03
Dec

Monday – OPEC Week – Rumors and Speculators Rule Until Wednesday

Print Friendly

Commodity Watch:

  • Crude Oil. Down 10% last week on fear of OPEC, the economy, and profit taking as crude broke several technical levels. This morning crude is trading between a quarter and a buck lower on fears OPEC will increase production (current analyst thinking is 500,000 to 1 mm bopd). Sounds out of OPEC ministers are as always mixed. OPEC's December 5th (Wednesday) meeting will be the big event of the week.  The latest from Al-naimi, Saudi's oil minister, and arguably the most influential oil man on the planet, is that the market is well supplied and no production hike is needed.
  • Oil Weighted Degree Days Inline With Normal, Expected To Jump Next Week. HDDs increased to 187 from 180 last week. This is much higher than the prior year of reading of 118 but in line with the original estimate for this week of 185. This CPC's estimate for this week is a season high 238.

hdd-ow-120307.jpg

  • Hugo Watch: Venezuelan vote says no to abandoning term limits that would allow Chavez to run for president again. Chavez can still rule through 2013 and has vowed not to give up on his socialist "reforms" despite the loss. Comment: ha, ha.
  • Russian November Output Falls. Russian, currently the world's largest producer of crude, feel 0.8% (80,000 bopd) in November from the prior month to 9.85 mm bopd. This is still up 1% versus year ago levels. Exports, which have been dribbling lower due to high export tariffs fell 2.25% or 100,000 bopd in November to 4.34 mmbopd. This lower level of exports is driven by a combination of Russia's growing domestic consumption and it's desire to squeeze the west.
  • Natural Gas. Down 9% last week as fat storage levels outweighed falling mercury. This morning gas is trading off another $0.20.
  • Gas-Weighted Degree Days Increased.  Gas-weighted HDDs increased to 172 from 144 last week. This is well above the prior year reading of 122 (when we saw a paltry gas withdrawal of 14 Bcf)  and was above the original estimate for last week of 164. This week's estimate from the CPC is 180.

hdd-gw-120307.jpg

Dry Bulk Shippers. The dry bulkers bounced with the market last week after several CEO's hit the airwaves screaming nothing is wrong with the business.

Key Thoughts:

  • Capesize, Panamax, and Handysize rates are all within 5 to 10% of their all time highs. The recent trades in both ship sales and contract fixings have been very favorable. See rate charts here.
  • Last week's sector performance was decidedly up with all but 11 of the stocks I'm keeping half an eye on ending well into the green. (NM) fared worst fall 11% last week but most stocks were up double digits with (TBSI) and (EXM) rising by mid 30%s. Heavy weight and still most spot market leveraged DRYS ended the week up 23%.
  • Taking a look at the 4 week history paints a much redder picture. All watched companies (see table below) are down from 7 to 33% even after last week's regrouping.
  • Valuations remain cheap. Of course that's rarely been a problem here except maybe on a trailing basis.

drybulk-113007.jpg

  • I hold a decimated call position in the (DRYS) Dec $125s. If you can tell me the direction of the market from now until Opex on the 21st I'll tell you what I'm going to do with them. Essentially the stocks moved in the same direction as the market. Given the unbelievably cheap multiple, the sound rate picture (at least between now and the death of my December calls), and most importantly the fact that investors are once again taking note of this up until recent favorite momentum group I may very well triple my $125s or add a some December $100. My sense is that the stocks will continue to run until the market runs out of steam and for that kind of market tied action you want to be in the biggest, cheapest, most spot leveraged name around.

 

Tanker Multiples... Just starting to have a look at the group again after a long hiatus...more to come shortly.

tanker-multiple-120307.jpg

Stocks We Care About Today:

(CLB) - simply fallen too much and approaching support. Will keep a sharper eye on this one as fundamentals drove the rally and fear and profit taking have driven the fall...much like they drove the stock moves of the drybulks.  

(APA) - another nice gas producer in Egypt. Probably little impact by itself on the stock but worth mentioning as they have a 100% interest in a massive concession in Egypt and have now successfully tested 4 zones in 3 wells.

