17
Sep

Monday – Waiting For Ben + Way To Go NFX!

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Crude down $0.60 to $0.75 to about $78.40 early while NG is trading up about a dime to around $6.40 as Ingrid, now weakened to a tropical depression, continues to survive windshear and to track on a more westerly course than previously expected. Ingrid is not expected to re-strengthen at this time.

As in most weeks the direction energy stocks will determined by 1) the broader market, 2) oil, and 3) natural gas. Since this is Ben Bernanke's week to prove whether or not he "get's it" item one on the list is more important than usual and I'll be extremely cautionus going into this ninth options expiry week of the year. If you missed last week's wrap post catch it here.

Merger Monday Watch:

  • China National Petroleum Corp is rumored to be considering a bid of as much as $5 B U.S. for Australian listed OilSearch according to Upstream. Comment: This could be supportive mid cap international oil companies in general and could put a little rally in for Papua New Guinea based (IOC).
  • Newfield Punts It's UK North Sea Division For A Stunning $8.82/Mcfe! Centrica is buying the unit for $488 million. The Street probably only expected half this number! At year end 2006 Newfield's UK division had 55.3 Bcfe of reserves attributed to it yielding a sale price of $8.82/ Mcfe sale price. Perhaps their Grove field wasn't fully booked, they have a good rate at their Seven Seas discovery this year, and their acreage certainly contained numerous untested prospects but man what a price.

Comments:

  • 1) Another asset delivered as promised and
  • 2) In your face Goldman Sachs,
  • 3) I'd expect another version of @NFX very soon. Newfield reports October 25 and we will be positioned well in advance of the report on the long side, and
  • 4) production guidance is expected to remain unchanged. 

I'm still long an ill-fated batch of September $50 calls from back in PSP (pre sub-prime) and those potentially could wake up with the recent run up in NFX's shares back to the $46ish level. I'll look at some October calls this morning and may even trade some Septembers if the stock doesn't react to the news out of the gate. NFX is 80% gas and highly hedged so it shouldn't be constrained by a little topping action in oil.

Finally, there's more of this kind of news to come before year end as the company looks to shed it's producing assets in the Bohai Bay and some smaller fields in Texas and Oklahoma. This sale, combined with it's shelf GOMEX sale last month and it's Cherokee Basin, OK sale should ensure a strong balance sheet and stout capital spending program into 2008. 

Other Stocks We Care About Today Watch:

  • (PBR) filed suit against ANP, Brazil's version of the EIA over the agencies intention to offer deep water block CM273 in the Campos Basin in a deepwater auction set for November. PBR made an oil discovery on the block but was nine days late in filing its development plan with the agency. Comment: their tax dollars not at work. No telling if they'll win but if they lose and the stock takes a small hit I'll be adding more October + calls.
  • (ESV) moving more rigs around, estimates continue to fall. They're moving a rig from the North Sea to the Med. I'm not looking for a big fall here but they continue to have weaker utilization than the Street expected and recent moves increase downtime / reduce earnings.

Gulf Coast Refinery Watch: Power has been restored to all three refineries that went offline last week due to Hurricane Humberto. The 850,000 bpd of capacity is expected to be fully operational by the end of this week. 

Mexico Is Slipping Into Some Comfy Nigerian Shoes Watch: Pipeline repairs are anticipated to be completed by today. Mexico has been forced to increase it's imports of gasoline by 50% to 300,000 bpd since the September 10 attacks to maintain availability. Rebel leaders have vowed further attacks until two rebels they claim are held by Mexican authorities are released. The authorities say they don't have them which sounds pretty familiar but it's a lot closer to home. Nigeria and Mexico would produce about the same amount of oil if it weren't for the activities of MEND and other Nigerian rebel groups but the U.S. imports 55% more oil from Mexico as we do from Nigeria so similar activity south of the border would be much more painful. I'd also note that one of the alleged captives is the brother of the rebel groups leader so don't expect them to fold up their rebel bomb making tents and go home anytime soon. 

Odds & Ends

Analyst Watch: Morgan Stanley is raising price targets on pretty much the entire OIH, (KWK) coverage resumed at UBS with a buy rating and $69 target. In other analyst news it's that time of the quarter again; the time when analysts mark their estimates to market for oil and gas prices. In general natural gas estimates were too high while crude targets were too low and given the gassier nature of most E&P companies that means estimates are being trimmed slightly. ESV slight earnings reductions over the rig move described above and lower international day rate assumptions in some markets, price target falls from $78 to $74 at  Southcoast.

Non-Event Watch: Goldman has upped it's year end 2007 crude price target to $85.  

MLP Watch: (XCO) files record sized $1.7 billion MLP. That story just got more interesting.

Housekeeping Item: Color of Z's comments to differ from others...at some point. 

 

 

122 Responses to “Monday – Waiting For Ben + Way To Go NFX!”

  1. 1
    Sambone Says:

    Nothing much on my scope on the weather front. Some are saying that Cane’s weather is favorable in GOMEX or Western Caribbean this week. I don’t see it yet, but I will keep an eye out.

