16
Oct

Tuesday – Oil Going Ballistic…Again

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In Today's Post:

1) Commodity Watch

2) Housekeeping Note: Added 3Q Earnings Watch Tab

3) Holdings Watch 

4) Early Read on Oil Inventories 

5) Natural Gas Imports: Falling

6) Crack Spreads: Stable; Rising In The West

7) Odds & Ends 

 

Commodity Watch: Moving On Up!

  • Crude Oil: Traders just couldn't get enough driving oil up $2.44 to $86.13. This morning oil is trading up again in a very volatile session which has seen prices reach as high as $87.97. In case you are wondering, the inflation adjusted all time high would be 90.46 set back in 1980. While I forecast that supplies will grow somewhat tighter in the next two months there seems to be little justification for oil at these levels. Even if there is a substantial draw down this winter the U.S. will very likely remain amply supplied with crude. Heating oil may be a different story and I believe the EIA's 28% YoY price tag growth for the 4Q is likely to be exceeded. This will likely be a good season to be long (SUN).
  • OPEC Watch 1: No further increase this year beyond plan. Two unnamed OPEC delegates tell Reuters there is no plan to boost output beyond the 500,000 bopd increase set for November 1. Sounds like Iran and Venezuela having some fun with the rest of the world.
  • OPEC Watch 2: Forecasts bump in demand, decline in Non-Opec supply. Yesterday the Cartel trimmed its estimate of Non-Opec supply by 100,000 and 120.000 bopd for 4Q07 and 1Q08 respectively. On the demand side they kept their 4Q numbers but raised their 1Q08 global demand level by 110,000 bopd, further increasing worries that tightness will linger into next year.
  • Tropics Watch: Nada although there is a low worth watching moving about in the southern GOMex.
  • Natural Gas rallied massively yesterday on a new annual low for LNG imports. Gas rose $0.471 (6.8%) to $7.445 yesterday. This morning gas is looking flat to up nickel in early trading.

Other Side Of Bull Coin Watch: From Bloomberg ~ Citigroup Inc., Deutsche Bank AG and HSBC Holdings Plc have predicted over the past month that oil prices would decline because of falling gasoline demand and a slowing U.S. economy. Oil may end the year below $70 a barrel, forecast Adam Sieminski, the global oil analyst at Deutsche Bank in New York. 

I Couldn't Agree More Watch: Also from Bloomberg ~ We are seeing the effects of the Fed lowering rates when it didn't need to,'' said Bill O'Grady, director of fundamental futures research at A.G. Edwards & Sons in St. Louis. ``Bonds and the U.S. currency have fallen while commodities and foreign currencies have become more attractive. There's been a steady flow of money into these markets since the cut.''

Housekeeping Item: Earnings Calendar Tab Watch: We've added a temporary tab for 3Q earnings at left. A handy little resource for all your energy company and ancillary company earnings dates and also some stocks that I just happen to care about. It's by no means a comprehensive list but it should track most if not all of the usual suspects we target around here.

Holdings Watch:

CALLS:

  • (RIG) Doubled up my RIG NOV $115 position for $5.20 bringing my average cost down to $5.40. Last bid $4.70.
  • (CHK) Entered the NOV $37.50s for average cost of $1.50. Last bid $1.45. I continue to hold my January 2008 $37.50s and $40s but this gives me a bit more leverage on 3Q earnings on November 6th.  

PUTS: No action.

Current Option Holdings: Click here.

Early Read On Inventories (from the Bloomberg and Reuters surveys)

  • Crude - up 1.5 million barrels (setting the bar pretty low if you ask me but they are anticipating a resumption of the heavier maintenance season which will cut back on crude demand. I was a little surprised by last week's increased utilization numbers but we should be rounding the corner soon. See more in the cracks discussion below as the 4Q could turn out to be a much lower than normal period for refiner utilization.
  • Distillates - down 0.3 million barrels.

 

Natural Gas Reporting Week Update:

  • Imports fell again, down 0.6 Bcfgpd from the prior week, led by lower LNG 
  • LNG - down to 0.86 Bcfgpd, a new low for 2007 and off 0.3 Bcfgpd from the comparable week last year. This is the reason for the massive rally in natural gas futures yesterday. It seems that with the recovery in European prices (now to levels $2 to $3 above Henry Hub) and a surge in Japanese demand to offset the loss of one of their reactors $7 U.S. gas is not a high level to maintain the sharply higher shipments witnessed this past summer. 

lng-101507.jpg

  • Piped Imports - also fell but just by 0.2 Bcfgpd to 9.3 Bcfgpd. I would expect these to fall off at least another Bcfgpd later this Fall as demand from Canada competes with volumes to be exported.

  • Degree Day Watch:
    • CDDs: Actual of 28 was down 8 from the prior week. Expectations for this week fall to 19 as Fall finally sets in. Electricity generation fell nearly 3% from the prior week but was still 5.8% ahead of the comparable week one year ago.
    • HDDs: spiked up to 45 last week but are expected to moderate some this week to 35.  Both of these readings remain well below normal and year ago levels.

 

Crack Spreads: West Coast Margins Continue To Show Material Improvement. This is a big part of why I'm still holding the (TSO) longs. One other interesting point; while we've probably reached close to the bottom of the Fall maintenance season which should give rise to rising utilization in November, the EIA is forecasting plummeting utilization in December. There forecast is based on a large number of planned outages which should drive utilization to its lowest level since 2002. Since VLO has already stated they are to have a relatively light maintenance season in the 4Q they will be producing at a time when inventories are falling, prices are high and the competition is taking a pit stop. 

cracks-101207.jpg

Refiner Multiple: Not cheap, not expensive. Still like (TSO) and (VLO) here. Actually need to get back into (VLO) at next convenient point. SUN and FTO are also looking interesting at this point but I'm not going to bite either before earnings.

refiner-multiple-101607.jpg

Stocks We Care About Today:

  • HK - announces sale of Gulf Coast division for $825 (guidance was $700 to $900). This yields a stout $4.04 / Mcfe which should be viewed favorably. I still plan on being long before 3Q earnings on 11/08 as the stock is too cheap and will be growing its remaining longer reserve life assets too fast not to garner additional multiple expansion. If you are unfamiliar with (HK) and/or are new around here check out my report on (HK) from one month ago. Though the stock has had an almost 20% run since then I believe they are just getting started.

Odds & Ends

Analyst Watch: Jefferies raises prices targets on the entire bulk shipping group.

Would you like to know more? Click here to see about subscribing. Discount rates are good for the first 12 months of renewals following subscription but the discount window is about to close.

