21
Sep

TGI Expiration Friday

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Friday Housekeeping Watch #1: Welcome New Subscribers! I'm sure you've read the Terms and Conditions of the site. Please also see a Brief Tour of ZEB at left and the note about keeping information from this site in this site. Lose lips raise bids. Ok, that's terrible but you know what I mean. Also, if you don't want the email blast of my trades please let me know. Thanks again for your interest. 

Friday Housekeeping Watch #2: Zman's Energy Brain Affiliate Program - Got someone you think should subscribe? Coworkers, brother-in-laws, or anyone but your worst enemy (can't have them making money!). Get them to sign up and get paid. Gather enough and you could have a free ride. Contact us at zmanadmin@gmail.com for details.

Friday Housekeeping Watch #3: Note On Expiration Week Buys: There are times when I don't want to share some of the things I do, not because I care about looking stupid but because I fear that some people look past whatever caveats I make and leap on my ideas, perhaps without reading the post first. Near expiration, from time to time, I take high reward potential / high risk bets. Some times they work (EOG from Tuesday to Wednesday was a 62.5% gainer but could have easily been toastas well and the jury is still out on my UNG trade although it looks like it will be a similar sized loss to EOG's gain). Often they don't as will be the case with the (PTR) put trade from yesterday. Always they are small trades which I won't be bragging about or worrying over come beer thirty on expiration Friday.  Suffice it to say that any trades taken in the last week before expiration are both highly risky and money I'm willing to completely sacrifice.

Commodity Watch

  • Crude Oil - Cruise Control, Hit Fourth Consecutive High. Reporters cited sources who cited everything from a series of precautionary GOMEX production shut ins (hmmm) to a renewed understanding of the tight winter market (sure, on NYMEX oil expiration day, riiiigghhtttt) to the falling dollar (bingo). The November contract (new front month for crude) is trading off about a quarter in pre market action to $81.50 (hey I thought it was at $84...oh, backwardation). The powers that be will likely make a stab at rallying this before inflation and its impact on the economy have a chance to weigh in sometime in the near future.

This has been an impressive rallycrude-rally-092107.jpg...click the thumbnail to see just how impressive

 

Last Thursday I provided some back of the envelope calcs on supply and demand which explain part of this seasonal surge (we're going to eat through move of our inventories) but given the velocity and magnitude of the recent move I think it's high time we saw a retracement. 

  • Natural Gas - Falling Again Despite The "Storm".  October contract gas continued to get clobbered into expiration (down another 3% this a.m. and it has pretty much fallen ever since I entered that put) but the strip held up well as GOMEX operators pulled personnel, non essential and otherwise and began shutting in volumes. This morning the November contract (what the UNG is keying off of now) is trading off between 1 and 2% (huzzay for my poor UNG $39 puts!) as I write this.
Tropics Watch: L93 continues to provide rain, a bid of wind but less mania. Click here for the latest disturbance which still hasn't been deemed a depression, let alone a storm. Most models have it going for NOLA arriving as a weak tropical storm and bringing quite a bit of rain.  
 

In Today's Post:

A) Natural Gas Review - YoY Deficit Achieved, So Now What?

B) Stocks We Care About Today

C) Holdings Watch

D) Odds & Ends

Stupid Headline Watch: Brent Crude rises to new record high of 79.35 on tornado warning in Florida. Comment: It's the end of the world as we know it (and I feel fine). 

Week Ended September 14, 2007: 63 Bcf Injection. Consensus Was 64. My number was 75.

  • Storage as of September 14, 2007: 3,132 Bcf (updated September 20, 2007).
  • Max storage for this week in history: 3,164 Bcf (2006).
  • We are now 32 Bcf BELOW (1%) year ago levels.
  • We are now 8.23% (238 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-092007.jpg

For more pretty gas storage graphs click here.

Natural Gas Takeaway In A Nutshell: So we reached YoY deficit status, a week later than I thought we would. What now? As you can see from this chart...

injections-092107.jpg

...we have been able to make up the gap to last year's storage numbers because of slack demand in the prior year periods which led to a series of large injections. As you can see from the green line, this trend looks likely to reverse in coming weeks which should mean we'll be back to a YoY surplus in 2 to 3 weeks potential putting a lid on gas prices until winter shows up.

  • By the way, NOAA indicated the fourth quarter will be warmer than normal, another factor that should limit average gas prices to a narrower range that last year.
  • I'm thinking we'll trade from $6.00ish (November contract currently at $6.87) to as high as $7.50 over the next 2-3 months (with the exception of higher spikes during periods of extreme). 

Stocks We Care About Today Watch:

  • NBL - CEO, Chairman, and President Mark Jackson resigned effective immediately according to Upstream.That's damn odd and probably won't be viewed in a favorable light. The stock is not one I actively follow so I probably won't play and I have not yet seen a confirming press release from the company. It'll be interesting to see if this sets off a game of musical chairs among the leading big cap E&P oil execs.
  • Canadian oil sands producers - I have not forgotten them and am still looking to enter put trades. This is from yesterday's post if you missed it or are new to the site: Alberta Royalties: the proposal is for increasing after payout royalties from 25% to 33% AND introducing a sliding scale severance tax on bitumen (1% rate when WTI is $40 moving up to 9% when oil is at or above $120). This would kind of take the fun out of owning stocks like (SU), (CNQ), (PCZ), (SYN.t), (WTO.t) and even (ECA). The list has been refined with the help of our friends north of the border.
  • (HAL) - A note entitled "moving to the positive side of neutral" - from Goldman, (a little late and how wishy washy can you be GS?!)- They're still concerned about US pressure pumping business but say the discount to SLB is excessive (wow, is that new?). This is a buy rating in disguise but  I'm going to wait on an energy move to the downside before re-entering long.

Holdings Watch:

CALLS: No Action.

PUTS: 

  • (PTR) Bought the September $155 for $0.45. This one came with plenty of "how not to treat your money" caveats attached and based on the look of the market this morning in Hong Kong (and the exuberance for the new shares to be offered on the mainland) it will be a total loss.