  2. 2
    QUARRYMAN Says:

    Good morning, all.

    “SAFETY PAYS” … perhaps this week especially.

  3. 3
    Sambone Says:

    Q – “Cash is King”

  4. 4
    JMiller Says:

    Zman,
    Why is Nat Gas up this morning if Ingrid is not a threat?

  5. 5
    zman Says:

    JM – fair question. I’d bet it’s that big bunch of clouds half way across the Atlantic. Since oil crossed into positive territory a few minutes ago the move up in gas has doubled and the gassy stocks are starting to rise again. I don’t see much of reason to rally it …

  6. 6
    QUARRYMAN Says:

    Hey Z.

    2 things:

    What are your thoughts on the UNG puts, and did you read up on WLT?

    I didn’t know that KKR did an LBO on them back in the day.

    Meryl Witmer (Barron’s Roundtable) touted this stock last year is how it came to my attention.

  7. 7
    kyleandy Says:

    s-bone u read this?
    jm
    this may answer your question
    http://www.crownweather.com/tropdisc.html

  8. 8
    zman Says:

    APA in full break out now

    NFX up $0.50 … broker notes are trickling out saying, “wow, nice sale what else have you done for me lately,” (yawn) “wake me up when you’ve got an equity deal to do. Oh, you don’t need an equal deal? Stock reiterated at Neutral”. This is why the sellside gets a bad rap.

  9. 9
    Nicky Says:

    Morning all – I guess this is the Golden Socks effect. So tedious – obviously they are long and need to get out of them.

  10. 10
    zman Says:

    Q- will probably add more UNG puts later today once the froth settles a bit. Same with ESV.

    WLT – not yet but it’s in the hopper

    Nicky – morning, you are no doubt correct

  11. 11
    zman Says:

    JM – on natural gas, one other thing…late season heat wave. Much of the south and some of the southeast are going back into the low 90s thing week.

    CPCs degree day forecast looks like it’s about a 1/3 warmer than last year and 25% warmer than normal. In the face of some big year ago injections we dip into YoY deficit territory which probably has the shorts on the run a bit but I think the current move is overdone and we’ll see some snap backs along the way.

  12. 12
    zman Says:

    NFX starting to pull ahead

  13. 13
    Sambone Says:

    K-I readem all, but mostly I look at charts, loops, and shear. Lots of science, but also alot of speculation. The blogs are mostly people who have nothing else to do. I do this during Cane season only, so don’t look for me on weather otherwise after the season until next year.

  14. 14
    Sambone Says:

    Z – Interesting article on Rigs in general and the GOMEX.
    http://www.dallasnews.com/sharedcontent/dws/bus/stories/091707dnbusgulfdrilling.2a5a40d.html

  15. 15
    zman Says:

    S- it is. That’s what ESV is up to right now. Thing is it doesn’t really do a good job of differentiating between <1,000 water depth (Shelf) and over a >1,000 (deepwater) where there are still a ton of opportunities.

    Energy stocks turning a bit lower now,and it’s not the broad market. Refiners and oil service are getting knock about a bit. Deepwater drillers too which may be just profit taking on a group that’s had a heck of a run before Ben starts talking tomorrow. Or it could be that everybody believes Nicky re Goldman and doesn’t trust this move at all.

    I still think oil trades off to mid 70s very soon…and NG back to low $6s which it probably holds.

  16. 16
    zman Says:

    Like the move in VLO and will look to re enter long later in the week, probably around report time on Wednesday (Ben dependent of course!)

  17. 17
    Sambone Says:

    Crude Steady Before Expected Fed Rate Cut

    By Matt Chambers
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures were steady early Monday ahead of a Federal Reserve decision on interest rates this week.

    The Fed is expected to cut its target rate for short term interest rates Tuesday by as much as 0.5 percentage point, a move that would be viewed as price-positive for crude oil markets.

    The front-month October light, sweet crude contract on the New York Mercantile Exchange was recently up 30 cents at $79.40 a barrel. Brent crude on the ICE futures exchange fell 11 cents to $76.11 a barrel.

    “There’s been nothing new to influence prices over the weekend, and the next big item people are watching is the Fed decision,” said Tony Rosado of IAG Energy Brokers in Fort Lauderdale, Fla. “They’re probably going to cut rates, which will give us a little bit of a boost.”

    The expiration of October crude oil options Monday is also supporting prices, traders said.

    “With open interest weighted toward the $80 call, the market could well firm as the day goes on,” Addison Armstrong, an analyst with TFS Energy Brokers in Stamford, Conn., said in a research note.

    Prices were weighed down by gasoline, which was lower as refineries in Port Arthur, Texas, began to restart after being shut down by power outages caused by Hurricane Humberto last week.

    Motiva Enerprises LLC is expected to begin restarting its gasoline unit Wednesday, according to regulatory filings. Total SA’s (TOT) refinery in the area had power restored Thursday and Valero Corp. (VLO) has also begun restart activities.