Low must be in the eye of the beholder. 

heating-oil-101607.jpg

 

151 Responses to “Tuesday – Oil Going Ballistic…Again”

  1. 1
    Sambone Says:

    8:51 am EST

    Nymex Crude Hits New Record $87.97

    DOW JONES NEWSWIRES

    From MARKET TALK:

    [Dow Jones] Nymex crude oil continues to barrel higher, touching a new intraday record $87.97/bbl overnight. Nov crude now +92c, or 1%, at $87.05. Threat of Turkey attacking Kurdish rebels in northern Iraq is boosting prices amid forecasts for a looming fourth quarter supply deficit.(matt.chambers@dowjones.com)

    Reported earlier:
    LONDON — Crude oil futures climbed more than a dollar in early trade in London, as the market maintained the strong buying momentum that has helped record five successive days of gains.

    Both ICE Brent and Nymex WTI futures surged to new record levels after strong overnight trading in Asia replaced Monday’s historical highs.

    Concerns over Turkey and Iraq continued to provide support for crude prices, while fears of a tight supply picture in the final quarter of the year remains a driver of recent strength. And with prices forging into record territory, traders reported short covering was adding to upside strength.

    “It’s momentum buying. We’ve broken some big numbers and any remaining shorts are having to cover,” a trader said.

    “Throw the tight fundamentals and Iraq into that and we could be looking at $90 before the end of the week.”

    At 1112 GMT, the front-month November Brent contract on London’s ICE futures exchange was up $1.23 at $83.98 a barrel, down from the new record high of $84.31 a barrel.

    The front-month November contract on the New York Mercantile Exchange was trading $1.34 higher at $87.47 a barrel, having fallen back from its new record level of $87.97 a barrel.

    The ICE’s gasoil contract for November delivery was up $13 at $722.50 a metric ton, while Nymex gasoline for November delivery was up 300 points at 218.75 cents a gallon.

    Concerns of an escalation in tensions between the Turkish government and Kurdish rebels in northern Iraq were welling Tuesday in anticipation of a vote in the Turkish parliament to decide whether Turkish forces could engage in military action.

    According to Turkish government spokesman, parliament will vote on the motion this week, and it is expected lawmakers will approve its passage.

    “Everybody is concerned about Turkey invading Northern Iraq, said Commerzbank analyst Eugen Weinberg. “The longer it’s unresolved, the longer the fear factor will remain.”

    Weinberg suggested any outcome would likely result in prices falling, as the speculative nature of recent price rises linked to the issue was removed and the markets could focus on concrete developments.

    Market participants expressed surprise at the speed and extent of Tuesday morning’s advance, particularly with other commodities paring their gains amid a strengthening in the dollar.

    Many agreed crude’s rise was helping foster even greater buying interest, and fueling further climbs as a consequence, with the Turkish standoff being seized upon by the bulls.

    “I think the whole thing has become self-fulfilling — I’m not sure where the selling comes from anymore,” said Jim Rintoul of TheOilTrader.com.

    He was one of a number suggesting the latest moves had been abetted by momentum algorithmic trading, rapid trading based on computer models. But in the same way these models have taken prices up, they would take them down again, he said.

    “Chances of a big down day grow higher as this market goes higher,” he said.

    A possible reversal of crude’s current path appeared too distant a prospect for those holding short positions, meanwhile. Closing out of shorts contributed to a spurt in prices Tuesday, traders said, providing the market with another buy signal.

    The short selling was also linked to expiry of the November Brent contract Tuesday, traders suggested, which had the potential to create a volatile afternoon’s trade.

    “There’ll definitely be some fun and games this afternoon,” said Sucden’s Robert Montefusco, “although it’s hard to see where it’ll be going.”

    Should crude prices cling to their gains Tuesday it will bring the number of successive daily higher closes to six, extending the trend set in process by a return of buying interest last week.

    “The trend has been extremely strong, technically,” said Julian Keites, a technical analyst at Fimat. “One thing I’ve seen is that, during the credit crunch, the realization was it might impact on demand.

    “People were talking about $50 a barrel. Now people are talking about $100 a barrel,” he said. “It’s remarkable. It’s very difficult to gauge where it’s going next.”

    Offering potential clues for further direction, this week’s Department of Energy weekly statistics report is due Wednesday, with expectations pointing to a build in crude and gasoline stocks.

    According to a Dow Jones Newswires survey of analysts, U.S. crude oil stocks are expected to grow by 1 million barrels. Gasoline inventories are also due to rise by 1 million barrels, according to the mean of the eight analysts’ forecasts, while distillate stockpiles — which include heating oil and diesel fuel — are seen falling by 400,000 barrels.

    “I think we’ll see a slightly bigger crude build, decent gasoline build, and in distillates I suspect a modest draw,” one analyst said. “But I think the stats haven’t been bullish for a number of weeks, instead the bulls have tried to extract a bullish element.

    “The market seems to have a will of $90 — I don’t think the stats are likely to end up in a wave of selling,” he said.

    —By Nick Heath, Dow Jones Newswires

  2. 2
    sane Says:

    War, Terror, Catastrophe: Profiting From ‘Disaster Capitalism’

  3. 3
    jimbo Says:

    Public posting (with gratitude)

    Not sure how I’m hacking in, but don’t tell the zman 😉

    Quest Resources (QRCP) is merging with Pinnacle Gas (PINN). I don’t see any benefit. Geographic mismatch, not apparent synergies. Any other thoughts?

    Petrohawk is divesting GOM holdings to concentrate on Fayetteville Shale and Cotton Valley regions and repay debt. Cash/share will go from 6 cents to about $4. This looks super good.

    Gonna be interesting today. Kick butt!

  4. 4
    zman Says:

    Jimbo: I plan to do one of these now and again for the guys at SeekingAlpha who were instrumental in launching this site. I did a piece on HK which should be available over there around the middle of last month. This sale prices is very good.

    PINN – I have not looked at the deal since it came public and I said I wouldn’t touch it. It’s fallen by half since then. Don’t know QRCP but will have a look.

    Thanks for your continued interest

  5. 5
    jimbo Says:

    QRCP is interesting because it has been a Carl Icahn holding. Recently went MLP. Active in my native SE Kansas, which is why I hold it.

  6. 6
    zman Says:

    Jefco took the price target on DRYS from 108 to 160. Lots of big ups for others including EXM and TBSI.

    Rig stocks including RIG down again with broad market.

    ESV down on an 8K last night updating their rig fleet status. I haven’t seen yet as their link is not working but it must be worse than expected given the reaction.

    Jimbo – all or almost all gas I assume?

  7. 7
    zman Says:

    TRADE: Jan 15 HK Calls for $4, my add more up to 4.30.