  • (UNG) - still holding as I think that gas, and not just the front month have further to decline as people wake up to the fact that storm fears are over done and that chart above, showing the coming decline in year ago injections, could easily flip storage back into YoY surplus. In early morning trading this one is again going my way so it's likely to torture me to near the close which is no way to spend your Friday's. Again, my OII calls here more than offset the potential loss in this one and any improvement (drop) in the price of UNG is a gift at this point.

Odds & Ends:

Analyst Watch: (RIG), (DO), and (WFT) lowered from buy to add at Calyon on valuation, maintains $121 PT, (DSX) upped to outperform at BS,  (STP) initiated with a Buy at Jefco and $45 PT.

In the words of Nicky's good buddy, Have a GREAT day!

 


125 Responses to “TGI Expiration Friday”

  1. 1
    Sambone Says:

    7:48 AM EST

    ICE Brent Hits New Record High At $79.35/Bbl

    Dow Jones Newswires

    LONDON — ICE Brent crude futures hit a new record of $79.35 a barrel in London trade Friday with support from the products market adding to concerns over potential storm activity in the Gulf of Mexico.

    Brent futures broke through year-long record levels during late trade Thursday, as concerns of Atlantic storms prompted short covering to drive the crude complex higher.

    Continuing strength in the products arena, particularly gasoil futures, helped extends gains Friday, traders said.

    “We’re coming into the winter season at the moment and more people are eyeing it,” a London based trader says. “We’ve got refining problems, all causing the products to push crude higher — it’s quite simple really we’re entering the winter season.”

    At 1131 GMT, the front-month November Brent contract on London’s ICE futures exchange was up $0.11 at $79.20 a barrel.

    The front-month November contract on the New York Mercantile Exchange was trading $0.20 lower at $81.58/bbl.

    The ICE’s gasoil contract for October delivery was up $3.75 at $708.50 a metric ton, while Nymex gasoline for October delivery was down 27 points at 213.24 cents a gallon.

  2. 2
    Nicky Says:

    Morning all.

    Samborne – is it still too early to get a grip on L93’s strength? Hype looks overdone to me. Also when is it actually forecast to hit land cos even our tropical weather update seems to have no idea about that!

    They are a little bit more interested in that wave off Honduras although they say it is badly organized.

    Nat gas with the lower low this morning has now completed 5 clear waves down and so we could now see a decent correction of the first leg down.

  3. 3
    zman Says:

    Looks like the movement / timing of a high to the north will determine if it stays offshore and strengthens or comes ashore. This morning accuweather said it could make landfall by Saturday morning (most likely case they feel) as far west as the LA/TX border or it could stay in the GOMEX and cause considerable trouble.

  4. 4
    Sambone Says:

    N – Hype, overdone? Correct. My crystal ball tells me that it won’t spin up.

    I’m watching the big wave.
    http://www.ssd.noaa.gov/goes/east/catl/loop-rb.html

  5. 5
    Sambone Says:

    9:09 AM EST

    Nymex Crude Edges Down; Storm Concerns May Trim Loss

    DOW JONES NEWSWIRES
    From Market Talk:
    [Dow Jones] Nymex crude futures edge down but may trim losses on weather concerns and a bullish outlook for the coming week. “We are definitely concerned about the storm and are watching the weather moment by moment,” says Larry Young, a senior trader with Infinity Brokerage. Adds crude may set fresh record highs in the coming week, as traders open long positions in the Nov contract, which began trading Fri. A disorganized storm system off the east coast of Florida has led to oil and gas production shut-ins, but it’s unclear how the storm will develop. Nymex crude -20c at $81.58/bbl. (renya.peng@dowjones.com)

  6. 6
    Nicky Says:

    Thanks Samborne. So you think the one in the Caribbean isn’t going to amount to anything either?

    The wave you are showing in the Atlantic looks a bit more impressive.

  7. 7
    zman Says:

    Spread Oct to Nov natural gas now $1.04. That’s pretty whacked. Strip out through May is up on the gulf thing.

  8. 8
    zman Says:

    PTR puts: toast. Stock opened up $7.70 on the mainland issuance.

    OII: up another 2% on this storm stuff. Will likely hold Octobers a little longer and punt Septembers late day today.

    November oil flirting with the even mark.

  9. 9
    zman Says:

    Shell and Saudi Aramco announce $7B plan to expand their Port Arthur refinery from 275,000 bpd to 600,000 bpd creating largest refinery in US by 2010.

  10. 10
    sane Says:

    That is one large refinery

  11. 11
    BigJim Says:

    Is anyone familiar with Talisman Energy(TSM) out of Canada. Someone yesterday bought over 17,000 calls on October 17.50 calls and over 5000 for the 20’s. It has been rumored buyout target for awhile. But now money is flowing that way. I have done some research and can not find any real reasons for that many calls beyon buyout. Now I saw Phil Flynn on CNBC say early in the week he liked Canadian energy companies. I don’t follow or know him and he did not mention this company by name. Basically wondering if were there is smoke does fire soon follow. The only question I have is it happening this quarter or next. Since quarter ends next week in between October expiration. Opinions needed.

  12. 12
    Nicky Says:

    Nat gas – possible fib retracement levels for wave ii:

    6.110 (38.2)
    6.228 (50)
    6.347 (61.8)

  13. 13
    Sambone Says:

    N- The one in the Caribbean is still in a bunch of shear. I’m watching it. At this time it doesn’t look like it will effect the fields in the GOMEX. Remember, the models do say that something could start forming either in the Caribbean or lower GOMEX about now.

  14. 14
    zman Says:

    BigJim – I used to know them pretty well. Even been to Scotland on a North Sea tour with them. It’s a great company. Perpetually undervalued, once upon a time for Sudan, now for their gas exposure in Canada (and for hints Jim Buckee has made about his next fun spot to drill being Iraq).