(SFY) - Swift is looking to punt its New Zealand oil assets and refocus on the US. That's old news but NZ is now offering up an exploration round onshore which could help improve the look of their assets as its been a long time since NZ has held a lease sale.

(DO) - Big Brazilian Contract. Diamond gets $2.3 billion in two six-year and two five-year contracts from PBR for its semi-submersible rigs. The $2.3 B is pre potential bonuses so that number could rise. 

(NFX) Monster Woodford Wells. I alluded to the need for a new @NFX publication and here you go (I love these guys). They're providing an update of the Woodford Shal, announcing monster rates in recent wells (initial production (IP) of 12, 10.3, 9.4 MMcfgpd). These are their longer lateral length tests and cost a bit more $7-8 mm apiece versus the $5 to $6 for their earlier wells but if the EUR (reserve size) are commensurate with the high IP's and they should be roughly proportionate than the extra dough is well spent. 

  • They announced an increase in Woodford acreage to 165,000 acre, maybe they picked up some of the stuff Aubrey was punting
  • Production is up 165 Mmcfepd up from 150 MMcfepd as of October 24th
  • Analysis shows average frac stage shows 0.6 Bcfe incremental reserves. That's good.
  • 13 rigs running for NFX and they've now spud 140 wells here and participated in 60% of the 400 wells in the play to date.
  • I'll be adding more soon.

Odds & Ends

Analyst Watch: (KBR) upped to buy at UBS, (PXD) initiated at RBC as an outperform (warming up to this name), (RIG) target increased from $131 to $154 at Stiffe.

Thanks for all your kind words and prayers for mom. 

86 Responses to “Monday – OPEC Week – Rumors and Speculators Rule Until Wednesday”

  1. 1
    zman Says:

    The NFX and DO news are big. Liking the Dec $50 NFX and the DO 120s either December or Jan.

  2. 2
    kaman Says:

    Z-
    Looked at the Baker Hughes GIS tool…pretty slick. Dumb question…is it comprehensive or just BHI-serviced rigs?

  3. 3
    zman Says:

    K – there are no dumb ?s here. Comprehensive. That’s the whole bag of beans.

  4. 4
    zman Says:

    SUxs trade starting to not suck..chart looks like its at the top of support here but is definitely moving with oil this month and not the hopes and dreams of Canadian anti-royalty concerns.

    DO not exploding higher…need to see details on those rigs …anyone seen the names of the floaters involved? Maybe it’s just oil or the pull of RIG which is drifting lower.

  5. 5
    Sambone Says:

    6:09 am EST

    Crude Drops More Than $1 As OPEC Meeting Nears

    By Nick Heath
    Of DOW JONES NEWSWIRES

    LONDON — Crude oil futures fell by more than $1 in London trade Monday, as investor expectation consolidated of an announced output increase at OPEC’s policy meeting this week.

    Doubts the Organization of Petroleum Exporting Countries might be deterred from upping its production quotas following last week’s sharp falls in crude prices, appeared to have been put to one side as the market braced itself for an increase in output.

    But trading was volatile, with Monday’s falls following on the heels of near $1 climbs during overnight trade.

    “It’s very volatile but there’s no fresh news. People are trying to second guess OPEC I think,” a trader in London said. “With the large downside move last week, I guess it gives OPEC an excuse to not do very much, i.e., no output increase or maybe another deferred one. We shall see”

    At 1056 GMT, the front-month January Brent contract on London’s ICE futures exchange was down $0.86 at $87.40 a barrel.

    The front-month January light, sweet, crude contract on the New York Mercantile Exchange was trading $0.85 lower at $87.86 a barrel.

    The ICE’s gasoil contract for December delivery was down $7.25 at $785.50 a metric ton, while Nymex gasoline for January delivery was down 106 points at 222 cents a gallon.

    —By Nick Heath, Dow Jones Newswires

  6. 6
    zman Says:

    NFX DO and CLB all moving nicely.

  7. 7
    zman Says:

    still happy with my TSO recovery trade

    APC still getting a little follow through last week’s guidance boost.

    DO – average day rate is ok but not great for this water depth floater but not really wowing anyone this morning. It probably will only move higher if oil can firm up.

    NFX – this one can move with or without oil as long as gas holds over $7 I see it moving back into the $53 to $54 land in the next week or two.