  8. 8
    Sambone Says:

    Weather – 99L in GOMEX. Doesn’t look to spin up. Tracks have it going to TX by tommorow. NHC agreeds. They aren’t sending the Cane hunters, so that tells me that at worst it will have 45 mph winds when and if it hits the coast. I got my eye on it though, and will report any changes that I see.

  9. 9
    jimbo Says:

    Mostly gas. Also has gathering pipelines which service other small E&P’s.

    Hemi Energy is another obscure Kansas play, but I’m not sleeping too well with this pink sheet player. Actively buying leases in Woodson County. Also revisting Humbolt-Chanute field.

  10. 10
    zman Says:

    Sambone – thanks

    Jimbo – interesting. A lot of the little players (even the solid ones) have been left behind the recent move. The moneys that’s driving a lot of this hates illiquidity.

  11. 11
    zman Says:

    Sane – nice conspiracy theory stuff for the morning!

    Somebody tell me why my HP desktop with Vista HATES my new HP laserjet #$!!@$#$

  12. 12
    Sambone Says:

    The great flip flop man!

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

  13. 13
    zman Says:

    ESV – rig fleet status…just peeling back the layers against last months report.

    Biggest changes in the GOMex…none of them good. Prices are falling, especially in water depths of 300′ or less.

    One dropped from low 90s to mid 60s – Ouch.

    another dropped from low hundreds to mid 90s for a couple of months and then expects to be mid 80s.

    Looks like their deeper capable Jack Up rigs are falling in day rate from the $140s to the low 100s

    In a nutshell: shallow water (jack up) rates continue to fall in the GOMex despite what the Street has been saying about a soft landing.

  14. 14
    zman Says:

    Sambone – did you see he’s going to appear on the “fair and balanced” business channel today? Guess I need to call my cable operator.

  15. 15
    Sambone Says:

    Heck yea, “He’s MY hero”! LOL

  16. 16
    zman Says:

    Nicky – what’s you next resistance level on WTI, also support for RBOB and HO?

    Bill – Jefco with a 160 target on DRYs and the stock is off with the broader market/profit taking. Jef is one of the better names on shipping so I’m a little surprised their PT upgrades didn’t rally the group. Is the BD index off today. It has been parabolic.
    http://investmenttools.com/futures/bdi_baltic_dry_index.htm

  17. 17
    Sambone Says:

    10:18 am EST

    Nymex Crude Up But Slips From New Record $87.97

    By MATT CHAMBERS
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures headed higher for a sixth straight session Tuesday, rising to a new intraday record $87.97 a barrel in early screen trading before paring gains.

    Prices have been rising over the past week on a combination of concern Turkish forces will attack Kurdish rebels in northern Iraq and forecasts that fourth quarter supply will fall well short of winter demand. A weak U.S. dollar has also been encouraging a rush in fund buying that is aiding prices.

    The front-month November light, sweet crude contract on the New York Mercantile Exchange was recently up 33 cents, or 0.4%, at $86.46 a barrel. Prices hit a record settlement of $86.13 a barrel Monday. Brent crude on the ICE futures exchange rose 45 cents to $83.20 a barrel. November Brent expires Tuesday.

    “We pulled back a little when prices couldn’t take out $88 a barrel and people took some profits, but there’s still the strong fourth quarter demand forecasts, and just as things have started to look better in Iraq, there’s the trouble with Turkey,” said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

    Crude’s recent rally started Oct. 9, and is the longest upward move by crude in more than a month. It began with forecasts from the U.S. Department of Energy for a 1.82 million barrel-a-day gap between fourth-quarter supply and demand. Concerns about supplies being unable to keep up with demand were boosted by International Energy Agency data released later in the week that showed a non-seasonal drop in the number of days of demand cover offered by oil stockpiles in Organization for Economic Cooperation and Development nations.

    The possible incursion by Turkey is a worry for oil supplies because it could threaten the pipeline that runs from Kirkuk, in Iraq, to the Turkish export terminal of Ceyhan. While exports of crude from Kirkuk to Ceyhan have been sporadic since the U.S.-led invasion of Iraq in 2003, oil has been flowing for the past two months and in recent days was being shipped at a rate of nearly 500,000 barrels a day.

    The IEA, in its monthly report released last week, cited the return of the pipeline as a major factor in its boosting of Organization of Petroleum Exporting Countries output by 245,000 barrels a day for September from August.

    Also supporting prices are the expiration of Nymex November options Wednesday. According to Nauman Barakat, an analyst at Macquarie Futures USA, open interest on calls, or options to buy, between $88 and $90 is more than four times the open interest on puts, or options to sell, between $85 and $88.

    “This will continue to put upward pressure on crude” as traders try to put the calls in the money, Barakat said.

    OPEC Secretary General Abdalla Salem El-Badri said that the group is concerned about the recent escalation in prices, but that rising prices are largely driven by speculators and refinery bottlenecks. The tone of the release suggests that the cartel is in no rush to add to its scheduled output boost of 500,000 barrels a day of crude, due to start Nov. 1.

    Front-month November reformulated gasoline blendstock, or RBOB, fell 71 points, or 0.3%, to $2.1504 a gallon. November heating oil fell 75 points, or 0.3%, to $2.2997 a gallon.

    —By Matt Chambers, Dow Jones Newswires

  18. 18
    Sambone Says:

    Hmmm, this may have been a reason for the upside push overseas on oil last night.
    http://afp.google.com/article/ALeqM5ix7NXpjYROW2Lvmx4r9Ga-TQtiEA

  19. 19
    Stephen Says:

    Nice to see a public posting as well, as it arrives in my RSS reader. You were absolutely right with your call on HK.

    Have missed out on quite a few of the stellar rises since September:

    CRK – BDE found oil in the GoM and pushed this way out of its $29 to $31 range. Will try to get in before earnings.

    The subsea equipment producers FTI and CAM, up 15% since the rate cut, not sure if their earnings can match their rise, especially FTI.

    Have also been watching the rise in Midway-Sunset Heavy Crude and wondered how you thought this might effect producers: PXP and BRY; and refiners: VLO.

    Still like GSF, which I think is the same as buying RIG, which have both underperformed OIH since the merger announcement. Also wonder when Carl Icahn is going to work his BEA Systems, Biogen Idec magic on RDC.

  20. 20
    jimbo Says:

    QRCP down 13+%. Guess I’m good company (here and elsewhere).

  21. 21
    redjack Says:

    Z..re GOMEX and drilling…did you see the following article?
    http://online.barrons.com/article/SB119222041179957595.html?mod=9_0039_Investors

  22. 22
    zman Says:

    Stephen – good to see you are still out there. I missed out on several moves since September expiration…waiting on the pullback that never came.