    The only reason for that kind of volume is takeout. I’ll take a fresh look and get back with you shortly.

  15. 15
    zman Says:

    OIH well into record high territory yesterday and today, now 195, looks like 200 or bust, it’s probably the cheapest index you can find on a trailing or forward earnings basis with a chart that looks like that.

  16. 16
    Popeye Says:

    Talisman Energy = TLM

  17. 17
    zman Says:

    TLM – yep still cheap, $4.96 estimated ’08 $C cash flow on an $18.70 company (just over 3x P/cF) making it cheapest of the Canadian E&Ps by a good margin. Same applies to

    They just gave a tour of their Vietnam division, could be people liked what they heard there or it could just be a rumor or someone trying to start one. Hard to trade as I like them but they are always cheap.

  18. 18
    Sambone Says:

    10:05 am EST

    Nymex Crude Up After 4 Record High Sessions

    By ANNA RAFF
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude-oil futures rose slightly Friday after four record-breaking sessions in a row, as buying momentum persists on storm worries ahead of the weekend.

    Light, sweet crude for November delivery was 29 cents higher at $82.07 a barrel after trading as low as $81.28 overnight on the New York Mercantile Exchange. November ICE Brent hit an all-time record high of $79.75 a barrel. Brent had been lagging the gains in the Nymex benchmark and are catching up as worries that a storm system off the western coast of Florida will wreak damage on energy infrastructure.

    The Nymex October crude contract, which expired Thursday, settled at $83.32 a barrel.

    Energy companies earlier this week evacuated platforms ahead of the system, which hasn’t yet been classified as a tropical depression, and shut in more than half a million barrels of oil equivalent output.

    “We are definitely concerned about this storm and are watching the weather moment by moment,” said Larry Young, a senior trading with Infinity Brokerage.

    Some traders say the storm system raises the specter of Hurricane Humberto, which last week strengthened unexpectedly as it made landfall in Texas, knocking out power to a key U.S. refining hub. But private forecasting firm Weather 2000 said the disturbance is unlikely to develop into a hurricane or interrupt hydrocarbons output for a long period of time because its path will avoid clusters of platforms and pipelines.

    “This mass of thunderstorms and convection (whether classified or not) was always going to trek across the Florida Peninsula, and into the Northeastern Gulf of Mexico,” Weather 2000 said in a note.

    Most oil and gas output originates in the central and western U.S. Gulf.

    Nymex heating oil for October delivery recently was 1.09 cents lower at $2.25 a gallon. The Nymex gasoline benchmark, reformulated blendstock for oxygen blending, was 1.59 cents higher at $2.1510 a gallon.

    Apart from uncertainty of the storm system, market sentiment continues to push for higher crude-oil prices, with a $85-a-barrel target being bandied about, said Tom Bentz, an analyst at BNP Paribas Futures in New York.

    There’s no consensus on when the wave of buying that took crude to record highs will dry up.

    “There’s not a whole lot out there pointing to crude going lower, but on the other hand, there’s not a whole lot saying it should be higher,” Bentz said.

    Bentz said he’ll be looking for signs that oil is due for a downward correction. Sustained increases in U.S. petroleum inventories, more volumes from the Organization of Petroleum Exporting Countries and indications that the U.S. economy is weakening further could spark a selloff, Bentz said.

    —By Anna Raff, Dow Jones Newswires

  19. 19
    BigJim Says:

    TLM keeps moving higher today on good strength. Thinking about getting some calls for October epiration.

  20. 20
    zman Says:

    BigJim – not that you’re not on to something but the screen is green and many of it’s peers are up as much or more.

  21. 21
    Nicky Says:

    WTI’s overnight lows is 81.28 – a move through there will be first indication this is done, with a move through Thursdays low of 80.26 confirming it.

  22. 22
    zman Says:

    Nicky – you keep up this negativism and PF is going to get angry with you.

  23. 23
    calvino Says:

    Good morning all – Microsft took about ten minutes to reboot today, but did come on at 9:35 am. The canux are going up, wondering if the reaction is already over. Perhaps wait for the final version of the expropriation to get circulated before putting them?

    Z – I think you went against your own gut with the PTR’s.

  24. 24
    zman Says:

    Thanks for the salt for my Kung Pao.

    Crude flirting with red again

    If you’re in UNG still, like me, it’d probably be smart to take the 30 cent bid and go home.

  25. 25
    Nicky Says:

    21249 is the equivalent level for RBOB with 20880 providing confirmation.

  26. 26
    zman Says:

    N – Did you see HO has been down all day. I think that NOAA weather forecast for a warm start to winter may be weighing again. I still think it has limited downside but thought it was interesting that it is no longer pushing up which kind of messes over the whole “products rally” angle for crude.

  27. 27
    Nicky Says:

    Yes watching it Z – often a good sign of an impending reversal if there is a divergence within the complex. Closes below 10 dma at 222.28 will a good sign that at least a short term top is in.

  28. 28
    calvino Says:

    I was too chicken for the UNG, although I am getting a little toast for my True. Methinks Talisman is partnered with Advantage on some 5km gas wells in the BC foothils, but memory very fuzzy, maybe someone else if not Advantage.. will check facts coffee to help me.

  29. 29
    drdavis124 Says:

    Gold Bought: SLW SIL MFN WGDFF HOLD: GG TGB NG

    PUTS : XLF, CFC BSC QQQQ SPY YHOO

    ENERGY: CHK XTO VLO SNG GST

    COAL YZC ACI MEE WLB

    OTHER BG BHP AAPL

  30. 30
    MMarkkk Says:

    Get after them Aubrey!!

    Chesapeake Chief Demands Apology From Connecticut Governor

    OKLAHOMA CITY (AP) — The chairman of an Oklahoma natural gas producer is seeking an apology from Connecticut Gov. M. Jodi Rell over claims that the company is attempting to manipulate the price of natural gas.