  8. 8
    zman Says:

    Crude caving, off 1.15 at lod at 87.50. Think 86 holds a little support now.

    somebody explain to me the SU rally which makes a liar out of my earlier comments today. up $0.80 now.

    Drybulks moving lower in an exagerated move with the market.

  9. 9
    Sambone Says:

    9:56 am EST

    Nymex Crude Down As OPEC Mulls Output Boost

    By GREGORY MEYER
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures were down slightly Monday as traders guessed at whether the Organization of Petroleum Exporting Countries will resolve to sell more oil at a meeting this week.

    Light, sweet crude for January delivery on the New York Mercantile Exchange was recently down 70 cents, or 0.8%, at $88.01 a barrel. Brent crude on the ICE futures exchange was trading off 58 cents at $87.68 a barrel.

    Prices have jumped around through the day as traders mulled the cartel’s next move.

    “The key event this week is going to be the OPEC meeting” scheduled Wednesday in Abu Dhabi, said Andy Lebow, a senior vice president at MF Global in New York.

    OPEC members sent conflicting signals to the market. Saudi Arabia’s Oil Minister Ali Naimi said Monday that OPEC’s decision this week on oil policy was “wide open,” declining to tip his hand ahead of the gathering.

    Asked whether there was a consensus within OPEC, Naimi said, “That is very premature. We have to meet and then decide. The field is wide open.”

    Other OPEC ministers argued against a production boost. Libyan oil policy and chief executive of Libya’s National Oil Co. Shokri Ghanem, for example, said that the recent fall in prices argued against an output increase, given that they came against a backdrop of an explosion last week on a major Canada-to-U.S. oil pipeline and forecasts for colder weather in the U.S.

    “There is no need for an increase. Prices are going down,” he said.

    The explosion on a pipeline owned by Enbridge Inc. (ENB) momentarily forced the shutdown of four lines in Minnesota, raising the specter of a large disruption in the U.S. oil supply. All but one, with a capacity of 420,000 barrels a day, are now operating. The restart of the fourth has been delayed by a snowstorm, the company said.

    Oil prices fell 9.6% last week, leading some to argue that OPEC is now under less pressure to boost output. When the oil futures traded near $100 a barrel — as they did as recently as a week ago — it was easier to expect an output increase, said Rick Mueller, a Netherlands-based senior oil analyst at Energy Security Analysis Inc.

    “But the picture is growing more complicated, because the more prices fall the less impetus there is for OPEC to do anything,” he said.

    Front-month January reformulated gasoline blendstock, or RBOB, was down 1.31 cents, or 0.6% to $2.2175 a gallon. January heating oil fell 2.80 cents, or 1.1%, to $2.4870 a gallon.

    —By Gregory Meyer, Dow Jones Newswires

  10. 10
    TTupp Says:

    you got to love stockpikr. i just read something that said somewhat to the effect that tso this week could outperform due to the cold weather through eating oil sales. correct me if im wrong but they do not have a refinery east of Arizona, correct, and therefore would not produce a drop of HO

  11. 11
    zman Says:

    T – they produce some for piping into the midwest. The more obviously plays if they want to look at cold weather are SUN and VLO. I think TSO will do well (of course its Monday and we have the cartel’s tea party on Wednesday) but not because of the weather. More to do with the fact that the pull of the KK/tracinda offer overly slammed the stock.

  12. 12
    TTupp Says:

    i agree

  13. 13
    TTupp Says:

    looking for entry into exm/drys here after the pull back.

  14. 14
    TTupp Says:

    looks like we have had a full reversal. did you see drys ceo on cnbc anyone? i missed it- anything of value?

  15. 15
    zman Says:

    little FTO is drifting around the $45 mark as well. That one greatly benefits from regional shortfalls in over the road diesel and reduced supplied of heating oil. And their cracks are better on the recent rally in the differential between sweet and sour crudes. Will update my sweet sour stuff for the morning.

    I’m not buying yet today or much last week as I’ve been seized by a streak of caution. Its better not to fight this up 2 day, down 2 day market with more money.

