25
Sep

Testy Tuesday – Commodities & Markets In For Some Volatility

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Commodities Watch:

  • Crude Oil: Off about a buck in pre market trading, sinking below $80. Profit taking.
  • GOMEX production continues to come back on line.
  • UAE says it will reduce output by 600,000 bopd for scheduled maintenance at three offshore fields. This is nothing new (it has been planned for a year and I recall seeing it some months back) but it may get some press that one of the OPEC 10 is taking production down at the same time Saudi Arabia will be ramping volumes to meet the quota hike announced on September 11th. This could be viewed as price supportive since many traders and oil gurus have questioned SA's ability to quickly ramp volumes.
  • Natural Gas: trading flat to slightly up early after a surprising run over $7 yesterday. Could be the forecast for a resurgence in unseasonably warm temps expected this week (one last bit of cooling demand).

Early Read On Wednesday's EIA Oil Report (from the Bloomberg survey)

  • Crude: expected down 2.1 million barrels
  • Gasoline: No change
  • Distillates: Up 1.2 

Comment: I feel like a broken record here but the crude withdrawal could / should again be bigger than the expectations given the GOMEX production shut in late last week. Since the last update yesterday morning I have to guesstimate oil production is back to between 80 and 90% of normal meaning less than 200,000 bopd remain shut in. I'd also bet we see another drop in refinery utilization to a level below 89%.

Tropics Watch: TD 12 Formed Mid Atlantic. Expected to gradually turn to the northwest and strengthen, possibly becoming a hurricane as early as Thursday. At present this storm is expected to curve north avoiding the U.S. entirely. For more click here. There is also a low just north of the Yucatan Peninsula in the GOMEX which could develop into a tropical depression soon.

Stocks We Care About Today

  • Chinese Oils: Oh What A Rally. Based on PTR's announced secondary the big 3 Chinese Oils (PTR), (SNP), (CEO) have soared. Watching and waiting. 
  • Offshore Shallow Vs Offshore Deep: According to Deutsche Bank the divergence between the US GOMEX Jackup market and the Deepwater markets continues to widen.
    • I'm short (ESV) here (which has been more resilient than I'd have thought) and again long (RIG).
    • DB points out that while JU rigs are leaving the U.S. for better rates in the international arena which is widely expected to stabilize GOMEX rates there is a large amount of new build capacity entering the market and that as such, operators are increasingly contracting rigs for shorter periods as they believe rates will fall.
    • At present GOM JU utilization is down to 60% versus international levels in the "mid to upper 90%s."
    • They therefore see the newbuild capacity as trimming international rates, not boosting GOMEX rates...just at the time when ESV is taking the time and money to start pulling rigs from the GOMEX and sending them abroad, what I term, "chasing dayrates."
    • My timing could be off and this may take longer to unfold than I previously had thought but the concept is coming together nicely. If they don't warn by early October I'll re-run this play on November options.                      
  • (KWK) - While some Barnett players are slowing down (CHK) others are taking the lull in news between quarters and evidently resilient gas prices to heart and ramping up activity. KWK is boosting its Barnett Shale budge by $200 million for the remainder of 2007 with the majority of the funds ($150 mm) earmarked for accelerating it's drilling in the shale and the rest planned for acquiring additional leasehold and building more gathering infrastructure.  
  • (BP)- "dreadful" 3Q results according to the the new CEO. He's planning to restructure BP after telling Reuters that "There is massive duplication and lack of clarity of who does what"
  • (AXC.to) - bought another deepwater block (JDZ Block 1) in the waters between Sao Tome and Nigeria for $US 77.6 mm. They have well control in the form of one successful well here drilled by (CVX) in 2006. Addax has the largest acreage position in the JDZ (joint development zone) now with interests in 4 blocks in what is undoubtedly one of the most target rich environments on the planet. A 10 well program is scheduled for the JDZ commencing in late 2008. See my book report on Addax here. No options but this is the next (TLM) and a long term hold for my IRA.
  • (PBR) - don't own it any longer with September expiration but I'd love to see it fall back a bit so I can do that again. The company continues to announce positive things, yesterday evening embarking on a stepped up drilling program in the extreme wester GOMEX.
  • Refiners: I'm on the sidelines for now. (TSO) to be added to S&P 500.