    Here’s the rest of the article:
    http://biz.yahoo.com/ap/070921/ok_rell_letter_chesapeake.html?.v=1

    Z…how about NFX gives us a good $3 run today to get those Sept 50’s in the money!!!!! Hey, if those jokers in DC can wish for universal healthcare, why can’t I wish for that! Both have equal chance of coming true and working out right!

  31. 31
    rammastr Says:

    ZMAN – Does your reasoning for the PTR puts still out weigh what is going on today?

    Hi NICKY.

  32. 32
    BigJim Says:

    Z – Bought some TLM October calls on speculation. Hopefully this plays well in the coming weeks. The option volume for me, is to strong not at least put a little in and see how it plays.

  33. 33
    zman Says:

    M – Re Aubrey. RELL IS AN IDIOT.

    yeah right. Can I get SWN over $45 AND UNG to sub 37.

    UNG falling like a stone now but it’s probably too little to late.

    RAM – they’re going to have a tough quarter on the refining side but the flood of money from mainland Chinese investors is obviously outweighing for now and I’ll wait to position my longer term positions next week or whenever the momentum slows.

    BigJim – good luck and I may be in there with you soon (but not today), still waiting on the group to pull back a little. You never know, TLM could be the merger monday stock!

  34. 34
    zman Says:

    November NG actually down a couple of pennies.

    Sambone: Any update on the “storm”?

  35. 35
    calvino Says:

    That’s my Governor – she’s Republican, surprising. Isn’t someone else supposed to be talking about a shutin. What do you figure that shut in has been worth to NG – fifty cents?

  36. 36
    calvino Says:

    Citi put a 90 target on CNQ – that explains some things

  37. 37
    Sambone Says:

    SUBTROPICAL DEPRESSION TEN ADVISORY NUMBER 1

    http://www.srh.noaa.gov/productview_all.php?pil=TCP&max=61

    Doesn’t look to effect the fields.

  38. 38
    MMarkkk Says:

    Z – you want SWN over $45…okay…poof!!!! it’s there. in our minds and dreams! see, I should be a politician!

    Cal: yes, Rell is a Republican, but that’s just a name. many more of those folks with R’s behind their names that don’t mean squat. who can tell the difference any more?

    EOG has some production shut in as well and I’m guessing there are lots of others who just aren’t talking about it!

  39. 39
    zman Says:

    Cal – I think it’s worht more an inflection point, not as much as 50 cent since they said they’ll still make their production target.

    EOG said they cut 50 in the rockies the other day. Gas there has routinely been under $1 the last couple of months as it can’t get to market.

    Mark – when is Rockies express open again, Jan?

    UNG – 45 cent bid now. Fair warning to the maker, if UNG doesn’t proceed lower in the next little bit I’m going to hit and be thankful

  40. 40
    zman Says:

    Mark – did you see APC’s Hackett took the opposite approach and said low gas prices were a temp thing and not worthy of a shut in for them. Now that’s smooth.

  41. 41
    zman Says:

    Mark – did you see the sale price on NFX’s UK stuff earlier this week. Analyst’s were like “wow, that’s great, almost $9/Mcf …good job….reiterate hold or add or weak buy rating”

    Nicky – nice earlier on crude…it’s even weighing down Nov gas.

  42. 42
    Nicky Says:

    Wti has a Gann support line which passes through about 80 today. A close below that would also confirm a top.

  43. 43
    Popeye Says:

    ABC says three rigs evacuated in advance of storm.

  44. 44
    Nicky Says:

    Okay boys its time to roll the complex over….. lets see it!

  45. 45
    zman Says:

    The headline from accuweather:

    No Hurricane This Time:

    http://www.accuweather.com/news-story.asp?partner=accuweather&traveler=0&article=1

  46. 46
    zman Says:

    Looks like the non-tropical disorganized area of clouds near Honduras is supporting gas now (barely).

  47. 47
    QUARRYMAN Says:

    SEP PTR and VLO puts?: C’est la Z !

    [ sorry, couldn’t resist )

    “SAFETY PAYS”

  48. 48
    zman Says:

    Q – I had NO VLO puts.

  49. 49
    QUARRYMAN Says:

    Does EOG have enough oomph to go another .50 today and bring me clear?

  50. 50
    zman Says:

    Q – that’s a crap shoot…no telling. oil looks to be legging lower and that would auger against it.

  51. 51
    QUARRYMAN Says:

    U r right. I freelanced that from the radio show earlier, during one of Phil’s mike-dominating explanations. It was profitable a good bit yesterday.

  52. 52
    QUARRYMAN Says:

    I put more serious money in the NFX position which I may just take to cash right now, while I’m in office.

    “SAFETY PAYS”

  53. 53
    Sambone Says:

    FYI – Blob near Honduras; Florida State has a model for a cane to spin right into LA.
    http://moe.met.fsu.edu/cgi-bin/gfstc2.cgi?time=2007092106&field=950mb+Vorticity&hour=Animation

  54. 54
    zman Says:

    I understand, just make sure people know that or they have to go hunting thinking I’m short when I’m not and it can be frustrating.

    I’m out of refiners right now.

  55. 55
    Nicky Says:

    WTI seems to have strong support at the 81.30 level. Need to break it…

  56. 56
    zman Says:

    Scoop around?

    Major re rally on oil, but the sentiment looks to be turning to “a weak retracement is in ok and even healthy”. I think if it keeps bouncing lower off even at some point it will set up a good profit taking drop, but probably little more than that for today.

  57. 57
    Sambone Says:

    Z’s favorite guy

    http://www.insidefutures.com/article/43033/Hey%20Dude!%20%20Its%20Uncle%20Sam's%20Year%20end%20Clearance!%20.html

  58. 58
    zman Says:

    Hillarious. PF switches from being an out and out bull to saythings like NOAA is offering some hope with its above normal weather forecast. You don’t hope for that if you’re bullish. Comeon you faker! He was throwing in the towel but now he refers to Shell pulling oil workers in the gulf as “icing on the bullish cake” Pleeeaaasse.