    T – I saw him, think it was Friday, maybe Thursday. He said the right stuff, nothing earth shattering and the mickey mouse club that is the anchor crew at CNBC (aside from melissa francis, faber, and joe kernon) were more interested in talking about how big those shiny ships were and which canals they could squeeze through. The group has reattached itself to the broad market which at the same time attaches itself to the CROWD’s view of the economy.

  16. 16
    zman Says:

    DO making a move despite the down oil and down RIG as the dayrates for the 4 contracts announced today (which average 283,000 per day)appear to be acceptable to the Street.

    Rigs
    Ocean Worker was getting $450,000 per day; this drops to $270 (but it was only a 6 month contract)

    Ocean Yatzy was mid $110s kpd; now $245

    Ocean Winner was low $110s kpd; now $270

    Ocean Alliance previous day rate unknown; now $341

    These 4 contracts are on top of the 2 that went to Callon last week in the Gomex:

    Ocean Victory was mid $320s kpd; now $505
    Ocean America was mid $370s kpd; now $480

  17. 17
    TTupp Says:

    what are the determinants of semis’s day rates?

  18. 18
    zman Says:

    T – demand vs capability vs region.

  19. 19
    zman Says:

    drybulks getting a little more tempting in here.

  20. 20
    zman Says:

    Broad market thoughts? Just on the charts of both the djia and the s&p, it looks to me like this rally is a critical juncture or at least at a pretty resistance resistance level. Thoughts welcome.

  21. 21
    Nicky Says:

    Morning all –

    WTI – August uptrend line comes in at 87.38 today – this support is key…..

  22. 22
    zman Says:

    morning Nicky…I was just about to ask you about crude and product levels and also see #20.

  23. 23
    Nicky Says:

    Broader markets – expecting a b wave lower this week possibly from slightly higher levels. After that we get C higher which should take us into the Fed and beyond….

  24. 24
    zman Says:

    Thanks Nicky, what levels on the S&P and DJIA would we have to get to for you to revise your thought there? I mean by that, if we went up through X, would it make you revise that and say we are not going lower yet. To me just using support / resistance which I know isn’t e-wave, it looks like the S&P needs to break on through above 1510 for people to really buy-in to a rally. That’s a long way from here, lol.

  25. 25
    TTupp Says:

    nicky mornigng to you. could you maybe explain to me the progession of the Gnann waves, ie, the sequence like: from #23, lowercase ‘b’, then uppercase ‘b’. it would make alot more sense if i could put these letters and roman numerals into context.

    thank-you.

  26. 26
    Sambone Says:

    Uncle Phil

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

  27. 27
    QUARRYMAN Says:

    … from a friend at a related blog:

    CHK – I love them! They are totally hitting my $37.50 target on the nose and I’ve made a fortune selling calls to suckers who think they’re a good company! I got out last week as it was no longer worth it as I bought out the December caller on Tues and then rode up to $38 again but what a ride that stock was…

  28. 28
    Nicky Says:

    Z – if 1470 gets taken out then we in the b wave lower.

    As far as levels on the upside I think 1510 is quite doable on the next leg up.

    The question out there is are we in a wave 2 not to take out previous highs or wave 5 which will exceed the previous highs. Still too soon to say…

    T Tupp – not quite sure what you are asking – do you want numbers (ie objectives to go with the letters). if so I expect b to get back to spx 1444.

  29. 29
    TTupp Says:

    no i want to know what order the letters and numbers go in, you say B, then i, a, it make no sense. like, within the ABC count their is i,ii,ii, or abc. how does that go? like how would it be labeled on a graph

  30. 30
    zman Says:

    Q – thanks for the input. Hate that guy’s writing style. Suckers? Not a good company? He doesn’t know much about energy.

    Writing calls against it is not a bad idea as it languishes from time to time but calling it a bad company…that’s just stupid. HK and NFX fall into the same category, languishing from time to time despite strong production growth and improving economics. I’m looking at writing calls against both of my stock positions there.

  31. 31
    zman Says:

    DO looks like a breakout forming.

    NFX strongly reversing trend as well. Those are some monster Woodford wells they are highlighting this morning. Note also that the majority of their acreage is in the core and they have the most experience with the play. CHK, which came a little later is selling down their non-core acreage and sort of deemphasizing this play. A bad company would just chase it based on what they see others doing.