    Subseas are overbought…took a small position in CAM late and got whacked for it. Still like OII but have been absent for a few weeks now.

    I don’t care that the JU cos are cheap, they’re cheap for a reason. If I had to buy one it would be RDC with their best in class JU but prices in the US are coming down and I think the int’l rates are bloated now. ESV has confounded me a bit but they seeing falling rates in the GOMEX and are mobing rigs to int’l to chase rate, probably at just the wrong time.

    heavy crude up = smallish impact on VLO, maybe worse for CVX. Nice for the boys at Berry and PXP and I suspect OXY.

  23. 23
    zman Says:

    Redjack…sounds like a puff piece to me, LOL. Take a look at the last several 8Ks from ESV and watch the rates in the GOMex fall month after month. Can’t see how that’s a good thing as the rigs hands have been getting more and more pay over the last five years and you know they aren’t getting whacked with rates. Maybe the team leaders …I’ll ask Wyoming about that.

    The problem with shorting them is they appear cheap on forward earnings. I just don’t trust the forward earnings.

    By the way, I added a temporary tab for earnings at upper left with some comp tables.

    Wow, look at COP go.

  24. 24
    Nicky Says:

    Morning all. Feeling giddy trying to keep up with the flop flop Flynn!

    The move off the early morning highs shows some potential for at least a short term top although I wouldn’t hold my breath!

    If so we are now retracing part (hopefully!) of the fall. Resistance is at 87.05 (50% and already passed) and 87.26 (61.8).

    Distillates comes in at 23161 (50%) and 23217 (61.85).

  25. 25
    Nicky Says:

    Rbob looking weaker relatively. 38.2% is at 21664, 50% is at 21731 and 61.8% is at 21797.

  26. 26
    Sambone Says:

    99L – No go. Nothing else of interest.

  27. 27
    Nicky Says:

    CNBC saying that traders are buying December $100 calls.

    Kilduff on (again!) calling for 100 by year end.

    Please please could they just not ask these guys back when their predictions do not come good. We wouldn’t be listening to Kilduff for a start this week!

  28. 28
    zman Says:

    N – relationships like yours and PFs can be difficult. You guys are like Carville and Matalin. He says 85 you say $50…lol.

    N – thanks for the levels

    Stocks starting to wake up a little with oil back over $87. What an odd thing to type, back over $87…I thought $77 was high.

    Micro caps worth watching for earnings: DNE and my old friends END and SCU

  29. 29
    zman Says:

    Besides all the nice stuff I always say about CHK on the fundy side, take a look at a weekly chart. 24 month base break out in progress.

    Going to lose my Oct COP calls shortly as I clean up the portfolio prior to expiration. May add to the November position shortly.

  30. 30
    jimbo Says:

    Recently heard a principal from TSO on Blomberg Radio. Stated that $10-15 per barrel of crude is due to speculation. Not just hedge funds are driving crude prices, but now retirement funds are entering. Could explain why there is such a disconnect between crude and NG/distillates/RBOB/crack spread. Crude is beginning to trade like a precious metal.

  31. 31
    Nicky Says:

    76% comes in at 8752 for wti and 23283 for distillates.

    Charts look like the market should turn down but….

  32. 32
    zman Says:

    Jimbo – I’ve read and heard several with much the same opinion. The question is do they broaden their scope and start investing in products ….I think they do but it takes time. One thing is certain, your going to see a lot more maintenance again in December and some of it wasn’t planned until recently. I think its a response to the widening crude to products spread.

  33. 33
    Nicky Says:

    It isn’t going to happen!

  34. 34
    jimbo Says:

    Z….I’m posting WAY too much as a guest. However, when these newbie NY traders figure out what aribtrage means and begin to see opportunities, maybe, just maybe.

  35. 35
    zman Says:

    Jimbo – its actually a pretty quiet day around here so feel free. Agreed re the arb.

  36. 36
    jimbo Says:

    Well then, what is the play? How to take advantage of crude/product disconnect.

    (I missed the credit default swap play, bout time I got lucky)

  37. 37
    zman Says:

    J – long the cheaper refiners with less 4Q downtime for now…VLO and TSO among independents, COP in the majors.

  38. 38
    bill Says:

    re # 16

    it was up to 130 in the am

    I think simple profit taking and the possibility drys is now selling 6 m shares into the market thru a controlled equity offering.

    Earnings will be out in early nov so i view this as the pause that refreshes.

    i recomend covered calls for any long buyer

    ie buy the stock at 122 and sell 1 nov 125 call for every 100 shares long.

    that will give you a monthly return of 10 % with the stock unchanged

    Thats right 10 % or 120 % annualized

  39. 39
    jimbo Says:

    TSO…..hmmm. Great structural play: stranded California. How about FTO? I’m close to Cheyenne.

    BTW….another CA play? Takeover target PEIX for ethanol?

  40. 40
    bill Says:

    Z

    as you know im bearish on the oil shippers

    Topt is down from 7 to 6.25.
    Im short TNP and Nat

    Im nibbling at topt and im probably early as q 3 rsults will suck and there is possibly another 10 % to the downside.

    But longer term, the assets are worth 8 bucks per share. So id put topt on your watch list and buy in the 5’s

  41. 41
    Sambone Says:

    11:46 am EST

    Nymex Crude Up But Slips From New Record $87.97

    By MATT CHAMBERS
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures headed higher for a sixth straight session Tuesday, rising to a new intraday record $87.97 a barrel in early screen trading before paring gains.

    Prices have been rising over the past week on a combination of concern Turkish forces will attack Kurdish rebels in northern Iraq and forecasts that fourth quarter supply will fall well short of winter demand. A weak U.S. dollar has also been encouraging a rush in fund buying that is aiding prices.

    The front-month November light, sweet crude contract on the New York Mercantile Exchange was recently up 33 cents, or 0.4%, at $86.46 a barrel. Prices hit a record settlement of $86.13 a barrel Monday. Brent crude on the ICE futures exchange rose 45 cents to $83.20 a barrel. November Brent expires Tuesday.

    “We pulled back a little when prices couldn’t take out $88 a barrel and people took some profits, but there’s still the strong fourth quarter demand forecasts, and just as things have started to look better in Iraq, there’s the trouble with Turkey,” said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

    Crude’s recent rally started Oct. 9, and is the longest upward move by crude in more than a month. It began with forecasts from the U.S. Department of Energy for a 1.82 million barrel-a-day gap between fourth-quarter supply and demand. Concerns about supplies being unable to keep up with demand were boosted by International Energy Agency data released later in the week that showed a non-seasonal drop in the number of days of demand cover offered by oil stockpiles in Organization for Economic Cooperation and Development nations.