Natural Gas Imports Watch: Gross imports stood at nearly 11.5 Bcfgpd last week, up about a tenth of a B from the prior week and down 0.5 Bcfgpd from year ago levels.

  • LNG volumes continued to slip falling 0.1 Bcfgpd to 1.47 Bcfgpd. (still 0.2 Bcfgpd higher than year ago levels)
  • Pipeline volumes from Canada edged back up to 10.0, which is donw 0.7 Bcfgpd from year ago levels.

Degree Day Watch: 

  • Last Week: 33 cooling degree days, much lower than previously expected and down from the prior week's 45. This is actually in line with normal and year ago readings. 
  • This Week: CDDs are expected to rally back to 46 which is about 75% warmer than year ago and normal levels. That must put a twinkle in Al Gore's eye.

Holdings Watch:

CALLS:

  • (RIG) Bought two equal sized tranches of the October $115s. One at $2.50 and another at $2.20. Last bid $2.45.
  • (DRYS) Bought an opening position in the October $85s for $5.80. Last bid $6.00. 

PUTS: No Action.

Stocks: No Action 

Odds & Ends

Analyst Watch: nada 

Iraqi Production Watch: Officials report the main line to Turkey which was sabotaged not two weeks ago was back online and pumped 1 million barrels across the border over the weekend.   

OPEC Watch: Nigeria says there is no need for further increases in production from OPEC just because oil is over the $80 mark. Comment: if he's basing that statement on his ability to control MEND and keep Nigerian light sweet flowing I have a stripper well to sell him. It just needs a little work, I promise.

89 Responses to “Testy Tuesday – Commodities & Markets In For Some Volatility”

  1. 1
    zman Says:

    TD12 now Tropical Storm Karen and forecast to bend north to Bermuda.

  2. 2
    zman Says:

    Sambone, what do make of the low drifting around in the GOMEX?

  3. 3
    Sambone Says:

    7:46 am EST

    Crude Down As US Output Returns, Eyes Weather

    By David Elliott
    Of DOW JONES NEWSWIRES

    LONDON — Crude oil futures fell further Tuesday morning in London as investors booked profits but losses are expected to be limited as U.S. production remains vulnerable to the ongoing Atlantic hurricane season.

    Traders said the restart of production in the Gulf of Mexico — after last week’s storm system passed without incident — continues to weigh on sentiment but pointed out brewing weather disturbances in the Atlantic mean the market will retain risk premium.

    “We aren’t out of the woods yet,” a trader in London said. “There is too much of this (hurricane) season left to run to allow for complacency.”

    At 1128 GMT, the front-month November Brent contract on London’s ICE futures exchange was down 55 cents at $78.36 a barrel.

    The front-month November contract on the New York Mercantile Exchange was trading $0.92 lower at $80.03 a barrel having earlier tested $80.00 a barrel.

    ICE’s gasoil contract for October delivery was down $7.25 at $700 a metric ton, while Nymex RBOB gasoline for September delivery was down 214 points at 206.20 cents a gallon.

    Latest news from the National Hurricane Center saw Tropical Depression 12 upgraded to Tropical Storm Karen. Located 1,565 miles east of the Windward Islands, the storm’s projected path isn’t a threat to Gulf of Mexico production, at least for now, but the oil market isn’t taking any chances.

    Also keeping traders on their toes is an area of low pressure headed for the Leeward Islands which, according to Olivier Jakob, analyst at Petromatrix, has a calculated path more favorable for a Gulf penetration but the system is for now still relatively weak. A weak weather disturbance in the southwestern Gulf of Mexico isn’t expected to impact oil production.

    This potential for further development of these weather systems is bolstering current prices and some in the market point out further support could be found from the weekly U.S. inventory data which will reflect the curtailed Gulf of Mexico oil production.

    But others point out the trimmed refinery utilization, as a result of last week’s weather disturbance and also Hurricane Humberto, will lower crude demand and negate any fall in production.

