18
Apr

Friday – Expiry Watch + SLB Reports A Brick But Sees Bright Outlook

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SLB missed which is not entirely unexpected. Guidance/general feel of their outlook is much more important than the quarter that's in the bag. I'll likely be adding to the May $100 calls today or the May $95s if the minor drubbing the stock is taking in the premarket persists into the conference provided that I like what I hear on that call. Otherwise, I'll be looking to remove the last two viable April options from my books (TLM and the $50 UNG puts) later today. Earnings start to gear up next week with more service names followed by the beginnings of the producers later in the week before the real onslaught of 1Q results hits in the following week. Have a great weekend if I don't see you in comments!

In Today's Post:

  1. Commodity Watch:
  2. Holdings Watch:
  3. Earnings Watch: (SLB)

Commodity Watch:

  • Crude Oil:closed down $0.07 to $114.86 yesterday in boring trading. Despite constant calls for its demise I think traders will take it higher on the most minor of disruptions at present. This morning crude is trading of $1.50 to $2.00 in a bout of early morning technical profit taking as the dollar makes small gains on the Euro. It's not surprising given the recent run in crude but I don't think it's the beginning of "the end" for crude by any stretch although the bears will be coming out of the wordwork today. 
  • Mexico Exports Watch: 2 of the 3 oil export ports which send crude to the U.S. reopened on Tuesday. The status of the third port is not yet clear however its likely we are in for one more weak week of crude imports.
  • Refinery Restarts: COP restarting a New Jersey gasoline unit today and I've seen a number of units restarted in the last few days so we may have seen the lows on utilization. While this taking gasoline prices lower early this morning which is weighing on crude, it will result in higher crude demand in a week or so.
  • Natural gas eventually traded off 4 cents to $10.34 after the EIA reported natural gas in storage increased by 27 Bcf, well above the consensus which called for an injection of 16 Bcf. If you missed last night's gas review post click here. This morning gas is trading off $0.10 to $0.15 on a percentage mirror of crude.

Holdings Watch:

CALLS:

  • (PQ) - Entered PQ May $22.50 Calls (PQEX) for $0.35.
  • (SLB) - Entered SLB May $100 Calls (SDBET) for $1.95.

PUTS: No trades yesterday

Earnings Watch:

SLB - misses 1Q08 (not entirely unexpected) buy argues for higher growth later in 2008  

  • EPS of $1.06 (from continuing ops) vs expectations of $1.12
  • Revenue came in at $6.29 B vs consensus of $6.32 B.
  • Operations show YoY and sequential improvements in North America and YoY improvements in Latin America, Europe, and Middle East / Asia.
  • Wester Gecko, their seismic division, results were off due to the timing of Gomex lease sales. 

Guidance: they see strengthening growth as the year continues due to:

  • thin excess global oil supply,
  • bigger than expected drawdown in U.S. natural gas inventories
  • they therefore see capex on the part of the Majors and E&Ps remaining higher for a longer period than previously thought.

Buyback Reloaded. SLB has 36.9 mm shares out of a previously approved 40 mm shares for $2.73 B. They upped the ante to $8 billion worth of additional shares (84 mm shares, or 7% of the outstanding at current prices).

Conference Call: 9 Est. Key things to listen for will be their North American activity outlook (U.S. but also Canda) and thoughts on when  seismic will ramp back up. 

Reporting Monday: (HAL) - before the open - and (NBR) after the close.  

Odds & Ends

Analyst Watch: RBC takes price target on (SPWR) from $80 to $99 (with the stock at $86.80 following yesterday's earnings), RBC also cut (LNG) price target from $50 to $20 - talk about asleep at the wheel...take a look at the daily chart on that one. (ZOLT) target trimmed from $45 to $40 at Jesup. 

Housekeeping Watch: I'll have a short "What Up With The Bakken Piece" out hopefully Sunday. Lots of maps to help get your bearings and lots of participant impact stats as well.

 

186 Responses to “Friday – Expiry Watch + SLB Reports A Brick But Sees Bright Outlook”

  1. 1
    zman Says:

    SLB – conf call started, they’re reading the press release highlights now. Hoping the stock stays off until open but it is moving up slowly.