  32. 32
    Nicky Says:

    TTupp – if as I suspect this move up from last weeks lows is wave 2 it will take the form of an abc, a is up, b is down and c is up. It will be a countertrend move.
    a may already be complete of close to completion and a move below 1470 says we are in b.
    Does that make any more sense?

  33. 33
    zman Says:

    Thanks Nicky, just trying to time an entry/addition to drybulkers

    Go DO!

  34. 34
    TTupp Says:

    did the new rig options just show up today?

  35. 35
    TTupp Says:

    drys has become quite a bit more liquid since we were profitably trading it last.

  36. 36
    zman Says:

    T – I see them, don’t know if they just started to day.

    re DRYS – agreed. options trading better too.

    DO may take half off table this afternoon but its the flavor of the day right now. This market has no staying power and I prefer to play with house money now more than ever.

  37. 37
    TTupp Says:

    z- how would you personally define a momentum stock? would you put fslr into that category along with drys?

  38. 38
    TTupp Says:

    z- re sux trade, i think it performance of late may have to do with the strengthening of the us dollar vs the canadian $. as if we didn’t have enough to contend with trading energy options…

  39. 39
    zman Says:

    T – that’s a good question and easy one for me to answer as it’s my definition. It would be one that moves based on easily understood (but often misunderstood) metrics, “man, check it out, people are putting solar panels on their rooves” or “people in China like to use cell phones, do you know how many people their are in China !!??!!?!?!”

    So the people stream in, irregardless of valuation. Drybulks cheap, solar expensive, and their is no matter to it. But the thing that makes it a mo-mo stock in my book are the large swings for no apparent reason…5% in a day being routine and 20% not being uncommon…come on, the fundamentals should dictate the price right? Not for these puppies. So I can say, wow the fundies for dry bulk look cheap. They fell from from 9x ’07 #s to 3x 07 numbers in 30 days and are back to the 5 level now. That’s what I call a mo-mo stock. I much prefer the stock plod from cheap to fair value or plod from cheap to higher price but cheap as the fundies improve to offset the multiple increase.

    This $5 and $10 per day action is Vegassy and tells me most of the people in the stock know the ticker, probably not the name of the company, and that China is a big place. I’ll play it from time to time but its dangerous and when it works I feel like “wow, glad to see the dealer busted, too bad I didn’t double down…where’s that damn waitress with my drink”

  40. 40
    TTupp Says:

    look at fslr’s chart today lol.

  41. 41
    zman Says:

    more on that…if I’m going to play a mo-mo play, it’s going to be one where I can get a handle on the driving metrics more easily . I much prefer drybulks and they happen to be cheap…don’t care how much they have risen, they’re still cheap. Also, their story is threatened by global recession and capacity additions but otherwise, the basic story has legs or repeatability. Energy story is a little better on the repeatability side. I buy an mcf of gas to heat my house and it’s gone when I burn and then I need to buy another one. I buy a solar panel and I’m out of the market for quite some time. I have a friend who works in the housing segment and he says the solar option was a big buyer desire 2 years ago… now not so much.

    Solar is a razor and blade story without the blades. Also, I see deep pocketed big oil (BP) encroaching on that business to drive down pricing. No cartel and increasing production capacity will likely outstrip demand at some point and then I think these stocks mirror the internet bubble 6 years ago. Election 08 is huge to them as I see Dems more friendly to subsidies via tax incentives.

    T – not sure on 38

    T- re $40 exactly. Did the same Friday.

    Should I follow the solars for a big short trade? I dunno. I think I might do a little work there and label it as radioactive trades.

  42. 42
    coco Says:

    reason for SU outperformance is chatter about BP for SU resurfaced. apparently TD was talking it up this morning

  43. 43
    TTupp Says:

    you can tell by all the volume in the first hour of trading who’s trading fslr. leering at it for a long jan or dec strangle. IV is a little bit expensive historically, but would likely become richer with a giant fall.

  44. 44
    zman Says:

    OII, CLB, DRQ charts all looking very interesting. Just know that I’ve not forgotten about them and they are very much on my radar. May go in small pre OPEC.