    At any rate, the output slide should already be factored into prices.

    “While the closure is expected to have a negative impact on the next U.S. oil inventory data, this should already be sufficiently priced in by the market,” said Eugen Wienberg, an analyst at Commerzbank in Frankfurt.

    And he felt the oil prices look vulnerable at current levels if U.S. east coast oil facilities escape further damage from the hurricane season.

    “We expect oil to list weaker in the next few days and weeks, provided there are no hurricanes,” he said.

    Aside from the weather worries, the market is also finding support from renewed geopolitical concerns after the main militant group in Nigeria said it was ending a ceasefire and as tensions surrounding Iran’s nuclear ambitions build. This comes amid growing expectation for tightness in the global oil supply and demand balance in the fourth quarter of 2007 and into 2008.

    But this latter view has helped prompt the speculative funds to build up a substantial long position, a factor that makes the market look top-heavy and may lead to further profit-taking short term.

    Technically, WTI’s lower close on Monday suggests a near-term top is in place, say technical analysts at Barclays Capital.

    “Sentiment remains at levels consistent with previous tops, and suggests a corrective unwind is needed before we can see further WTI gains,” they said.

    —By David Elliott, Dow Jones Newswires

  4. 4
    zman Says:

    What I find funny is how many people you can find saying oil is going to fall into the 70s when oil is off a buck or two citing a lack of hurricanes. When it was at 84 these same jokers were calling for higher prices due to tight supply and demand but now that its off a bit you need a hurricane to support your theory. Weak.

    I’ve been saying mid 70s for awhile now but I doubt it will fall that far and if it holds 80 it could turn higher. The tightness in S/D won’t be going away without a warm winter higher OPEC production so I agree with the downside is limited statement.

  5. 5
    Sambone Says:

    GOMEX – Not expecting much at this time. Disorganized, lots of shear. It should go west and hit Mexico by Wednesday.

  6. 6
    calvino Says:

    Morning all. Missed yester – did everyone see the abu debi buy. hundred per flowing barrel and 40% premium to market. i was in fri morn and out fri noon – arrr. Mcdep infers that chicom’s 3mmt/y NG offtake from Woodside is start of a pattern.
    Jodi Rell watch: today Connecticut has asked Congress Energy? to investigate crack spreads. On the other hand, she is helping fcel to ramp production, so I am not going to critisize.

  7. 7
    zman Says:

    S – thanks

    Everything opening down (energy and otherwise), even Chinese oils

    Oil below 80; interesting to see if we close below there. products off as well

    Rell – I can send her the formula for calculating them if that would help, lol

  8. 8
    Nicky Says:

    WTI should see a pullback into the mid 70’s.

    Distillates needs to break 21910 for confirmation we have a correction underway.

  9. 9
    Sambone Says:

    Cal – Saw the buyout, mentioned it yesterday. Hopefully COSWF is next.

  10. 10
    Sambone Says:

    9:03 am EST

    Nymex Crude Keeps Sliding; Below $80 Overnight

    DOW JONES NEWSWIRES

    [Dow Jones] Nymex crude continues its slide, dropping below $80 a barrel in overnight trade. Crude had rallied partly on last week’s shut-ins of oil output in the US Gulf, but now producers are ramping up production, putting pressure on prices, says Addison Armstrong of TFS Energy Futures. Backwardation, when the front-month contract trades higher than subsequent months, is narrowing, which makes crude futures not as attractive for passive funds, which often take profits off the difference between the front- and second-month contracts. Nymex Nov crude -78c at $80.17 after hitting a low of $79.89/bbl. Dec crude -74c at $79.41. (elizabeth.landau@dowjones.com)

  11. 11
    zman Says:

    waiting and watching right now

  12. 12
    Sambone Says:

    Red across the board

  13. 13
    zman Says:

    through N’s level on HO

    looking at RIG 110 calls but will wait a bit for this to settle as crude can’t seem to find a floor yet.

  14. 14
    zman Says:

    FTI – subsea construction holding up nicely , could be a nice trade if oil puts on a mid or late day recovery. This is loosely lumped in with CAM and OII, both of which are getting whacked.