    This guy blows in the wind like John Kerry in the last campaign. “ooohhh, what’s that shiny bauble over there?! I think I’ll talk about that” (sees another shinier bauble; first bauble thuds on the ground “oh wait, there’s another, I like that one even better” and on and on and on and on…

    …and for the last time, that looker is Nicky’s favorite boy, not mine. 😉

  59. 59
    QUARRYMAN Says:

    When XLE was 70 I place a bargain shopping limit buy in for Jan08 75 puts which I now own and index is now nearly 77.

    Don’t know how to play this. I’m down about 20%.

    Do I wait and speculate on volatility in XLE fluctuation ?

    Or should I take the loss and roll them out to Mar 75s same strike or to Jan 77s

    This is the ATH area.

  60. 60
    Sambone Says:

    Z – LOL, tell us how you really feel!

  61. 61
    Nicky Says:

    Aye DDGPF (Drop Dead Gorgeous PF) is all mine!!

  62. 62
    zman Says:

    Q – I think we get a pullback in oil soon, see chart this morning. That said it may take another week. I’m short some worthless XLE’s lower but wouldn’t take on any new ones just yet.

    Nicky – I knew it!

    Sambone – did you see he said “after Wednesday” about Bernanke’s move on rates. I’m sorry, didn’t that happen on Tuesday?! Also, must have needed filler as it’s Friday.

  63. 63
    cadillac Says:

    z,

    What’s up with ESV today. Strong up!

  64. 64
    Sambone Says:

    Z – True that.

  65. 65
    zman Says:

    Tell me why the refiners are up here if products are lower and oil is flattish and products are lower. Market up / energy up I assume.

    ESV – up on a ultra-deep semi sub 2 yr contract with NXY beginning in …wait for it…2010. It’s up on the headline number that says its a $340 million total value contract. Will watch for now, may add more early next week

  66. 66
    zman Says:

    cadillac,

    Add that headline to the almost all green energy screen and it being a cheap stock and the brokers are hyping it.

  67. 67
    sane Says:

    Z,

    I saw a quote from PF on Tuesday that oil demand instantly jumped following the rate cut, like at that second. I know I went out and bought about 1000 gallons of gasoline and burned it just because of the rate cut.

  68. 68
    zman Says:

    Sane,

    I’ve started drinking it with my coffee.

  69. 69
    sane Says:

    Yeah has kind of a sweet taste.

  70. 70
    sane Says:

    Is it beer thirty yet because I got the sailboat packed and I am ready to get out of Dodge.

  71. 71
    calvino Says:

    i like it with a bit of naphthenic and palmitic acids- nothing like that smell in the morning

  72. 72
    Sambone Says:

    Ngas – If we have mild weather (Goldilocks, not to hot or cold) between now and Nov 2nd, we’ll hit overflow during the week of Oct 26th. If we hit overflow, then Ngas will crash.

  73. 73
    calvino Says:

    sane – don’t tell me – when I got up today, i was ready to pick up a barron’s and get my coffee. then i looked at my watch, and i thought the day was wrong. by the time i got to the pc, i missed the bell

  74. 74
    MMarkkk Says:

    Ok, that storm in the gulf may look a bit weak but one of the forecasts have it sitting on top of Baton Rouge at 2PM on Saturday. Now, while it may not be a big storm, sitting on top of Tiger Stadium 30 minutes before kick off is a REALLY BIG DEAL! ‘Dem Tigers have an appointment to dispense a severe butt kickin’ to South Carolina and Mr. Pretty Boy Spurrier. That’s if the rain storm doesn’t scare them off! Tiger Bait!

    My watch says beer thirty, so I don’t think I’ll wait for NFX to get over $50. The oil patch is pretty much shut down already so no one’s out there to talk deals with so I’m going home! Have a great weekend folks. M

  75. 75
    calvino Says:

    the loon has bounded past parity – amazed that BOC has not started open market ops yet, can not be good for their mfg and they already surplusing budget, what’s to lose? should be a bounce back a little – they could be waiting for a spell so as not to get timed.

  76. 76
    sane Says:

    Later M

  77. 77
    Sambone Says:

    Cal – Looks like COSWF and SU rebounding after the news the otherday.

  78. 78
    sane Says:

    Cal,

    And I was thinking of sailing up to Canada this week. I think I will stay here in the states with my worthless dollar. What is next parity with the peso?

  79. 79
    calvino Says:

    I used to go up there to be chillin with my homies at the University of Toronto at 1.4usd/cd. There was a decided cost advantage to the exchange induced price differential of Molson back then.

  80. 80
    TTupp Says:

    Z- did you read anything of NB’s research?

  81. 81
    Nicky Says:

    #72 – time to dust the hat off!

    Finally the frickin market has rolled over!

  82. 82
    Nicky Says:

    Crazily distillates now looking the strongest relatively!

  83. 83
    zman Says:

    Molson – ug, how about Black Label.

    Tupp – nope, not lately but I have access to lots of Street stuff now. (probably too much. I miss anything good, I’ll go hunt for it!

    Nicky – such language! But go down fricken UNG!

  84. 84
    rammastr Says:

    NICKY – Which frickin markets?

  85. 85
    TTupp Says:

    yea, go read about the trusts stuff….. i think you have your lines crossed on the issue

  86. 86
    zman Says:

    Tupp – I haven’t been talking about trusts, just a mention of oil sands producers. The stuff I’ve read has been pretty harsh about the future potential increase in taxes and a bitumen sev tax step up tax. Is that tax some how good for the producers.

  87. 87
    zman Says:

    …Street firms have been talking about lopping 10% of earnings for guys like SU

  88. 88
    zman Says:

    …and I haven’t pulled the trigger on a single put in that group yet.

  89. 89
    coco Says:

    story on reuters from petrologics saying crude shipments from OPEC set to increase from 12-OPEC members- 12-member Organization of the Petroleum Exporting Countries is set to rise 300,000 bpd to 30.8 million bpd, Petrologistics said, on a rebound in shipments from Iraq.

