04
Feb

Mardi Gras Monday

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New York Giants defeat New England Patriots so we should get a bounce in the markets now, right?

This week the big cap E&P companies begin reporting year end results. They've had a nice drift up into earnings and for the most part CFPS estimates have climbed as well. We kick off with (APC) after the close (read on) and get most of the big 5 out of the way by week's end. By the way, if you missed the weekend wrap it was a subscriber request loaded weekend so click here to view it.

Commodity Watch:

  • Crude Oil fell 2% last week as worries over the economy outweighed mounting speculation that not only is OPEC not about to grant the U.S.'s wish that it increase production but that the group is contemplating a reduction in production quotas at it next meeting in March. This morning crude is trading off about $0.50 into the mid $88s.
  • Nigeria Watch: Attack on Shell manifold supplying Bony export point leaves 11 dead (3 soldiers and 8 rebels) but production was not further impeded.
  • Natural Gas fell 3% last week despite witnessing the largest single week withdrawal ever record. The expectation of warmer weather won out driving the decline in gas prices. This morning, gas is fall another dime to the low $7.60s on this week's unseasonably warm forecast.
  • HDDs last week came in at 212 vs 192 previously forecast. Year ago weather was 240. Out of the last 7 weeks, this is the six week to see the actual degree day tally rise from the week earlier forecast.
  • This week's forecast is for HDDs to plummet to 169.

The Earnings Week Ahead

week-3-earnings.jpg

 

Stocks We Care About Today:

Anadarko (APC) Reports After The Close, Here's The Wish List:

For the 4Q:

  • Production in a range of 543 to 565,000 BOEpd (50 to 52 mm BOE).
  • Year end exit > 560,000 BOEpd
  • CFPS of at least: $2.86 per share (earnings of $0.77 but that's really not what your looking for when you judge an E&P).

From 2008 Guidance:

  • Reiteration of YoY production guidance equating to 5 to 9% growth. I'd be surprised if they can up this yet.

From an operations update:

  • Independence hub in the deepwater GOMex should be maxed out at 1 Bcfgpd capacity or very near it
  • other Gomex deepwater: both development and potentially exploration news related:
    • Boomvang satellite drill result,
    • should get some production estimates on Caeser and Tonga discoveries (tie backs to Constitution)+word on an exploratory test at W. Tonga,
    • word on compression impact on flows at Redhawk,
    • word on expected IP at Powerplay,
    • high interest ultra deep (32,000 foot) test way out in Walker Ridge should be at TD,
  • Rockies: look for an update on PRB compression and volumes
  • International: may have results at a deepwater well off Brazil (Serpa)

(KWK) Announces Whopping 780% Reserve Replacement. This is on top of last year's 840% RR and should be looked upon favorably.   Preliminary F&D costs are $1.38 per Mcfe, high to last year's $0.96 per Mcfe, but still on the low end of the scale for the industry. They also slightly bested production guidance for the year at 27% versus 25% expectations. 

(IOC) Elk 4 Well Update: no report yet.

Odds & Ends

Analyst Watch:

  • (HAL) upped to overweight at JP Morgan.
  • Jefferies raises the land drillers: (PTEN), (GW), (PDC), and (UDRL) all go from hold to buy. This is a big call for that analyst and represents a turn in sentiment on a group that has been washed out and comes in the wake (2 weeks ago) of a merger here (ALY for BRNC). Of the group I think I'm most interested in (ALY) who not only scooped up Bronco for cheap but is making strides to enter the red hot Brazilian market and the stock continues to hit fresh lows despite a rapidly growing earnings profitle (trades at a little over 5x 2009 numbers).
  • FBR takes price target on (ACI) up from $58 to $72. 

Offshore Service Analysis Co. Infield Systems Sees Subsea Spending Jump. The UL firm sees global spending on subsea infrastructure of $106 billion over the next five years, a 65% increase over the prior five year period. This was a strong upward revision and welcome news for the likes of (CAM), (FTI), and (OII) among others. Infield highlighted subsea trees as having a very strong 2008 with record orders of; excellent news for industry leader (FTI) but also for (MDR) and (NOV).  

 

 

86 Responses to “Mardi Gras Monday”

  1. 1
    Sambone Says:

    7:52 am EST

    Crude Oil Lower As Demand Worries Weigh

    By Angela Henshall
    Of DOW JONES NEWSWIRES

    LONDON — Crude oil futures traded broadly lower in London Monday morning, with reduced future demand for crude the dominant concern for market participants.

    “The front-month price appears to driven by the underlying bearish sentiment for global economies, and it’s not going to go away some time soon” said a trader based in London.

    Oil prices slipped as persistent fears over a possible U.S.-led global slowdown fueled further profit taking.

    The trader expects the state of the U.S. economy to continue to weigh on the relationship between Nymex, light sweet crude and ICE Brent “and inevitably affect transatlantic arbitrage opportunities.”

    At 1222 GMT, the front-month March Brent contract on London’s ICE futures exchange was down $0.42 at $89.02 a barrel.

    The front-month March contract on the New York Mercantile Exchange was trading $0.51 lower at $88.44/bbl.

    The ICE’s gasoil contract for February delivery was down $12.00 at $788.25 a metric ton, while Nymex gasoline for March delivery was down 108 points at 227.26 cents a gallon.

    Traders are waiting to see whether Friday’s move down signifies the start of a trend lower. U.S. crude oil prices fell 3% Friday, the biggest single day decline since Nov. 28.

    A number of factors point to further weakening, according to Petromatrix analyst Olivier Jakob, meaning recent lows at around Nymex $86 a barrel are likely to be tested again “until signs the voluntary refinery run cuts are starting to have an impact on product stocks.”

    Jakob said relative technical values, through a continued deterioration of product cracks and Nymex crude moving back to a contango, are a negative input.

    While high volatility for global equities at a time when the oil market has lacked a clear fundamental outlook has brought closer oil-to-equity correlation, this connection appeared to break down Friday.

    “Oil detached itself from the world stock markets Friday,” ignoring what appeared to be flow of funds into equities, said Andy Riddell broker at ODL Securities.

    As equity markets sustained a strong rally — pushed higher by deal speculation — crude weakened.

    “Although stock markets were strong on the back of bids, and good potential earnings ratios, demand worries seem to be a bigger concern to the commodity funds and long liquidation caused the large fall in the afternoon session,” Riddell said.

    Friday’s weakness surprised market participants.

    “Although (it) is only one session of weakness, we’re back below ICE Brent March $90 a barrel, and I didn’t really want to see pullbacks going this far,” said a broker at FuturesTechs.

    “If we get above and close above $90.52 a barrel Monday we’ll stick with the bulls, otherwise we’d prefer to be playing it as a short once again, and look for a test of $86.93 a barrel.”

    Looking more widely at geopolitical drivers for the complex, although tensions continue to simmer in Turkey with news of fresh violence between Turkish military and Kurdistan Workers’ Party rebels over the weekend there has been no impact on oil shipments.

    Nigeria, on the other hand, remains a primary concern, amid anxiety over a recent escalation in violence between local groups and the military.

    Although no disruption to oil production has been reported, a battle between gunmen and soldiers took place at the weekend near a Royal Dutch Shell Bonny Light crude field pumping station.

    —By Angela Henshall, Dow Jones Newswires

  2. 2
    zman Says:

    I need to created a drop down memu for oil story headline

    oil down over economic concerns
    oil up due to rebel attack
    oil up as no one cares about the ecomomy
    oil sideways as no one cares about oil
    oil down as people stop driving

    all and more could be useful for lazy reporters

    oil now up $0.30 b/c they wanted to prove the previously story wrong

  3. 3
    Denise Says:

    Good Morning Z-Thankyou for analyzing MVO
    very helpful-going to rebuy and tuck away-would not have been aware of stripper well cost and upkeep(need a oil 101 class-I am a generalist)
    I was thinking since we will probably be in a low yield environment for a while these trusts might get more demand.

  4. 4
    Dman Says:

    Z- you were sniffing around YGE last week. Seems to be bouncing after being sliced in half. Thoughts?

  5. 5
    zman Says:

    Denise – your point about “low yield environment” is more salient than any I made in looking at EVEP or MVO. Obviously oil price matters but the market is likely to being marking these yields down (and the prices up) as long as oil doesn’t look due a collapse.

  6. 6
    zman Says:

    Dman – Re YGE – I’d really like to know when they report 4Q numbers. I spent the late afternoon Friday with a local money manager chatting all things solar, drybulk and E&P and his opinion on the China solars, which he gave me a big Simmons piece on and which I have not yet touched, is that the numbers there are very unreliable. Analysts are looking for 2010 results > $20 eps….yet the stock is where it is. I may take a little March call action just to play but will wait at least until it either 1) firmly breaks this downtrend or 2) lets us know when it will report the quarter. I don’t know enough about them yet to dip more than a toe.

  7. 7
    Sambone Says:

    9:40 am EST

    Nymex Crude Steady After Turkish Airstrikes

    By Gregory Meyer
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures were steady Monday as the market weighed a report of Turkish attacks inside northern Iraq against uncertainty in the world economy.

    Light, sweet crude for March delivery was recently up 21 cents, or 0.2%, at $89.17 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange rose 23 cents to $89.67 a barrel.

    Oil futures opened slightly higher in the pit session after reports that Turkish warplanes had hit some 70 Kurdish rebel targets inside northern Iraq, the fifth air attack inside Iraqi borders in the last two months. Iraq now produces about 2.5 million barrels of oil a day, or 3% of world oil demand.

    “Any news like that reminds people the Middle East is a pretty dangerous place,” said Rick Mueller, director of the oil practice at Energy Security Analysis Inc. in Wakefield, Mass. “That can take prices up a bit even though no physical volume is affected.”

    In Nigeria, Africa’s top oil producing state, gunmen engaged with troops near a petroleum-pumping station in the country’s southern oil region over the weekend. Oil production wasn’t affected during the incident, said Royal Dutch Shell PLC (RDSA.LN), near whose oil-pipeline intersection point the firefight took place.

    Counterbalancing supply risks are continuing concerns about the direction of the world economy, and with it, oil demand. The International Monetary Fund last week said global growth would slow to 4.1% this year from 4.9% in 2007, largely because of a projected slowdown in the U.S. That could damp world oil demand growth that the International Energy Agency currently sees at 2.3% in 2008.

    Oil futures have declined from their $100 highs of a month ago amid economic concerns.

    “We cannot say we were surprised by the latest dip in crude prices, as we have been warning in recent commentary that increasing signs of an economic stall in the U.S. will eventually take its toll on energy prices,” said Edward Meir, an analyst at brokerage MF Global, in a research note. “More importantly, the weakness we are seeing in the U.S. is now spreading elsewhere, rendering the notion that the world’s economies can somehow decouple from the U.S. as largely misguided.”

    Oil prices fell 3% Friday after the Organization of Petroleum Exporting Countries resolved to keep its output quota steady at 29.67 million barrels a day. Iraq is not subject to the production target.

    The cartel next reviews production levels March 5. Some delegates are pondering the need for a production cut next month in the face of a cooling economy and forecasts for seasonally slower demand in the second quarter. But Kuwait’s acting oil minister said Monday that OPEC will consider raising output, state news agency Kuna reported.

    Front-month March reformulated gasoline blendstock, or RBOB, was up 1.09 cents, or 0.5% to $2.2943 a gallon. March heating oil rose 97 points, or 0.4%, to $2.4586 a gallon.

    —By Gregory Meyer, Dow Jones Newswires

  8. 8
    zman Says:

    IOC off a buck on no volume. People are impatient.

    HAL waking up.

  9. 9
    Denise Says:

    Z-I have been reading-(do not quite understand all the issues yet)(have to run it by a knowledgeable friend)but there is a growing potential for a lot of problems in muni bond fund land-a lot of the closed end funds may experience some issues(of the NAV variety)along with muni yields dropping-

  10. 10
    Denise Says:

    Coal prices are surging, according to Bloomberg. Prices jumped 25% to a record in Australia as torrent weather continues to plague production in China, the world’s largest producer and consumer of coal. More than three weeks of snow have halted the transportation networks in the country, killing at least 60 people and causing approximately $7.5 bln in economic losses, marking the country’s worst snow storm in 50 years. China, which relies on coal for 78% of its power, announced a halt in exports until April in an effort to boost domestic supplies

  11. 11
    zman Says:

    D – the muni stuff is cary

    The China coal story – I heard 8 days of supply for the country last week, down from the usual 16, could be a bit lower by now.

    In the rails, your GBX is popping as Icahn takes almost 10%. ARII starting to move up too.

    drybulk rates edged up a little more this am.

  12. 12
    Denise Says:

    Wow-look at GBX go-looks like short squeeze

  13. 13
    zman Says:

    those Turkish airstrikes are a complete non-event for oil other than a general heightening of tensions.

  14. 14
    Sambone Says:

    Carl Ican took a 9.4% in GBX

  15. 15
    Sambone Says:

    Possible takeout talks

  16. 16
    zman Says:

    Sam – yep, ARII running, RAIL probably going to move too.

  17. 17
    Denise Says:

    I believe he has a stake in arii-
    it has been his worst preforming posistion. Interesting -think I will add to both if they settle down

  18. 18
    zman Says:

    group starting to green up nicely with oil up $0.70.

    APA is later this week and should have a gangbuster of a quarter and good things to say.

    APC is tonight but I went over that in the post.

    IOC seeing good action in the March 25 calls.

    Deepwater rigs looking up again (wow, that would be 2 consecutive days green,lol)

    PBR looks poised to go higher (reports on the 21st)

    HAL trying to move up
    XOM thinking about it.

  19. 19
    zman Says:

    Solar stocks off to the races today. FSLR up $11.

    YGE to ship thinner wafers (less needed raw silicon). Also announced 2008 guidance which appears higher than previously thought.

  20. 20
    zman Says:

    DSX signs time charter for Panamax vessel at $55m per day for 11 months versus current spot of just under $46. Still hold March calls there.

    Also, schedules 4Q release bmo on 2/15 (options expiration day).

  21. 21
    Denise Says:

    Z-On IOC How great is the possibility Elk 4 results could be reported after 2/15?

  22. 22
    zman Says:

    ZTRADE:

    Feb $130 RIG Calls for average $2.80. Also hold the $140 Feb calls which are starting to come back to life. After a pretty much straightline slide from $150ish to $120 last Thursday the stock and the other deepwater drillers are starting to turn North. Earnings out on FEB 20 so these strikes will expire then but are a cheaper way to play a run into that date than holding the Marches through another holiday weekend on the 18th.

  23. 23
    zman Says:

    D – I think pretty slim…should be any day unless given their last know depth on the 17th. The result will likely come in two stages…a report that they are at TD and a little about the subsurface conditions encountered (hydrocarbon bearing zones found) and their current plans (ie, well cleanup, conduct a drillstem test or DST) followed by more results like an actual production test. Bear in mind this is still exploration and nothing is certain.

  24. 24
    zman Says:

    HAL finally getting a little respect (thanks JP Morgan), I’m out of the FEBs at any point we attempt but fail to break $35.

  25. 25
    Denise Says:

    Z-Thank you have plenty of put protection and was wondering if I should move out. Curious why you would not buy a cheap feb put against your call-like the 15’s.

  26. 26
    zman Says:

    D – had planned too on Friday and forgot like a chump. May add around the close today.

  27. 27
    Nicky Says:

    Morning all – broader markets – I think any weakness will be short lived early this week. It seems the market needs to head a bit higher – possibly 1423 spx, 13100 Dow into next week before we turn down again.

    Energy – sentiment seems to have got a lot more bearish. I presume the market got a lift off the Turkey news earlier but I still think this market is a sell. We need to break under 85.10 to confirm and if we do then we could see 78 or lower.

  28. 28
    zman Says:

    Morning Nicky – I think OPEC will manage production in an attempt to forestall a plunge below $80. I think they step up the rhetoric below $85 and if crude inventories in the U.S. are 10+ million barrels higher by March 5 they cut production. I’ll eat my hat if we see oil in the $60s this year.

  29. 29
    zman Says:

    CHK tipping high, could have a strong day on results this week from Barnett players DVN and EOG.

  30. 30
    Sambone Says:

    11:54 am EST

    Nymex Crude Rises $1/Barrel; Iraq, Nigeria Tension

    By GREGORY MEYER
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures climbed more than $1 a barrel Monday as tensions in oil-producing Iraq and Nigeria prompted jitters about oil supply.

    Light, sweet crude for March delivery was recently up 99 cents, or 1.1%, at $89.95 a barrel on the New York Mercantile Exchange, after reaching $90.10 a barrel. Brent crude on the ICE futures exchange rose 84 cents to $90.28 a barrel.

    Oil futures ascended steadily during the pit session after reports that Turkish warplanes had hit some 70 Kurdish rebel targets inside northern Iraq, the fifth air attack inside Iraqi borders in the last two months. Iraq now produces about 2.5 million barrels of oil a day, or 3% of world oil demand.

    In Nigeria, a spokesman for rebel group Movement for the Emancipation of the Niger Delta, or MEND, on Monday claimed responsibility for a weekend attack on a military houseboat stationed at a crude oil pipeline hub in Nigeria. MEND spokesman Jomo Gbomo said in an e-mail, the attack, which took place at Royal Dutch Shell PLC’s (RDSB.LN) hub in Bayelsa state, was organized to commemorate group leader Henry Okah’s fifth month of imprisonment.

    Traders may also be reacting to chatter that the Organization of Petroleum Exporting Countries, is considering a cut to output quotas next month after keeping them steady at a meeting last Friday, said analyst Stephen Schork.

    “The volatility is certainly being driven by the headlines,” said Schork, editor of the Schork Report, an energy markets newsletter based in Villanova, Pa.

    Counterbalancing supply risks are continuing concerns about the direction of the world economy, and with it, oil demand. The International Monetary Fund last week said global growth would slow to 4.1% this year from 4.9% in 2007, largely because of a projected slowdown in the U.S. That could damp world oil demand growth that the International Energy Agency currently sees at 2.3% in 2008.

    Oil futures have declined from their $100 highs of a month ago amid economic concerns.

    “We cannot say we were surprised by the latest dip in crude prices, as we have been warning in recent commentary that increasing signs of an economic stall in the U.S. will eventually take its toll on energy prices,” said Edward Meir, an analyst at brokerage MF Global, in a research note. “More importantly, the weakness we are seeing in the U.S. is now spreading elsewhere, rendering the notion that the world’s economies can somehow decouple from the U.S. as largely misguided.”

    Oil prices fell 3% Friday after OPEC resolved to keep its output quota steady at 29.67 million barrels a day. Iraq is not subject to the production target.

    The cartel next reviews production levels March 5. Some delegates are pondering a production cut next month in the face of a cooling economy and forecasts for seasonally slower demand in the second quarter. But Kuwait’s acting oil minister said Monday that OPEC will consider raising output, state news agency Kuna reported.

    Front-month March reformulated gasoline blendstock, or RBOB, was up 2.50 cents, or 1.1% to $2.3084 a gallon. March heating oil rose 2.94 cents, or 1.2%, to $2.4783 a gallon.

    —By Gregory Meyer, Dow Jones Newswires

  31. 31
    Sambone Says:

    Uncle Phil

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

  32. 32
    Nicky Says:

    OMG not that hat again Z! 70’s I think is possible not sure about 60’s this year.

  33. 33
    zman Says:

    No, not THAT hat. THAT hat is in a glass case now that 2007 is done. This is a NEW hat which I’d also eat if we see $4 natural gas at any point this year.

  34. 34
    zman Says:

    HAL Feb calls nicely in the black finally.

    I’d bet CAM is next to rally post good earnings (last week).

  35. 35
    Nicky Says:

    Samborne – thought you would like this –

    http://kayakman.livejournal.com/79510.html

  36. 36
    Nicky Says:

    We are close to 50% of the retracement of the highs to the lows of the last week for wti.

  37. 37
    Nicky Says:

    Energy on a tear now – what’s behind this? Finally seems to have detatched itself from the broader market but can see no reason for such a big move up?

  38. 38
    Sambone Says:

    N – I tend to agree with alot of what he saids. Sounds like me, but that guy is a bigger bear than I am. Thanks

  39. 39
    zman Says:

    CLR with a nice bump in reserves but a very good report from a relative new play for them, the Trenton / Black River which I normally associated with NY and PA but this is in Michigan. 1 well producing, second well with a very nice test rate, third well locks promising. Will augment this tomorrow’s post for you CLR holders.

  40. 40
    zman Says:

    for the bears:

    Click on the link at left for Michael Metz, CIS for Opco, he says we’ve seen the highs for the year.

    http://www.marketwatch.com/

  41. 41
    zman Says:

    Nicky – it is a bit of weird move on oil but so was the $3 collapse at the end of last week. Even NG is up today and it bikini weather here.

  42. 42
    Nicky Says:

    well not sure about that Z – as you know I think it should have collapsed long ago – it is just so far removed from reality!

    What can we expect on a fundamental basis regarding nat gas? Is the forecast for it to remain warm? If so what was it like this time last year? The Elliott wave count is potentially quite bearish but it has been a tricky one!

  43. 43
    zman Says:

    GBX and ARII to the moon, RAIL trickling higher.

  44. 44
    zman Says:

    Nicky – see 28. I don’t buy their “we have no control argument…I don’t think they need to produce more but they are looking at damage control for an economy that is not going to see that big a drop in oil demand unless it is protracted.

    Re gas it was cold last week but not as cold as last year. It is warm this week and was very cold last year. The third week is still up for grabs in the forecasts I’ve seen but a year ago it was starting to warm up. So gas may come off into the mid to middle lower $7 by my way of thinking. Supply is probably up 2 to 2.5 Bcfgpd relative to year ago levels via production and is, depending on the week, down 1 to 2 Bcfgpd for imports. So net were up a little on supply and we’re short of year ago levels on gas storage and the weather becomes less conducive to big withdrawals in a few weeks although late season cold snaps could help bring storage to par with the five year average . I’d bet on $7 to $8 very near term with mid $6s in March/April and all eyes on LNG/Canada volumes and Barnett permits and rig counts.

  45. 45
    Nicky Says:

    Didn’t Opec give the same argument when oil was $30 a barrel.
    If there was any truth in anything they said they would not be worried about a US slowdown with the oil price at these crazy levels. They want to defend the price when we are at $90? They are just crooks!

  46. 46
    Nicky Says:

    Thanks for the info on nat gas btw!

  47. 47
    Sambone Says:

    Crooks = Chavez

  48. 48
    kyleandy Says:

    z thks for info on EVEP and OEXFF good stuff!!! re OEXFF my friend said u were using dec 31 2006 reserves, new report (not out yet) will show reserves increasing from 4 to 6 yrs.

  49. 49
    Dman Says:

    Hi Nicky,

    why exactly do you think $90 oil is crazy?

    Mat Simmons says it’s still cheap. Cheaper than bottled water, in fact! Nobody has to drill thousands of feet into the seafloor to get water 🙂

  50. 50
    zman Says:

    K – I hear ya and he’s right and it was a very cursory view. I was just looking for anything that could be holding them back. The reserve life expansion your friend is talking may be doable and would certainly boost the shares since they kept their spending to get there in check.

  51. 51
    scoop006 Says:

    Cramer sold his remaining 500 shares of RIG. Says”rising costs limiting earnings upside potential”

  52. 52
    Nicky Says:

    Dman – I don’t believe the fundamentals have changed since this time last year when oil was at $50. In fact if anything fundamentals have deteriorated as with the turn down in world economies demand is going to be lower.
    This move up was never about fundamentals but only about speculation. Spin it which ever way you want – a falling dollar, Iran etc etc. but it still comes down to speculation.

    Now don’t get me wrong – are we done to the upside price wise? No I expect it to go substantially higher in time.

  53. 53
    zman Says:

    Nicky – how much do you reckon speculators had to do with my “just another bump in the road” chart of oil inventories. You know, the one I post every Thursday that shows US ex SPR inventories falling from 354 mm bbs at the end of June to a low of 282 mm bbs ( a 20% decline) at the end of the year.

  54. 54
    zman Says:

    Remember that I went back and took a look at the normal pattern for June end to Jan beginning period for crude inventories and no other year was even close to that kind of decline in stocks until you get back to 1991.

  55. 55
    Dman Says:

    Z, Scoop : re 51.

    Cramer was telling everyone to sell oil stocks last week, ahead of today’s nice lift in the sector and the commodity.

    So there’s no reason to assume he actually has some pertinent data on RIG’s costs. These days he just tends to wing it.

    But still, it’s worth examining: how could RIG’s costs be blowing out. Personnel costs?

    OTOH if rates are still rising strongly, it simply may not matter. Is there some way to get a handle on this costs issue?

  56. 56
    Nicky Says:

    I don’t disagree Z – but right now I see no sign of any shortages and you cannot argue that demand is not falling.
    The speculators just jumped on any opportunity they could to ramp the price. Most the time they were citing things other than the inventory level ie Turkey, Iran – none of which have come to bear. The price should have dropped $15 alone when that report came out on Iran.
    Maybe the time will come when it will be about a fundamental supply shortage but last year that was not the reason that they ran the prices up.

  57. 57
    Nicky Says:

    Cramer was also telling everyone to buy Google as it made new highs in December. The price of Google is now $250 lower and he is now trashing it. Pity he didn’t give his followers an exit strategy!

  58. 58
    Nicky Says:

    RE # 56 – I should have added ‘in my opinion!’ – sorry.

  59. 59
    zman Says:

    Nicky, no worries or “my opinion needed”. Those same speculators are now bears and ignore the very things that brought them here. I just try to balance the pluses with minuses and see where it leaves me at the end of the day. PF and his ilk are into spin doctoring as they use the media to try to “make their trade work”. No meat on their spin covered bones.

  60. 60
    Nicky Says:

    I couldn’t agree more Z – they are now going to ‘speculate’ it lower!

  61. 61
    zman Says:

    so you can trade the candidates’ potential to win california in clinton.ca and obama.ca according to CNBC. Doesn’t come up on my system.

  62. 62
    zman Says:

    Re RIG and rising costs, it could be personnel but that story is pretty long in the tooth. Will do some snooping on costs but with Cramer it is more than likely his Rearview Mirror Enabled Magic 8 Ball Stock Machine detected the drop from $150 to $120 for RIG as service was killed last month, cracked open a Chinese misfortune cookie and the words “rising costs” were printed on the ticket.

  63. 63
    Jason Says:

    Z – I’m late on APC. Do you like it at this level for the after-the-bell earnings play?

  64. 64
    zman Says:

    J – I’m holding it through the numbers despite a pretty nice gain. I don’t expect it to rock ala AAPL or GOOG in the old days but a point or two is possible at the open and I think more in the days after the conference call. They have at least a couple of exploration wells that they may be at TD which could give a little zip as well if successful. I think the big thing is that Hacket will talk it up unless they just outright miss which I don’t expect. This is the year after the turnaround year for them and they could offer some pretty exciting details about new exploration plays (China, Brazil)

  65. 65
    Sambone Says:

    N – Speculators = “Crowd”

    #57 – I gave up on that clown years ago when I started buying CHK. This guy went from buy to sell, back to buy, sell, buy, sell, etc. He alsways bght at the high and sold at the low on CHK.

    #62 – I ran numbers this weekend and until the next earnings report comes out when Global Sante Fe and Transocean numbers finally come together I.E. Debt, etc before I can get my arms around it. Too much of a moving target with not enough info to make a decision on growth potential.

  66. 66
    Sambone Says:

    Cramer performance and calls. i like the Jan 8th call.

    http://www.yourmoneywatch.com/index.php?name=Home&op=cramerscalls

  67. 67
    Sambone Says:

    Correction, Jan 9th call

  68. 68
    Sambone Says:

    3:25 pm EST

    Nymex Crude Ends Higher; Nigeria Supply Threat

    By Gregory Meyer
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures gained to close above $90 a barrel Monday after traders reconsidered a selloff last week and reacted to fresh violence in Nigeria’s tumultuous, oil-rich southern region.

    Light, sweet crude for March delivery on the New York Mercantile Exchange settled $1.06, or 1.2%, higher at $90.02 a barrel. March Brent crude on the ICE futures exchange rose $1.02 to $90.46 a barrel.

    Analysts groped for definitive reasons behind the rally. One explanation was that front-month crude’s 3% pullback Friday on the back of economic fears went too far.

    “It looks like we were retracing what probably was an overdone selloff on Friday,” said Addison Armstrong, an analyst at TFS Energy Futures in Stamford, Conn. “There’s really a lot of competing news out there right now. I’m not sure why the bulls are holding sway.”

    Support for prices came from Nigeria, a major oil exporter that since 2006 has halted more than 500,000 barrels a day of production amid struggles with rebel groups.

    In the latest sign of strife, a spokesman for rebel group Movement for the Emancipation of the Niger Delta, or MEND, on Monday claimed responsibility for a weekend attack on a military houseboat stationed at a Royal Dutch Shell PLC (RDSA.LN) pipeline hub. A firefight left three soldiers and an unknown number of assailants dead, the Associated Press reported, though Shell said production wasn’t affected.

    Reports that Turkish warplanes had hit some 70 Kurdish rebel targets inside northern Iraq also unleashed supply jitters. Iraq now produces about 2.5 million barrels of oil a day, or 3%, of world oil supply, a substantial fraction of which is exported through Turkey.

    “News like that reminds people the Middle East is a pretty dangerous place,” said Rick Mueller, an oil analyst at Energy Security Analysis Inc. in Wakefield, Mass. “That can take prices up a bit even though no physical volume is affected.”

    The market brushed off other developments analysts said suggested demand for crude could soften in the weeks ahead. The National Weather Service is predicting warmer-than-normal temperatures for much of February across the U.S. Northeast, the world’s largest heating oil market. The Commerce Department reported U.S. factory orders in December grew more slowly than Wall Street expected. U.S. stock markets, which oil traders have recently watched as a proxy of economic sentiment, were lower as of the Nymex’s 2:30 p.m. EST close of floor trading.

    Sustaining a recent reversal of earlier trends, the Nymex April crude also settled higher than the front-month March contract, at $90.07 a barrel, suggesting concerns about immediate supply problems are taking a back seat.

    Analysts surveyed by Dow Jones Newswires see U.S. oil stockpiles building in weekly data due out Wednesday, which is among the “strong arguments for the downside,” Armstrong said.

    Crude oil inventories rose by 2.2 million barrels in the week ended Feb. 1, according to the mean of 10 analysts’ forecasts, while gasoline inventories grew by 2 million barrels.

    Distillate stockpiles, which include heating oil and diesel fuel, fell by 1.8 million barrels, the analysts forecast, while refinery use dropped by 0.2 percentage point to 84.8% of operable capacity.

    In the oil products markets Monday, front-month March reformulated gasoline blendstock, or RBOB, climbed 2.83 cents, or 1.2%, to $2.3117 a gallon. March heating oil rose 3.44 cents, or 1.4%, to settle at $2.4833 a gallon.

    More information on settlements and highs and lows for futures on Nymex and ICE platforms can be found by searching for the following headlines:

    Nymex Light Crude Oil Close

    Nymex Harbor RBOB Gasoline Close

    Nymex Heating Oil Close

    ICE Brent Crude Oil Close

    ICE Gas Oil Close

    —By Gregory Meyer, Dow Jones Newswires

  69. 69
    Dman Says:

    Re 68:

    Groping analysts. That’s all we need 🙂

    Seriously though, it’s nice to see some honesty (i.e. the “I’m not sure” bit).

  70. 70
    TTupp Says:

    nicky- do you ever use volume in your analysis? i don’t know much about the topic, but am currently doing some reading. this book im reading says that climactic volume coupled with quickly falling price similiar to the price/ volume action od valero though the last part of jan. they also said in these circumstances these bottoms get retested. that being said, ive notice a fw of the stock i follow retracing nicely from the ~jan 22 intra day lows on very low ever decreasing volume (see VO & FSLR). what would this technical picture paint to you? there is no mention of volume with regards to retracement in my book.

    also, on the topic of retracements, from the markets recent high on dec 26, to the intra day low on jan 22nd, using fib. analysis, would i calculate the retracement from the intra day low or close on the 22nd. and is this starting point of dec 26 the proper basis or sould the high point be taken from the higher close from dec 10– or even oct. 30 or the all time high on oct 11?

    thank-you in advance.

  71. 71
    Sambone Says:

    Tini time

  72. 72
    Nicky Says:

    Broader markets – very slow today. I think we should get down to 1365 ish in the spx in the next day or so and then see a bigger bounce into options expiry next week.

    The wave 4 count was negated with the move last week above 12724 do my favored count is that we have a 2 playing out which means the next move is 3 down which would be very bearish.

    The alternative count which still can’t be discounted is that the January 22nd lows finished an ABC wave 4 down and we are now in 5 up to new highs – just doesn’t feel right to me but is still a possibility.

    DMH – you out there with any thoughts on the count?

  73. 73
    zman Says:

    T – Did you receive an email from me?

  74. 74
    TTupp Says:

    z no- what about?

  75. 75
    Nicky Says:

    Hi T Tupp – yes volume can be very useful and particularly when looking at chart patterns and looking for a climatic top or bottom. To me the fact that the bounce since 22nd January on the shares you mention has been on low volume paints a bearish picture.

    By the same token I am looking at overall volume in the broader market today as being low and coming on a down day that to me suggests higher highs ahead.

    The move off the lows looks countertrend to me. Countertrend moves are 3 waves or mutations thereoff ie 7 or 11. At the moment we have 5 overlapping waves so it looks like we need a down (currently underway) to be followed by another up (into next week).

    With regards the closing or intra day lows I use the intra day moves but during market trading hours rather than futures ie the Dow traded as low as 11634 on 22nd January which is the level I would use to base my fib retracements on.(futures traded down to 11280).

    When you refer to the starting point are you referring to an Elliott wave count? If so then I am counting it from the all time highs on 11th October.

    Hope that helps and I haven’t confused things more!

  76. 76
    TTupp Says:

    yea i got it

  77. 77
    TTupp Says:

    maybe its on a cc that expired. leme check my paypal acct

  78. 78
    zman Says:

    T – no worries, just passing along a message they sent to me.

  79. 79
    TTupp Says:

    shouldn’t be, i just bought the lime green unitard that borat wore in the movie off of eBay for my trip to the Dominican. lol

    ill investigate… lol

  80. 80
    dmh Says:

    Nicky:

    As you said the move above 12724 negated any possible 5 wave count from Oct highs, so I think what we have is an initial ABC 3 wave intermediate A zig-zag down and we are correcting a B wave up in some form.

    not sure I follow you when you say we have a wave 2 playing out as that would imply that we have completed a 5 wave down from Oct, I only see a 3 wave down?

    It’s possible but remote that the correction is over and we are on to new highs, except that I don’t hear or read anyone talking about this, so who knows?

  81. 81
    zman Says:

    borat … now that’s funny

  82. 82
    zman Says:

    I’m investigating have a wiki section where subscribers could put their holdings or charts like the Elliot stuff to show each other. I’m a bit of a tech tard so it takes me a little longer than you’d think.

  83. 83
    TTupp Says:

    gimme a week or so until my new one gets here by mail since i lost the one on file and cant remember the number or if it or if it is probably expired (i got an email from e signal too)

  84. 84
    zman Says:

    no worries

  85. 85
    TTupp Says:

    nicky- “When you refer to the starting point are you referring to an Elliott wave count? If so then I am counting it from the all time highs on 11th October”.

    well thats a nw topic that im learning right now, but i was referring to a simple fib. retracement theory. ie from the intra day low on the 22nd, we are now x% of the preceding move that anded on jan 22nd and began on xxxx? i don’t know where to get my starting distance of the move. i have read some stuff about using thirty days or so, but other time ive heard references of the length of the wave preceding the bounce/ retracement not a time unit.

  86. 86
    Alhambra Says:

    Anadarko ceo on cnbc

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