  15. 15
    zman Says:

    DRYS on discount this morning. Lower oil, via bunker fuel, helps them.

  16. 16
    Sambone Says:

    Wow, Oil now down 1.75 to 79.20

  17. 17
    zman Says:

    …and I missed where PF said that would happen, lol

  18. 18
    zman Says:

    79 new level to hold

    TSO could not have picked a better day to get added to the S&P500

  19. 19
    Nicky Says:

    Distillates broke support and is now tanking.

    WTI has support at 78.25,78.20 and then around 77.30. It certainly looks like we have the retracement in force but a move below 78.25 will nail it.

  20. 20
    zman Says:

    Wow that was a fast bluelight special on DRYS. It’s up now.

    Brokers taking a favorable view of KWK’s decision to boost capex in the wake of their asset sale two weeks ago. I agree and will be taking some calls here.

  21. 21
    Sambone Says:

    Z – May I now present the most knowlegable man on Wall Street in regards to Energy, Mr. PF has enetered the building.

    http://www.321energy.com/reports/flynn/current.html

  22. 22
    zman Says:

    one word, 3x: blah, blah, blah.

  23. 23
    zman Says:

    well, at least DRYS is green.

  24. 24
    Sambone Says:

    9:57 am EST

    Nymex Crude Slides Under $79; US Output Restored

    By Matt Chambers
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures were lower Tuesday, slumping under $79 a barrel as Gulf of Mexico producers continued to restore output that was shut in last week by an approaching storm system.

    Questions over whether oil prices are sustainable at more than the psychologically important $80 level and profit-taking after a sharp run-up in prices lately are also weighing on prices. Once prices were unable to hold $80, they dropped quickly, dropping below $79.

    The front-month November light, sweet crude contract on the New York Mercantile Exchange was recently down $1.79, or 2.2%, at $79.16 a barrel after falling as low as $78.96. Front-month prices reached an all-time intraday record of $83.90 on Sept. 20. Brent crude on the ICE futures exchange fell $1.41 to $77.50 a barrel.

    “I think the market was a little overvalued when it was trading above $83,” said Tony Rosado of IAG Energy Brokers in Fort Lauderdale. He said the market turned downwards overnight after producers continued to bring back production in the Gulf after a tropical depression passed through the region over the weekend, causing little damage to infrastructure. Prices “could easily drop another dollar,” he said.

    The equivalent of 251,285 barrels a day of Gulf oil production remained shut in Monday morning, the U.S. Minerals Management Service said, down from 814,578 barrels a day that had been shut as of Friday.

    The threat of Gulf of Mexico hurricanes will still play on traders’ minds, however, after a tropical depression in the Atlantic Ocean was upgraded to Tropical Storm Karen Tuesday morning. The National Hurricane Center said it posed no immediate threat to land.

    Traders will also be looking ahead to Wednesday’s weekly U.S. inventory statistics put out by the Department of Energy. Analysts are expecting a fifth straight decline in crude oil stockpiles in the data, according to a Dow Jones Newswires survey of analysts.

    Crude stocks are seen falling by 1.8 million barrels in the report, according to the average of the analysts’ forecasts. Gasoline stocks are seen building by 200,000 barrels, and distillate inventories, which include heating oil and diesel fuel, are expected to gain by 1.1 million barrels. Refinery use is seen dropping by 0.6 percentage point to 89% of capacity.

    “The market is awaiting the weekly DOE stats tomorrow to get some sort of market direction,” said Nauman Barakat, senior vice president at Macquarie Futures USA. “I feel the downside is limited — we will see big draws in crude in the stats due to storm disruptions.”

    Front-month October reformulated gasoline blendstock, or RBOB, fell 3.84 cents, or 1.8%, to $2.045 a gallon. October heating oil fell 4.78 cents, or 2.1%, to $2.1828 a gallon.

    —By Matt Chambers, Dow Jones Newswires

  25. 25
    zman Says:

    Ya know, PF is calling for yet another seasonal top in today’s piece. That alone may put a bottom in on oil this am.