    The possible incursion by Turkey is a worry for oil supplies because it could threaten the pipeline that runs from Kirkuk, in Iraq, to the Turkish export terminal of Ceyhan. While exports of crude from Kirkuk to Ceyhan have been sporadic since the U.S.-led invasion of Iraq in 2003, oil has been flowing for the past two months and in recent days was being shipped at a rate of nearly 500,000 barrels a day.

    The IEA, in its monthly report released last week, cited the return of the pipeline as a major factor in its boosting of Organization of Petroleum Exporting Countries output by 245,000 barrels a day for September from August.

    Also supporting prices are the expiration of Nymex November options Wednesday. According to Nauman Barakat, an analyst at Macquarie Futures USA, open interest on calls, or options to buy, between $88 and $90 is more than four times the open interest on puts, or options to sell, between $85 and $88.

    “This will continue to put upward pressure on crude” as traders try to put the calls in the money, Barakat said.

    OPEC Secretary General Abdalla Salem El-Badri said that the group is concerned about the recent escalation in prices, but that rising prices are largely driven by speculators and refinery bottlenecks. The tone of the release suggests that the cartel is in no rush to add to its scheduled output boost of 500,000 barrels a day of crude, due to start Nov. 1.

    Front-month November reformulated gasoline blendstock, or RBOB, fell 71 points, or 0.3%, to $2.1504 a gallon. November heating oil fell 75 points, or 0.3%, to $2.2997 a gallon.

    —By Matt Chambers, Dow Jones Newswires

  42. 42
    zman Says:

    J – funny you should mention, I was musing yesterday about how the ethanol glut could come into play as demand stays high and mo gas prices don’t keep up with crude.

    FTO IS cheap for FTO. I think I said in the post I’m waiting to see their earnings.

    Thanks Bill …did you spy #16 above

    Sam – Opec is basically saying its out of their hands.

    That open interest comment smells like a top to me. Late to the show, want to play and will have no one to blame when they are holding the bag.

  43. 43
    Sambone Says:

    Z – “The Crowd” again, you betcha

  44. 44
    zman Says:

    Journalist busy recrafting stories to lose the headline about slipping from 87.97 and towards breaking $88 with new “causes” for the rally I’m sure.

  45. 45
    Nicky Says:

    So I guess this rally continues until the Turkey vote tomorrow and then they can really buy it. Or do they then sell the fact.

  46. 46
    zman Says:

    They sell at 90.

  47. 47
    rkbos Says:

    z,

    CHK – know you’re positive on it. i went long 35s, some ’09 and some ’10, several months ago. would like your thoughts on monthly chart going way back, if you’re able, to ’96. while i’m certainly no chart pro, price action seems to say we’re setting up for a nice move soon, no?

  48. 48
    Nicky Says:

    absolutely Z re #42. So today will be 6 up days in a row and 21 up days out of 31.

    Must be time for the broader market to roll over again with yet another leg up in energy.

    Longest rally in more than a month??? (#41) I am hearing traders say they have never seen a move like this.

  49. 49
    jimbo Says:

    Think I saw this in Seeking Alpha. ADM has stated intention of increasing ehtanol portfolio Valuations are low. Prime targets are PEIX and VSE.

  50. 50
    zman Says:

    rkbos – let me say that I’m no chart guy either but it certainly looks that way to me. The nice thing is it hasn’t really traded with the group as much as shadowed it. Value still remains key to the story.

  51. 51
    Nicky Says:

    Well I wonder if we have an imminent top – CNBC now on every five minutes talking 100 dollar oil and wheeling every analyst out they can to tout it. We must be getting close.

    Just bring on the Flynn!

  52. 52
    zman Says:

    To me it is simply amazing how hot and cold those guys run. If oil is off two buck you can find 10 of them who’ll say next stop 80 and another 5 who see 75. If its up two buck you can reverse that. They don’t bring out the more reasonable voices until oil trades sideways for several days. CNBC production staff needs a big case of prozac sent over.

  53. 53
    Sambone Says:

    Nicky – If the “Talking heads” are pumping it, then we are near or at the top. Hmmm, wasn’t it about a month ago they were calling for $50 or below?

  54. 54
    el_vogel Says:

    I don’t understand the HK call purchase – could you explain that a little? Why 15 @ 4.3 vs, say, 17.5 for $2 less?

  55. 55
    Sambone Says:

    Um, if this article is correct, what’s all the fuss about?
    http://www.cnbc.com/id/21323022

  56. 56
    Nicky Says:

    Finally some sanity on CNBC – much to Sue Herrera’s disappointment! Someone saying a $7 premium is anticipating a total meltdown in the Middle East!
    And analyst number two saying that a Turkish incursion could be very good as it may stabilize the region and add a million dollars a day! Now we have some sense.

  57. 57
    Stephen Says:

    Talking of refiners, what about the Brazilian sugar cane ethanol producer CZZ, that ADM has a stake in. Seems to be trading at a P/E of 14.2.

    IPO’d on Sep 5th. I’ve always thought it pretty crazy to try and produce ethanol from corn. Not sure if there is much coverage of CZZ.

  58. 58
    zman Says:

    El – Good question. Less premium, more liquidity in the 15s vs the 17.50s. Just a preference thing on my part but I’d rather be deeper in the money on this one so that I come closer to capturing the $ for $ move. If it goes to 21 in short order than both options will do well and the higher leverage 17.50s will have a greater % move, but, if it drifts up, then you have to work off over $1 of premium in 17.50s. In the end I could have chosen the 17.50s as well but it’s had a good run and they are over 50% premium. A pull back would have hurt more.

    Stephen, yeah corn is a very bad way to make ethanol, besides that it’s inflationary to use it and that it is barely economic given the cost to convert. Sugar is the way to go. ADM should be engineering cane to grow north of zone 9 in the U.S. Cellulosic is next but its aways off. Will look at CZZ, thanks.

  59. 59
    sane Says:

    Nicky,

    It was like last year when oil shot up d/t N. Korea shooting off missiles. Nowhere near oil production, but somehow they related it to oil. This time they are really salivating because it is near oil.

  60. 60
    apbd Says:

    Z:
    Any thoughts on HOC???
    apbd

  61. 61
    Nicky Says:

    Aye Sane – but when these guys that actually talk sense say it may actually bring some more oil back on the market by stabilizing the region you realise how back to front they have this trade.

  62. 62
    zman Says:

    Sam – the outage on that pipeline being nothing new is very true. One could argue the recent discoveries in Kurdistan not coming on line in the next couple of years as a source of concern but that would be pretty pathetic. Maybe I’ll forward it PF so he can have another bullish talking point, lol.

