    anyone know what the fed fund futures are pricing in probability-wise?

  35. 35
    rammastr Says:

    ZMAN – we all think it’s going to be mayhem next week. Any thoughts to playing the weakness besides ESV? Cramer does entertain my 4 month boy!

  36. 36
    rammastr Says:

    NICKY – it’s time for where are we now. Last time out we could see around 1496 on the S&P and then run to 1496 and possibly roll over. What are your thoughts?

  37. 37
    rammastr Says:

    Sorry 1471 first then 1496.

  38. 38
    zman Says:

    Q – PTR at 148!

  39. 39
    rammastr Says:

    There seems to be a run on Northern Rock Bank in England. Subprime stuff.

  40. 40
    QUARRYMAN Says:

    Hi Z,

    Did you take a glance at WLT?

    I share Nicky’s concern in Post #23, also.

    “Keep an eye on that highwall, boy!”–SAFETY PAYS.

  41. 41
    Sambone Says:

    Ram – if N and Z are correct on energy, look at DCR.

  42. 42
    QUARRYMAN Says:

    Post 39.

    Yeh, well I’m out too soon!

    Is this a good mo. trade today?

  43. 43
    zman Says:

    PTR, not saying that, you had just asked if could reach 147 earlier in the week.

    wlt weekend reading

  44. 44
    TTupp Says:

    Z- re: ptr , every mainlander is putting his/ her 50k there

  45. 45
    zman Says:

    tupp – right and ceo and snp

  46. 46
    drdavis124 Says:

    1-CNBC, I have it on all the time & use it as a ‘CONTRA.INDICATER”. In my 77 years I have never seen more interest by everybody including this blog on Tues’s Call.
    2-Phil’s Prediction==The MKT will TANK & what they do or don’t do will not matter. I am short XLF SPY QQQQ
    Phil

  47. 47
    rammastr Says:

    ZMAN – ESV up, RIG down – go figure. SAM – DCR?

  48. 48
    TTupp Says:

    how does this guy get minus 1m b/d of gasoline from 350,000 b/d of cruded? lol

    http://www.bloomberg.com/apps/news?pid=20601072&sid=a8WGbWxNukBU&refer=energy

  49. 49
    zman Says:

    ESV early stages of the game yet.

    Deepwater all off today. Will add October or later RIG after Tuesday

    Dr D – it’s something to talk about a on lazy Friday. It may or may not tank but what they do will matter to those trading options.

    NFX /SWN Nice moves, not nice enough for my legacy calls to wake up.

    Gas up 7% = short squeeze.

  50. 50
    zman Says:

    Tupp – I outline the loss at the top of today’s post, close to 850,000 bpd of throughput capacity (not all gasoline) from the three refineries.

    Matt is a smart guy but talk about a perma bull, sheesh. He’s constant telling the Saudis their engineering reports are faulty and way overstated while accusing the US govt of losing track of millions of barrels of oil.

  51. 51
    Sambone Says:

    Ram –
    http://www.etfconnect.com/select/fundpages/etf_funds.asp?MFID=170372

  52. 52
    rammastr Says:

    SAM – cool, thanks.

  53. 53
    TTupp Says:

    Z- ceo & snp?

  54. 54
    zman Says:

    CEO = CNOOC Chinese National Oil Co
    SNP = China Petro and Chem

  55. 55
    TTupp Says:

    nicky- re f1 fine. wholly crap, but Hamilton is still in contention for driver champ, although fernnnnnnnnando will probally take it

  56. 56
    TTupp Says:

    oh yea i meant to type 850k, but thats crude and hes saying gasoline! your right what an alarmist– they even site him as author of all things “peak-oil”

  57. 57
    zman Says:

    swn, nfx, xto, kwk – running hard on up gas. While I don’t trust up gas I’d add that they all are discounting much lower long term gas than they should be or than the 12 -24 month strips reflect.

    Goldman should have had more patience with NFX. $0.80 away from a nice breakout.

    APC and COP should move on up a little more here than they have so far, cheap, gassy, incremental production growth coming. CHK same.

  58. 58
    drdavis124 Says:

    Re 40 QUARRYMAN:WLT-Looked at it a number of times. Not exciting; there is better Coal stuff around. My biggest coal holding is YZC. The are a number of good mumber of China Coals. Has anyone done DD on them???

    Phil

  59. 59
    drdavis124 Says:

    Please excuse my many bad TYPO mistakes. Getting senile

    Phil

  60. 60
    zman Says:

    So Nicky, will this make 9 straight days or 10? It’s been suggested I change the URL of my site to http://www.tboonewasright.com

  61. 61
    Nicky Says:

    sorry for delay – moving into a friends house for weekend as ours is being tented for termites! at least i have internet here!