  2. 2
    zman Says:

    HAL off early on the SLB which may also be an opportunity.

  3. 3
    Sambone Says:

    5:28 am EST

    Crude Edges Lower In Light Trade

    Dow Jones Newswires
    From Market Talk
    0920 GMT [Dow Jones] Crude oil futures drift lower in thin volumes, the market is taking a breather after a series of record highs this week. Little fresh news to steer prices — although traders eye reports of possible fresh militant violence in Nigeria — while market offers little direction from steady dollar Friday. “Oil has been taking so widely its directional clue from the dollar that when the dollar does not move, oil does not know where to go,” says Oliver Jakob of Petromatrix. Profit taking ahead of the weekend risk to prices later Friday, traders add. Nymex May crude -35c at $114.51/bbl, ICE June Brent -32c at $112.11/bbl. (NHE)

  4. 4
    zman Says:

    SLB – they read the statement in the PR regarding growth getting stronger in 2008…not exactly blowing me away.

    Q&A starting.

  5. 5
    tater Says:

    I am having trouble getting the SLB c call up on my computer. Could you please make note of why their margins are slipping? I’ve read analysis that they are losing pricing power. Thanks

  6. 6
    Sambone Says:

    Surge In Natural-Gas Price Stoked By Global Trade

    By ANN DAVIS andRUSSELL GOLD
    Of THE WALL STREET JOURNAL

    Americans feeling the pain of record gasoline prices now face the likelihood of another fuel shock, from natural gas.

    Prices in the U.S. have risen 93% since late August as power-hungry nations like South Korea and Japan compete in a global natural-gas market that scarcely existed a half-decade ago. Still, U.S. prices are as low as half the level of some overseas markets, suggesting they have much further to rise.

    The global appetite for natural gas has profound implications for a U.S. economy already tipping toward recession and struggling against inflation pressures. The fuel heats half of U.S. homes, generates 20% of the country’s electricity and is used to make everything from fertilizer to plastic bags. In March, rising natural-gas prices contributed to a higher than expected 1.1% increase in producer prices, according to the Labor Department.

    U.S. natural-gas output has actually been rising in recent months, and not everyone agrees that prices are destined to surge. However, a significant number of financial players are now betting on an increase.

    On Thursday a report by the Barclays Capital unit of Barclays PLC warned that, partly because of rising natural-gas prices, the U.S. could start to see spikes in electricity costs in as little as a year. “Power is at the cusp of its next boom cycle,” analysts said. “When power markets tighten, prices do not notch up, they skyrocket.”

    On Thursday, natural-gas prices on the New York Mercantile Exchange fell five cents per million British thermal units, or 0.5%, to settle at $10.383, ending a three-day upward march. That’s 33% shy of the record close of $15.378 on December 13, 2005, when a cold snap jolted the market.

    What’s new is the global price competition. Prior to 2003, gas was primarily a regional commodity, consumed near where it was produced and transported by pipelines. Often, it would be simply burned off as waste at oil wells, since transportation was so difficult.

    That changed with development of cheaper methods for supercooling and transporting the fuel across the ocean in liquefied form, which requires 1/600th the space. The global trade took off.

    Today, a tanker of liquefied natural gas, or LNG, pulling into port in Japan can command close to $20 per million BTUs, roughly double the price of the U.S. benchmark. As a result, the U.S. is having trouble attracting the imports it needs to supplement homegrown production.

    Last weekend, Cheniere Energy Inc. inaugurated a massive new LNG terminal on the Texas-Louisiana border capable of accommodating six tankers a week, making it the largest terminal in the U.S. However, observers expect few tankers to dock there until they can obtain higher prices for their cargo. Cheniere’s stock is down 70% from its 52-week high; earlier this year, it put itself up for sale.

    For the moment at least, the import slowdown means the U.S. has a glut of LNG import terminals like these. From California to New England, proposals for such facilities have faced staunch community opposition. This month New York Gov. David Paterson said the state wouldn’t issue a permit for a proposed terminal in the Long Island Sound, arguing that it wasn’t appropriate for the environmentally sensitive area.