    Kurds do have big oil potential but I don’t think even the IEA has factored them into Iraq’s long term growth profile. AXC.to (addax) has poked several straws in the ground over the last 12 months that are 30,000 bopd + producers. Nice but contracts not signed yet, then you need infrastructure…takes time, especially if people are shooting at you while you weld. No problems like that so far but if the area were to go lawless it would be.

  63. 63
    zman Says:

    HOC – avoid anything I say about that stock like the plague. It is thin and therefore not subject to the laws of valuation or physics. I am cursed when it comes to trading them. The look expensive and could probably therefore rally 10 points.

  64. 64
    el_vogel Says:

    What I find interesting about the HK options trading today is how activity doesn’t actually pick up until you start looking at December. the options you’re talking about are definitely by far the most liquid (most traded). Interesting pattern…

  65. 65
    zman Says:

    El V – well they have said the company is for sale as recently as October 9th, maybe people are starting to believe them.

  66. 66
    Nicky Says:

    On the other other how are they going to ‘gracefully’ do an about turn on the Turkish issue and turn it into a plus rather than a minus – can’t see it somehow!

  67. 67
    sane Says:

    N,

    Agreed, I am just saying they can spin anything into a oil bull perspective, even if it might be good.

  68. 68
    zman Says:

    Sane – if they come across the border en masse I say we go to 90 and the backwardation to the out months increases. It would be an unsettling time in the region but you can bet the Turks would keep that pipeline open.

  69. 69
    sane Says:

    Z,

    Agreed

  70. 70
    Sambone Says:

    12:16 pm EST

    Nymex Crude Breaches $88; Jumpy On Errant Missile?

    DOW JONES NEWSWIRES
    From Market Talk:
    [Dow Jones] Crude-oil futures have breached $88 a barrel on the Nymex, hitting an intraday high of $88.05 following a gradual build. This trade happened in the pit. Fears that tensions on the Turkey-Iraq border could disrupt oil supplies and that a cold winter would spur a run on heating oil continue to be the drivers. Traders are sure on tenterhooks, though. One notes that the last leg of the run-up came following a news story about the U.S. military accidently firing a missile from a base in Qatar and hitting nearby farmland. Nov crude +$1.67 at $87.80/bbl. (anna.raff@dowjones.com)

  71. 71
    el_vogel Says:

    You’re probably right…HK’s been pretty explicit about being up for sale for at least a couple of years now, so maybe it’s getting ready to actually happen!

  72. 72
    Nicky Says:

    When we are actually in the grips of a cold winter that too maybe a fundamental reason for higher prices. But its going to be warmer than average!

  73. 73
    sane Says:

    N,

    But colder than last year 😛

    (Had to say it)

  74. 74
    zman Says:

    Funny to see SU not playing again. Guess T Boone’s friends are on vacation.

  75. 75
    scoop006 Says:

    Z Any value in ESV Nov. 50P’s @ $.55

  76. 76
    zman Says:

    Scoop – that’s a long shot as the Street appears to defend this thing to the death. While continuously/quietly shaving their price targets. That and they keep buying their stock back to support it. Just too hard to fight. I’m not saying it won’t happen but I’m still trying to decide which ones to play.

  77. 77
    zman Says:

    So why hasn’t XOM warned yet?

  78. 78
    rammastr Says:

    ZMAN – Just say no to puts. Puts are bad.

  79. 79
    Sambone Says:

    1:18 pm EST

    Crude Hits Record $88.20 On Supply Concerns

    By Matt Chambers
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures hit a new intraday record of $88.20 a barrel Tuesday, spurred higher by concerns that any Turkish incursion into northern Iraq could crimp crude supplies and by forecasts for a fourth quarter supply deficit.

    Prices have risen for the past five sessions on a combination of concern Turkish forces will attack Kurdish rebels in northern Iraq and forecasts that fourth quarter supply will fall well short of winter demand. A weak U.S. dollar has also been encouraging a rush in fund buying that is aiding prices.

    The front-month November light, sweet crude contract on the New York Mercantile Exchange was recently up $1.64, or 0.4%, at $87.77 a barrel. Prices hit a record settlement of $86.13 a barrel Monday. November Brent crude on the ICE futures exchange rose $1.49 to $84.24 a barrel, after rising to a new record $84.49. November Brent expires Tuesday.

    Reports of the U.S. military accidentally firing a missile from an army base in Qatar and hitting nearby farmland underlined the attention being paid to supply risks from Middle East conflict and helped lift prices past $88 a barrel.

    “The missile report re-triggered the marketplace and spurred prices,” said Tony Rosado of IAG Energy Brokers in Fort Lauderdale, Fla. “The bulls are ready to keep pushing this market beyond certain technical levels and if we can break past these highs we’re probably headed toward $90 a barrel.”

    Crude’s recent rally started Oct. 9, and is the longest upward move by crude in more than a month. It began with forecasts from the U.S. Department of Energy for a 1.82 million barrel-a-day gap between fourth-quarter supply and demand. Concerns about supplies being unable to keep up with demand were boosted by International Energy Agency data released later in the week that showed a non-seasonal drop in the number of days of demand cover offered by oil stockpiles in Organization for Economic Cooperation and Development nations.

    The possible incursion by Turkey is a worry for oil supplies because it could threaten the pipeline that runs from Kirkuk, in Iraq, to the Turkish export terminal of Ceyhan. While exports of crude from Kirkuk to Ceyhan have been sporadic since the U.S.-led invasion of Iraq in 2003, oil has been flowing for the past two months and in recent days was being shipped at a rate of nearly 500,000 barrels a day.

    The incursion could also threaten a planned increase in oil flows through a pipeline from Baku, Azerbaijan, through Georgia and into Ceyhan. The pipeline currently moves between 600,000 and 700,000 barrels a day and hopes this could be ramped up to a planned 1.2 million barrels next year are unlikely if tensions between Turkey and Kurdish groups escalates, according to analysts.

    Front-month November reformulated gasoline blendstock, or RBOB, rose 1.65 cents, or 0.8%, to $2.174 a gallon. November heating oil rose 2.56 cents, or 1.1%, to $2.3328 a gallon.

    –By Matt Chambers, Dow Jones Newswires

  80. 80
    rammastr Says:

    ZMAN – Thanks for the earnings calender info. QMAN mentioned the SLB play for the end of the week. SLB should turn up with market up.

  81. 81
    zman Says:

    Ram – very true lately

    Sam – I wonder if oil is higher because of the concerns with Turkey, or it the concerns with Turkey is higher because of oil. hmmmmmm…

    Oil actually surged b/c the U.S. tilled someones farm for free???!!! oh come on!

    There they go with the ramp up potential lost volumes story…that’s nonsense.