  45. 45
    zman Says:

    Thanks COCO!

  46. 46
    QUARRYMAN Says:

    Z.

    Ever listen to that audio clip from Vulcan’s Chairman I posted last week?

    Q.

  47. 47
    zman Says:

    gasoline cracks probably bottomed for the season last week. Gasoline is actually up today which is not surprising given demand strength but there may be some refinery outage out there that I have not seen yet other than the MRO refinery fire over the weekend (no effect on production) and a fire at a Saudi refinery (unlikely to have any impact over here)

    heating oil and diesel cracks continued higher last week.

    Q – yes, it all sounded good. Did you see my list of questions for you re aggregates? Its was at the end of the day in comments and I think I said some stuff in the next day’s post as well.

  48. 48
    zman Says:

    NE cracks at best levels since early September

    Gulf coast cracks particularly weak for gasoline but better for diesel.

    Oil up $0.50 now. If it holds APA, now down pretty much the biggest of the oil leveraged E&Ps should pop.

  49. 49
    zman Says:

    DO – this would be an all time closing high

    ZTRADE: HAL $37.50 December Calls for $0.65 and $0.70.

  50. 50
    zman Says:

    Solar plays I watch:
    ESLR
    FSLR
    JASO
    SOLF
    SPWR
    STP
    WFR

    Let me know if you guys would add anything. FSLR appears to show the fastest earnings growth through ’09 for the group but also sports more than double the group average. I’m not going to delve too deep into the industry (yet) but I’ve always found it interesting. It may be that a shift to some of the less expensive names in the group is occurring from the FSLR which has become a household name.

  51. 51
    freeflow Says:

    when is the OPEC meeting Z?

  52. 52
    Sambone Says:

    Wednesday? I believe Free

  53. 53
    TTupp Says:

    rig due for a nice correctionne

  54. 54
    TTupp Says:

    aka entry.

  55. 55
    zman Says:

    51 & 52: Wednesday, they’ll be done when we are just getting our first cup of joe in the states.

    53: just technically speaking?

  56. 56
    ram Says:

    How about a spastic solar name: TSL

  57. 57
    TTupp Says:

    oii going crazy, ill ive seen is a motley fool article that was basically good for a cheesy pun or two. stuck in a weird trading range. looks interesting if it pops to over 68$

  58. 58
    TTupp Says:

    re tsl, i just threw up from looking at that chart! wow vol

  59. 59
    zman Says:

    thanks Ram, oohhh a Chinese name, fun

  60. 60
    TTupp Says:

    re solar: i wouldent be surprised id fslr fills the gap @ $150 before the end of jan.

  61. 61
    zman Says:

    T – re FSLR me either, not cheap but gonna get cheap…way out of line with the group. Everybody want a series of blue tables for the morning on solar? I’ve been so looking forward to adding coverage of these bloated pigs, seems like a good time. Also, seeing some dirt cheap names that are starting to catch on like SOLF, which is trading at 3x 2009 earnings. At 19 now, up from 11 three days ago and cheap, you have to wonder pretty hard at the estimates but its not a single analyst but 4 of them looking for $6+ in 2009.

  62. 62
    zman Says:

    NFX topping $51

  63. 63
    TTupp Says:

    z, re blue tables: that would be great. sometimes oil companies price action becomes stagnant and boring. furthermore, coal, uranium, and solar are all forms of energy and can bring some more depth and diversification to our trading. i personally trade the above, with solar very new to me.

    tsl has some decent options action; derivatives on a roulette game basically.

  64. 64
    zman Says:

    T – cool, thanks for the feedback. TSL second cheapest on a forward multiple in the group (11x 2009 est)…I’ve traded these guys (the solars) in the past but it was years ago. If I had bought leaps then on the group I could have just retired and done this from a beach somewhere.

    Coal I’ve done quite a bit of work on in the past, highly fragmented industry with only a few large players. I should be in BTU right now.

    Uranium…did a little bit there as well in a former life but am not up to speed. Like the CCJ as a long term concept. That’s a project for 2008.

    Man the OII chart is tempting me…been watching it for days based at 63 and took my eyes off it this am to my detriment. CLB rising as I thought per the post. This one could run a lot more, will buy on a dip if it holds Friday’s low.