  26. 26
    zman Says:

    Bill,

    Nice call TOPT last few days.

  27. 27
    calvino Says:

    Z – what are the refiners doing? Harvest is getting sold. Heard on Bloomberg that filling stations are suffering at these prices.

  28. 28
    calvino Says:

    Go Phil – what you said though, Zman

  29. 29
    zman Says:

    Cal – that’s a little open ended. What do you mean by “what are they doing” I’d saying making product and selling it but that too would be a little open ended. 😉

  30. 30
    zman Says:

    and 28 I don’t get either. Had your coffee yet?

  31. 31
    calvino Says:

    Yea, go Phil, meaning go Phil and call the bottom!

    Are the refiners green is what I was asking? I was watching the canuxs.

  32. 32
    zman Says:

    Ohhhhh.

    Refiners red save TSO which went into the S&P500. Oil and products trading off about the same but VLO and co are all off with the rest of the energy complex which is keying off down $1.75 crude.

  33. 33
    calvino Says:

    I had cup #1, getting ready for #2.

  34. 34
    zman Says:

    way ahead of you, almost on pot 2

  35. 35
    mdinh Says:

    Should I keep my mouth shut?

    Did you make the forum public again?

  36. 36
    calvino Says:

    I am trading around the refineries turning in anticipation of report tomorrow.

  37. 37
    zman Says:

    Cal – not a bad idea. Think we need over the 2 mm barrel expected draw to get crude out of the doghouse. Could very well get that.

    thanks mdinh

  38. 38
    calvino Says:

    I know I need more java when I hit the buy button and it was supposed to be the sell!

  39. 39
    calvino Says:

    I should not be admitting that..

  40. 40
    zman Says:

    Cal – my trading system defaults to Calls when I switch strikes. Made for more than one incredible, I can’t believe this put is this cheap a buy to only be later realized that it was a call. Doohhh!

  41. 41
    zman Says:

    mdinh, you still around?

  42. 42
    calvino Says:

    Yea, I know there was a booboo when I get instant fulfillment on the order.

  43. 43
    Popeye Says:

    Z, I think mdinh was refering to not needing to login this am.

  44. 44
    zman Says:

    Popeye – thanks. I forgot to tick the private box on the post this morning. It’s private now.

  45. 45
    Nicky Says:

    WTI – the move off the lows looking no more than a correction right now.

    FIB levels to watch are:

    7977 (23.6%)
    8026 (38.2%)
    8067 (50)
    8108 (61.8)

  46. 46
    Nicky Says:

    Same with distillates:

    Fib levels are:

    21939 (23.6)
    22073 (38.2)
    22181 (50)
    22290 (61.8)

  47. 47
    zman Says:

    BP says CEO was referring to operations and not profits when he said “dreadfull”…makes a lot more sense.

    Oil test 79 again.

  48. 48
    Nicky Says:

    Blimey John Kilduff has changed his tune – they are a nightmare these guys. Last week he had us going to 100 now he has us back to 72.

  49. 49
    zman Says:

    Kilduff gets a mention for that in tomorrow’s post. We should start a flip floppers hall of fame.

    ESV may finally be breaking down on a chart

    DRYS doing nicely; RIG trading off with group but a little better than the OIH whose chart does not bother me.

  50. 50
    Sambone Says:

    Off subject – Us Dollar getting slammed again.

  51. 51
    zman Says:

    That’ll give PF and Kilduff an excuse to flip flop and look for fundamental explanations to explain a rebound in oil

  52. 52
    Sambone Says:

    Weather – Watching 97L a bit more closely. It’s flaring up, even though it’s under 20 shear.
    http://www.ssd.noaa.gov/goes/east/catl/loop-rb.html

  53. 53
    fraser921 Says:

    If you want to get up on tanker and dry bulk sector , Jefferies is having a conferance.