    Front-month October reformulated gasoline blendstock, or RBOB, fell 1.43 cents, or 0.7%, to $2.0221 a gallon. October heating oil fell 40 points, or 0.2%, to $2.22038 a gallon.

    —By Matt Chambers, Dow Jones Newswires

  18. 18
    Sambone Says:

    Here’s everybodies favorite guy!

    The Energy Report

    Phil Flynn
    September 17, 2007

    One storm passes and the other one continues. Tropical storm Ingrid weakens and the financial storm seems to be continuing. After nine straight up days oil pulled back from record highs and is looking for direction. Perhaps it will try to find its way as the market seem poised to answer some pretty philosophical and probing questions such as: Is Iraq all about the oil? Is the world running out of oil? And what will be the effect on oil and the rest of the world if the price of oil dips or if we slip into recession. Are we just sleep walking though a crisis?

    Is Alan Greenspan being hit with his own case of irrational exuberance or is he just being irrational? Greenspan turns into Green-spin and says that the war in Iraq is largely about oil. Alan Greenspan is making the rounds promoting his new book and has made some pretty provocative statements. Many I agreed with and some I didn’t but perhaps the most disturbing quote I heard from him was that the Iraq war was mainly about oil. Mr. Greenspan in his time as Fed Chairman use to focus on the consequences of every word he uttered but he must have not really thought about the consequences of this simplistic and not well thought out statement. Was the Iraq war really just about oil?

    Mr. Greenspan of course offers no evidence to back up his irrational claim other than everyone knows that the war in Iraq was largely about oil. Maybe we should remind him and the rest of the world that the war in Iraq is all about terrorism as the US stands up to the type of extreme dangers that killed innocent Americans on September 11, 2001. We removed a ruthless mass murderer dictator that had made direct threats against the US and US Interest. How many people have forgotten that Vladimir Putin the President of Russia called Mr. Bush and warned him that Saddam was planning an attack on the US in the days before the attack on Iraq?

    This war is about protecting the US and the rest of the world from Islamic fascist who thought that they could do anything without fear of reprisals. It was to create a battleground so we could fight terrorists out in the open as opposed to waiting for them to strike outside of the shadows where they have comfortably lurked. That’s not to say that Iraq’s vast oil potential and resources did not play into our decisions and let’s not forget that oil is one of the reasons that Al-Qaeda attacked us. Didn’t Osama bin Laden say the rest of the world was getting rich off his oil and that he’d like to see oil at $100.00 a barrel? Oil was the reason Iraq attacked Kuwait. And could anyone argue that protecting oil resources are a major part of protecting our national security. Oil has played a role in this war on terror but first and foremost it’s a war on terror.

    The war against terror is a war that will be fought on many fronts and Iraq is just one of them. The question now is will Iran be next? French Foreign Minister Bernard Kouchner is warning that, “we have to prepare for the worst, and the worst is war.” Mr. Kouchner was discussing Iran’s nuclear ambitions and said, “We must negotiate right to the end but if Tehran possessed an atomic weapon, it would represent a real danger for the whole world.” Last week there were reports the United States was making war plans as well.

    Are we sleepwalking into a crisis? The Independent reports that Lord Oxburgh, the former Chairman of Shell, has issued a warning that the price of oil could hit $150.00 per barrel, with oil production peaking within the next 20 years. He also said that diminishing resources could push the price of crude to $150 a barrel. He accused the industry of having its head in the sand about the depletion of supply. But maybe the reason that their head is in the sand is that they are looking for more oil? Did you ever think of that? There is alot of oil in the sand you know. Expensive to get at but there nonetheless.

    Would a world wide recession be a good thing from a geo-political perspective? The Financial Times had an interesting piece about, “A world of $50.00 oil.” The FT asks us to, “Imagine a world in recession, where oil cost $50 a barrel.” The FT then asks us, “Which economies would be most affected? There are obvious losers. In Saudi Arabia, the largest oil producer, oil accounts for 90% of exports, this in turn represents almost two-thirds of the economy’s output.” In fact the FT says, “Indeed, members of the Organization of Petroleum Exporting Countries are more dependent on oil now than when prices fell sharply in 1985-86 and 1997-98 exports plummeted in value after the OPEC basket fell from $27.00 a barrel to $13.50, and from $18.70 to $12.30 respectively . But in 1995 and 19997, oil exports were just 21% of OPEC’s gross domestic product compared with 36 percent now.” In other words OPEC is more dependant then ever on oil prices staying strong and should be deathly afraid of any economic slowdown because if the world goes into a recession you can bet OPEC will go down as well. The FT says that, “a low oil price will have political as well as economic ramifications, not only just in the Middle East. In Venezuela and Russia, policy is highly dependant on buoyant energy prices. Oil provides half of Venezuela’s government revenues, oil and gas combined contribute more than half of Russian government income.” And without that high price their anti-west and anti-capitalistic practices would be kaput. They would be bugging Western governments for help like they did in the late nineties and putting their hands out. Worthwhile reading in the FT today.

    We’re looking for crude oil supplies to be up 2.0 million barrels, gas down 1.0 MB, distillates up 1.5 MB and runs up .5% from the weekly supply report from the Department of Energy.