    HK, APA and CHK both started the day off on the wrong foot and remain there. Bargains all.

    If you are not in DO there’s a good chance now for a run on $120 next day or two. I’ll be adding to my post today or tomorrow, maybe a different strike and in Jan.

  65. 65
    Nicky Says:

    Any pop now in energy keeps the pressure on Opec – this is a really difficult one for them imo.

  66. 66
    Nicky Says:

    CNBC reporting that Iran and Libya are calling for no increase which is why we popped. Market now believes they will not increase production.

    So are we back at $100 if they don’t?

  67. 67
    zman Says:

    Nicky – agreed. It’s a two pronged issue for us as well. 1st, try to figure out what they are going to do…my best guess is 0 to 500,000 bopd. 2nd, gauge the market’s reaction. Last time they hiked we got skyrocketing oil …it all depends on expectations vs outcome…and not the fundamentals, at least not initially.

    Vz and UAE said much the same over the last same over the last several days and Saudi keeps threatening to hike while saying its not necessary…these guys should have worked for Greenspan.

  68. 68
    zman Says:

    ZTRADE: DO $120 Dec calls for $3.30 for a quick trade with the stock up $1.25 after having been up $3+ earlier.

  69. 69
    Nicky Says:

    Yes Z and it was most bizarre that oil skyrocketed when they hiked!

    If they can get this back above 90 I believe it keeps the pressure on. But I am also thinking that once the dust settles this may sell off even if they do nothing. After all the huge price of late was all about speculation and not fundamentals…..

  70. 70
    zman Says:

    Nicky – that’s true re the potential for a sell off on the “do nothing” scenario. If they do nothing it communicates to the market that “we’re not tight” just as the last production hike sent the message that it was in fact needed.

  71. 71
    Nicky Says:

    Yes Z – and also the market is going to expect a rally if they do nothing and we know how often the opposite happens to expectations.

  72. 72
    Alhambra Says:

    Re 50: CSIQ – Canadian Solar, actually mostly a Chinese co.

  73. 73
    bill Says:

    topt down today and probably tomorrow as secondary prices after the market on tuesday. Underwriters are shorting into tuesday night. i expect it to go up late in the week. If it gets priced at 3.75 maybe a dip to the seocondary price which is a great buy in price, imho.

    Z– add TNP to your tanker list.. my 3rd favorite and a good value play

    DHT and atb are full payout plays but are trading at an excessive premium due to dividend

  74. 74
    zman Says:

    Thanks Alhambra will add to list

    Bill…thanks its a WIP. Will add all 3, these guys trade on yield as much as PE right? Also, are they more likely to trade on TEV/EBITDA than PE?

  75. 75
    zman Says:

    CLB and OII not gonna chase today. Pretty good day on the group…oil up in after market, NG shed losses from down a quarter to down three cents on the day.

  76. 76
    ram Says:

    Sorry – I forgot to disclose that I own TSL in a 401K. I purchased in Feb and decided to stay on this rollercoaster for at least a year.

  77. 77
    ram Says:

    ATW up 20% in 4 days. Hopefully it will calm down soon.

  78. 78
    zman Says:

    RAM nice move on the TSL!

    ATW…unreal move, good stock, good results but wow, unreal move.

  79. 79
    TTupp Says:

    re atw: awesome move. was their news?

    DO is the contrarian play here though. small enough to grow, best eps/cfps 08-09 estimates/ current price, management competency, balance sheet/ income statement metrics …..etc.

  80. 80
    zman Says:

    ATW: big 3Q beat last week…these guys have 8 rigs (tiny) but well managed

    SD just released numbers. Will have some analysis in the morning post.

  81. 81
    TTupp Says:

    yea too small for me.

    i bet DO hits an intra day tomorrow 12-124- very nice entry.

  82. 82
    TTupp Says:

    lightning hit a railroad track in south Africa’s shipping port- the worlds largest coal shipping point. it disrupted shipments last week, looks like it might be a positive for coal prices which have contracted over the past week.