    Z’s lastest pick Drys will present tomorrow.

    i sold Topt today and took profits. Still long and strong Drys and i think 100 is doable

    http://www.wsw.com/webcast/jeff19/

  54. 54
    fraser921 Says:

    z’s latest pick DRYS will be presenting tomorrow

    Listen in.. you will like the story.

    also presenting are tanker stocks and service industry

    http://www.wsw.com/webcast/jeff19/

  55. 55
    TTupp Says:

    Z- drys looks like it made a measured gap yesterday marking its halfway rally; which should bring you to 100~

  56. 56
    zman Says:

    Bill,

    Sorry about, the system thinks your a spammer sometimes although why I don’t know.

    TUPP- sounds like a plan

  57. 57
    fraser921 Says:

    ok

    im on a dif browser now. sorry for the multiple posts

  58. 58
    zman Says:

    NFX announcing new hedges for 2008:

    Nat gas: 60% hedged at very favorable 7.75 and higher. Also started hedging 2008/2009 winter, small but over $8

    They’re hedge Rockies basis now and should come out on that Stone acquisition smelling like a rose once Rockies Express opens.

  59. 59
    fraser921 Says:

    z’s 5.80 calls are now worth 7.90.

    with another 5 dollar up move in the stock, the 80’s will go for 11.50 and a nice 100% up move in 1 week.

    If you are inclined to trade..wait until after they present tomorrow. Maybe there will be more upgrades.

    jefferies upgraded drys yesterday but it didnt get any press

  60. 60
    TTupp Says:

    Z- do you know what a “market imbalance on close” means?

  61. 61
    calvino Says:

    Who’s afraid of Karen, not the people trading refiners, it seems.

  62. 62
    calvino Says:

    I think it means that shares remain outstanding, meaning not delivered. Applied to failure to deliver shortsales, commonly.

  63. 63
    zman Says:

    Tupp – it’s an end of day thing you see in NYSE stocks meaning the specialist couldn’t match buys with sells at the end of the day. Generally meaningless but as I was on the other end of the business (not trading) I’m sure others here could put forth a more detailed exp. Sometimes you’ll also see it with news near the close that causes pressure one way or the other on the stock, like lots of sellers and no buyers when the chairman of XYZ decides its time to blow out of XYZ.

  64. 64
    rseidman Says:

    zman – Have you moved on RIG yet today?
    Or is something holding you back?

  65. 65
    ck78 Says:

    Z – Might be a little late but is it worthwhile adding TSO calls on the S&P entry news. Since it won’t be added until COB tomorrow, I am tempted for a quick 2-3 day trade to satisfy my speculative appetite. Too foolhardy ??

  66. 66
    TTupp Says:

    Z – have you done any work on drys as to comparing it to its competitors forward PE’s?

  67. 67
    zman Says:

    Sorry – grabbed a bite to eat

    R – very tempted re RIG early today but thought I’d wait for the numbers tomorrow. Came very close to adding the $110s though.

    CK – hard to say, thought about it and passed, again, would like to see mo-gas numbers tomorrow first. Not foolhardy as it’s cheap now.

    Tupp – yep, DRYS is pretty cheap on 08, trading under 9x even after this rise vs EGLE and GNK both over 10x. Seem to be a WS darling as well.

  68. 68
    TTupp Says:

    im going to take a pos. in drys today when this rally takes a little off the top.

    wow z im starting to use your Euphemisms

  69. 69
    TTupp Says:

    what will it be trading at when its selling for 100?

  70. 70
    Sambone Says:

    1:52 pm EST

    Nymex Crude To Hover Around $80 Until EIA Data

    DOW JONES NEWSWIRES

    From MARKET TALK:

    [Dow Jones] Oil prices probably will trade in a narrow range around $80/bbl until US inventory data is released Wed, says Tim Evans, an analyst at Citigroup. Without fresh headlines, crude and oil products fall in parallel. “In the absence of any particular refinery outage or refinery restart, they will tend to swing in the same direction by about the same amount,” Evans says. Petroleum benchmark contracts are down about 2% across the board. Nymex Nov crude -$1.17 at $79.78/bbl. Nov benchmark gasoline -3.34c at $2.05/gal. Nov heating oil -4.41c at $2.1865.gal. (elizabeth.landau@dowjones.com)

  71. 71
    zman Says:

    T – next you’ll be moving to Tx

    9.5x 2008 consensus at $100

  72. 72
    zman Says:

    Somebody wanted out of DRYS bad, really banged it down intraday hitting bids.