  90. 90
    zman Says:

    Tupp – I can’t go read it now so tell me where you think I’m wrong and on what. That’d help me out.

    Coco – thanks. PF and company will, in short order, claim that OPEC can’t raise production.

  91. 91
    zman Says:

    HK cresting 17, been awhile since I’ve seen that.

  92. 92
    TTupp Says:

    there’s nothing lengthy…2 small articles. its mostly going to effect trusts, and the especially the ones with mature assets

  93. 93
    Nicky Says:

    Looks like I spoke to soon – huge bounce in distillates.

  94. 94
    zman Says:

    Please just tell me where you think I’m wrong or give me the ticker of one and I’ll look for it. I wasn’t talking about trusts but I’d still like to know what it is you are trying not to tell me

  95. 95
    Nicky Says:

    Ram – sorry energy although no confirmation as yet. WTI has support at 80.77.

  96. 96
    zman Says:

    I can just hear them saying, the bounce in crude after the initial dip following the OPEC statement is the result of trader’s suspicions that OPEC simply can’t bump production up in time.

    I should be selling my UNG trade off for 20 cents on the dollar now but I’m just not that smart. Plus oil and gas may crack lower over the next 30 minutes as traders cash in oil fearing more OPEC statements and no stormy Monday.

  97. 97
    zman Says:

    Tupp – I can’t find the password, can you synopsize where my wires are crossed. thanks

  98. 98
    zman Says:

    Skud list:

    SWN, NFX calls from July
    XLE protective puts from before OPEC
    UNG so far
    PTR
    these all go off the board a 0s

  99. 99
    Sambone Says:

    I fell for M at the game.

    Tropical Depression TEN Public Advisory
    ——————————————————————————–
    Home Public Adv Fcst/Adv Discussion Wind Probs Maps/Charts Archive

    US Watch/Warning
    ——————————————————————————–

    000
    WTNT35 KNHC 211746
    TCPAT5
    BULLETIN
    TROPICAL DEPRESSION TEN INTERMEDIATE ADVISORY NUMBER 1A
    NWS TPC/NATIONAL HURRICANE CENTER MIAMI FL AL102007
    100 PM CDT FRI SEP 21 2007

    …DEPRESSION BECOMES TROPICAL…

    SATELLITE IMAGERY INDICATES THAT THE SUBTROPICAL DEPRESSION HAS
    ACQUIRED ENOUGH TROPICAL CHARACTERISTICS TO BE CONSIDERED A
    TROPICAL DEPRESSION.

    A TROPICAL STORM WARNING REMAINS IN EFFECT FROM APALACHICOLA FLORIDA
    WESTWARD TO THE MOUTH OF THE MISSISSIPPI RIVER…INCLUDING NEW
    ORLEANS AND LAKE PONTCHARTRAIN. A TROPICAL STORM WARNING MEANS THAT
    TROPICAL STORM CONDITIONS ARE EXPECTED WITHIN THE WARNING AREA
    WITHIN THE NEXT 24 HOURS.

    FOR STORM INFORMATION SPECIFIC TO YOUR AREA…INCLUDING POSSIBLE
    INLAND WATCHES AND WARNINGS…PLEASE MONITOR PRODUCTS ISSUED
    BY YOUR LOCAL WEATHER OFFICE.

    AT 100 PM CDT…1800Z…THE CENTER OF TROPICAL DEPRESSION TEN WAS
    LOCATED NEAR LATITUDE 29.7 NORTH…LONGITUDE 85.9 WEST OR ABOUT 50
    MILES… 85 KM…SOUTHWEST OF APALACHICOLA FLORIDA AND ABOUT 155
    MILES…250 KM…EAST-SOUTHEAST OF MOBILE ALABAMA.

    THE DEPRESSION IS MOVING TOWARD THE NORTHWEST NEAR 11 MPH. A TURN TO
    THE WEST-NORTHWEST IS EXPECTED DURING THE NEXT 24 HOURS. ON THE
    FORECAST TRACK…THE CENTER OF THE DEPRESSION WILL BE MOVING NEARLY
    PARALLEL TO THE COASTLINE WITHIN THE WARNING AREA TODAY AND
    TONIGHT.

    MAXIMUM SUSTAINED WINDS ARE NEAR 35 MPH…55 KM/HR…WITH HIGHER
    GUSTS. THE DEPRESSION IS EXPECTED TO BECOME A TROPICAL STORM LATER
    TODAY OR TOMORROW.

    THE MINIMUM CENTRAL PRESSURE REPORTED BY A RECONNAISSANCE AIRCRAFT
    WAS 1006 MB…29.71 INCHES.

    RAINFALL ACCUMULATIONS OF 2 TO 4 INCHES…WITH ISOLATED MAXIMUM
    AMOUNTS OF 6 INCHES…CAN BE EXPECTED IN ASSOCIATION WITH THE
    DEPRESSION.

    ISOLATED TORNADOES ARE POSSIBLE OVER SOUTHWESTERN GEORGIA…THE
    FLORIDA PANHANDLE…AND SOUTHEASTERN ALABAMA THROUGH TONIGHT.

    COASTAL STORM SURGE FLOODING OF 1 TO 2 FEET ABOVE NORMAL TIDE LEVELS
    CAN BE EXPECTED IN AREAS OF ONSHORE FLOW.

    REPEATING THE 100 PM CDT POSITION…29.7 N…85.9 W. MOVEMENT
    TOWARD…NORTHWEST NEAR 11 MPH. MAXIMUM SUSTAINED WINDS…35 MPH.
    MINIMUM CENTRAL PRESSURE…1006 MB.

    THE NEXT ADVISORY WILL BE ISSUED BY THE NATIONAL
    HURRICANE CENTER AT 400 PM CDT.

    $$
    FORECASTER FRANKLIN

  100. 100
    rammastr Says:

    ZMAN – Quotes from Tom Kloza do anything to the energy markets?