    Z – re #24 yes commodities. Although once broader market turns down again energy stocks will too.

    T -Tupp – F1 – Ferrari had to win somehow! Ridiculous imo as if McClaren had just copied them that would only make them as good and not better. Would love to see Hamilton do it – he is so cool!

    Ram – give me a second…..

  62. 62
    Nicky Says:

    ps – I agree re CNBC as a great contrarian indicator. Still waiting for them to start calling for 100 dollar oil.

    They had super bull Addison Armstrong on and he was super bullish but still said his top was 85 – how disappointing and PF is positively bearish – nightmare! It can’t fall until they become super bulls.

  63. 63
    Nicky Says:

    Ram – move off the lows looks corrective to me which is extremely worrying as we know how big next week is going to me. Upside does not look complete so my best guess is that we complete on Monday or after the announcement Tuesday. Most likely Fib areas for correction to complete are 1498 and 1517.

  64. 64
    Nicky Says:

    watching energy futures closely here – we may have a reversal underway.

  65. 65
    zman Says:

    so, how many days is this. oil at 80.10

  66. 66
    zman Says:

    you mean a reversal to the upside, lol.

  67. 67
    zman Says:

    don’t fight it, drink the coolaid and dream of $85

  68. 68
    Nicky Says:

    watch for a break of 7980 and then 7940

  69. 69
    Nicky Says:

    this would be ten up days right Z? or is it 9?

  70. 70
    Nicky Says:

    can’t we drink something stronger than coolaid as its Friday??

  71. 71
    zman Says:

    beer thirty in 2 hours, 27 minutes.

  72. 72
    Nicky Says:

    sorry just realised you asked me the same question – this would be 10 up days i think.

  73. 73
    zman Says:

    Ibovespa just cresting postive back into positive territory. PBR probably worth a day trade long for you gun slingers.

  74. 74
    zman Says:

    Latest Ingrid, still expected to weaken, and still a little strong than they thought she’d be at this point.

    http://www.wunderground.com/tropical/tracking/na200702_flashtool.html?extraprod=flashtool#a_topad

  75. 75
    zman Says:

    OII getting the same treatment
    RIG/GSF got earlier this week for buying an expensive shiny boat (leasing it in this case).

    Other subsea construction firms continuing to rock along: CAM and FTI. Great long term fundies but man what a run. If Ingrid is a dud or runs up the eastern seaboard the dip in oil and gas will deflate several percent out of each.

  76. 76
    Nicky Says:

    distillates bounces off small uptrend line at 22200, complex starting to feel some pressure methinks

  77. 77
    zman Says:

    can one person confirm receipt of the email blasts this week/today. Reason I ask is not one of you have asked to be removed from the list.

  78. 78
    rammastr Says:

    Thanks NICKY. Gun slingers? PBR looks weak. I wonder if the energy stock MM are also leary about a top.

  79. 79
    zman Says:

    PBR weak over fear of possibly losing that deepwater block next week and the IBOV is off.

  80. 80
    Nicky Says:

    I got Blasts – thank you.

  81. 81
    zman Says:

    Nicky – TY

  82. 82
    Sambone Says:

    Nymex Crude Tops $80 A Barrel Again

    DOW JONES NEWSWIRES
    From MARKET TALK:
    11:55 (Dow Jones) Front-month Oct Nymex crude pops up above $80/bbl after several unsuccessful attempts in morning trading. Oct crude oscillates on either side of $80/bbl after climb to intraday high of $80.07/bbl. A fresh challenge at yesterday’s all-time record of $80.20/bbl could be in store this afternoon, traders say. Market eyeing developments with Tropical Storm Ingrid, weighing chances it’ll develop into a hurricane over the weekend, traders say. Oct crude down 14c at $79.95/bbl. (HL)

  83. 83
    Sambone Says:

    Take me off the Blast

  84. 84
    zman Says:

    FEEDBACK FRIDAY: WE’RE TWO WEEKS IN AND I WANT YOUR FEEDBACK: MORE OF THIS, LESS OF THAT, ETC.

    Please…Not in the comments. If you have thoughts on this please send them to me at zmanalpha@gmail.com. Thanks.

  85. 85
    zman Says:

    Sambone – Done.

  86. 86
    sane Says:

    I like the blasts. Especially the VLO one yesterday 😛

  87. 87
    TTupp Says:

    yea i like the blast / get tham

  88. 88
    rammastr Says:

    BLASTS are good.

  89. 89
    Sambone Says:

    Nicky’s buddy, LOL

    The Energy Report

    Phil Flynn
    September 14, 2007

    Welcome back, to where your bad dreams were your ticket out. Welcome back to that same old place you laughed about. Where the names have all changed since you hung around. Who’d a thought they would lead you, back here where they need you?