    Overall, U.S. imports of LNG have slid over the past nine months to a five-year low, and natural-gas inventories are running relatively low. Deutsche Bank commodities chief David Silbert says that if the U.S. is unable to attract LNG supply this summer, prices could spike up sharply within a few months if a hot summer were to reduce the ability to build a cushion of gas going into next winter.

    As the odds increase that the U.S. will pass climate-change regulations that raise financial penalties for burning coal, cleaner-burning natural gas is gaining favor as the fuel to power electric plants.

    Overall, gas demand from the U.S. power sector grew by 10% last year, according to the Energy Information Administration. By 2025, the U.S. could see domestic production lag demand by 15 billion to 20 billion cubic feet a day, Linda Cook, executive director of gas and power for Royal Dutch Shell PLC, told a recent energy conference.

    The increased global trade in natural gas was driven partly by huge investments since 2003 in facilities to liquefy gas for export — chilling it to negative-260 degrees Fahrenheit — as big Western oil companies saw a business opportunity and ramped up spending on LNG infrastructure. This created economies of scale and further drove down the price of producing and shipping LNG long distances.

    This triggered a revolution in gas markets. Previously, countries like Nigeria, which has ample natural gas, had no easy way to sell it due to a lack of pipelines to markets needing the fuel. Same was true for Qatar, also home to enormous gas reserves.

    Early thinking assumed the globalized market would cause prices to fall because countries tight on supplies could more easily import. Former Federal Reserve Chairman Alan Greenspan, in 2003, predicted LNG would create a “price-pressure safety valve” to stabilize prices in the U.S.

    But the market is evolving differently. One key change involves the way LNG sales contracts are written. Until recently, buyers were in the driver’s seat: They were able to strike long-term deals and lock in their costs for many years. A seller like Indonesia, for instance, might have agreed to ship LNG to Japan for 10 years at relatively rigid prices.

    Today, however, sellers have the clout. They are demanding that contracts be loosened to let them divert their output to markets where prices are higher. (In return they generally agree to share the profits with the customer).

    This free-for-all has let suppliers shop their product to the highest bidder, adding to price volatility.

    One example: When an earthquake last summer forced a massive Japanese nuclear plant to close, utilities there ramped up natural-gas use. Prices soared in Japan, which in turn drove up prices in far-off European countries, including the United Kingdom.

    This kind of situation can trigger domino effects world-wide. Late last year, the global scramble for scarce LNG worsened as a drought hit Spain, cutting its ability to use hydroelectric power. Spain normally leans on neighboring Algeria and Egypt for LNG imports — but in February those countries were busy shipping to Japan where prices were twice as high as Spain.

    Spain turned to Trinidad for imports. But that has meant less gas for the closer — but lower-priced — U.S. market, which in the past has taken most of Trinidad’s output. Trinidad’s shipments to the U.S. through the first two months of the year are down 31% from the year-earlier period, according to government data.

    Not everyone agrees U.S. natural-gas prices are certain to rise. Domestic producers such as Chesapeake Energy Corp. have made significant strides tapping into new sources of natural gas, sending U.S. gas production up 7% in January from a year earlier, to 68 billion cubic feet a day.

    Chesapeake Chief Executive Aubrey K. McClendon sees production continuing to grow, holding U.S. gas prices between $7 to $10 per million BTUs and avoiding the need to increase imports. And Michael Stoppard, a senior director of energy consultant CERA, predicts world LNG supply will grow by 30% in the next two years, making more chilled gas available for the U.S.

    Nevertheless, more financial players are lining up against the bears, saying low prices won’t last. They point out that, even as U.S. production increased in 2007, prices still rose 19%.

    Meantime, as Asian buyers grab more LNG from the Atlantic basin, U.S. prices, though at 27-month highs, still look cheap. Energy hedge funds in Houston and New York have placed a flood of bullish bets on U.S. gas prices for delivery several years from now, say some of the traders and their Wall Street brokers.

    One argument underpinning that bet: U.S. gas is far cheaper than it has historically been relative to crude oil. Until 2004, the price for a barrel of oil was roughly the same as the price of 6,000 cubic feet of gas, the equivalent amount of energy. Now oil is almost double the price of gas on that basis, Lehman Brothers analysts point out.

    In a twist, the effort to build alternative-energy projects like solar arrays and wind farms also boosts construction of gas-fired plants. Because wind is unpredictable, it’s often necessary to build back-up generators, and gas-fired plants have an advantage in that they can be started up relatively quickly, says Doug Kimmelman, senior partner with Energy Capital Partners, a private-equity firm focused on the power sector.

    In addition, regulatory approval and construction times are shorter for gas plants than coal or nuclear. For reasons like these, new gas-fired power plants continue to be built or planned.

  7. 7
    zman Says:

    tater – varies from area to area. For instance, in Mexico, they were ramping rigs into deeper, hotter, areas. The upfront costs were higher which depresses margins. In seismic, it was revenue volatility due to weather, the timing of lease sales. They sound like they really expect it to improve going forward.

    The difference from December notes is that they were thinking all of 2008 would be a transition year but now see it more as 1H08 is the transition (for their business and service in general) and that the back half of 2008 is the ramp INSTEAD of 2009 being the ramp.

  8. 8
    zman Says:

    SLB Q&A

    Saudi Arabia – mobilized equipment, will be big, little impact this year, bigger in 2009.

    SLB “very comfortable with full 2008 Wall Street expectations”

    Margins offshore – “they’re fine…going forward quality of revenue will improve but it depends on success of exploration wells”

    “growth to significantly expand in 2H08” – most significant change from December call is North America – strong statement for HAL and NBR.

  9. 9
    tater Says:

    Thanks, got on now. “Big difference between margins on a successful exploration well and an unsuccessful well….” I love those kind of helpful statements.

  10. 10
    zman Says:

    Tater: I love how the Goldman analyst said “thanks, that’s very helpful” – yeah, right.

    My sense is that these guys are bagging the Street. After last quarter reports bashing they are not going to guide the Street higher but instead just keep them where they are and then beat.

    Pricing bottoming in stimulation – that’s not a small deal.

  11. 11
    zman Says:

    well that was a short window of red on SLB.

    Going bid some NBR.

  12. 12
    tater Says:

    Good question on the amount of bidders pre vs. post lease sale

  13. 13
    zman Says:

    ZTRADE: Added to June $37.50 NBR Calls for $1.55

  14. 14
    zman Says:

    Tater – what did he say, had to grab the phone for a sec.

  15. 15
    zman Says:

    SLB rallying now. It’s hard to understand why people dump shares pre market on a number without reading or listening. Always amazes. Maybe you’re right, maybe not but wouldn’t you want to know before you just punt on a number. Maybe knowing that the outlook is more important than the #, lol.

  16. 16
    tater Says:

    He said basically that yes it does matter, but that he is comfortable with the end result anyway.

  17. 17
    zman Says:

    I’m now pretty full on NBR … SLB call continues to go well.

  18. 18
    zman Says:

    HAL now running in trail of SLB, NBR should follow.

  19. 19
    Jay Reynolds Says:

    Hmm, the Haynesville Shale just moved to the other side of the state. Guess I missed that : )

    http://money.cnn.com/2008/04/17/news/economy/natural_gas/index.htm?source=yahoo_quote

  20. 20
    zman Says:

    Jay – how’s that?

  21. 21
    zman Says:

    oh, I didn’t see the link on my crackberry. , lol. Maybe you should try to sell that guy some leases “on the cheap”.

  22. 22
    zman Says:

    Sharon Efferson – could see gas prices on fire this summer due to hurricane forecasts. Does she get a percentage from T. Boone or what?

  23. 23
    reefguy Says:

    z- did you see the LNG article in the WSJ this morning?

  24. 24
    zman Says:

    Reef – no, LNG the company or the commodity.

  25. 25
    zman Says:

    SLB up $2…I wonder how those sellers down at 92 feel with the stock over 97 now?

    HAL a rocket ship now.

    NBR in the green

  26. 26
    reefguy Says:

    Front page, the commodity. Looks like George Kaiser had it backwards. LNG will not come to US, rather than lower NG prices, will raise them.

  27. 27
    zman Says:

    Scoop – they may be pinning you on PQ

  28. 28
    zman Says:

    SLB topping $98.

    Reef – reading it now.