  83. 83
    TTupp Says:

    81 should read intra day $122-124

  84. 84
    TTupp Says:

    does anyone know of a website that publishes rates for vlcc; spot and day? i like drys’ website for drybulk rates, something like this would be great. thanks in advance.

  85. 85
    zman Says:

    Bill posted this over the week. I’ll be adding it to the shippers tab soon.

    you can track daily tanker rates at this site

    http://www.intertanko.com/
    then click on research & projects

  86. 86
    Nicky Says:

    hmmmmm….

    WASHINGTON (Dec. 3) – A new U.S. intelligence report says Iran halted its nuclear weapons program in 2003 and it remains on hold, contradicting the Bush administration’s earlier assertion that Tehran was intent on developing a bomb.

    A new intelligence report released Monday runs counter to President Bush’s warnings about Iran’s nuclear ambitions. In October, he said Tehran must be stopped “if you’re interested in avoiding World War III.”

    The National Intelligence Estimate (NIE) released on Monday could undermine U.S. efforts to convince other world powers to agree on a third package of U.N. sanctions against Iran for defying demands to halt uranium enrichment activities.

    Tensions have escalated in recent months as Washington has ratcheted up the rhetoric against Tehran, with U.S. President George W. Bush insisting in October that a nuclear-armed Iran could lead to World War Three.

    But in a finding likely to surprise U.S. friends and foes alike, the latest NIE concluded: “We do not know whether (Iran) currently intends to develop nuclear weapons.”

    That marked a sharp contrast to an intelligence report two years ago that stated Iran was “determined to develop nuclear weapons.”

    But the new assessment found Iran was continuing to develop technical means that could be used to build a bomb and it would likely be capable of producing enough enriched uranium for a nuclear weapon “sometime during the 2010-2015 time-frame.”

    The shift in the intelligence community’s thinking on Iran comes five years after a flawed NIE concluded neighboring Iraq was developing weapons of mass destruction — a report that helped pave the way for the U.S.-led invasion in March 2003.

    No nuclear, chemical or biological weapons were ever found in Iraq and intelligence agencies since have been more cautious about Iran’s nuclear ambitions.

    Bush and Vice President Dick Cheney, who have repeatedly accused Iran of seeking nuclear weapons, were briefed on the new NIE last Wednesday.

    Washington, which insists it wants to solve the Iran problem diplomatically while leaving military options “on the table,” is pushing for tougher U.N. sanctions against Tehran but faces resistance from China and Russia.

    Iran insists it wants nuclear technology only for civilian purposes, such as electricity generation.

    The nuclear standoff has become a major issue in the 2008 U.S. presidential campaign, with candidates weighing in on the prospects for military action against Iran.

    U.S. Still Sees Iranian ‘Risk’

    Senate Majority Leader Harry Reid, among senior Democrats who had requested the updated report on Iran, said the assessment challenged some of the administration’s “alarming rhetoric about the threat posed by Iran.”

    He and other critics had accused Bush trying to rush the country into war again based on faulty intelligence.

    Bush’s national security adviser said that on balance the report was “good news,” insisting it showed Tehran was susceptible to international pressure but that the risk of it acquiring nuclear weapons “remains a very serious problem.”

    But he added: “The international community has to understand that if we want to avoid a situation where we either have to accept Iran on a road to a nuclear weapon … or the possibility of having to use force to stop it with all the connotations of World War III, then we need to step up the diplomacy, step up the pressure.”

    Administration officials denied the new NIE had exposed a serious intelligence lapse but could not explain how agencies failed to detect for four years that Iran’s nuclear weapons program had been halted.

    Intelligence officials said the suspension involved design and engineering for a bomb and covert uranium-conversion work.

    A key NIE finding was that: “Tehran’s decision to halt its nuclear weapons program suggests it is less determined to develop nuclear weapons than we have been judging since 2005.”

    Still, the report said: “We also assess with moderate-to-high confidence that Tehran at a minimum is keeping open the option to develop nuclear weapons.”

Leave a Reply

You must be logged in to post a comment.

Zman’s Energy Brain ~ oil, gas, stocks, etc… is is proudly powered by Wordpress
Navigation Theme by GPS Gazette

s2Member®
Get Adobe Flash player
%d bloggers like this: