05
Mar

OPEC Wednesday

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What an ugly day yesterday was. Red across the board starting with the broad markets and ending with the commodities and taking down everything in between. Looking for the beginnings of a rebound today.

  • OPEC Watch: OPEC is widely expected to hold production quotas flat, a decision that is likely to be crude price supportive. I'd expect a final statement from the cartel between now and 12 EST. At the bottom of the post I have included some odds and ends from the live broadcast at the meeting Vienna overnight. The recurring themes are concern over the falling dollar, the need to cut based on fundamentals, the fact that prices have become decoupled with the fundamentals. You can listen to live and recorded interviews and analysis from the meeting here.

Commodity Watch:

  • Crude Oil: April crude tumbled $2.93 to $99.52 and actually traded into the $98s briefly during. Traders were spooked by the prospect that OPEC may sit on its hands today. Oil has been trading up $0.50 to $1.00 all evening as various tidbits come out of the OPEC meeting. 
  • EIA Director Sees Oil At $57 Per Barrel In 2016. Guy Caruso, head of the EIA said prices will fall "as exploration and development expands and brings news supplies to the market." Guy also said he doesn't see gasoline prices rising to $4 per gallon by Spring 2008 but that they would be higher than the EIA has so far forecast. Your tax dollars at work.
  • Mexico Exports - Stormy Weather Watch: Increasing incidence of stormy weather is once again delaying some exports as export points are temporarily shuttered due to high seas. PEMEX says recent closures should not affect exports to the U.S. but its worth keeping an eye on if storms gear back up to the levels we saw last November.

EIA Inventory Expectations (from the Bloomberg Survey)

exp-022908.jpg

ZComments: Numbers will take a back seat to OPEC's decision and more specifically to the language in OPEC's statement today. 

  • Crude: this will be the 8th consecutive weekly increase in U.S. crude inventories, and though these inventory increases are normal on a seasonal basis, rising crude stocks and high import levels help make OPEC's argument that "its the speculators stupid".
  • Gasoline: At 14 year highs, gasoline inventories stick out like a sore thumb acting as a check on 1Q08 crack spreads. Gasoline demand should continue to run near 9 mm bpd.
  • Distillates: middle distillates continue to see support from the weather.
  • Natural Gas has had an interesting last few days. Looking back to last week, April gas broke out of a 2+ year base ranging from $7 to $9. After nearly a month long run, gas hit a closing high of $9.443 on record volume. Since then it has made stabs higher but failed to attain higher closes and volume has come off. It has repeated this pattern of spike and rest 3 times in the last 3 weeks. This morning gas is trading back up a dime pre-market...it will be interesting to see if it can hold on to that move. Tomorrow

Holdings Watch: No changes.

Odds & Ends

Analyst Watch: (PXP) upped to outperform at Credit Suisse and (PDC) upped to buy at Deutsche.

I spent the evening listening to live interviews from the OPEC in Vienna. Here are some tidbits from various minsters and consultants. 

OPEC 148th Meeting Opening Comments:

  • Seeing slower growth world-wide - all OECD regions.
  • China and India will continue to grow but not as fast as 2007.
  • Growing "global despondency" causing reduced demand estimates.
  • Crude oil prices are detached from the fundamentals of supply/demand. This is a function of bottlenecks in the refining sector, production problems, geo-political problems, and the falling dollar.
  • Increased oil price speculation is not welcome.
  • OPEC is now producing 32 mm bopd. "Market is well supplied. Examining what can be done to achieve stability, not volatility."

 

Interviews With:

Iraqi Oil minister:

  • more supply than demand, on a dollar inflation adjusted price "oil is not really that high"
  • OPEC does not feel responsible for "high" oil prices.
  • "its not only the oil, look at the wheat, look at the metals"... producers and consumers should meet to discuss policies for stabilizing commodity markets
  • production at highest level since regime change in 2003, production 2.5 mm bopd, exp 2 mm bopd, increase production by few hundred 000 bopd by end of year
  • bid round announced for expanding production further - 115 companies competing for contracts. See this adding 500,000 bopd of capacity in the near term.
  • 115 billion barrels confirmed reserves, another 400 structures not yet explored.

Angola Minister:

  • production at 1.9 mm bopd now
  • 27 years of war followed by 5 years of peace - continuing to rebuild infrastructure, stabilizing.

 

JBC Energy (oil consulting firm) main points:

  • U.S. and OECD crude inventories are high but not that high.
  • Gasoline at 14 year highs is a real problem as more global downstream capacity comes on line this year and next.
  • U.S. CAFE standard changes are behind the stagnation in gasoline demand, then perhaps economy.
  • JBC sees continued margin pressure on refiners for gasoline cracks pretty much globally aside from Asia. Middle distillates are better supported by weather for now.
  • JBC sees increasing competition from biofuels towards gasoline...in other words, the higher % of blending components in the finished gasoline inventories chart I ran in last Tuesday's report will continue to depress margins.

 

 

136 Responses to “OPEC Wednesday”

  1. 1
    Nicky Says:

    Unless I misheard CNBC are reporting that this move by OPEC is extremely bullish for oil citing that the reasons they have’nt cut is that they clearly see supply problems down the line. This is blatant manipulation of the facts. OPEC must be wondering why they didn’t cut with the reaction by energy prices this morning!
    Somehow didn’t we know that the media would distort the facts!

  2. 2
    Nicky Says:

    WTI has resistance at 101.10 and 101.63

  3. 3
    texana Says:

    i’m kind of curious how much stock value aubry @chk has $ wise, ward @sd wants to add 100 mil & he is @ 500 mil, the undisputed leader is hamm @clr. sd had a great report & roared back @ the end of the day.

  4. 4
    zman Says:

    Tex – about $1.4 B

  5. 5
    zman Says:

    Nicky – you are right re CNBC and OPEC. There was no worry about supply voiced by any of the ministers I heard talk. The official decision is still not out.

  6. 6
    zman Says:

    NG up almost $0.20 on this move in crude…yeah, that makes sense.

  7. 7
    Nicky Says:

    Distillates on an absolute tear too – nothing makes sense. If its a wave 2 this is very typical though – will make you think we are heading back to the highs and then pull the plug.

  8. 8
    zman Says:

    drybulk rates were up yet again:

    http://www.dryships.com/index.cfm?get=report

    at some point you’d think the stocks would notice this.

  9. 9
    zman Says:

    just watching stocks for now … given the move in oil, ng, and products, this is a pretty tentative move on the part of the energy stocks.

  10. 10
    Sambone Says:

    7:41 am EST

    Crude Higher After Pullback Tempts Buyers

    By Nick Heath
    Of DOW JONES NEWSWIRES

    LONDON — Crude oil futures traded more than $1 higher in London Wednesday as buyers looked to take advantage of Tuesday’s pullbacks, anticipating further rises amid strong ongoing investor support for commodities.

    Nymex light, sweet crude prices had already broken back through $100 a barrel before news emerged from the meeting of ministers from the Organization of Petroleum Exporting Countries in Vienna that OPEC had verbally agreed to leave production levels unchanged, a decision widely anticipated by the crude markets, and one that had little immediate impact on prices.

    “The price action yesterday and today is some combination of profit-taking and then getting back in, movements by the funds, and technicals. It’s hard to pinpoint,” said Mike Wittner, head of global oil market research at Societe Generale in London. “But the key point is there doesn’t seem to have been anything fundamental that has caused the volatility we saw yesterday and today. I don’t think OPEC has got a lot to do with it.”

    At 1213 GMT, the front-month April Brent contract on London’s ICE futures exchange was up 49 cents at $98.01 a barrel.

    The front-month April light, sweet, crude contract on the New York Mercantile Exchange was trading 68 cents higher at $100.20 a barrel.

    The ICE’s gasoil contract for March delivery was up $20 at $934.25 a metric ton, while Nymex gasoline for April delivery was up 335 points at 256.26 cents a gallon.

    With OPEC leaving its quotas as expected, market participants will turn their attention to any statements indicating when the group may convene again, some suggested.

    “I think the rollover was widely anticipated — the key will be whether they say “we’re not going to do anything before the next scheduled meeting” or “we’re going to hold another one’,” said Jim Rintoul of TheOilTrader. “If the meeting is less than three months away, it would suggest they want to keep hold of this market, and the market would see that as supportive of prices.”

    A senior OPEC delegate said Wednesday the group will meet informally on the sidelines of the International Energy Forum in April in Rome. The date for an extraordinary meeting won’t be set until then, he said. OPEC is scheduled to next meet in September.

    Events in Vienna were seen to dampen crude trading activity somewhat Wednesday, with latest U.S. Department of Energy weekly inventory data, due out 1530 GMT, also keeping some participants on the sidelines.

    According to the average of a Dow Jones Newswires survey of 15 analysts, U.S. crude oil stockpiles rose 2.3 million barrels in the week ended Feb. 29.

    While confirmation of those predictions will add to market perception that the U.S. is not currently struggling for oil supplies, a bearish price response should not be taken for granted with crude’s recent strong performance linked more to fund buying and investor appetite for commodities than oil market fundamentals, many said.

    “It remains to be seen whether all these factors, i.e., rising energy stocks, weakening U.S. energy demand, and an uninspiring macro backdrop, will succeed in changing the recent market mindset, namely, one where participants seem to be determined to buy commodities as an inflation hedge and an optimum investment play,” said Edward Meir, analyst at MF Global in New York.

    The DOE data are also expected to reveal gasoline inventories rose 900,000 barrels last week, according to the Dow Jones analyst survey, while stocks are seen on average to have fallen by 1.9 million barrels.

    Refinery use is expected to have risen by 0.3 percentage point to 85.0% of capacity.

    —By Nick Heath, Dow Jones Newswires

  11. 11
    zman Says:

    Its funny to listen to the various energy consultants in Vienna at this meeting. From one guy to the next you hear demand is off big or not off at all for crude and for gasoline.

    OPEC newswoman says they expect the minister’s statement pretty soon. Despite what Bloomberg and Reuters are reporting, the official decision is not out yet.

  12. 12
    Sambone Says:

    Price Up, Demand Down — 2Q Vexes OPEC Again

    By DAVID BIRD
    A DOW JONES NEWSWIRES COLUMN

    NEW YORK — In just the month since OPEC last met to review oil output policy, oil prices have swung in a remarkable 20% trading range.

    As the Organization of Petroleum Exporting Countries gathers for Wednesday’s talks in Vienna prices alight near their highest-ever level, hit Monday of $103.95 a barrel.

    In a replay of trading the day OPEC decided Feb. 1 to keep output levels unchanged, Nymex crude prices fell near 3% on Tuesday. At $99.52 a barrel, though, prices are up more than $11 a barrel, as early comments signal a rerun of OPEC’s month earlier decision.

    At OPEC’s last gathering, Secretary General Abdalla Salem el-Badri projected that a recession in the U.S. and elsewhere wouldn’t last more than two or three quarters and wouldn’t greatly impact the emerging economies of India and China.

    Fingers crossed, OPEC heads back to the Vienna bargaining table with clear signs that oil demand in the U.S. is dropping, due to an economic slowdown helped in part by high oil prices.

    But added worry over the global economy adds another layer of complexity to the always tricky issue of setting second-quarter output.

    For all of 2007, oil demand in the U.S., the world’s largest oil consumer, was essentially flat versus 2006, when demand dropped by 0.6%, to 20.7 million barrels a day.

    But in December alone, demand for gasoline — the most widely used petroleum product — fell 1% from a year ago, or 89,000 barrels a day, the biggest decline since after hurricanes Katrina and Rita ravaged the Gulf Coast in 2005.

    If not for strong weather-related demand, which pushed distillate (heating oil/diesel) use up 2% to its highest December level since 1976, demand would have dropped nearly 200,000 barrels a day from a year ago.

    Funds Vs Fundamentals
    The strong distillate demand has added a further worry for the economy, pushing diesel fuel prices to sustained record highs. Gasoline prices are following, too, trading at their highest-ever levels on the East Coast and the West Coast, according to the Energy Information Administration.

    By most expectations, OPEC, in the face of record high prices, won’t officially lower its oil output to adjust for declining seasonal demand with the end of winter in the Northern Hemisphere.

    OPEC’s de facto leader, Saudi Arabian Oil Minister Ali Naimi, was quoted in an interview published last weekend that OPEC, which pumps 40% of the world’s oil, doesn’t control prices in today’s market.

    “Hedge funds, retirement funds, pension funds and so forth, seize any opportunity to make money and that’s what they are doing .. but it is driving the (oil) price, it is creating a paper demand and influencing the price,” he said.

    Still, if OPEC puts too little oil into the market, already high prices could climb further, putting that much more pressure on the world economy. Too much OPEC oil in the market and prices may unravel faster than some in the group may like, while building up consumer stockpiles and thereby extending a period of lower prices.

    In the best of circumstances, OPEC and analysts who measure supply and demand for consumer governments don’t do a great job of sizing up second-quarter oil demand in February, a review of past forecasts show.

    OPEC long has been nervous about assessing the weak demand period after the market meltdown that lingered long after the notorious Jakarta meeting in late 1997. OPEC misread the implications of the Asian economic crisis and lifted output quotas by 10%, just as an extremely warm winter in the Northern Hemisphere also slashed demand in what should have been the peak season. By the end of the second quarter, prices were down 26% from the fourth quarter and took 20 months to recover.

    Perils Of Puzzling 2Q Demand
    Current forecasts from OPEC, the U.S. EIA and the International Energy Agency, the Paris-based watchdog of the major industrialized countries in the Organization for Economic Cooperation and Development, vary by nearly 500,000 barrels a day.

    Forecasters at the OPEC Secretariat expect global demand to drop by nearly 1.6 million barrels a day in the second quarter, from the first quarter, while EIA sees the drop at just over 1.1 million barrels a day.

    Last year, the average of February forecasts of the three organizations called for a fall of nearly 1.6 million barrels a day, by global demand dropped by just 1 million barrels a day in the second quarter. U.S. crude oil prices jumped 11.8% in the quarter, to an average of $65 a barrel.

    The most glaring miscalculation of second-quarter demand came in 2004 and is the root of the current relentless price surge.

    OPEC and the other forecasters failed to detect signs of surging demand from China and other developing countries outside of the OECD.

    Projections from EIA, IEA and OPEC echoed each other. The second-quarter demand plunge would be one to remember, on the order of 2.3 million to 2.9 million barrels a day, or nearly 4% of global demand.

    OPEC already had surprised the market with an unexpected cut in September 2003, of 900,000 barrels a day, which underpinned then shaky prices at above $30 a barrel.

    Heading into the February 2004 gathering in Algeria, many analysts thought (much like today) there wasn’t any political will for OPEC to cut output with prices near records high — then at $34 a barrel.

    But ministers, fearful of the impending demand drop, pledged to slash output by 9%, or 2.5 million barrels a day, from current production.

    Root Of Current Price Rally
    Soon prices were solidly over $40 a barrel and never moved below that mark again, even as OPEC didn’t follow through on the deep cut.

    Naimi later told The Wall Street Journal that he traveled to China after the meeting and saw first hand the dynamic appetite for oil in what is now the world’s second- biggest energy consumer, and decided not to cut supplies.

    But by then, the die was cast. Second-quarter demand dropped off by as little as 650,000 barrels a day in 2004, the EIA later estimated, after predicting in February the fall would be 2.9 million barrels a day.

    IEA had projected non-OECD demand in the 2004 second quarter would drop by 600,000 barrels a day from the first quarter to 30.4 million barrels a day. Instead, IEA data now show, it rose in the period by 800,000 barrels a day, to 33.1 million barrels a day.

    OPEC, which expected a 2.3 million barrel-a-day decline in the 2004 second quarter, now says the dropoff was just 970,000 barrels a day.

    The 2004 lesson is little comfort for a market now relying on OPEC to tweak its output levels strategically in coming months to manage an increasingly complicated market that is increasingly out of its control.

    (David Bird is senior energy correspondent for Dow Jones Newswires)

    —By David Bird, Dow Jones Newswires

  13. 13
    reefguy Says:

    APC new credit line(unused) $1.3B- They should buy XCO to get Marcellus position

  14. 14
    Nicky Says:

    Nat gas has to stay below Mondays 9605 high for it to resolve bearishly short term…

  15. 15
    uop Says:

    Z –
    tempted to sell 1/2 of my UNG as – maybe it won’t go higher with the possible weather changes up north,

    to what degree is NG now related to the price movements of oil ?

    with OPEC not changing, the economies slowing, resource use should slow further.

    What month is typically gasoline use going up ?

    Alll these things interact and its pretty hard to make any predictions.

    Txs

  16. 16
    zman Says:

    OPEC coming back with their decision now.

    uop – very hard to tell the linkage. seems to be tied early in the day but then has a mind of its own.

    OPEC saying demand is falling US, Europe, not so much China and India

    May / June on gasoline

  17. 17
    zman Says:

    OPEC – holding flat

    expressing support for PDVSA in their dispute with XOM

    next regular meeting: September 2008

  18. 18
    redjack Says:

    re #13…last year they sold a lot of properties to XCO.

  19. 19
    reefguy Says:

    redjack- I was making light of the garage sale this week and new credit facility. Sounds like $3.1B in dry powder

  20. 20
    zman Says:

    OPEC Q&A:

    see lower demand 2Q and probably rest of year due to near recession in U.S.

    holding flat should help push stocks up next few months which should help global economies.

    2Q stock build: 1.2 mm bopd, up 0.4 mm bopd in 3Q,

    YoY global demand: see growth of 1.2 mm bopd,

    growth in non-OPEC supply estimate: see growth of 0.9 mm bopd,

    quota remains at 29.67 mm bopd for the OPEC-12,

    OPEC: “what’s happening in the oil market is due to the mis-management of the U.S. economy”

    Hey Reef, doubt Hackett is ready for another deal like that yet, know you’re kidding but APC for XCO isn’t a horrible idea. Would get analysts off their back on the question of having a core resource play, lol.

  21. 21
    Nicky Says:

    That statement re mis management makes you wonder what is going on behind the scenes with the US who have been pushing for OPEC to increase production and obviously OPEC are not happy with this pressure and not about to bail the US out.

  22. 22
    Nicky Says:

    Distillates make a new all time high

  23. 23
    zman Says:

    Nicky – yeah, he said it with a certain amount of venom in his voice. They are clearly exasperated with Bodman and Bush alternating between begging and cajoling them into raising production. al-Naimi said he didn’t know who would buy the crude if they produced more.

    He said for now oil will continue to trade in dollars but they are clearly not happy with how the dollar has been handled.

  24. 24
    Nicky Says:

    Well not quite sure how they managed it but price is doing the same as if they had cut I would have said.

  25. 25
    zman Says:

    Nicky – agreed, they have gotten better at this.

    they were asked what criteria would be used (drop in price, increase in price) to determine if they need to meet earlier than September. He said the ministers would know it when they see it so no luck trying to pin a price band on them.

    Q&A over with oil up $2

  26. 26
    Popeye Says:

    CHK is getting left behind today but HK is leading the way up on my screen.

  27. 27
    zman Says:

    I see that, add EOG to getting left behind but then I’d comment that both have had a good run. HK got punished for no reason yesterday, down something like 5% and while I was tempted to buy I’m long shares and the April 20s and the sea of red could still return in 8 minutes when the oil numbers come out.

  28. 28
    zman Says:

    One thing from listening to all these ministers last night I left out of the post. The incredible and accelerating production and refining plans of every country that got in front of the camera. Should be looking for BIG infrastructure stocks like Flour or some such. Ideas welcome, it sounds like more and more contracts to be announced soon.

  29. 29
    reefguy Says:

    z- if Hackett needs a resource play, then his dry powder can buy HK. Floyd is looking for an exit…

  30. 30
    Nicky Says:

    Broader market: as suspected we have a short term (one day?) rally underway. Its difficult to get excited about a market that rallies on a Charlie/Ambac rumour, ISM numbers that didn’t come in any worse than expected (although still bad) and ADP numbers which point to bad non farm payrolls on Friday.
    If the bearish count prevails then this rally should stall out as a 3 wave bounce between 12300 and 12400 ish. Only a move above 12750 would be bullish.

  31. 31
    reefguy Says:

    Increase in infrastructure requires increase in thru put; ie: raw demand for oil. gas, lng. Products to be made to supply consumer uses in china and india?

  32. 32
    zman Says:

    whoa oil??!! up $3

    crude inventories FELL 3.1 mm bls

  33. 33
    Nicky Says:

    Just had a trader on CNBC responding to the inventory figures who is normally very bullish who seems to have turned pretty bearish. Expects this market to sell off.

  34. 34
    zman Says:

    sharp drop in crude imports to 9.4

    refining back up to 85.9%

    gasoline came in very high with a build of 1.7 mm barrels

    good thing OPEC got their statement out before this hit, LOL!

  35. 35
    zman Says:

    Stocks are still struggling to believe the rally in the commodities.

  36. 36
    zman Says:

    fwiw, QMAR getting dragged up by EXM which reports next Wednesday. The dry bulks showing first signs of life in a week.

    Re 31 …they didn’t say but that would be my guess as the host said something about the Chinese dropping their bikes and buying cars and the Kuwaiti minister smiled.

  37. 37
    zman Says:

    nothing bullish in those numbers for the refiners.

  38. 38
    Nicky Says:

    Trying to get a grip on the Elliott wave count. Distillates and wti had been following the same count until today when distillates made new highs.
    WTI looks to be in the process of a wave ii – this remains my preferred count whilst the highs hold!

  39. 39
    Nicky Says:

    RBOB looking very soft – maybe a precursor for the rest of the complex.

  40. 40
    uop Says:

    Z –
    do you also analyse/watch vital metals for petroleum refining such as platinum, palladium, nickel etc.

    Wikipedia: under platinum they do not even list the most important application of platinum: in making catalyst for octane/gasoline making, without Pt you cannot make octanes,

  41. 41
    zman Says:

    re RBOB being a precursor…that one’s data really did not support a rally.

    uop – No I don’t. Platinum is making news, correct?

  42. 42
    zman Says:

    Sane – any API data out yet?

    Sambone, what was the symbol on the gasoline ETF?

  43. 43
    Bob Says:

    Z-The gasoline ETF is UGA

  44. 44
    Sambone Says:

    10:35 am EST

    Crude Swings Back Over $101, OPEC Holds Steady

    By BRIAN BASKIN
    Of DOW JONES NEWSWIRES

    HOUSTON — Crude oil futures traded higher Wednesday, as OPEC agreed to leave output unchanged, with members citing adequately supplied markets.

    Light, sweet crude for April delivery recently traded up $1.60, or 1.6%, at $101.12 a barrel on the New York Mercantile Exchange. April Brent crude on the ICE futures exchange traded up $1.16, or 1.2%, at $98.68.

    Commodities posted huge declines Tuesday, with oil showing its largest overall drop since November, reformulated gasoline blendstock, or RBOB, futures falling the most since May, and gold and silver shedding the most in a single day since Feb. 5. The 5.3% decline in RBOB came amid record trading volumes, Nymex Holdings Inc. (NMX) said Wednesday.

    The Organization of Petroleum Exporting Countries verbally agreed at the group’s meeting in Vienna to hold output steady, a move traders say was already priced into the market.

    “The oil market is currently stable,” said Saudi Arabia’s oil minister, Ali Naimi. “Stock levels are within the five-year average and there is no need to increase even one barrel of oil.”

    Attention now shifts to the U.S. Department of Energy’s release at 10:30 a.m. EST of oil and product inventory figures for the week ending Feb. 29. Analysts surveyed by Dow Jones Newswires expect a 2.3 million barrel increase, which would mark the eighth-straight gain. Gasoline inventories are seen rising by 900,000 barrels, with distillates expected to fall by 1.9 million barrels.

    The market hasn’t reacted strongly to the past few data releases, as large crude builds became routine. A surprise draw or overly excessive build still has the potential to rattle oil prices, however, said Mike Zarembski, senior commodities analyst at brokerage optionsXpress Inc. in Chicago.

    With oil supplies on the rise — as OPEC members pointed out with their decision — the market remains focused on technical factors, Zarembski said, including the weak dollar, which has sent speculators flooding into commodities that are priced against the U.S. currency.

    “That whole commodities-wide selloff tells us it’s more of a money game here than individual market fundamentals,” he said. “The market wants to move higher, and yesterday’s lows may be a near-term bottom.”

    James Crandell, a Lehman Brothers analyst, called the dollar-fueled oil rally overblown, but added that the market would still need a jolt on the supply or demand front to snap out of its climb.

    “To bring the near-term market into focus again, an eye-catching event is needed,” he wrote in a note to clients. “(Wednesday) brings an OPEC meeting and the weekly DOE stats release, neither of which we expect to be eye-catching, but could continue inertia going downward.”

    Front-month April RBOB recently traded up 4.55 cents, or 1.8%, at $2.5746 a gallon. April heating oil traded 6.46 cents higher at $2.8567 a gallon, up 2.3%.

    –By Brian Baskin, Dow Jones Newswires

  45. 45
    Sambone Says:

    UGA

  46. 46
    uop Says:

    Z – what is your view on SU, its up over 3$,
    Phil is quoting your info on oil and is shorting SU

  47. 47
    zman Says:

    thanks guys, they wouldn’t have one for HO would they?

    Everybody say go NFX and HK Go and come on EOG

    Dw Rigs and service catching a wave here but I’m holding off (other than the 2x pos in OII) as I just don’t trust the broad here. What’s the reason dejour for the rally, more Gasparino rumors? Like Nicky said, the econ data was un-inspiring and we have more to get through later this week + $102.50 oil can’t help …it’s not even helping XOM as the RBOB gets outpaced 2 to 1 today.

    uop – I own a little SU from about 10 days ago but did not report it as a blast as it was a partial fill and tiny. I think it runs to old highs. Phil at PSW quoting my stuff? I wonder how he gets it and how he comes to shorting it as I’m not exactly a bear here, except on NG.

  48. 48
    zman Says:

    uop – can you let me know what he’s quoting…I would not be short that.

  49. 49
    zman Says:

    oil up 3.70 at 103.19 … imagine if they had cut production.

  50. 50
    uop Says:

    Z –
    as per Phil: SU – I am salivating! We’re going to switch to the $105 puts, now $2.40 and go 20 in the DTP for $2.25 and 5 in the $10KP and $25KP if we hit $2, as that is too cheap to turn down! XXX

    in the meantime SU has gone up more,

    some of his followers got out of the puts, he has rolled up and doubled down.

  51. 51
    uop Says:

    Z- just sold 1/2 of my UNG at 46.65$, cannot finetune this as I also expect NG to drop soon ?

  52. 52
    bill Says:

    drystocks finnally bottomed out and up about 5 %

    Drys just locked in a 2 yr time charter at 115 k per day.

    the 822 m ebitda number assumed 114 k per day in the spot market!

    Drys is a 100 dollar stock trading at 75, imho.

    Futures are up big time and so is the physical market, in fact its charging back up to challenge its old highs

  53. 53
    zman Says:

    Uop – ahh, thanks for the information. ya know, Phil is a smart guy but he “hates” oil and trades from that mindset.

    I will short energy occasionally (selectively and often much to my chagrin). Despite $100+ oil and $9 + NG you can’t really say that the sector is expensive on PE, P/CF or TEV/EBITDA basis versus historical levels. SU mints $ over $60 and probably over $50. I think that SU is one of the poster child stocks for high dollar oil and as such I think it has a good chance of moving back into the mid teens if crude can maintain trip digits for even another week. Along that same vein APA and APC could easily mount moves to new highs here. (holding some April APC 70s now but out the APA).

    uop – again, glad to have your input. also glad, I only had an initial toe hold back into the refiners (small and getting smaller piece of VLO I should just dump but won’t yet)…that Spring run argument is getting pretty hard to make now and obviously, any run won’t come close to matching the 2007 spring/summer move for the likes of VLO/TSO/FTO/HOC/ALJ/ and WNR (which we shorted early and not enough of last year)

  54. 54
    zman Says:

    Bill – the sector is very mo-mo, more than it has been of late, these repeated down $5 days in DRYS and comparable % moves in the rest are for the birds when you can watch the rates rebounding as they have been to no effect on the group. Maybe today is the beginning of a multi-day catchup?

  55. 55
    bill Says:

    yes,that what im thinking. When it goes down , its a 4 or 5 day run. the same when it goes up

    the mo-mo guys jump in and out of this all the time

    25 % of the float is shorted and i think one of these times the stock will keep running..up ( I hope)

    The bdi is up from 5615 to 8162 yesterday and i think it will be up another 200 tomorrow (for today) yet the stocks havent really moved

  56. 56
    bill Says:

    The bdi is up from 5615 end of january so rates are up almost 50 % in 1 month and drys is mostly spot

  57. 57
    zman Says:

    lettuce prey someone notices 😉

  58. 58
    zman Says:

    anybody got the recommendation that’s holding CHK’s feet to the floor today? looks like a broker comment.

  59. 59
    zman Says:

    Bill – this is the best day the QMAR / EXM spread has enjoyed in quite some time.

  60. 60
    zman Says:

    crude just touched new high of 103.98

  61. 61
    zman Says:

    oil up 4.70 over 104. Stocks not really buying it. I can’t believe the broad market isn’t crapping out.

  62. 62
    reefguy Says:

    12 mo NYMEX NG strip now $10.04

  63. 63
    reefguy Says:

    12 mo CL strip $100.63

  64. 64
    zman Says:

    Producers that don’t at least grab some costless collars up here should have their heads examined. Talk about locking in the one thing you can’t control (price) at the best price you’ve ever seen.

  65. 65
    xweto Says:

    Crude run on the hourly from open is parabolic and VERY overbought … looks like a shark feeding frenzy

  66. 66
    zman Says:

    oil up 5%,
    nat gas up 3%

    xoi up 1.7%
    xng up 1.3
    oih up 3% – that oih chart is not pretty.

  67. 67
    Nicky Says:

    Rumours of a fund on the wrong side of a distillates trade making things worse apparently…

  68. 68
    zman Says:

    X – agreed.

    N – wouldn’t be surprising. Have not looked at the short interest there in awhile. In natural gas land you just know someone big is going to implode. You can’t have this kind of a run almost 25% in a month now and record short interest and not have a problem.

  69. 69
    zman Says:

    HK just officially broke out.

  70. 70
    bill Says:

    someone is on wrong side of ng

    ME!!!

  71. 71
    zman Says:

    Nicky said NG was going to 10 a couple of times, guess she was right.

  72. 72
    Brian08 Says:

    You and me both bill…This is friggin’ painful…

  73. 73
    Nicky Says:

    John Kilduff now talking $108.00

  74. 74
    T-Tupp Says:

    anyone have an opinon on the abk halt?

  75. 75
    ychong Says:

    Z, my oil and gas stocks are doing well, but refiners aren’t. I know that the crack spreads are kind of stuck in the mud with the crude price’s advances of late and the build in gasoline stock.

    I am thinking about the future (spring/summer) gasoline demand vs. future gasoline supply. What is your prognosis for the refiners this spring/summer? (i.e., how much of crack spreads improvement do you anticipate?)

  76. 76
    Nicky Says:

    nat gas now gone absolutely vertical. nightmare. there is a possible fib target between 9790 and 9890

  77. 77
    T-Tupp Says:

    refiners getting tuned. not going to chase it but tso looks like it may test 32, but i doubt vlo will go to its jan lows.

  78. 78
    zman Says:

    y – not as much as last year probably goes without saying. OPEC said the outlook for refiners this Spring/Summer is over-zealous on the part of the Street. I just have a little VLO and nothing else. There is not visibility on improving cracks with 14 year high in gasoline inventories. VLO and FTO may benefit from higher differentials (sweet vs sour as they can run more sour crude than most) but its hard to get excited about them right now. It very much depends on the consumer and whether or not they keep driving cars and speculators and whether or not they keep driving prices.

  79. 79
    uop Says:

    Z – NG going wild, it seems ready to short??

  80. 80
    zman Says:

    anybody got an angle on that ABK and what’s holding the broader up with oil at 104?

    uop – unfortunately I was early on that short…three tranches of UNG puts all dying. Not saying you are wrong and I don’t get the price here other than a continually squeeze and replenishment of shorts. I went in on days just like this one at first and watched it run on up. Then I tried my last set UNG 43s on a reversal day. The dip buying is very well organized. My save is that I’m more long calls on the E&Ps.

  81. 81
    T-Tupp Says:

    z re #80, cvx & xom are holding up the dow with 104$ oil

  82. 82
    uop Says:

    Zman:

    now sold all my UNG as this is unreal,
    now I will have to make money on my UNG puts on the way down, I have apr46puts,

    also: still think that 47.5$ on UNG will not hold, this is going higher because of the frenzy in oilprice.

    have order in on shorting UNGClls for $1.90.

  83. 83
    Nicky Says:

    CNBC now calling for $120 by June. You gotta love em! And they will be asking why the broader market has tanked next!

  84. 84
    zman Says:

    N – I take it it was a guest? Which reminds me, don’t ya know PF is in a bad mood?! Or did he officially flip?

  85. 85
    Nicky Says:

    They were quoting some options trader Z.

    PF got stopped out of all his longs yesterday – he must be mad!

  86. 86
    Nicky Says:

    AMBAC deal close to be announced. Don’t be surprised to see them sell it after an initial pop.

  87. 87
    Nicky Says:

    Earlier Elliott wave analysis for WTI was totally wrong! I should have heeded distillates.
    So we are in v. It could be i of v or this could end up being all of v.

  88. 88
    dmh Says:

    Z. If you have time can you look at this article re drillers and specifically WFT.
    Not sure I follow his logic re potential price cuts when there are not enough rigs for overseas work.

    Thanks

    http://www.moneyshow.com/msc/investors/article.asp?aid=tptp030608-14339&iid=tptp030608&scode=010473

  89. 89
    Nicky Says:

    This wave at least looks close to completion in wti and distillates. Couple of small waves up to finish it which we are now seeing….

  90. 90
    j Says:

    KWK moving with some decent volume.

  91. 91
    zman Says:

    D – I read that twice. I don’t see WFT as particularly unique. I also don’t get the pricing argument. Demand is so strong that they are constrained so they will cut prices? That’s a new one. It seems like he’s mixed anecdotal evidence from the U.S. and north American onshore markets where there is some softness with the international offshore markets where is correct that demand is high. WFT is smaller and cheaper than SLB. That’s good. But they have north American exposure (half of their revenues) as well so there’s that softness. On a forward basis it trades at 12x ’09 vs HAL at 11x and its growing faster…so maybe not a bad pick on valuation. But the immunity from softness argument, I don’t get. Wyoming will probably have a bunch to add late tonight here.

  92. 92
    zman Says:

    So was that the ABK deal Gasparino was looking for? Market no seem to like.

  93. 93
    zman Says:

    KWK – Stock is in full breakout mode, which makes good sense on a day when gas is up $0.45! and oil is up $4.60! Those guys are very leveraged to gas (obviously) and to liquids prices (natural gas liquids). That’s one of the those companies that I look at every once in awhile and own for short periods every great once in awhile, like SWN…growing like a weed and priced like it and run like a very efficient machine. I have not even looked over their year end reserves and 2008 guidance. I’m not going to buy a name like that that is so commodity price levered on a day like today though, lol. I’m also not familiar with their hedge position.

  94. 94
    zman Says:

    more KWK – just looking at a table of 2007 E&P finding costs from Johnson Rice and KWK was best in show (again) at $1.38, next guy up is XTO, average is closer to $2.33 per Mcfe. Those results are up from .99 in 2006 but still, they lead the pack. If you can find it and develop it for $1.40 and operate (get it out of the ground) for cash costs of $2 ish (LOE+G&A+production taxes) that’s a pretty impressive margin with gas at almost $10!

  95. 95
    Sambone Says:

    Just got back.

    Ambac Will Try To Raise $1.5B Via Equity Sales To Defend AAA

    NEW YORK — Ambac Financial Group Inc. (ABK), the battered No. 2 U.S. bond insurer, said Wednesday it will try to raise $1.5 billion in fresh capital to defend the key AAA rating at subsidiary Ambac Assurance.

    Ambac will try to sell $1 billion in common stock and $500 million worth of equity units — notes that must be converted to common stock in May 2011.

    The common stock offering will dilute the holdings of existing shareholders. Ambac’s shares dropped 10% on the news to $9.65.

    Ambac warned the offerings may not be enough to prevent a later downgrade of Ambac Assurance’s AAA ratings by Moody’s Investors Service or Standard & Poor’s. Were that to happen, the company said in a prospectus filed with the Securities and Exchange Commission that it could retreat to “a significantly reduced business plan” and operate with AA ratings.

    Ambac previously scrapped plans to raise at least $1 billion in equity capital after its shares plunged in mid-January, saying market conditions weren’t favorable.

    Fitch Ratings responded by stripping Ambac’s insurance units of their AAA ratings. Standard & Poor’s last week affirmed its AAA ratings, but said a downgrade is still possible. Moody’s has the ratings on watch for a downgrade, but hasn’t yet weighed in.

    —By Andrew Dowell, Dow Jones Newswires

  96. 96
    zman Says:

    TLM – don’t know if any still holds this but they had a nice find in the North Sea yesterday. Stock is acting ok.

  97. 97
    Sambone Says:

    12:39 pm EST

    Nymex Crude Tops $104 On Lower Inventory

    BY BRIAN BASKIN
    Of DOW JONES NEWSWIRES

    HOUSTON — Crude-oil futures set a new intraday record high Wednesday on the back of a surprise draw in U.S. oil inventories and a fresh low for the dollar.

    Light, sweet crude for April delivery recently traded at $104.09 a barrel, up $4.57, or 4.6%, on the New York Mercantile Exchange. The April contract traded as high as $104.56.

    Futures, already up following OPEC’s decision to hold oil output steady, took another leg up following weekly U.S. government data showing a 3.1-million-barrel draw in crude-oil inventories last week. Most analysts had expected stockpiles to rise. Shortly thereafter, the dollar hit a new low against the euro. Crude stocks and the dollar are among the most closely watched indicators for the direction of oil prices.

    “We react to it kneejerk, with the dollar,” said Peter Donovan, a vice president at Vantage Trading in New York. “The feeling is the market is just a runaway train, sellers are just extremely hesitant to get in front of it, and who can blame them?”

    The U.S. data released by the Energy Information Administration showed an unexpected draw due to lower imports, which tend to be volatile, but also a 1.2-percentage-point increase in refinery utilization, which may indicate that U.S. oil demand is more resilient than thought, analysts said.

    “Second-quarter crude demand might actually go up,” said Antoine Halff, deputy head of research at brokerage Newedge USA in New York, who was one of the few analysts to predict a draw. “It seems that a lot of the spring refining maintenance has taken place early this year.”

    Gasoline inventories rose by 1.7 million barrels, compared with an expected 900,000-barrel increase, while distillate stocks fell 2.3 million barrels, slightly more than the 1.9-million-barrel forecasted decline.

    Front-month April reformulated gasoline blendstock, or RBOB, is trading up 6.08 cents, or 2.4%, at $2.5899 a gallon. April heating oil trades 14.63 cents higher, or 5.2%, at $2.9381 a gallon.

    The other story dominating trading is the dollar, which hit a low against the euro for the sixth time in seven sessions. Oil and other commodities priced in U.S. currency become relatively cheaper as the dollar weakens, which has prompted speculators to bid up futures prices.

    The Organization of Petroleum Exporting Countries decided earlier Wednesday not to alter output. While the decision itself was already factored into oil prices, the rhetoric surrounding the decision was not, said Donovan, with Vantage Trading.

    “The oil market is currently stable,” said Saudi Arabia’s oil minister Ali Naimi. “Stock levels are within the five-year average and there is no need to increase even one barrel of oil.”

    —By Brian Baskin, Dow Jones Newswires

  98. 98
    Sambone Says:

    OPEC Holds Steady, Rebuffs Calls From Consumers

    By SPENCER SWARTZ andGRAINNE MCCARTHY
    Of DOW JONES NEWSWIRES

    VIENNA — OPEC held its production policy unchanged Wednesday, expressing confidence in the market and rebuffing calls from large consuming nations to pump more oil to help alleviate scorching crude prices.

    OPEC Backs Venezuela In Exxon Row, Urges Amicable Solution

    Following the meeting, Saudi Arabia’s powerful Oil Minister Ali Naimi said the global oil market is stable, and that the 13-member group doesn’t see a need to meet again before their next scheduled gathering in September.

    The decision comes amid heightened fears about the health of economic growth in the U.S., the world’s largest energy consumer, and against a backdrop of rising crude inventories in the developed world.

    The Paris-based International Energy Agency, the energy watchdog for the world’s major industrialized nations, disputed that OPEC could be so certain that there was enough oil on the market.

    “There’s something we have to keep in mind about stock levels: we don’t know where stocks are for 45% of the world, where they could be lower,” said Lawrence Eagles, head of the oil market division at the International Energy Agency, referring to uncertainly about oil inventories in China and elsewhere.

    Crude oil futures moved further into uncharted territory after OPEC held steady, getting an additional jolt from a surprise draw in U.S. oil inventories and a fresh low for the dollar.

    Light, sweet crude for April delivery recently traded at $104.09 a barrel, up $4.57, or 4.6%, on the New York Mercantile Exchange. The April contract traded as high as $104.56. Crude futures breached their all-time, inflation-adjusted highs on Monday.

    OPEC, which produces four out of every ten barrels of oil consumed globally, says there’s no demand for extra oil and continues to lay the blame for soaring oil prices at the door of what Naimi called “tremendous speculation.”

    “There are even those who buy futures and speculate that oil prices will reach more than $200 in 2013 and 2015.” he said. “The most important thing that OPEC and Saudi Arabia look at is the stability of market factors.” the U.S. becomes clearer.

    OPEC President Chakib Khelil went further, saying the global market is being affected by what he called “the mismanagement of the U.S. economy,” and that U.S. problems were a key factor in the cartel’s decision to hold off on any action.

    “If the prices are high, definitely they are not due to a lack of crude,” he said. “They are due to what’s happening in the U.S. There is sufficient supply. There’s plenty of oil there.”

    Khelil’s comments came one day after President Bush lashed out at the organization, saying it would be a mistake for OPEC not to pump more.

    Cut Down The Line?

    Crude oil traders say OPEC is powerless to wield much influence over prices, which are currently taking their cue more from Federal Reserve monetary policy, rising inflation fears and the weak dollar than oil supply and demand factors.

    Still, many analysts believe the next few months could herald a change in OPEC policy, with producers either officially or unofficially taking more barrels of oil off global markets in the event of a marked slowdown in the U.S. making a real dent in energy demand. A big uncertainty in this scenario centers on how well developing economies, most notably China and India, can withstand a U.S. slowdown or recession.

    OPEC ministers will meet informally on the sidelines of the International Energy Forum in April in Rome, a senior OPEC delegate said.

    Venezuela’s escalating legal dispute with Exxon Mobil Corp. (XOM) emerged as a significant sideshow at OPEC’s second meeting of the year. Several ministers expressed support for South America’s largest oil producer in the commercial dispute that could set a milestone in conflict resolution between oil-rich nations and oil companies.

    In its official statement, OPEC supported Venezuela, saying it prefers negotiated solutions to the kind of unilateral court action pursued by the U.S. oil major that has resulted in a partial freeze on the Andean nation’s assets.

    —By Spencer Swartz, Dow Jones Newswires

  99. 99
    Sambone Says:

    Uncle Phil

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

  100. 100
    jiveyjr Says:

    I hold TLM…like the stock very much…thx for the update

  101. 101
    dmh Says:

    Z. Thanks for #91

  102. 102
    zman Says:

    D & J – any time. J – me too re TLM – high quality company…seems to have hit a slow spot that they are working through. Gotta think they get bought.

    APC just a hair short of a all time closing high…that looks higher soon to me.

    NFX – up $2 and into all time record territory. Nice to see after they got snubbed over 4Q results.

    HK got within 40 cents of the record and a beautiful chart. May punt the Marches and hang onto the Aprils this week.

  103. 103
    ram Says:

    I can see why no one likes the ABK fix if people do the math on the $1.5b infusion. At an average of $200,000 loan defaults, that covers only 7,500 homes. So I just got uncomfortable, because it could take $1.5T to cover ABK.

  104. 104
    ram Says:

    Wait, so if I have $500,000 worth of equity in my home, I’m allowed to back $50,000,000 or greater worth of mortgages. Yikes!!

  105. 105
    Nicky Says:

    Z – there seems to be a blast of cold weather coming back this weekend – any idea how long it is going to last? For obvious reasons!

  106. 106
    zman Says:

    Ram … and still I read and hear analysts and fund managers who say (and have been saying) to sell energy and buy the financials. My thoughts have been:

    1) just b/c commodity prices are high and the energy sector has run it doesn’t mean that the stocks are expensive. In fact, most energy stocks are cheaper than the S&P500 multiple and growing faster.

    2) the financials still seem prone to “balance sheet risk” Either on it or off it, its hard to tell how much liability is out there.

    I know the first point is still true, is the second? Thanks in advance for your answer Ram.

  107. 107
    zman Says:

    Oil trading to up $5 in the after market.

    Whiskey Tango Foxtrot??? People weren’t expecting OPEC to boost production. So what gives?

    This would certainly be what I’d call an over-reaction to the draw on crude stocks. That was an import glitch and a bit of increased demand. I don’t think you can extrapolate that demand into a “the economy is just fine” assumption. Anybody see anything? I’m getting ready to punt some names if this gets much sillier.

  108. 108
    zman Says:

    Nicky – the weather maps keep rapidly changing. Now the NWS shows colder than normal across 75% of the country in the 1 to 5 day range, then warm in the west, cool in the east in 6-10 and 11-15 day forecast. Just can’t shake the cold.

  109. 109
    reefguy Says:

    oil gonna see 105 after hours

  110. 110
    Nicky Says:

    All I hear Z is that fundamentals are no longer of concern and that the funds are just piling in….$ was weaker again today too although that looks to be nearly done and a bounce due.
    Crude up another 42 after the close – insanity but where does it end.
    RBOB also staged a massive rally into the close – that certainly is not on fundamentals.

  111. 111
    zman Says:

    Reef – yep, thinking about taking some CEO or PTR that could jump if Asian energy rallies overnight. They took a big hit yesterday, getting no bounce today.

  112. 112
    ram Says:

    Unfortunately, there is only speculation on how many more forclusures will happen. But what is certain, only our Government has the capacity to meet the obligation of payments through printing as much money as possible. Also, what a knucklehead Bernake is to suggest the banks should compress the loans priciple so people are not upside down and run away from their loans. What army of people are going to look at each loan and adjust accordingly? He has proven that pure economic education can be a downfall when it comes to leading the Federal Reserve Board. He can’t be the best. Nicky or Samb, would you offer your services, please?

  113. 113
    Nicky Says:

    That little pop and now the drop in wti after the close may now signal a pullback in crude…

  114. 114
    zman Says:

    Nicky – when the crowd decides to pick some other shiny bauble, crude is going to get whacked, not to be too technical. Personally I think it will come from a mid day reversal after a big gap up for no particular reason. I’m weighing taking both profits and losses to get clear.

    Ram – I couldn’t agree more about Buzzkill Ben. I thought of calling him to ask about getting my mortgage reduced. Adam Smith is spinning at high velocity in his grave.

  115. 115
    zman Says:

    Friedman Billings ups APC price target from $75 to $82.

    S&P confirms APC revolver at BBB-. Isn’t that below ABK’s debt rating?

  116. 116
    rseidman Says:

    Z: Wouldn’t we have a better chance making a profit on DRYS if we rolled to April?
    Or are you expecting a miracle?

  117. 117
    Nicky Says:

    On the subject of Ben – look at this:

    Some nice quotes from our economic “stewards”. Lies begat lies. Or
    incompetence exemplified.

    Be sure and check the comparison with the Japanese Real Estate bubble…

    Bottom in 2012-2014? Matches my time frame for the end of the stock
    markets’ bear.

    And that time frame is also my prediction for the end of the Federal Reserve
    system.

    Housing Bottom Nowhere in Sight

    Bust
    no longer confined to high-value states.

    Mike Mish Shedlock

    Feb 15, 2008 11:00 am

    Inquiring minds have been asking me how far the housing bubble busting has
    progressed. Many are asking “Is this the bottom?” It’s a good question, so
    let’s take a look at several viewpoints: Bernanke’s, mine, and a friend of
    mine who prefers to be known simply as “BC”.

    CNBC is reporting Bernanke Expects
    Housing Recovery by Year End:

    Federal Reserve Chairman Ben Bernanke told lawmakers Tuesday he expects the
    downtrodden U.S. housing sector to improve by the end of the year, a senator
    who participated in the closed-door meeting said.

    “He let us believe that the housing situation should begin to ameliorate by
    the end of the year,” Sen. Pete Domenici, a New Mexico Republican, told
    reporters.

    An Alternative Viewpoint

    Using the Japanese land bust model as my guide, here is how I have called
    things in real time.

    Click to enlarge

    The Spring 2008 arrow was just added. The arrow is one notch closer to its
    final destination.

    Flashback March 26, 2005

    The initial data point was established in the post
    It’s a Totally New Paradigm on March 26, 2005. Here are some excerpts
    from that post.

    * Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says
    that “South Florida is working off of a totally new economic model, newer
    than any of us have ever experienced in the past.” He predicts that a
    limited supply of land coupled with demand from baby boomers and foreigners
    will prolong the boom indefinitely.

    * “I just don’t think we have what it takes to prick the bubble,” said
    Diane C. Swonk, chief economist at Mesirow Financial in Chicago, who was an
    optimist during the 90’s. “I don’t think prices are going to fall, and I
    don’t think they’re even going to be flat.”

    * Gregory J. Heym, the chief economist at Brown Harris Stevens, is not
    sold on the inevitability of a downturn. He bases his confidence in the
    market on things like continuing low mortgage rates, high Wall Street
    bonuses and the tax benefits of home ownership. ”
    It is a new paradigm” he said.

    Flashback October 27, 2005

    Inquiring minds may wish to review
    Bernanke: There’s No Housing Bubble to Go Bust.

    Ben S. Bernanke does not think the national housing boom is a bubble that is
    about to burst, he indicated to Congress last week, just a few days before
    President Bush nominated him to become the next chairman of the Federal
    Reserve.

    U.S. house prices have risen by nearly 25 percent over the past two years,
    noted Bernanke, currently chairman of the president’s Council of Economic
    Advisers, in testimony to Congress’ Joint Economic Committee. But these
    increases, he said, “largely reflect strong economic fundamentals,” such as
    strong growth in jobs, incomes and the number of new households.

  118. 118
    Nicky Says:

    Just gonna post something lengthy but makes very interesting reading and relates to Mr Bernanke and how competent he is!

    Some nice quotes from our economic “stewards”. Lies begat lies. Or
    incompetence exemplified.

    Be sure and check the comparison with the Japanese Real Estate bubble…

    Bottom in 2012-2014? Matches my time frame for the end of the stock
    markets’ bear.

    And that time frame is also my prediction for the end of the Federal Reserve
    system.

    Housing Bottom Nowhere in Sight

    Bust
    no longer confined to high-value states.

    Mike Mish Shedlock

  119. 119
    Nicky Says:

    Feb 15, 2008 11:00 am

    Inquiring minds have been asking me how far the housing bubble busting has
    progressed. Many are asking “Is this the bottom?” It’s a good question, so
    let’s take a look at several viewpoints: Bernanke’s, mine, and a friend of
    mine who prefers to be known simply as “BC”.

    CNBC is reporting Bernanke Expects
    Housing Recovery by Year End:

    Federal Reserve Chairman Ben Bernanke told lawmakers Tuesday he expects the
    downtrodden U.S. housing sector to improve by the end of the year, a senator
    who participated in the closed-door meeting said.

    “He let us believe that the housing situation should begin to ameliorate by
    the end of the year,” Sen. Pete Domenici, a New Mexico Republican, told
    reporters.

    An Alternative Viewpoint

    Using the Japanese land bust model as my guide, here is how I have called
    things in real time.

    Click to enlarge

    The Spring 2008 arrow was just added. The arrow is one notch closer to its
    final destination.

  120. 120
    Nicky Says:

    Flashback March 26, 2005

    The initial data point was established in the post
    It’s a Totally New Paradigm on March 26, 2005. Here are some excerpts
    from that post.

    * Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says
    that “South Florida is working off of a totally new economic model, newer
    than any of us have ever experienced in the past.” He predicts that a
    limited supply of land coupled with demand from baby boomers and foreigners
    will prolong the boom indefinitely.

    * “I just don’t think we have what it takes to prick the bubble,” said
    Diane C. Swonk, chief economist at Mesirow Financial in Chicago, who was an
    optimist during the 90’s. “I don’t think prices are going to fall, and I
    don’t think they’re even going to be flat.”

    * Gregory J. Heym, the chief economist at Brown Harris Stevens, is not
    sold on the inevitability of a downturn. He bases his confidence in the
    market on things like continuing low mortgage rates, high Wall Street
    bonuses and the tax benefits of home ownership. ”
    It is a new paradigm” he said.

    Flashback October 27, 2005

    Inquiring minds may wish to review
    Bernanke: There’s No Housing Bubble to Go Bust.

    Ben S. Bernanke does not think the national housing boom is a bubble that is
    about to burst, he indicated to Congress last week, just a few days before
    President Bush nominated him to become the next chairman of the Federal
    Reserve.

    U.S. house prices have risen by nearly 25 percent over the past two years,
    noted Bernanke, currently chairman of the president’s Council of Economic
    Advisers, in testimony to Congress’ Joint Economic Committee. But these
    increases, he said, “largely reflect strong economic fundamentals,” such as
    strong growth in jobs, incomes and the number of new households.

  121. 121
    Nicky Says:

    Cumulative Real Change Of Southern California Home Prices

    My friend “BC” just sent me his estimate as to where we are, also in
    graphical form.

    Click to enlarge

    Comments from “BC”:

    * The SoCal housing bust remains on track (and for the US overall).

    * Nominal prices will likely not bottom out until the early to
    mid-’10s.

    * Were the historical pattern to repeat, real house prices will not
    again reach the ’04-’06 peak until the mid to late ’20s or perhaps even
    later.

    * US nominal household net wealth is set to decline steadily over the
    next 4-6 yrs. (and possibly well beyond), a phenomenon not experienced since
    the Great Depression in the US and in Japan since the early to mid-’90s.

    * The Federal Reserve cannot print US household net wealth into
    existence.

    See
    When Will Housing Bottom? for additional charts from “BC”. The
    striking thing to me is how similar the Japan Nationwide Land Prices Chart
    is to the Southern California chart above that I have been using as my
    model.

    The New Paradigm

    The new paradigm is now called walking away. There is even a national
    referendum on walking away. See
    Moral Obligations Of
    Walking Away for details. This paradigm is still in the early innings.

    Sacramento Region Foreclosures Nearly Equal Home Sales

    Auction signs are now sprouting up all over California. The Sacramento
    region is being hit especially hard as
    foreclosures nearly equal home
    sales in January.

    In the most ominous indicator yet of the Sacramento region’s struggling
    housing market, January saw nearly as many people lose their homes as buy
    them. The nearly equal number of home sales and foreclosures stems from
    still-rising numbers of bank repossessions and what’s typically one of the
    slowest months on the real estate sales calendar.

    Still, the tallies reveal an unprecedented phenomenon in a region where
    sales and home values have been declining since summer 2005. Every business
    day during January in the region, an average of 85 people lost their homes
    to lenders, almost double the number of foreclosures from September,
    according to Foreclosures.com, a Web site for real estate investors.

    The foreclosures — more than 10,000 last year in the eight-county capital
    region — are fast pushing down home sales prices. Sacramento County’s 1,077
    closed escrows for new and existing homes were the lowest for January since
    1996. The 354 home sales in Placer County were the lowest since 1995 for a
    January.

  122. 122
    Nicky Says:

    All Real Estate Is Local

    Common wisdom says there is no such thing as a national housing bubble. The
    reason often cited is “All Real Estate Is Local”.

    Please consider a chart of total sales by region from the National
    Association of Realtors (NAR).

    Click to enlarge

    Inquiring minds will also want to take a look at

    state by state data. And with a hat tip to
    Calculated Risk for the previous link, one can see that year over
    year sales declined in 46 states plus D.C, with no data available for
    Indiana, New Hampshire, and Idaho. Sales increased in South Dakota.

    Clearly the real estate bust is well contained to 49 states plus D.C. It’s a
    good thing for those South Dakota numbers too, otherwise we might be talking
    about the busting of the national housing bubble.

  123. 123
    zman Says:

    R – yes we would and not expecting but hoping. 12 days left after today. The 95s are not worth selling in my book so they sit out there as a long shot. The 85s can definitely get back to whole. As far as going to April…I’d like to see another day of up trading. It fell over $10 in two days for no reason I could find. It may give back today’s gain for same reason (none) tomorrow. If we get another up day on rates you’d think the recovery would continue. But I’m feeling a little gunshy. Hoping the EXM acts as a catalyst next week for my QMAR as well. But to get back to your ?, yes, given the same expected move up it would be wise to roll or at least add the Aprils.

  124. 124
    Nicky Says:

    Sorry none of the charts posted but this link is worth a look:

    https://image.minyanville.com/assets/FCK_Aug2007/File/Pics5/japan-land-pric
    es-update-2008-02-rgb-176-10-10.png

  125. 125
    zman Says:

    Nicky – that is funny. funny and sad. I couldn’t get in that last link.

  126. 126
    Sambone Says:

    3:26 pm EST

    Nymex Crude Ends At Record High; Stockpile Surprise

    By BRIAN BASKIN
    Of DOW JONES NEWSWIRES

    HOUSTON — Crude-oil futures surged to a record high Wednesday on an unexpected decline in U.S. oil inventories and further weakening of the dollar.

    Light, sweet crude for April delivery settled $5 higher, or 5%, at $104.52 a barrel on the New York Mercantile Exchange. The April contract traded as high as $104.95, topping the previous intraday record by $1. The outright single-day gain is the biggest in at least two years.

    April Brent crude on the ICE futures exchange closed $4.18 higher at $101.70.

    Oil had settled below $100 a barrel Tuesday, but quickly returned to triple digits as the Organization of Petroleum Exporting Countries moved to maintain current output levels, with the Saudi Arabian oil minister saying that the markets didn’t need more oil.

    The U.S. Department of Energy’s inventory data, showing a 3.1 million-barrel decrease whereas analysts had expected a 2.3 million-barrel build, was what truly set off the rally, however, analysts said. Prices immediately shot up by more than $1.

    “They’re looking at the unexpected crude draw and jacking (prices) higher,” said Kyle Cooper, director of research with IAF Advisors in Houston. “The market remains in a bullish mindset, you have to respect that.”

    A larger-than-expected draw in distillates sent futures in heating oil to an all-time high, helping pave the way for the rest of the energy complex. With spring and summer typically periods of low demand for heating oil, Wednesday’s gains could prove temporary, analysts said.

    “This week’s stats are broadly neutral,” wrote analysts at Societe Generale, who noted that the draw in oil was countered by a big increase in already-swollen gasoline inventories. “The most bullish element — heating oil — is short-lived.”

    Front-month April reformulated gasoline blendstock, or RBOB, settled 11.30 cents higher, or 4.5%, at $2.6421 a gallon. April heating oil settled 15.13 cents higher, or 5.4%, at $2.9431 a gallon.

    Crude received an extra push to its latest record as the dollar hit a new low against the euro, less than an hour after the EIA data release. Oil — along with most other commodities — has soared over the last month as the dollar has weakened.

    —By Brian Baskin, Dow Jones Newswires

  127. 127
    Sambone Says:

    N – Wow, you sound like me!

  128. 128
    Nicky Says:

    Z – try and copy and paste it.

  129. 129
    ram Says:

    NFX???

  130. 130
    zman Says:

    loving closes on APC over 66, NFX over 57

  131. 131
    zman Says:

    Newfield = NFX

  132. 132
    ram Says:

    Yes, thanks. #128 was in ref. to #107 about NFX punting to lock in $$$.

  133. 133
    zman Says:

    gotta run

  134. 134
    redjack Says:

    Strange…..
    ATHENS, GREECE–(MARKET WIRE)–Mar 5, 2008 — Excel Maritime Carriers Ltd. (NYSE:EXM – News), an owner and operator of dry bulk carriers and a provider of worldwide seaborne transportation services for dry bulk cargoes, announced today that on Monday, March 17, 2008, after the close of the market in New York it will release its results for the fourth quarter and year ended December 31, 2007, rather than the previously announced date of Wednesday, March 12, 2008.

    The company’s management will not host a conference call.

  135. 135
    zman Says:

    Ram – agreed, nice. I think easily doable now that you will have a lot of chart guys going “oh, oh, look at that” and if they can run oil into the weekend…don’t know about that but maybe a run on $105 + before the drunk wears off and the hangover begins.

    RJ re 133…What the heck kind of news announcement is that. I seriously think they were originally scheduled to report on 3/3, then 3/12 now 3/17 AND no conference call. Hmmmm.

  136. 136
    zman Says:

    Profit taking over-taking crude after a morning bounce within a nickel of 106

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