    With apologies to John Sebastian just who are we welcoming back? No not Vinnie Barbarino. Who are we excitedly welcoming back are those fabulously fantastic funds and takers of risk! What? Where? Why are we welcoming them back? Very simply because of what they represent and what they say about the outlook for the rest of the economy.

    As oil has soared, the old pits at the Nymex have been full and its clear commodity funds and speculators are back and back in a big way. And what’s more every one is glad to see them. Even those who in the past have been less than thrilled with the role of trading funds in speculators are probably breathing a sigh of relief to see them. Yes even the critics who have tried to blame speculation for driving up the price of oil and even global warming are secretly relived to see those seekers of profit back doing what they do. They are happy to see them back because of what they represent.

    Because through the eye of the speculator we see that wonderful and magical and counter intuitive desire to again take risk. Why do they take that risk? Perhaps because they feel there is profits to be made. Speculators are once again embracing oil. They are coming back with a vengeance doing risky business because they believe that perhaps the worst of the housing crisis is over.

    Let’s face it. Remember a few weeks ago before the credit crunch began, commodity funds had near record long positions in oil. They got out as the mantra became an “aversion to risk” as uncertainty about the outlook of the economy became cloudy. The desire to take risk is a key component to the success of any economy and when the risk takers went away things looked bleak. Fear led to uncertainty and uncertainty may have led companies to pause on hiring and consumers to spend a bit less. A trend if it had continued would have been a scary thing for the economy and the global market speculators. The clearest sign yet that the economy is weathering the sub-prime storm is the return of the market speculators.

    Yesterday hurricane Humberto played havoc with the refineries. The quick development of the storm shut 3 major refineries at a time when gas supplies are still below normal. Today traders will worry about tropical storm Ingrid and fears that she may turn into something to be reckoned with.

    Call Phil Flynn at 800-935-6487 to open your account! The winter heating season is upon us!

    Buy November crude at 7780 – stop 7500.

    Buy November heating oil at 22100 -stop 21700.

    Buy November RBOB at 20000 – stop 19700.

    Stopped on long October natural gas from apprx 550 at apprx 670!!! Buy November natural gas at 620 – stop at 580.

    Have a GREAT day!

  90. 90
    zman Says:

    ESV – still up a bit on that rig contracted to Mexico.
    Things to think about:
    1) they’ve never wanted to send rigs to Mexico. Forced to by the same lack of utilization that made me short them yesterday.
    Some brokers are spinning it as a positive as in “now they’ve got one rig there and that’s a foot in the door”

    That’s a crappy argument since they never wanted to go there and could have at any time in the past. They got there by underbidding NE who has fewer rigs available.

    They didn’t disclose the rate. Hmmmm.

    Morgan Keegan is theorizing that the length of the stay (900 days) means substantial dockyard time for refit and is lowering numbers a little.

  91. 91
    Sambone Says:

    Looks like Ingrid is going to rip apart with shear.
    http://cimss.ssec.wisc.edu/tropic/real-time/atlantic/winds/wg8shr.html

  92. 92
    zman Says:

    Nicky – that oil slide is your fault

  93. 93
    Nicky Says:

    I did tell you ….#64

  94. 94
    zman Says:

    ooohhhhh……reversal…..I thought that you meant were going up since we were down at the time.

  95. 95
    zman Says:

    RIG getting drilled.

  96. 96
    rammastr Says:

    RIG is about to run thru it’s 50dma at 105.57.

  97. 97
    zman Says:

    Ok, just read that PF daily piece. Is that useful? Is he on drugs?

  98. 98
    Sambone Says:

    PF – Yes, on drugs

  99. 99
    sane Says:

    He is just high on $80 oil.

  100. 100
    zman Says:

    UNG puts probably not a bad bet here, in the money, and short term. Spread is ugly but I’m betting on big short cover report in another 45 minutes.

    Sambone – I got nothing of value out of that. I guess that’s why he’s on TV and I only get to do radio.

    RIG held the 50 day.

  101. 101
    sane Says:

    I love the 3rd paragraph. I bet the consumer is just giddy with glee to see the NYMEX pit cheering. Ummmm Yeah.

  102. 102
    Nicky Says:

    Z – we were up at the time I said it – wti was making its highs of the day and it looked spiky. I thought it a bit odd when you said reversal to the upside in response – at the time I thought you were just joking about. Also I gave you levels to watch for the break in wti.

  103. 103
    Sambone Says:

    wonderful and magical

  104. 104
    zman Says:

    I was joking both times.

    TRADE: UNG $39 September Puts for average of $1.17

  105. 105
    Nicky Says:

    just checking what I said it correct. wti made its hod at 19.20 at 8035. I posted about the reversal at 19.29.