    Call Phil Flynn to open your trading account. The winter heating season is around the corner.

    We’re long Nov crude from apprx 7780 – stop 7500.

    We’re long Nov heating oil from apprx 22100 – stop 21700.

    Buy Nov RBOB at 20000 – stop 19700.

    Buy Nov natural gas at 680 – stop 620.

    Have a GREAT day!

  19. 19
    zman Says:

    TRADE: Entry into the OII – October $75 Calls – for average $1.68 with the stock down 5% ($3.80) on no news that I see. Still hold the September $60s which carry a horrendous spread now but are up about 250% on the bid.

  20. 20
    sane Says:

    Is Flynn getting soft?

  21. 21
    zman Says:

    Sambone – still think Ingrid heads north?

    When’s the next update?

  22. 22
    Sambone Says:

    Ingrid – DOA. Less than 50% chance to reform.
    I’m currently watching the patch off Jacksonville. Winds have it moving through Florida to the gulf.
    http://www.ssd.noaa.gov/goes/east/carb/loop-rb.html
    http://wavcis.csi.lsu.edu/forecasts/forecasts.asp?modelspec=temperature
    Note hit wind and then “animation”

  23. 23
    Sambone Says:

    Water in GOMEX a nice toasty 85 degrees, bathtub.

  24. 24
    zman Says:

    Market dominating action in the stocks:

    XOI down 0.6%
    XNG down 0.2%
    OIH down 0.9%

    with oil and NG UP 0.8% and 3% respectively.

  25. 25
    zman Says:

    Sambone – any thoughts re #21

  26. 26
    nonsequitor Says:

    ZMAN–

    New subscriber/poster—

    I do not want to play the DIA/spy for fear of the Bernanke Tuesday B.S. however I think the Dow does get hammered—
    I want to play “COP” 85 puts —what are your thoughts –based on the chart if the dow gets hit for 300 points it looks as though this is going to test the low 82 area immediatly…thoughts
    Thanks in advance

  27. 27
    zman Says:

    NG really looking like a short squeeze now. Up $0.25 (4%).

    Non-seq – Welcome aboard! Let me start by saying I’m not a fan of shorting COP…cheapest major, very gassy, lots of growth potential and I’ve got calls there right now.

    That being said, I don’t give advice/recommendations …I just tell people what I’m doing…but, if I WERE TO do COP short for Ben speak I’d like the $85 Septembers for a buck even.
    I’d be more tempted to go with the CVX 90s but that’s just me and if Ben disappoints then $2-3 is going to come out of everything in a hurry.

  28. 28
    zman Says:

    IF this market recovers today SWN would make a good day trade as longs as gas holds which it will if the forecast does.

    Ingrid forecast looks pathetic…winds down to 25 mph by Tuesday.

    Odd Northeasterly movement out of area just south of Hispaniola

    Mid-Atlantic clouds look less organized.

    http://www.intellicast.com/Storm/Hurricane/AtlanticSatellite.aspx?animate=true

  29. 29
    Sambone Says:

    Z- See #22 (On my screen it saids “awaiting moderation”, not sure what that means)and 23.

  30. 30
    rammastr Says:

    ZMAN – Why the UNG SEPT put trade?

  31. 31
    zman Says:

    Sambone – when you put two or more URL’s in a comment in places it on hold because a lot of spammers use links in their comments…I just didn’t see it. will bump the limit to four. thanks for the response.

    Ram – it seemed like a good idea at the time. Will add once more if it goes much higher as this looks like a short squeeze. I thought the death of Ingrid would whack it back as that’s what drove it up late last week but a little bit of increased late season cooling load is driving short covering today.

  32. 32
    nonsequitor Says:

    Z–
    Thanks for the response—COP is purely a technical chart play ( i am a complete energy rookie) — for a two day move—basically greenspan goes .25 pts market disappointed fears recession and fed behind curve –INGRID a non event and oil in the high 70’s looking for trap door plays— thanks for the CVX chart looks vulnearble as well for a quick two to three point drop——
    If you think there are any better plays within the energy sector that would react to a FED disappointment I would love to hear them—
    thanks

  33. 33
    zman Says:

    Sambone – that option is changed to 4 so you can have three links in your comments from now on without getting put in the penalty box as a suspected smut peddler, LOL.

    Thanks again for the update…does it look to like things are breaking up a bit mid-atlantic?

  34. 34
    Sambone Says:

    Off Subject – Overall market
    Watching LEH in morning, will they lie or tell the truth, Fed meeting – 25, 50 or none.
    Wenesday – Oil, MS – Will they lie or tell the truth.
    Thursday – FDX earnings. Is the economy up or down.
    Friday – Triple witching?

    It’s going to be intersting this week.

  35. 35
    calvino Says:

    Bloomberg says lotsa NYMEX action in dec 85’s and mar 90’s

  36. 36
    zman Says:

    NS – you’re welcome and chart wise they both could get drop-kicked. Good luck and I’ll look at some vulnerable names for tomorrow’s post. Thing like my favorite OII and FTI that have had huge runs of late could be in for bad day on a 25 bps cut. I hate shorting quality as you never know when someone decides it’s too cheap to pass up but for a dt, they’d probably get a haircut.