  101. 101
    Sambone Says:

    Feel for M. Wet day

  102. 102
    Sambone Says:

    1:47 PM EST

    Nymex Crude Falls Amid Market Correction

    DOW JONES NEWSWIRES

    1:45 (Dow Jones) Nymex crude falls as the market begins to find it difficult to maintain the vertiginous highs reached in the last several days, says MF Global analyst Mike Fitzpatrick. “We put a major top in,” he says. “There’s a good, sizable correction underway, and this is the beginning of it.” He adds that forecasts predicting sub-tropical storm over the northeastern US Gulf isn’t a major threat to energy production is helping weigh down prices. Nov crude off 93c at $80.85/bbl. (CLS)

  103. 103
    zman Says:

    Tom Kloza commnets?

    gas not running yet on the comments Sambone just posted but oil up a little.

    Sambone, does that look like it is now expected to stay over water than at last check?

  104. 104
    zman Says:

    what did Kloza say? Got a link

  105. 105
    Sambone Says:

    Looks like it will run the coast as per NHC.

  106. 106
    Nicky Says:

    It will be history by Monday though.

  107. 107
    zman Says:

    MMS GOMEX offline

    814K bopd
    2.4 Bcfgpd

  108. 108
    zman Says:

    yes but check out the end of day rally in crude and gas it is causing.

  109. 109
    Sambone Says:

    N – Yep, history. If it keeps it’s present track and doesn’t move more west, then it will hit landfall tonight. Top winds could be 45mph.

  110. 110
    Sambone Says:

    Still watching this wave in the mid atlantic.
    http://www.ssd.noaa.gov/goes/east/catl/loop-wv.html

  111. 111
    zman Says:

    Sambone, think it starts to spin? Looks like part of it is getting shaved off, hows the shear in front of it look.

    wonder if we see a post close sell off.

  112. 112
    Sambone Says:

    2:20 pm EST

    Nymex Crude Down On Profit-Taking

    DOW JONES NEWSWIRES

    [Dow Jones] Nymex crude oil futures fall as traders take profits and liquidate long positions, says BNP Paribas analyst Tom Bentz. “Traders are running for profit-taking, and once it gets rolling, it keeps rolling on the downside,” he says. Nov crude -58c at $81.20/bbl, after dipping to intraday low of $80.55/bbl.(renya.peng@dowjones.com)

  113. 113
    Sambone Says:

    On the mid atlantic blob. It is split. Northern part has 20 to 30 shear. South it’s 10 to 5. Once it moves more west it’s clear sailing (low shear) until you get into the middle of the Caribbean. We’ll see next week.

  114. 114
    rammastr Says:

    Oil wavers, but gas prices set to rise

    By JOHN WILEN

    Oil prices wavered Friday, buffeted by profit-taking and a low dollar, but analysts say gas prices are about to start rising again following oil’s recent record-breaking advance.

    Gas prices have so far held steady or even fallen despite a rally that has boosted oil prices to new records in each of the last eight trading sessions on the New York Mercantile Exchange.

    “That’s over now,” said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service. “From now on, every $1 a barrel advance in crude has to be accompanied by a 2 1/2 cent increase in gas prices.”

    Oil’s advance has been driven by a combination of the Federal Reserve’s half-point interest rate cut, the falling dollar and concerns that tropical storms will strike key oil and gas installations in the Gulf of Mexico.

    Interest rates and their role in pulling the dollar lower are drawing fresh investment dollars into energy markets, analysts say.

    “What interest rates were placed at … is the key to oil prices going higher,” said James Cordier, president of Liberty Trading Group in Tampa, Fla.

    As oil has risen, the spread between what many retailers pay for their gasoline and what they charge consumers has shrunk substantially, or even reversed in some cases.

    “The people who actually sell the gasoline are really, really suffering,” Kloza said.

    Retail gas prices in many areas are already a nickel behind where they would need to be to allow retailers to turn a profit, Kloza estimated. Gas prices will likely rise an average of 10 to 15 cents a gallon nationwide over the next couple of weeks, Cordier said.

    Overnight, the average price of a gallon of gas rose 0.6 cent to $2.797, according to AAA and OPIS.

    Meanwhile, light, sweet crude for November delivery fell 8 cents to $81.70 on the New York Mercantile Exchange after rising as high as $82.40 earlier. November crude became the benchmark front-month contract after the October contract expired Thursday at a record close of $83.32 a barrel. Prices reached $83.90 in intraday trading, also a record.

    Also Friday, October gasoline futures rose 0.44 cent to $2.1395 a gallon on the Nymex. In London, November Brent crude rose 26 cents to $79.35 a barrel on the ICE Futures exchange.

    Retail gas prices, which typically lag the futures market, peaked at $3.227 in late May. At the time, futures were rallying as refiners were reporting an unusual number of unexpected outages. Investors were concerned the industry would not be able to make enough gas to meet peak summer driving demand.

    As the summer progressed, however, refiners ramped up their gasoline production, and the supply worries ebbed.

    Now, with peak summer driving season receding in the rearview window, many analysts had concluded that falling demand would compensate for supplies, which are again falling.

    They didn’t count on oil’s fall surge. Gas prices have little choice but to follow, Kloza said. Still, he doubts prices will again reach the $3 level this year. Oil prices typically peak for the year in early October, Kloza said. When that happens, oil prices will decline into the winter months, pulling gasoline back down.

    But in the meantime, he said, oil could rise as high as $91 a barrel.

    “Crude will almost certainly go higher in the next 30 days,” Kloza said on his blog, Speaking of Oil.

    In other Nymex trading, heating oil futures fell 1.13 cents to $2.2496 a gallon while October natural gas gained 4.4 cents to $6.052 per 1,000 cubic feet.

