20
Dec

Thursday – Oil Review & Natural Gas Preview + A Few Stocks of Interest

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The story of yesterday: Bigger than expected draw in crude and heating oil and a bigger than expected build in gasoline stocks. All three close higher. Stocks rally on the oil numbers despite a minor loss for the broad markets.

In Today's Post

A) The oil report review

B) The gas report preview

C) Stocks of Interest

D) Changes in Holdings (just two yesterday)

E) Odds & Ends 

Commodity Watch:

  • Mexico Port Closures: The EIA reported that all three of Mexico's export points on the GOMEX reopened on Wednesday following a brief closure due to storms.  

Oil Report Review (expectations were from Bloomberg)

exp-vs-act-121907.jpg

 

Crude Oil Stocks Fall 7.6 million barrels vs an expected drop of 1.5 million barrels... The much larger than expected decline in stocks was driven by a sharp drop in imports (down 950,000 barrels per day) and it appears fog in the Houston Ship Channel was the culprit as the Gulf Coast region witnessed the preponderance (5.8 million barrels) of the decline. The EIA says that fog closed the HSC for 78 hours last week and closed it again for a few hours Wednesday.

crude-stocks-121907aaa.jpg

...or as I like to show it in my "all pauses so far are just another bump in the road lower" chart...

crude-stocks-121907bbb.jpg

...and here's another way to slice it.

crude-days-supply-121907.jpg

Crude Days of Supply defined: for those of you that don't live and breath crude here's another way of slicing the data which attempts to take into account storage relative to demand. Generally you don't get big moves in the ratio but I thought I'd show it this week as we are starting to trend lower. So when people at Christmas parties say to you "man, oil sure is pricey, doesn't seem right with inventories roughly even with the five year average!" you can quickly retort with "have you considered looking at days of supply?" 

Crude Imports: Last week's reported import levels were obviously impacted by Gulf Coast port closures. Even so you can't point to imports and say, "There it is! There is the big bump from OPEC having raised production rates/quotas!" Just hasn't shown up yet or being consumed largely elsewhere? Too early to say but I think its a combination of both. This number will no doubt rebound next week.

crude-imports-121907.jpg

 

Gasoline: Saw a much bigger than expected build of 3.0 million barrels. API also confirms a large build in gasoline stocks. How the the build occurred is yet again a bit of a mystery as production fell by only a little less than demand did week to week and the increase imports simply would . Ah EIA numbers.

  • Production: Fell 43,000 bpd week to week to 9.112 mm bpd. Utilization at refineries dropped 1% to 87.6%.
  • Imports: increased by 120,000 bopd, nearly erasing the drop from the prior week. Nothing out of the ordinary here and definitely no surge from imports seeking high U.S. prices.

gasoline-imports-121907.jpgclick to expand

  • Demand eased by 60,000 bpd week to week and was 2.1% below year go levels but is still 1.2% above the 5 year average. Not bad when you consider that prices are still running 29% above year go levels at the pump. 

gasoline-demand-121907.jpg

  • Gasoline Stocks...Rebuilding. Gasoline stocks now stand at 102% of year ago levels and 97.6% of the five year average.

 gasoline-stocks-121907.jpg

 

 

 

 

 

 

 

 

Distillates: Bigger than anticipated draw at 2.0 million barrels.


dist-stocks-121907.jpg

In case you're wondering the heating oil chart looks like a mirror image of crude oil with support at $2.45 and resistance at $2.70 and last sale at $2.60 on the February contract.

The Heating Oil Portion of Distillates looks much more dire than overall distillate stocks:

ho-121907.jpg

What's the best play? Probably (SUN), (VLO) and (FTO) and maybe companies that make insulation as people in the northeast are simply not going to believe their heating bills this winter. I'm not currently in any having not yet rolled forward and having been a little leery of the gasoline numbers but if this winter persists in smashing heating oil stocks I will be compelled to get ba 

Natural Gas Storage Preview. Two Words: Easy Comps.

  • My Number: 120 Bcf vs 85 Bcf in the year ago period and 146 last week
    • Imports were up 1.1 Bcfgpd week to week and were in line with the comparable week last year.
    • But it was much colder last week than a year ago. Gas weighted HDDs came in at 192 which is just slightly under the prior week but well above the 146 recorded for the second week of December 2006.
    • This withdrawal should put us even with year ago storage levels and the next two reports should drop us well into (by 75 to 125 Bcf) into year over year deficit by year end.
    • This is nothing to write home about but it should keep gas above $7 with any large variances in withdrawals relative to expectations popping gas back towards the mid $7s or even $8.
    • The net short position of speculators has become increasingly large (bearish) in the last few weeks (its been larger than normal all year but it's getting bigger again.
  • Street Consensus Number: 132 Bcf.

Stocks of Interest Today:

(SFY) Runs Away From Kiwi Flop. Swift finally punted on its New Zealand venture selling the largest of its few discoveries on the island for $87.8 million to Aussie Origin Energy. They expect total proceeds of $110 to $120 million when the last of their NZ assets are sold, hopefully by early next year. In my mind this is the best thing they can do in the line of "getting back to one's knitting". The NZ venture has been a troubling 5 or 6 year period for these guys who are otherwise good operators in the U.S. gulf coast region.

Back in October I wrote:

  • Swift Energy may be one step closer to punting its Kiwi sub. 
  • Oily little SFY (oil was 65% of 2Q07 production) is planning to focus its volume growth efforts on the U.S. and has already retained Scotia to advise on a sale of the NZ piece (12% and 13% of 2Q production and YE06 reserves respectively). Scotia should be able to get them $2 to $2.50 and Mcfe for those assets or $210 to $265 million. Who wants to worry about a troublesome asset on the far side of the planet which from day 1 was wrought with delays, lower than expected and declining production, weak prices, and higher than expected costs? I say good riddance to the Kiwi Albatross. 
  • Besides, SFY just did a producing property acquisition last week in South Texas and is flush with new inventory to drill. What's even more convenient, the high end of my sale price range above would pay for the S.Texas acquisition. Neat huh?
  • Hopefully a tumble in oil can pull this stock down a bit so we can take a position prior to earnings and the divestiture.
Now with the light at the end of the tunnel I look forward to owning SFY again. The acquisition price looks low to me and hopefully to the Street as well as I would love for the stock to get drilled in the near term to give us a good entry point.
 
A few reasons to like it now:
 
  • Back to their knitting in 4 core U.S. regions in Tx and Louisiana (still on the acquire and exploit the under-exploited old fields here)
    • The divestiture of NZ means more capital to power house areas like Lake Washington (100 id'd locations, 120 leads)
  • 12 year reserve life
  • large drilling inventory within their older fields in Texas, massive 4300 sq mile 3D seismic over Louisiana (going after deeper targets
  • already conservative balance sheet sees debt cut by a third with the sale of NZ assets
  • At a shockingly low 2.8x 2008 CFPS estimate, this oily little E&P is trading well below its bigger cap peers. 
A few causes for concern:
 
  • LOE has been rapidly rising here. This should flatten out (grow at a slower pace) in 2008.
  • Production growth has slowed. Part of this is due to declining production in NZ but they need to announce a pretty active capex budget to help get them out of a this rut. 
SWN Ups 2008 CapEx; Targets 35% Production Growth 2008. This was announced after the close but the stock ran 4% yesterday versus a 1% rise in the group so some people knew early. SWN plans to spend $1.46 ($1.33 B on drilling) as is guiding for unit volume growth of 35% to 152 Bcfe in 2008.
 
Plans to drill 475 wells in the Fayetteville Shale, up from 400 this year
  • over half of them will be the long lateral variety (over 3,000 feet).
  • over half drilled as multiple wells from single pads (think reduced costs)
  • 75% will be drilled with the benefit of 3D (hopefully think bigger ultimate recoveries)

SWN also said current gross production from the Fayetteville Shale is 300 MMcfgpd, up from 260 MMcfgpd as of October 22. Said the 2008 program could see them at 450 MMcfgpd for a 2008 exit rate.

Summary: The 35% growth number probably doesn't come as much of a surprise.  Good stock, 3D expansion and use in 2008 should result in better average EURs than to date, cost creep has been minimal so far, stock is not cheap but their growth rate and potential allows for trading in pretty rarefied air. Also, they plan to accelerate drilling in the conventional Arkoma and this may be how they plan on besting the 35% target because they are under-promise, over deliver type guys and you know they think that 35% number is a lock.

FTO Refinery Fire Update: FTO said its smaller refinery (52,000 bpd in Cheyenne) will be running at 23 to 30,000 bpd capacity for the next 3 to 4 weeks while repairs are made following the December 15th fire. Knowing could provide a little relief to this stock. They should still be enjoying wider differentials between WTI and the heavier crudes they process.

Graph of WTI versus Canadian Hardesty Heavy shows that the differential between the two is exploding giving (FTO) cheaper feedstock than most refiners.

wti-vs-hardest-121407.jpg

(PBR) Sees Higher Output In 2008. Capex was announced as in line with previous five year plan and domestic production was seen growing 14%. 

Holdings Watch:

  • Sold Jan 115 PBR calls acquired Monday for $2.70, up 32%. I continue to hold my original position here.
  • Bought RIG January $135 Calls for $5.70.

Odds & Ends

Analyst Watch: (PBR) upped to buy at Citi, (HES) cut to hold at Citi (I said this was over done in comments yesterday, guess they agree), Cantor cuts (TOPT) price target from $8 to $7 (of course, the stock is still at $3.59 so $7 would be a nice move).

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76 Responses to “Thursday – Oil Review & Natural Gas Preview + A Few Stocks of Interest”

  1. 1
    Sambone Says:

    8:00 am EST

    Crude Choppy As Market Mulls Inventory Datats

    By Nick Heath
    Of DOW JONES NEWSWIRES

    LONDON — Crude oil futures failed to hold on to midday gains in London Thursday and fell back as traders mulled Wednesday’s U.S. inventory data.

    Attention focused on the near 8-million-barrel-drop in crude oil stockpiles, that pushed U.S. crude inventories to their lowest level since February, 2005, and to below their five-year average for the first time in three years.

    Prices also spiked briefly on news of shipping delays in the Suez Canal, after an incident involving two vessels temporarily halted traffic Thursday.

    But prices dropped back towards Wednesday’s closes as momentum faded with trading volumes remaining thin.

    At 1243 GMT, the front-month February Brent contract on London’s ICE futures exchange was down 19c at $91.29 a barrel.

    The front-month February light, sweet, crude contract on the New York Mercantile Exchange was trading 3c higher at $91.27 a barrel.

    The ICE’s gasoil contract for January delivery was up $6.50 at $820.50 a metric ton, while Nymex gasoline for January delivery was down 9 points at 233.10 cents a gallon.

    Data released by the U.S. Department of Energy Wednesday showed crude stockpiles fell by 7.6 million barrels in the week to Dec. 14 to 296.9 million barrels.

    Recent closures of the Houston Shipping channel, a significant artery for oil imports into the U.S., were cited as the cause of the fall in stockpiles.

    It helped ease concerns at the size of the drop, with expectations that delayed crude imports will show up in forthcoming inventory figures.

    However, the decline unnerved some Thursday, giving prices some support, as further fog in the Houston Shipping channel raised doubts as to when crude inventories might rebuild.

    “Product stocks are OK, but crude oil is still on the low side,” said Olivier Jakob of Petromatrix, which would create some uncertainty until signs of the delayed crude shipments start to materialize.

    The price reaction to Wednesday’s data surprised many, who expected that the extent of the crude drawdown would have sparked a more robust response.

    “Although prices stayed in positive territory, it was somewhat of a mild reaction to the drawdown of 7.6 million barrels. Two or three weeks ago, prices might have really leapt,” said Peter Beutel of Cameron Hanover.

    While Beutel added that a delayed reaction to the data remained possible, he was among a number of analysts Thursday to note that dwindling pre-Christmas trading volumes appeared to be limiting the opportunity for prices to make a substantial move either higher or lower.

    “There is not much conviction in either direction,” said Edward Meir, analyst at MF Global in New York.

    “Bulls need to see open interest start to build after the steep 70,000-lot decline of the past three days. Granted, much of this decline had to do with the recent expiration of the January WTI contract, but we think some of the drop also reflects a preference by the funds to move to the sidelines.”

    Prices spiked briefly Thursday on news that shipping through the Suez Canal had been interrupted, after an oil tanker ran aground in the seaway.

    Traffic through the canal — about 7.5% of world sea trade — was halted for six hours until the grounded vessel was towed away. Fifty-nine ships were delayed for passage from both the Mediterranean and the Red Sea mouths Thursday.

    “It gave prices a bit of a kick but it should be sorted out by the end of the day,” said Robert Montefusco at Sucden in London, as prices retreated from their intraday highs on the news that the canal wasn’t facing prolonged delays.

    He added, meanwhile, that with crude prices remaining above $90 a barrel, they would continue to attract technical support.

    “We like it while it’s above $90 — it keeps it mildly bullish,” he said.

    —By Nick Heath, Dow Jones Newswires

  2. 2
    Sambone Says:

    C expects oil to be $80 in 2008, and $75 in 2009.

  3. 3
    Sambone Says:

    Glad I don’t own MBI. Worries me about Muni bonds now.

  4. 4
    zman Says:

    Sambone: was that a change by Citi on their oil price deck?

  5. 5
    zman Says:

    green energy open even with commodities slightly off across the borad

    SFY up slightly…notes in the post
    SWN up big again, not chasing for the moment with the gas report due out next hour.

    bulks and tankers lower

  6. 6
    Sambone Says:

    Yep

  7. 7
    zman Says:

    APA and PBR feeling their oats this morning. I will need to punt the APA $100 calls in the next 2 days and they are now drawing even (not that that matters as the market could care less where I own it but it does make the sale more palatable).

  8. 8
    redjack Says:

    Z..I was able to view the comments today without logging on…

  9. 9
    redjack Says:

    re a shortage of deepwater rigs and dayrates of $600000 +

    http://www.oilandgaseurasia.com/news/p/0/news/1515

  10. 10
    zman Says:

    RJ – yeah, I do the occasional pro bono piece, Christmas spirit and all.

  11. 11
    Sambone Says:

    9:41 am EST

    Nymex Crude Steady After New Weather Outlook

    By Gregory Meyer
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures were steady Thursday in light volume as traders weighed an outlook for a warm winter against continuing tightness in U.S. oil stocks.

    Light, sweet crude for February delivery was recently down 1 cent at $91.23 a barrel on the New York Mercantile Exchange. February Brent crude on the ICE futures exchange fell 32 cents to $91.16 a barrel.

    The National Oceanic and Atmospheric Administration said Thursday continuing La Nina weather conditions will make for a warm start to 2008 in the eastern two-thirds of the U.S., an area that includes the world’s largest heating oil market, the Northeast U.S.

    “This doesn’t mean the market can’t rise, but it might not make people as bullish,” said Michael Cambria of Eagle Futures on the Nymex floor.

    Meantime, the dollar reached a fresh nearly two-month high versus the euro at $1.4310 and four-month high versus sterling at $1.9867 overnight, bringing oil down “a tad lower” early in the session said Nauman Barakat, a senior vice president at Macquarie Futures USA in New York.

    Oil futures have traded between about $89 and $95 a barrel in the last week amid light pre-holiday trading. On Wednesday, the market rose for the first time in a week after the U.S. Energy Information Administration reported a larger-than-expected draw in crude stocks of 7.6 million barrels. U.S. oil inventories now stand at 296.9 million barrels, in the lower half of their average range for this time of year.

    Much of the fall came from a decline in imports, which market watchers blamed in part on fog that kept tankers outside the Houston Ship Channel last week. But with U.S. oil stocks now at their lowest level since February 2005, the data also highlighted ongoing tightness in supply.

    “While the data is already priced in, we would add that the domestic crude supply coverage below the 300 million barrel level will keep the entire complex sensitized to any geopolitical headlines or reported supply disruptions into the new year,” said Jim Ritterbusch, president of Galena, Ill.-based oil trading adviser Ritterbusch and Associates, in a note.

    Traders were reminded of geopolitical risk after militants in the Niger Delta launched a pre-dawn attack Thursday on a jetty operated by the Nigerian National Petroleum Corp. in Nigeria. Also Thursday, a crude tanker ran aground in the Suez Canal, halting traffic in the waterway for six hours until it was towed away, the Associated Press reported. Prices momentarily jumped overnight as a result.

    Front-month January reformulated gasoline blendstock, or RBOB, was down 53 points, or 0.2% to $2.3266 a gallon. January heating oil fell 37 points, or 0.1%, to $2.5942 a gallon.

    —By Gregory Meyer, Dow Jones Newswires

  12. 12
    zman Says:

    thanks Sam, I missed the tanker aground and the Nigerian trouble…neither sound impactful but I like to stay current.

    Thanks RJ, will have a read. Those $600K+ rates only to the ultra dw capable floaters but their are indications that most offshore segments are still rising at any real water depth.

  13. 13
    zman Says:

    Natural Gas Draw 121 Bcf, probably a slight disappoint to the Street Consensus at 132. I was at 120 Bcf (I think they underestimated the rally in imports or I just got lucky).

  14. 14
    zman Says:

    Natural gas is now back in year over year deficit: by a whopping 4 Bcf.

    Storage is still 9.2% above the 5 year average.

    NG is trading sideways down 10 to 12 cents at about 7.05 following the report.

  15. 15
    bill Says:

    re 9

    drys owns 34% of ocean rig
    they forecasted getting 525 k for the rig

    they are asking 600 k per the article

    z- likes rig which is in the same space

  16. 16
    zman Says:

    wow DO, the other deepwater driller I like and don’t currently hold.

    bill: do they own it like a piece of an unconsolidated subsidiary in that their share of its earnings will pass into their income statement or is it a passive investment, carried on their balance sheet in the hopes that the stock will appreciate and they can sell it higher later or acquire it outright?

  17. 17
    bill Says:

    I believe its a passive investment although some analyst’s bumped up earnings on the news so it could be the former.

    They follow fasb and im not sure what fasb says on a 30 % stake

  18. 18
    zman Says:

    ZTRADE: SWN Jan $55 CALLs taken for $2.45.

    We have a string of easy comps in terms of gas storage coming up that should support $7. See post on details of why I like it now.

  19. 19
    zman Says:

    HOUSEKEEPING ITEM: if you’re not getting the email blast please give a shout to zmanadmin@gmail.com

    This just in from a good friend of the blog.

    Simmons read on SWN’s 2008 capital program and growth guidance:

    SWN’s 2008 capital program and guidance should be received positively as the information highlights the company is again poised to deliver best in class growth, efficient operations and a staggering inventory of low-risk drilling opportunities. SWN is guiding toward 85% y/y increase in the Fayetteville production growth and 35% FY’08 total production growth (slightly above SCI’s 31% estimate). 2008 guidance drives our FY’08 earnings estimates 22% higher with additional upside potential provided by the Marcellus Shale which could add $4/shr to our NAV. Finally, SWN maybe alleviating Street concerns over escalating debt to total cap with new guidance for 38% D/TC likely removing the concerns regarding an equity issuance in 2008.

    EPS: New / Old / Street
    4Q’07 $0.38 / 0.34 / 0.37
    FY’07 $1.23 / 1.18 / 1.23
    FY’08 $1.98 / 1.62 / 1.77

    note the bump in 2008 (largely due to a decrease in DD&A)

  20. 20
    zman Says:

    Thanks Bill. I think they have a choice of doing either. Sounded like a passive investment to me and not an earnings leveraging event.

  21. 21
    ram Says:

    Z- I know you like CHK, but it’s becoming a slacker.

  22. 22
    zman Says:

    Ram – stock is basing, waiting for higher gas pricing. No catalyst now so its all about gas prices.

  23. 23
    zman Says:

    which by the way just turned positive…maybe traders are noting those easy comps from last years second half of December heat wave.

    Next to comps from last year:
    49 Bcf for week of Dec 21
    47 Bcf for week of Dec 28

  24. 24
    zman Says:

    anyone here from Austin? Need a good new restaurant recommendation. Slow day.

    RIG actually thinking about coming positive.

    BTU first bad day in awhile, one more and I’m in.

  25. 25
    redjack Says:

    Austin here…what are you looking for?

  26. 26
    scoop006 Says:

    Z Try IMPERIA Pan Asian Food
    310 Colorado St. Pricey but good

  27. 27
    zman Says:

    Thanks RJ, off the boat these days? Coming into town a little after new years, looking for somewhere new to eat, tired of Z tejas (although I like the name) and Kirby lane. May check out the Ritz now that I heard its been turned into an Alamo.

    Scoop – is that a noodle bowl? I love noodle bowls.

    out for a bit of last minute shopping, back in an hour.

  28. 28
    Sambone Says:

    Love this Dow Jones headline today.

    “The financial sector is offically in a bear market, S&P reports. The roughly 80 financial stocks in the S&P’s fisancial group are now off 21% year to date, fitting bear market criteria often defined as a prolonged drop, usally by 20% or more, by a stock-market index or sector”

    Wow, I wonder if the talking heads on TV will get it?

  29. 29
    zman Says:

    Thanks Scoop, looks good.

  30. 30
    Sambone Says:

    Nicky’s new broker

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

  31. 31
    zman Says:

    Sam – I think I like my post better but his does have the bonus of rhyming, lol.

  32. 32
    ram Says:

    Is Hk breaking out of a base?

  33. 33
    Sambone Says:

    Off subject – Hmmmm, maybe their right?

  34. 34
    zman Says:

    Ram – I’d say not until you’re through 17 on the HK

  35. 35
    scoop006 Says:

    Z You think COP has a decent chance of sailing thru $85 by tomorrow ?

  36. 36
    zman Says:

    RBC says SFY got a good price for their NZ assets. Looked pretty light to me and the market clearly not happy with the sale which was not a surprise and should be seen as a relief…clearly the rest of the Street did not like the price. No action here today but I will work it up before their spring analyst meeting. Used to go and may go this year.

    Scoop – kind of a crap shoot with one day left but it could certainly make it. Lot more chance than CHK has of getting to $40 πŸ™

    RIG starting to work now, big lag to DO on the day though.

    looks like oil and gas are going to close flat in a pretty quiet session.

  37. 37
    bill Says:

    do up 3 % today

  38. 38
    ram Says:

    I thought you were not going to respond because of the Cramer crack. You know, with Cramers inside track on hedge funds, he probably has good insights on when and how they operate. Sometimes I have been told by Mrs RAM that I am so logical that I anoy people. I will try to hold back. My last deposition for the year is unfortunately in 10 min. Save the last trade for early A.M. tom if you can!!

  39. 39
    QUARRYMAN Says:

    Q BLAST !!!! πŸ™‚

    Vulcan Materials is under 80.

    Good buying opportunity for investors.

    QUARRYMAN

  40. 40
    zman Says:

    Ram – already forgot the cramer crack, was playing a dr seuss game with my daughter. Trying to get her proficient with numbers so she can 10 key some stuff for me, lol.

  41. 41
    scoop006 Says:

    Z What’s the correlation in trading prices between APC & COP. Sold APC $60 last week, still holding COP $85

  42. 42
    zman Says:

    Scoop – are you asking if they trade together ? If so, yes sort of. COP swallowed Burlington Resources a couple of years back now making it the most gas leveraged as a percentage of N. American natural gas production. APC is more volatile as its just a very large E&P and doesn’t have the refining arm but they move in the same direction…is that what you meant. I sold my $60s as well in APC and have been kicking myself (daily)for not getting back in. Favorite among E&P captains of all time and I’d vote the guy in for present in a second. That said, their fundamental picture is stronger than its been in years after themselves having gobbled up Western Gas and Kerr-McGee. They’re a mini-major with the the downstream headache and they are growing quite well now while having paid down a ton of debt from the acquisitions. The stock is probably expensive once it gets to $80 if it does that in the next 12 mos.

    Q – $78 is my level (the recent low, it holds that I take some calls)

  43. 43
    zman Says:

    HK toying with 17
    SWN/APA/RIG starting to work better now
    PBR backing down if you missed…hmmmm.

  44. 44
    scoop006 Says:

    Thanks for the education. Just can’t decide weather to sell or hold the COP 85.

  45. 45
    zman Says:

    Scoop, if they are Decembers you know there is a good chance they get pinned. Not saying sell (I don’t do that, right) plus I’m ok with the fundies but a poor trader (at least of late) so you might want to do a Constanza of anything I’d say. All kidding aside, its a tough last minute call but odds are they get pinned. You’ll know early in the morning where its going to close. Probably depends on the direction of oil and gas in the morning. I think the stock continues to go higher but between now and the close tomorrow I have little clue.

  46. 46
    scoop006 Says:

    Z -I came to play so I’m holding.

  47. 47
    zman Says:

    Scoop = “Gutsy Move Mav”

  48. 48
    bill Says:

    topt news

    http://biz.yahoo.com/ap/071220/top_ships_drybulk_delivery.html?.v=1

    yabba dabba do0. Topt is a great turn around play for 2008.. i expect a double

    tanker rates are high

    May I suggest Nat at any price below 35

    nat is mostly spot. They pay out 100 % of every dollar of cash flow. Q 4 dividend should be about 80 cents, but q1 might be double that or more

  49. 49
    zman Says:

    Bill…why do you think tankers and bulkers off so much today? Know they are likely separate reasons. Do you think they really turn Jan 1?

  50. 50
    bill Says:

    I have no idea. I took adavantage of the softness in Nat to buy some jan 35 calls at 5.00

    The dry rates are a bit off but imho, still healthy

    there is no reason why the tankers are off today…sometimes they follow the price of oil. I heard the saudis might cut production 90 m bbd a day but that could be a rumor.

    The one thing i look at are the shipping rates. And the rates for the tanker are sky high ( too late to help q4, but if these last another 2 months, q1 pls will be excellent)

    The dry sector could be selling off for year end tax reasons and rates softening a bit as off late, They are off a good 10 % lower than highs reached a month ago

  51. 51
    bill Says:

    avg oct 23,960
    avg nov 33,755
    avg dec mtd 79,555

    todays rate 98,000++

    11/1 29,178
    11/2 29,551
    11/5 29,034
    11/6 29,279
    11/7 28,570
    11/8 23,514
    11/9 19,176
    11/12 19,571
    11/13 19,793
    11/14 18,982
    11/15 19,648
    11/16 22,195
    11/19 21,944
    11/20 23,000
    11/21 25,000
    11/22 26,197
    11/23 37,867
    11/26 40,830
    11/27 55,141
    11/28 72,288
    11/29 75,881
    11/30 75,961

    33,755

    12/3 75,522
    12/4 74,789
    12/5 74,790
    12/6 69,363
    12/7 68,751
    12/10 71,567
    12/11 98,766
    12/12 102,891
    12/13 97,709
    12/14 97,709
    12/17 98,880
    12/18 99,934
    12/19 99,616
    12/20 98,047
    12/19
    12/19

    avg 79,555

    This a huge increase and affects NAT the most as they are mostly a 100 % spot charterer. All the other ones are a mix of fixed (lower rates) charters and spot.

    For instance topt fixed suezmax are about 35 k per day. So they were happy with that when rates were below 20 k. Now that they are 100 k per day, their charteror is happy

  52. 52
    Alhambra Says:

    Totally off base from this blog but had to share
    SLM (SallieMae) – how did I not hear about this until now? This will be taught in B-school for the next ten years as how not to handle a conference call.
    audio: http://biz.yahoo.com/cc/4/88074.html
    transcript:
    http://seekingalpha.com/article/57992-sallie-mae-slm-corporation-shareholder-call-transcript?source=yahoo

  53. 53
    Sambone Says:

    Al – WOW!!!!!

  54. 54
    bill Says:

    kinda of a slow day so forgive me for posting alot of stuff

    this guy is very knowledable on the dry sector

    http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_D/threadview?m=tm&bn=24683&tid=63891&mid=63891&tof=8&frt=2

  55. 55
    bill Says:

    his opinion on the market

    http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_D/threadview?m=tm&bn=24683&tid=63894&mid=63895&tof=8&frt=2

  56. 56
    bill Says:

    bdi article on bulk

    http://www.thebaltic.co.uk/currentissue/p_27.php

  57. 57
    redjack Says:

    thanks bill

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    ram Says:

    #52 – Is this April fools!!?? SELL SEll SELL SELL ….

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    52 = the definition of myopic.

    Bill, thanks for the posts.

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