  37. 37
    zman Says:

    Thanks – Cal – the Goldie Effect.

  38. 38
    Sambone Says:

    Z – Mid Atlantic – Nothing to get excited about at this time, plenty of shear just in front of that mass, so yes, looks to be breaking up. Everything bears watching though.

  39. 39
    zman Says:

    oil back over $80, dollar looking weaker

    saw Chavez swapped all of his $ denom deposits to euros mostly and others.

  40. 40
    Nicky Says:

    WTI and Distillates look to be in the final wave up of this move.

  41. 41
    zman Says:

    Thanks Nicky, what about NG, any resistance nearby you see?

  42. 42
    Nicky Says:

    WTI’s October contract high is at 80.51

  43. 43
    Nicky Says:

    Z – nat gas has resistance at 6.610 and 6.635 and 6.705.

  44. 44
    zman Says:

    Thanks Nicky, that kind of what I was thinking…we’re just about there. I’d guess it may run all the way to $7 before bouncing off that heading lower.

  45. 45
    zman Says:

    crude strength primarily dollar weakness before the Fed.

    at 6.61 on NG (up 5%), gas is taking heart from the surge in oil prices today.

    Pemex headline- $1.1 billion in offshore “maintenance” contracts up for grabs in the Campeche area, work to begin at year end. Wonder how much of it is Dean related.

  46. 46
    RickWI Says:

    I am thinking that NG is up based off the GFS and Euro forecast models showing a low pressure feature move through the central Gulf from Fla to the Tx coast. GFS forecast runs this morning don’t show this feature getting very strong but I suspect Mets out there point to the bathwater temps in the Gulf as a caveat.

  47. 47
    nonsequitor Says:

    ZMAN—
    assuming dollar weakness is from fear that the FED goes .5 point—if they go with a quarter point do you expect a bounce in the dollar and subsequent pressure on oil from the dollar bounce perspective

  48. 48
    zman Says:

    Thanks Rick…After the Instant Hurricane (just add hot water) Humberto of last week traders are a little antsy.

    Nice resistance peg on the NG 6.61 Nicky.

    Stocks look trapped in tight ranges today waiting on Ben, I’d have to bet on weaker into the close though.

  49. 49
    zman Says:

    NS – that stands to reason and I’m thinking we get a quarter or nothing tomorrow. Is nothing still a possibility?

  50. 50
    RickWI Says:

    That is exactly what I think they are worried about, re: what happened wtih Humberto.

  51. 51
    sane Says:

    I would say nothing is a possibility tomorrow if the fed is as worried about inflation as they say they are.

  52. 52
    zman Says:

    NG hit 6.62 then backed off again. Gassy stocks for the most part could care less.

    Sane – if that happens we’ll get a $5 or 5% off sale (whichever comes first).

  53. 53
    sane Says:

    To be honest though, I don’t see it happening.

  54. 54
    nonsequitor Says:

    no rate cut would would be a possibility if Bernanke’s manhood was not sitting in a box underneath Bush’s desk

  55. 55
    Sambone Says:

    Rick – See “Crowd”, Could be Cane fears, but I think it is the “Crowd”. These folks can turn on a dime, so be careful. What is interesting is that the Crowd looks to the GOMEX for trouble. If we look at history 05 was bad, but that was a rare event. That is why IMO that speculation is getting very volitile.

  56. 56
    calvino Says:

    T. Boone says he’s building a 1 bil windfarm in TX. Are we finished? Any wind names?

  57. 57
    zman Says:

    Cal – the T Boon thing is a few months old. Wind names: GE and a dutch private. Sane might have a better play but I’ve never found one that would give you leverage on big wind farms like that.

  58. 58
    sane Says:

    As long as they ignore “non-core” inflation the economy is a bed of roses to the fed. It is like ignoring a benign tumor.

  59. 59
    zman Says:

    One of the problems I have with the govt’s way of measuring inflation is that it is so not real world…like the EPA’s old way of measuring mileage. It’s efficiency based, not dollar based which is frankly pretty stupid. Also, the non-core energy costs seem to creep into other areas with little notice by the government. They should focus on buying power for wages earned, that would reflect quite a crimp…

  60. 60
    RickWI Says:

    Sambone, I agree 100% and for the sake of the clients I work with on hedging I hope this late week forecast activity is a fizzle. “The crowd” since 2005 apears to have embraced the “hurricane forecasters”, who in many cases appear to be model huggers.

  61. 61
    Sambone Says:

    Z – CPI minus Energy and Food. What do Americans spend most of their disposable income on after house/car payments? Energy effects everything including transportation,plastic bags, etc. What bugs me is they stopped printing the M3, which has increased 14% YOY=Printing money.

  62. 62
    Sambone Says:

    Rick – I used to make “Models” as a kid and they were all plastic, not real.