  29. 29
    reefguy Says:

    Marcellus-Haynesville(Bossier)-Barnett——Wild Idea of the day…US is exporter of NG

  30. 30
    zman Says:

    Aubrey said the same, also jokingly, on the 8 shale play conference call.

  31. 31
    Popeye Says:

    Z, any idea what is driving DRYS today?

  32. 32
    zman Says:

    Reef- did you see the 5,000 acres in Tarrant Cnty CHK is picking up for $17K/acre last night.

  33. 33
    reefguy Says:

    z-But I am not joking…

  34. 34
    reefguy Says:

    Tarrant- in the core area, that seems like the going price

  35. 35
    zman Says:

    Popeye – no, strong market maybe. I’ve taken a little hiatus from the group and am not chasing into earnings. Rates have been forming what in a stock would be a flag with decreasing volatility. Have no idea if the idea translates but I’m going to schedule a lunch with my shipping expert soon.

  36. 36
    zman Says:

    I’m sure the JP Morgan egghead is calling them idiots this morning…He, unlike Aubrey, lacks vision.

  37. 37
    Denise Says:

    Good morning
    Very hard to stay long HAL when looking at the chart
    makes me mighty nervous

  38. 38
    zman Says:

    DO breaking out. I love nothing more than going against a analyst recommendation and being right.

  39. 39
    reefguy Says:

    LNG prosess question. Is a facility a one way operation. Can it receive only or could it liquify?

  40. 40
    zman Says:

    Denise – when in doubt sell half. I think they are in front of a shift in N. American gas activity that will drive the Gas rig count up 100 to 200 rigs in the next 12 to 18 months. That’s a lot of pressure pumping , drilling etc etc.

    NBR by the way is great play on the Bakken. Hope to have my piece out Sunday but their rigs are the no kidding around size 1,000 horsepower variety you need to drill 10,000 feet down and then a mile over the section. They have 15 rigs in the play now working for the likes of EOG, WLL, CLR, HES, MRO, COP(Burlington) and the play looks to be accelerating so NBR is going to benefit from increased natural gas AND oil.

  41. 41
    zman Says:

    SLB tapping on 99 now.

    Reef – I’m sure it would take a massive refit but you would have the port/mooring part of it as well as the pipeline infrastructure and permits so its a lot better than greenfield. But I don’t think any of the old ones or the new ones can flip a switch and reverse the process.

  42. 42
    Jay Reynolds Says:

    Sold 1,200 to close long position in GSG (ETF commodities, heavily weighted in crude) Sit and watch the fed for a bit.

  43. 43
    zman Says:

    I am having a seriously good day. This kind of activity does not last and while I’m enjoying it I am looking to raise cash in the near future and play with more house money.

  44. 44
    zman Says:

    SLB at $100

  45. 45
    elijahwc Says:

    For all Marcellus fans, here is an opps……

    ATN Atlas Energy Resources announces its decision not to proceed at this time with offering of Class B units (41.26 )

    Co announces it has determined not to proceed at this time with the previously announced offering of its Class B common units, as set forth in its preliminary prospectus supplement filed on April 17, 2008 with the SEC, in order to allow investors sufficient time to become aware of information relating to certain non-cash balance sheet adjustments resulting from its natural gas and oil derivative contracts.

  46. 46
    zman Says:

    Thanks Eli

  47. 47
    Sambone Says:

    Uncle Phil

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

  48. 48
    Sambone Says:

    10:02 am EST

    Nymex Crude Pulls Back After Strong Week

    By Gregory Meyer
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures surrendered more than $1 a barrel Friday as traders took profits and the dollar registered gains.

    Light, sweet crude for May delivery was recently down $1.35, or 1.2%, at $113.51 a barrel on the New York Mercantile Exchange. June Brent crude on the ICE futures exchange was trading $1.19 lower at $111.24 a barrel.

    Nymex crude Thursday closed more than $4 above last week’s closing price. The urge to take profits, along with Thursday’s expiration of options on May Nymex crude futures, cooled the market, traders said.

    “Options went off the board yesterday, which let some air out of the balloon,” said Peter Donovan, vice president at Vantage Trading on the Nymex floor. “It’s also Friday. After being up four or five bucks, it’s time to give a little something back.”