  82. 82
    drdavis124 Says:

    New put-Garmen Jan 08 @$2.00 GQRMP.
    Why? GPS prices are crashing $199.

  83. 83
    drdavis124 Says:

    ForgoT Strike GQRMP 1/08 $60 COST $2.00

  84. 84
    Sambone Says:

    Z – Since Nicky’s good buddy is going over to the “Fair and Balanced” Talking head show, why don’t you call the Talking heads at CNBC and join their crew? LOL

  85. 85
    zman Says:

    S – I busy actually working, lol

  86. 86
    Nicky Says:

    T Boone will be on CNBC hosting tomorrow morning – imagine the gloating.

  87. 87
    Nicky Says:

    Samborne – don’t tell me he’s leaving! Which is the Fair and Balanced Talking Heads show – Bloomberg?

  88. 88
    Brian08 Says:

    Somebody’s got to pay for Okie State’s new football stadium Nicky!

  89. 89
    Nicky Says:

    But Z if you go on you can ramp it in the direction we want and we can all sit back and let the profits pour in. We won’t need to work!

  90. 90
    zman Says:

    Fair and Balanced = Murdoch’s new Fox Business news channel

  91. 91
    Nicky Says:

    Actually Brian aside from the oil ramping I am a big fan – he was absolutely wonderful with animal rescue during Hurricane Katrina. He literally chartered dozens of planes and flew dogs out of the staging areas. He spent a fortune – not that he doesn’t make it!

  92. 92
    Sambone Says:

    Nicky – He’s said in his little memo today that he will be on that new show, Fox Biz news? Can’t believe you don’t have it on to watch for him. LOL

  93. 93
    Nicky Says:

    Samborne – gonna switch over right now and watch for him. Hang on just adjusting my PF for President T shirt.

  94. 94
    Sambone Says:

    See, told ya PF is Nicky’s hero!!!!!

  95. 95
    zman Says:

    Go COP Go!

    I’m going to start selling I Miss Phil shirts on my site.

  96. 96
    zman Says:

    DRYS down $8.50, probably a buying op, Bill, hows the BDI look today?

  97. 97
    Nicky Says:

    Hmm interesting – Nymex increasing margin requirements from tomorrow by 33% in the front month contract.

  98. 98
    Nicky Says:

    Another huge ramp into the close.

  99. 99
    rammastr Says:

    ZMAN – #80

  100. 100
    zman Says:

    RAM – sorry, thought that was a statement. I’m staying away from SLB / HAL into SLB’s earnings. They need a good beat and encouraging words after the recent run. Of the two I still like HAL better based on valuation, change in story.

  101. 101
    rammastr Says:

    Thanks.

  102. 102
    Nicky Says:

    Turkey have said they are not actively looking for military action in northern Iraq.

    So why isn’t oil falling???

  103. 103
    zman Says:

    TRADE: OUT October COP $85 CALLS for 2.86 average for a 33% gain since 10/2 and held through the “3Q warning”. I think the stock has further to run which is why I still hold the November $85 calls.

  104. 104
    rammastr Says:

    ZMAN – Why the JAN vs DEC on HK?

  105. 105
    zman Says:

    Nicky – that’s what you call indirect fire, lol.

  106. 106
    zman Says:

    Ram – just wanted a little more time.

  107. 107
    Nicky Says:

    Z – something isn’t right. They take away the reason the market has gained 10 bucks and it carries on up???

  108. 108
    Nicky Says:

    Distillates at highs of the day.

  109. 109
    zman Says:

    I’ll probably have a PQ piece out tonight or tomorrow.

  110. 110
    Sambone Says:

    2:37 pm EST

    Crude Hits Record $88.20 On Supply Concerns

    By Matt Chambers
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures hit a new intraday record of $88.20 a barrel Tuesday, spurred higher by concerns that any Turkish incursion into northern Iraq could crimp crude supplies and by forecasts for a fourth quarter supply deficit.

    Prices have risen for the past five sessions on a combination of concern Turkish forces will attack Kurdish rebels in northern Iraq and forecasts that fourth quarter supply will fall well short of winter demand. A weak U.S. dollar has also been encouraging a rush in fund buying that is aiding prices.

    The front-month November light, sweet crude contract on the New York Mercantile Exchange was recently up $1.64, or 0.4%, at $87.77 a barrel. Prices hit a record settlement of $86.13 a barrel Monday. November Brent crude on the ICE futures exchange rose $1.49 to $84.24 a barrel, after rising to a new record $84.49. November Brent expires Tuesday.

    Reports of the U.S. military accidentally firing a missile from an army base in Qatar and hitting nearby farmland underlined the attention being paid to supply risks from Middle East conflict and helped lift prices past $88 a barrel.

    “The missile report re-triggered the marketplace and spurred prices,” said Tony Rosado of IAG Energy Brokers in Fort Lauderdale, Fla. “The bulls are ready to keep pushing this market beyond certain technical levels and if we can break past these highs we’re probably headed toward $90 a barrel.”

    Crude’s recent rally started Oct. 9, and is the longest upward move by crude in more than a month. It began with forecasts from the U.S. Department of Energy for a 1.82 million barrel-a-day gap between fourth-quarter supply and demand. Concerns about supplies being unable to keep up with demand were boosted by International Energy Agency data released later in the week that showed a non-seasonal drop in the number of days of demand cover offered by oil stockpiles in Organization for Economic Cooperation and Development nations.

    The possible incursion by Turkey is a worry for oil supplies because it could threaten the pipeline that runs from Kirkuk, in Iraq, to the Turkish export terminal of Ceyhan. While exports of crude from Kirkuk to Ceyhan have been sporadic since the U.S.-led invasion of Iraq in 2003, oil has been flowing for the past two months and in recent days was being shipped at a rate of nearly 500,000 barrels a day.

    The incursion could also threaten a planned increase in oil flows through a pipeline from Baku, Azerbaijan, through Georgia and into Ceyhan. The pipeline currently moves between 600,000 and 700,000 barrels a day and hopes this could be ramped up to a planned 1.2 million barrels next year are unlikely if tensions between Turkey and Kurdish groups escalates, according to analysts.

    Front-month November reformulated gasoline blendstock, or RBOB, rose 1.65 cents, or 0.8%, to $2.174 a gallon. November heating oil rose 2.56 cents, or 1.1%, to $2.3328 a gallon.

    –By Matt Chambers, Dow Jones Newswires

  111. 111
    zman Says:

    Glad I still hold the November COPS, that thing is on fire (well, at least for COP that is)

  112. 112
    Sambone Says:

    Off subject – Financials getting spanked, which anit good for da market

  113. 113
    rammastr Says:

    The FED can’t save Christmas for the Mortgage resets.