  63. 63
    zman Says:

    Sambone – right and the way they measure on the core stuff like your car is absurd.

    Buy a pickup in 2005 for $20K with front only airbags. Buy one in 2007 for $21K but it has front and side airbags. Their “lab” might determine that these two vehicles cost “the same” due to the greater utility of having more airbags. So no inflation. That’s BS and it’s applied to everything from lawn mowers to microwave ovens.

  64. 64
    zman Says:

    Sambone, that’s funny, my parents have an attic full of those.

  65. 65
    rammastr Says:

    ZOLT – a play on wind energy. It mfgs carbon fibers for “large” gen rotors.

  66. 66
    zman Says:

    Nat gas at 6.65 now, up 6%.

  67. 67
    zman Says:

    Thanks Ram:

    nice grower too.
    2006: $0.17
    2007E: 0.68
    2008E: 1.47
    2009E: 2.12

  68. 68
    zman Says:

    oil at 80.60—all time new high

  69. 69
    RickWI Says:

    Good one Sambone.

    Zman, where can you buy a pickup for 21k?

  70. 70
    calvino Says:

    Did a little wind research. GE is so big, doubt a bil would move its margins. However, found a microcap contracting Westinghouse to build turbines in TX. Going to open up, never know..

  71. 71
    zman Says:

    Rick –

    http://www.fordvehicles.com/trucks/f150/

    and it’s even American made, lol

  72. 72
    sane Says:

    Cal,

    Re# 56, 57

    Wind is a tough bag to follow. Lots of small private and penny stock corps out there. Here one day gone the next.

    As for TB’s he has made no hint of partners, or possible suppliers.

    Vestas ( VWSYF ) is a Dutch corp who builds large turbines ( 2Mw+ ) I don’t think they offer options though ( could be wrong ).

    You could possibly play lightweight material providers on a large development such as this.

  73. 73
    zman Says:

    It’s amazing how little the stocks care today about oil and gas shooting the moon.

    Cal- is that CPTC?

  74. 74
    Sambone Says:

    Idea – COSWF (Pink sheet) sells on the Toronto as COS_u.TO. Currently it’s about $32.45USD (closed yesterday). McDep has a target of $39 USD. http://www.mcdep.com/
    I agree. This is more of an income idea. I believe they will raise their distribution by 20 cents and possibly pay a special distribution when they announce in late October. Possible buyout candidate, possible conversion to a corporation. Their cost is $40.00 to produce and they are getting well over $80.00 US because of the canadian $. BTW, My Mother and Mother in law owns it.

  75. 75
    RickWI Says:

    I wonder if that includes wheels and an engine. LOL

    OK back on topic….thngs look stong on the NYMEX.

  76. 76
    drdavis124 Says:

    Why are “yous-all” wasting time on Ben. What he does is will not affect the market for more than a few hours or at most a day or two. The market will be going down over the next 4-6 weeks.
    My down call does not inlude ” all metals, energy & Agriculture related Co’s”

    Phil

  77. 77
    Nicky Says:

    Is #76 written by PSW? If so why doesn’t your call include energy?

  78. 78
    zman Says:

    PBR / PTR mounting recoveries,

    APA looking very strong all day

    Nicky – it’s a different Phil Davis.

  79. 79
    drdavis124 Says:

    ZOLT is a winner. Take a look at CPTC

    http://www.compositetechcorp.com

    Phil

  80. 80
    Nicky Says:

    Ah okay Z – just wondering as I know PSW is bearish energy!

    Just cannot see a .50 cut tommorrow with 80+ oil.

  81. 81
    zman Says:

    From Marketwatch

    Beth Sewell, managing partner at Quantum Gas & Power Services, said there’s a tropical wave south of Hispaniola that could track into the Gulf of Mexico later this week. “That’s about all I can see to create excitement,” he said.

    To me that looks pretty pathetic as a reason.

  82. 82
    zman Says:

    Nicky – agreed. I’d say 25 or maybe nothing although that’s a stretch.

    Unreal on gas: Only your $6.705 stands at this juncture. What’s next, $7 and $7.15

  83. 83
    Sambone Says:

    Nymex Crude Hits Record $80.50 Before Fed Meeting

    By Matt Chambers
    Of DOW JONES NEWSWIRES

    NEW YORK   Crude oil futures rose to an intraday record Monday on speculation the Federal will cut interest rates. The expiration of crude oil options, as well as talk of more Atlantic hurricanes, also spurred prices higher.

    The front-month October light, sweet crude contract on the New York Mercantile Exchange rose as much as $1.40, or 1.8%, to an intraday record of $80.50 a barrel beating the previous record of $80.36 set Friday. The contract recently traded at $80.24. Brent crude on the ICE futures exchange rose 48 cents to $76.69 a barrel.

    The Fed is expected to cut its target rate for short-term interest rates Tuesday by as much as 0.5 percentage point, a move that would be viewed as price-positive for crude oil markets. As well as being positive for spending, a fall in rates would pressure the dollar, another factor that is seen as strengthening U.S.-denominated crude prices.