    Having some tech issues and am stuck on phone

    would someone be so kind as to give me oil, rbob, ngas, ho

  73. 73
    zman Says:

    crack spread page updated

    they’re holding up pretty well, nothing to write home aboot

  74. 74
    zman Says:

    ck78 – could have made a few $ on your trade idea re TSO already.

  75. 75
    Nicky Says:

    WTI 7945
    RBOB 20362
    Distillates 21797
    Nat gas 6347

  76. 76
    zman Says:

    N – TY. Products did not fare well.

  77. 77
    ck78 Says:

    Z – Doh !! I watched the price action around 1.05 but unfortunately got distracted with my day job and missed the subsequent run-up. I should have pulled the trigger at 1.05. Oh well, live and learn..

  78. 78
    zman Says:

    TRADE: Opening position in VLO 70 Oct CALLS for $1.75.

  79. 79
    zman Says:

    OMG! CNBC just attributed part of the slide in oils to BP’s “dreadfull” quarter comments. The guy was talking about charges for the quarter related to restructuring issues with their operations. Not that the financials would be bad. CNBC just said revenues would be dreadful which was the original story yesterday, COMEON! They told Reuters this hours ago and I mentioned that it made more sense in 47 above. They’re worthless.

  80. 80
    zman Says:

    out for 30

  81. 81
    zman Says:

    back in

    RIG recovering nicely

  82. 82
    QUARRYMAN Says:

    Z.,

    Hey been out since AM.

    Should I add to NFX or BHI positions?

    I missed the discussion on the VLO purchase, can you explain why?

    Thanks.

    “SAFETY PAYS”

  83. 83
    zman Says:

    Q – don’t make recs

    I did not add to NFX today, may tomorrow.

    BHI is not on my radar screen as a long, maybe a short

    VLO – down 3%, cheapest of refiners, think oil and products could pop on tomorrow’s oil report, been waiting for them to come back in a bit.

  84. 84
    QUARRYMAN Says:

    Z.

    I’ll try to be more selective in my wording.

    I think RIG is attractive if it dips to 111
    ?
    If DRYS picks up momentum tomorrow would you add more as a mo play?

    What time is the oil report tomorrow?

  85. 85
    zman Says:

    That’s ok, I’ll just try to get to my point better.

    I agree RIG and was surprised to see that telephone pole rally of a close in it.

    For that matter, APA closed strong after a mid day lashing. APC did ok too. DVN and EOG did not fair nearly so well.

    NFX you know I like it anytime it gets close to $45 all the way up to $50

    DRYS – I might indeed. Will include a table of the group to demonstrate just how cheap it is.

    9:30 CST EIA

  86. 86
    fraser921 Says:

    id pick up drys NOW as a value play and buy more before next earnings report as a momentum play.

    as z just said “Will include a table of the group to demonstrate just how cheap it is.”

    Best time to buy is when market opens lower or in a free fall.

  87. 87
    rammastr Says:

    ZMAN – As oil stabilizes at higher levels, i.e. 75 to 85, versus 65 to 75, does it stand to reason certain companys could have blow out earnings that takes most people by surprise?

  88. 88
    rammastr Says:

    ZMAN – #87 is in no way of extracting a recomendation from you.

  89. 89
    zman Says:

    Ram – the short answer is yes. Especially on the blow out earnings and somewhat on the surprise side.

    Majors and integrateds 3q adn probably 4qs will be very solid. Better than YoY in many cases…unless they’re gassy, then the jury is still out.

    As to the surprise side, the gassier names in the big cap range, like COP or cheap, so a little surprise will go a long way.

    Estimates for the 4Q for gas are generally low and have been reduced for both 3Q and 4Q of late. For oil, estimates have been coming up slowly but steadily. I’ll have to do a little more work to try and pinpoint 3Q surprises but there is still plenty of time as price 3Q announcement territory is Halloween.

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