  114. 114
    jimbo Says:

    Tidewater is nearing Aug 16th low on 2Q warning. This really looks like a value!

  115. 115
    zman Says:

    Jimbo – thanks for the headsup, missed the warning.

  116. 116
    jimbo Says:

    Has to be one of my favorite PEG’s: 0.16

  117. 117
    QUARRYMAN Says:

    Z.

    G’day. I’m cleaning house before leaving for the rest of the week.

    Nabors Oct puts. Do you still hold them?

    .. or just dump them to market?

  118. 118
    zman Says:

    Re TDW – they’re not overweight to the GOMex are they?

  119. 119
    zman Says:

    Q – still hold, will lose em tomorrow, they’re having trouble falling in a down service market. Same goes for the ESV 55s, getting a little relief today but really need a red service day tomorrow. My 50s are tot.

  120. 120
    redjack Says:

    Z…Tidewater warned this am

  121. 121
    jimbo Says:

    TDW…quite international. Houston company…overweight Gomex? proabably.

  122. 122
    zman Says:

    RJ – right, just wondering if anyone knows if it was GOMex specific or business around the world?

  123. 123
    zman Says:

    Did Cramer say something nice about COP this afternoon? Sure is outperforming XOM. Can’t be b/c its so cheap.

  124. 124
    redjack Says:

    Cramer just did a plug for RIG

  125. 125
    Sambone Says:

    Cramer = Phil, IMO

  126. 126
    zman Says:

    RJ – don’t know if that’s good or bad…maybe people are still stinging from the anti-plug he gave HAL just before it shot out of a 2 year trading range.

    Just kidding, how can you not like Cramer?!

  127. 127
    jimbo Says:

    TDW….
    -Vessel usage down due to maintenance and repairs (dry dock time)
    -Vessel revenue higher
    -6% increase in dayrates worldwide

  128. 128
    redjack Says:

    he has his followers (I’m not one)

  129. 129
    QUARRYMAN Says:

    Thanks.

    I have intermittent computer access, just don’t won’t to be left holding the bag on expiry.

  130. 130
    zman Says:

    J – Re TDW: seems like a pretty thin reason to sell it off…pretty forgivable transgressions unless it becomes a habit, especially with the higher rates.

    RJ – I think he’s smart…just question the motives.

    Q – If you’re in ESV puts you are already holding a bag of something

  131. 131
    Sambone Says:

    Z – I don’t like Cramer because two years ago I tracked him on his calls on CHK. Not good! No one can know that much about a stock. Someone calls in and has some question on let’s say every stock on the NYSE and he knows the bottom line. No way any human including Cramer knows this. Your a smart guy, tell me should I buy, sell or hold CSCO, GE, etc. etc. and so on. I think he is all show. I’m suprised he hasn’t been sued.

  132. 132
    Sambone Says:

    3 minutes to “Tini time”. So Z your out part Thursday and all Friday? Will you post Friday?

  133. 133
    zman Says:

    Sambone – I didn’t say he’s for me but he’s obviously onto something like a 21st century snakeoil salesman. I like him because it’s guys like him and that 10 second sound bite friend of Nicky’s that remind me to not address stuff people ask me in an off the cuff manner. I try to know more than a ticker and buy or sell “feeling ” on a stock and I still get it wrong a good chunk of the time. But like I said, a lot of people like him. Of course a lot of people like Wheel of Fortune too.

  134. 134
    zman Says:

    Sam – will post Thursday for sure, Friday probably unless hotels in Delaware don’t have internet. Then I’ll just check in on the crackberry from time to time under the aaatest name.

  135. 135
    QUARRYMAN Says:

    I’m still holding a bag of
    PooTeR puts!

    … not been a good week so far.

    My luck like it is so far, I may have to stick to the .25 slots in L.V.!

    Have a great week with the in-laws, Z.

    Q.

  136. 136
    bill fraser Says:

    z Re drys

    a better index is the avg panama rates

    Here is the data

    10/1 76,615
    10/2 76,298
    10/3 77,245
    10/4 77,811
    10/5 77,989
    10/8 78,281
    10/9 79,700
    10/10 83,219
    10/11 85,675
    10/12 88,379
    10/15 88,885
    10/16 88,513

    As you can seee it was off a tad from yesterday but still at obscene levels

    Simple profit taking and drys selling shares into the controlled equity offering

  137. 137
    zman Says:

    Thanks Bill. Seems like Jefco picked an odd time to bump the price target, I guess they are not part of the syndicate managing the 6mm.

  138. 138
    zman Says:

    Posted a small report on PQ – in a nutshell I like it.

  139. 139
    zman Says:

    This is what I do all day when I get bored talking about the crazy antics of PF! Have a good one and I’ll see most of you in comments tomorrow.

  140. 140
    bill Says:

    here is a chart on what it cost to ship a ton of coal

    http://www.ssyonline.com/_phps/_view.html?view=150

  141. 141
    bill Says:

    PQ

    Z I love your stock write ups and ideas.

    Compelling case for PQ. Thanks

  142. 142
    zman Says:

    That is not sustainable. The ships are going to be worth weight in gold.

  143. 143
    zman Says:

    Thanks Bill

  144. 144
    Nicky Says:

    A short while before the energy market closed the Turkish Prime Minister said that even if Parliament okayed it there were no plans for an immediate attack. The fact that the market did not fall on this news but in fact rallied clearly shows that this is not the reason for the gains which have been bought about by speculative buying whatever the spin that is being put on it.

    Open Interest in both the November and December contracts fell by 20k yesterday. The wild volatility today points to short covering.

    The executive vice president of the New York Oil Heating Association said today that the idea of low heating oil supplies in the north east was the biggest farce around.

  145. 145
    zman Says:

    NYOAH’s EVP might want to explain how PADD I distillate stocks being down to 59.4 mm barrels vs 68.2 last year is the biggest farce around. It may depend on what your definition of low is but farce is probably a strong word.

    I’ve added a couple of graphs to the end of today’s post to illustrate how some might think it’s low at least relative to last year’s levels.

  146. 146
    jimbo Says:

    QRCP has also purchased Enbridge Energy interstate trasport system for $133M.

    http://biz.yahoo.com/ap/071016/enbridge_energy_system_sale.html?.v=1

  147. 147
    texana Says:

    z great art on pq. do u see g8r potentional in price expansion in the gas plays to catch up with oil going forwrd? another oily play here in w.tex is cxo but it has moved up big from its ipo in aug. sometimes waiting for the pullback u miss the whole move. i’m lg on hk, long cup & hndle breakout @ 17.50 on 10-11. what a g8r price for there gom props how much fun can u have w/ 825 milliooonnn, thx agn tex

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