    “The next big item people are watching is the Fed decision,” said Tony Rosado of IAG Energy Brokers in Fort Lauderdale, Fla. “They’re probably going to cut rates, which will give us a little bit of a boost.”

    Nymex crude prices have risen 13% in the past three weeks on a combination of a weakening dollar and forecasts for tight supplies amid growing demand in the last quarter of the year. The threat hurricanes could impact Gulf of Mexico production, and speculation conflict in the Middle East or Nigeria could escalate and crimp oil supply are also aiding prices.

    The expiration of October crude oil options Monday boosted the front month Nymex contract, traders said.

    “With open interest weighted toward the $80 call, the market could well firm as the day goes on,” Addison Armstrong, an analyst with TFS Energy Brokers in Stamford, Conn., said in a research note.

    A call option at $80 would give the holder the right to buy October crude at that price, meaning if prices are above $80, the holder can profit. Prices are often pushed toward or beyond popular strike prices when options expire.

    Forecasts for more Atlantic storms that could threaten Gulf of Mexico oil production also supported prices.

    “A large majority of weather models now show a tropical cyclone either developing over or moving into the Gulf of Mexico during the last half of this week,” Jim Rouillier, senior energy meteorologist with private weather forecaster Planalytics, said in a research note.

    Traders have been surprised at the quick development of Hurricanes Felix and Humberto this season. Humberto boosted gasoline and heating oil prices last week when rains caused a power outage in the Texas refinery hub of Port Arthur.

    Front-month October reformulated gasoline blendstock, or RBOB, rose 61 points, or 0.3%, to $2.0425 a gallon. October heating oil rose 1.82 cents, or 0.8%, to $2.226 a gallon.

    —By Matt Chambers, Dow Jones Newswires

  84. 84
    zman Says:

    …and I add that the stocks look more dubious about the move than every. A gutsy move would be for me to double down on the ung put play for 2/3rds of what I paid for them on Friday but I’m leery of further squeezing.

  85. 85
    zman Says:

    Sambone – do you have a link to a weather model that shows:

    “A large majority of weather models now show a tropical cyclone either developing over or moving into the Gulf of Mexico during the last half of this week,”

  86. 86
    Nicky Says:

    Z – there is a downside gap at 6.785 to 6.884. For the bearish count to stay alive 7.192 must hold.

  87. 87
    Sambone Says:

    NGAS – EP’s Cheyenne Plains Compressor Station down. One of the reason’s NGAS is up today is because it could impact injection depending on how long it’s down. That’s what the traders are saying at the NYMEX.

  88. 88
    Sambone Says:

    Tropical Disturbance 50
    Issued: 11:25 AM CDT Monday September 17, 2007

    Tropical Disturbance 50 is hard to describe, as it’s not a typical tropical weather system that we can see with satellite and track as it moves across the tropics. The disturbance is actually a combination of features that we expect to come together by Thursday, either in the northwest Caribbean Sea or the southeastern Gulf of Mexico, and quite possibly develop into a tropical cyclone. There’s a cold front that will drop into southern Florida over the next 48 hours, producing thunderstorms from the Bahamas southward to western Cuba. A weak disturbance over the central Caribbean will be moving westward toward western Cuba over the next few days as well. This, combined with a very favorable environment for development may lead to the formation of a tropical storm either in the southern or southeastern Gulf of Mexico as early as late Wednesday evening or more likely on Thursday of this week.

    All model guidance continues to indicate tropical development between the northwest Caribbean and southeastern Gulf of Mexico by Thursday. If something should develop, then a track to the west or west-northwest is most likely, possibly toward the Texas or Louisiana coasts. The earliest potential impact on the deepwater drilling areas off the Louisiana coast would be on Friday.

    It will not be until Wednesday that we have a disturbance that we see forming and that we can track. And it’s not likely that a tropical depression would develop until Thursday. This means that once the storm begins to develop, there may be little time before potential impact in the central and northwest Gulf.

    Note – This was sent to the Rigs in the GOMEX

  89. 89
    zman Says:

    Goldman says COP best value in oil patch among majors…well now it’s official.

    They went on to add oil markets are now in pase 2 of a multi-year super-spike era

    How is SU not $100 today? lol

    Thankyou Sambone!

  90. 90
    RickWI Says:

    http://moe.met.fsu.edu/tcgengifs/
    GFDL, CMC, GFS, UKM. Click animate and then forward when it brings up the map. Round blobs going into Gulf are the “hurricane” tracks shown on the models.

    http://www.nco.ncep.noaa.gov/pmb/nwprod/analysis/index_carib.shtml
    Click 12z update, click 10m wind column on day 4 at 96 hour and see big L in Gulf. Prior days show track of big L through Gulf. This updates 4 times a day, 00z, 06z, 12z and 18z. 00 and 12 are the major runs. 00z updates around 11:00PM CST and 12Z around 11:00AM CST.

  91. 91
    calvino Says:

    Yea, Z.. cptc.. looks good to me, looks like they are just starting to grow with lotsa upside.