    Also supporting energy prices on Friday was a storm system in the Gulf of Mexico that could develop into a tropical depression or storm. Oil and gas companies have evacuated hundreds of workers from offshore rigs as a precaution, and “shut-in,” or suspended about a quarter of the Gulf of Mexico’s daily oil production.

    But most analysts and investors expect the storm’s impact on production to be short, even if it strengthens.

    “This is a storm that would probably have had no impact if it were not for Humberto,” a recent storm that surprised forecasters by strengthening from tropical depression to hurricane strength in a matter of hours.

    ——

    Associated Press Writers Pablo Gorondi in Budapest and Gillian Wong in Singapore contributed to this report.

  115. 115
    zman Says:

    Thanks Ram – I agree with him and would apply it to HO as well as I was saying in 26 above:

    N – Did you see HO has been down all day. I think that NOAA weather forecast for a warm start to winter may be weighing again. I still think it has limited downside but thought it was interesting that it is no longer pushing up which kind of messes over the whole “products rally” angle for crude.

  116. 116
    zman Says:

    Blast just sent, I’m looking at exiting the UNG puts, down about 80%. will continue to watch until I get tired of it but this is fair warning that it could go to 0 in a flash.

  117. 117
    Sambone Says:

    Huge volume on BQI

  118. 118
    zman Says:

    they announced a secondary this morning is all I see.

  119. 119
    rammastr Says:

    bqi

  120. 120
    zman Says:

    Yawn, pinning action. I’ll be on my blackberry. Have a great weekend.

  121. 121
    sane Says:

    Later all going sailing

  122. 122
    Nicky Says:

    Z – Heating oil did not fall in proportion to either wti or rbob today and recovered much quicker.

    That said heating oil and wti are following the same chart pattern and I am expecting them to sell off together.

    FWIW Brent looks done, jury still out on wti because of the rollover and a very difficult to distinguish wave full of ill defined subdivisions, distillates could have ended in an wave v ending diagonal too. Either way the end is close.

  123. 123
    Sambone Says:

    Watching a spin on top of Dominican Republic.
    http://www.ssd.noaa.gov/goes/east/carb/loop-wv.html

  124. 124
    Sambone Says:

    3:26 pm EST

    Nymex Crude Closes Slightly Lower

    By CASSANDRA SWEET and RENYA PENG
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude-oil futures ended slightly lower Friday as traders took profits ahead of the weekend and discounted the threat of a tropical depression disrupting U.S. Gulf Coast energy infrastructure.

    Light, sweet crude oil for November delivery ended 13 cents lower at $81.65 a barrel, after trading as low as $80.55 on the New York Mercantile Exchange. November ICE Brent ended 5 cents higher at $79.14, after hitting an all-time record high of $79.94 a barrel.

    Final settlement prices weren’t in yet.

    Friday was the first day during which November Nymex crude futures traded as the front-month contract.

    The Nymex October crude contract expired Thursday at $83.32 a barrel, ending four record-breaking sessions.

    The slight dip Friday occurred as traders took advantage of current high prices to take profits and appeared less concerned about a tropical depression moving through the northeastern U.S. Gulf, said Phil Flynn, an analyst and broker at Alaron Trading Corp. in Chicago.

    “It’s probably a reflection of profit-taking and a reflection of hopes that the tropical weather in the Gulf of Mexico won’t be as bad as some people have feared,” Flynn said. He noted that futures closed lower last Friday, after record highs were reached that week.

    Strong global demand for oil and the weakening of the U.S. dollar are factors that will likely push oil prices back up above $83 a barrel in the near future, Flynn said. Other factors, such as political tensions this week between the U.S. and Iran, that might have affected prices in past years, have had little or no impact on the oil market, he said.

    The weakening in oil prices Friday came as “no surprise,” after this week’s sharp rally and given high volatility in the market, said Darin Newsom an energy analyst at energy trading firm DTN in Omaha, Neb.

    “Personally, I still think the market will continue to go up in a long term,” Newsom said. The next high for the front-month contract is likely to be about $89 a barrel, he predicted, citing technical charts.

    Meanwhile, Tropical Depression 10 was expected to become a tropical storm later Friday or Saturday, according to the National Hurricane Center. The center of the depression was located about 50 miles southwest of Apalachicola, Fla., and about 155 miles east-southeast of Mobile, Ala. at about 2 p.m. EDT, the NHC reported.

    A tropical storm warning was in effect from Apalachicola, Fla., west to the mouth of the Mississippi River, including New Orleans and Lake Pontchartrain. The warning means that tropical storm conditions are expected within the next 24 hours.

    Energy companies earlier this week evacuated platforms ahead of a tropical depression off the west coast of Florida. Producers have shut in 62.7% of oil production and 30.8% of natural gas production in the Gulf of Mexico, according to the U.S. Minerals Management Service.

    Most of the shut-in production, which totals 814,578 barrels of oil and 2,371 million cubic feet of gas a day according to the MMS, was halted on Wednesday and Thursday. Drillers also evacuated 17 rigs, out of 89 total in the Gulf.

    Earlier Friday, traders were concerned the storm might imitate Hurricane Humberto, which last week strengthened unexpectedly as it made landfall in Texas, knocking out power to a key U.S. refining hub. But private forecasters discounted the current weather system, saying even if it strengthened before making landfall, it was unlikely to bring much, if any damage.

    The storm’s “limited amount of over-water time and close proximity to the coast” indicate it won’t develop quickly into a powerful storm as Humberto did, predicted Jim Rouiller, senior meteorologist with private forecaster Planalytics in Philadelphia. Wind damage is likely to be “minor” and limited to a 40-mile radius, he said.

    Nymex heating oil for October delivery closed 47 points lower at $2.2562 a gallon. The Nymex gasoline benchmark, reformulated blendstock for oxygen blending, ended 2.51 cents lower at $2.11 a gallon.

    —By Cassandra Sweet, Dow Jones Newswires

  125. 125
    Sambone Says:

    I’m gone, “Tini time/market about to close”. Have a good weekend.

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