  106. 106
    Sambone Says:

    Z – TV? Hmmm, then you’ll be another “Talking Head”. CNBC might not like your type of cheerleading! LOL

  107. 107
    Nicky Says:

    now you have me confused. and I thought I was the joker!!! Anyway is the upside done? It will take a drop through 76.90 to confirm it. So a lot lower. I would think we take another peak to the upside yet but today is a warning shot and it was a very sharp reversal.

  108. 108
    zman Says:

    Thanks Nicky, sorry to be a confusing host.

    Any thoughts on NG while you’re still on line?

  109. 109
    QUARRYMAN Says:

    FEEDBACK:

    I get your blasts and like them.

    Please figure how to make your posts unique-looking: either by color, size, border, font or something. You post a lot (which I like) and often back to back and the alternating colors makes backtracking or cruising the last hours posts a bit more difficult.

    In general, I like ZEB!

    Q.

  110. 110
    Nicky Says:

    Nat gas on drugs after the close.

  111. 111
    zman Says:

    Q – are you talking about the comments? If so it’s on the hit list for the weekend…we’re just too dumb to have figured it out so far but thanks.

    Nicky – now that’s PF-style helpful!

  112. 112
    Nicky Says:

    Ah Z – was looking at it before I saw your post. The move off today’s highs was only a 3 wave move so to me the upside does not look done. Resistance above 6.498 is at 6.610.

  113. 113
    Nicky Says:

    Lol Z. I thought at the time I wrote #110 what a waste of time but wanted to alert you to the move! Knew it would take me a few minutes to sort the levels. All excuses of course!

  114. 114
    rammastr Says:

    ZMAN – still sticking with UNG if we still have more upside?

  115. 115
    Nicky Says:

    Also there is a big gap at 6.784 – 6.884 which would look good if it was filled and is in an area of resistance too.

    Makes you wonder about Ingrid though…..

  116. 116
    rammastr Says:

    If Ingrid fades, is there anybody behind?

  117. 117
    rammastr Says:

    ZMAN – nice to be out of PBR.

  118. 118
    Sambone Says:

    Ram – Nothing on my scope.

  119. 119
    Sambone Says:

    Ram – Here is what accuweather is saying;

    There is reason to believe that tropical development could begin in the southern Caribbean as early as Sunday. There is already a large area of convection in the area as shown on the current satellite picture. Furthermore, the flow will be aligned properly, and the water could not be any warmer. If a tropical system does form in this area, it would probably pursue a track toward the north and northwest, eventually bringing it into the Gulf of Mexico later next week. This will be another one of those watch and wait situations.

    Frankly, I don’t see it.
    http://www.ssd.noaa.gov/goes/east/carb/loop-rb.html

  120. 120
    Sambone Says:

    Ram – If they are right the ECMWF has a track right to LA/MS. We’ll see.

  121. 121
    rammastr Says:

    Thank you SAM.

  122. 122
    zman Says:

    PBR Sort of wish I’d taken my own advice there but I’m ok at present with it. Will hold through weekend.

    APA is just on fire.

    RIG – big recovery off the low

  123. 123
    zman Says:

    APA – Kilduff mentioned earlier lol.

    This is one of my buys from last Friday’s bottom fishing.

  124. 124
    Nicky Says:

    Samborne – do you mean you don’t see Ingrid developing or following that track?

    Nat gas now moving down pretty fast again. Frankly the way it looks now I can make a case for it either gapping up or down Sunday night. That said the upside does not look done but it may come after a move lower.

  125. 125
    Sambone Says:

    Hmmm, doesn’t look like Humberto wants to leave the GOMEX. Check out the fast moving front in lower Mississippi moving south.
    http://adds.aviationweather.noaa.gov/satellite/displaySat.php?region=MGM&isingle=mult_big&itype=vis

  126. 126
    Sambone Says:

    N – IF Ingrid survives the shear, she’ll track to maybe Florida, but looks to me like more towards Mid Atlantic away from land. It stalled now hardly moving.
    http://www.ssd.noaa.gov/goes/east/tatl/loop-rb.html

  127. 127
    zman Says:

    Beer Thirty! Thanks for a great week everybody!

    Saturday post out mid day as we’re off to kill more birds before sun up.

  128. 128
    Sambone Says:

    Ok folks have a good weekend. It’s “Tini” time/market closed. Next week will be fun to watch. I’ll report on the weather before the open on Monday.

  129. 129
    Nicky Says:

    Samborne – as of Saturday morning your forecast about Ingrid going into Atlantic looks spot on:

    http://intellicast.com/Storm/Hurricane/Active.aspx?storm=1&type=track

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