  92. 92
    Sambone Says:

    Z – Many of them. See this link, and go to the green area in the middle. You’ll have to play with it awhile until you get what you want.
    http://www.stormjunkie.com/qcklnk.html

  93. 93
    zman Says:

    Rick – UKM looks a bit scary for the Tx GC, no?

    Thanks R & S for the meteorology links

  94. 94
    calvino Says:

    Nat Gas – watched Advantage presentation. There’s about 10 drill rigs left working in Canada.. Drillers are cutting disctributions today, or look like they want to give up the ghost anyway. It’s all fun and games until winter comes to the ball..

  95. 95
    RickWI Says:

    Ukie would be a bad solution to the for an upcoming weather pattern in the Gulf.

  96. 96
    BigJim Says:

    Zman:

    Do you like SU at this price. Dennis Gartman was pumping on Fast Money last week. What concerns me is the put volume in XLF and VIX. It is very high. Opinions welcomed.

  97. 97
    QUARRYMAN Says:

    Z.

    Starting to worry about the UNG puts. Are you holding off on guidance until tomorrow?

    … haven’t had time to read through back messages.

  98. 98
    QUARRYMAN Says:

    Big Jim

    I’ve been tracking XLF for some time and it’s bottom at 33. It seems like it’d take some serious and sustained selling to drive it below 32. I’ll LEAP in at the low points and wait for shorts to cover.

    BSC has earnings on Friday, which should be informative on this index, no matter what Ben says.

    “SAFETY PAYS”

  99. 99
    Sambone Says:

    2 things I just read may help everybody;
    1) Quote – “The key this coming week is not to PREDICT the markets, but instead to FOLLOW the markets and the new trend if one in fact develops.”
    2) As of last Friday, according to the 30-day Federal Funds futures, there is a 42% probability of a 25-basis point rate decrease versus a 58% probability of a 50-basis point rate decrease. Sambone saids if it’s only .25, the market won’t like that, my take.
    We’ll see tommorow, won’t we.

  100. 100
    rammastr Says:

    ZMAN – an update on your thoughts on SEPT options. Days to expiry…

  101. 101
    zman Says:

    Q – may or may not add to them tomorrow. Ingrid died as was the hope for that quick play but other storm mania is cropping up. I don’t give guidance.

  102. 102
    Sambone Says:

    Quarry – I’m long SKF. Truth or lie. LEH in the morning.

  103. 103
    BigJim Says:

    Thanks Quarryman

  104. 104
    Sambone Says:

    “Tini” time/ Market closed

  105. 105
    zman Says:

    NFX has shed all of today’s news driven gain.

    SWN, which rallied with gas also back to flat.

    Dr P. This is why we chat a bit about Ben. Normally given a 5% rally in NG and a 2% rally in crude these stocks would be off to the races and I’d have jumped in with both feet on the NFX news this morning but Ben-Fear outweighs fundamentals as I wrote in the introduction this morning. So I think bantering about it is at least somewhat useful.

    Q – sorry to be quippish. A report I was working on just went up in smoke on my PC and the autosave feature…didn’t

  106. 106
    rammastr Says:

    ZMAN – Thanks.

  107. 107
    zman Says:

    Ram – did I answer a question?

  108. 108
    calvino Says:

    Aha – now I know why Microsoft is selling off!

  109. 109
    zman Says:

    Cal – As someone who uses multiple computers with multiple operating systems every day I’d say that MS should trade lower everyday. Today however it wasn’t Vista that buggered me but Firefox which is independent (but I’d bet owned in part by GOOG)

  110. 110
    rammastr Says:

    No. Bad day. Sarcasm. #100

  111. 111
    zman Says:

    Ram – as in …you’re having a bad day?

    September – should be out the door very soon. I dumped lots late last week and have some long shots (NFX, SWN, TSO) left and some bad spread/hard to trade options left. I’ll be getting out of them opportunistically tomorrow and Wednesday and at any price there after.

  112. 112
    rammastr Says:

    Yes. It is the what’s left dept., RIG, UNG, etc..

  113. 113
    zman Says:

    no APA?

  114. 114
    rammastr Says:

    Wasn’t able to capture APA.

  115. 115
    zman Says:

    at least your out of PBR though

  116. 116
    rammastr Says:

    Correct.

  117. 117
    zman Says:

    Ram – I’ll walk through all the remaining calls for the morning post.

  118. 118
    zman Says:

    If I might ask, do you typically go “all in” on your first trade? I only ask because I don’t. It’s very difficult to buy options (at least for me) with perfect timing. I typically buy 1/4 to 1/3 of my expected position and then sit on it a few days.

  119. 119
    calvino Says:

    I have noted from experience that entering a position incrementally has been the most remunerative approach. Jesse Livermore would have condoned the pattern.

  120. 120
    zman Says:

    That’s my experience, doesn’t alway work of course but it generally keeps my head on my shoulders.

  121. 121
    Nicky Says:

    WTI now over $81.

  122. 122
    texana Says:

    thx for update on HK, any comment on ARD they are doing some great infill drilling in permian basin & se new mexico

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