    Oil fell as the dollar gained strength against the euro, which was recently $1.5757 from an all-time high of $1.5985 Thursday. The greenback’s weakness has helped support crude’s months-long rally, for reasons including the fact that it softens the blow of high oil prices for buyers using other currencies.

    “We believe the oil price remains mesmerized by the course of the U.S. dollar.,” Deutsche Bank commodity analysts said in a note Friday. If the euro should climb to $1.62, it would imply oil prices jumping to $118 a barrel, Deutsche Bank said.

    Oil has also derived strength from outages and uncertainties in exporting regions.

    In Nigeria, where some 500,000 barrels a day in capacity remains offline because of sabotage and security concerns, the Shell Nigeria Joint Venture received a report of an explosion in the Cawthorne Channel area of the Niger Delta Thursday, a spokesman for the joint venture said. The Cawthorne Channel is located in the southern part of the Delta, near the Bonny Light crude oil shipping facility.

    The report follows a claim earlier Friday from militant group the Movement for the Emancipation of the Niger Delta that it had sabotaged a pipeline at Adamakiri, located in the Cawthorne area.

    Some analysts warn prices could decline in the second quarter amid signs a slowing U.S. economy will eat into demand. Among them is Goldman Sachs, which foresees a potential short-term price drop but a rebound later in the year. The bank raised its year-end target for the benchmark oil price to $115 a barrel from $105 a barrel, and now says oil prices will average $105 this year.

    “We reiterate…that the window for a price pullback to around $99 a barrel is rapidly closing as we expect that expansionary fiscal and monetary policy measures, along with a stable price environment, will support a recovery in US oil demand,” and strengthen prices for crude futures scheduled in later delivery, Goldman said.

    Front-month May reformulated gasoline blendstock, or RBOB, declined 3.88 cents, or 1.3% to $2.9190 a gallon. May heating oil fell 2.77 cents, or 0.9%, to $3.2397 a gallon.

    —By Gregory Meyer, Dow Jones Newswires

  49. 49
    kiaora Says:

    Z….what about SLB. This is a gift I’m having a hard time holding on to.

  50. 50
    zman Says:

    K- I’m taking half off the table soon and playing with house money.

  51. 51
    zman Says:

    ZTRADE: SLB – Half out of the May $100 calls picked up yesterday for $4, up 105% with the stock up about $5, I will take longer dated called on a pullback next week.

  52. 52
    zman Says:

    I’m going to take half of the May HAL calls off the table today with the stock up around $2 and earnings before the open. I will also likely add longer dated calls here today.

  53. 53
    Jason Says:

    Re #52 – Are you thinking the same way about DO?

  54. 54
    zman Says:

    ZTRADES:

    HAL – Out Half HAL May $45 for 3.05 for 97% gain to average cost. Will be looking to add longer dated calls today on a pullback.

    DO – Out half DO May $130 Calls for 7.30, up 115%.

    Time to play with more house money and less of my own money.

  55. 55
    zman Says:

    Jason – great minds!!!

  56. 56
    zman Says:

    Natural gas up $0.20 so all three sets of my UNG puts are toast.

  57. 57
    VTZ Says:

    What about nfx? That’s a keeper until earnings?

  58. 58
    uop Says:

    zman:

    going out to june with HAL and SLB ?

    everything up but HK down ?

  59. 59
    uop Says:

    zman:

    who owns the house money ?

  60. 60
    kiaora Says:

    Z…I get july for HAL, and Aug for SLB…..No Junes available

  61. 61
    zman Says:

    VTZ – I think so unless it really runs into them making earnings impossible to justify the price. Those guys are very smart and I think they will not only scream about 6 mm/d IPs in the Woodford, but more Uinta oil than people are thinking. Then there’s the Mancos shale… and maybe a deepwater update (been awhile)

    Uop – its a nickel. RE HAL and SLB, yep June, just waiting to see if we cool at all. HAL getting close for me to a trigger.

    CNBC says MEND blew up a shell pipeline.

    House money – as in when you take the money from the casino and then play with it instead of your own. Hate to use a gambling metaphor but it sounds cooler than saying I’m playing with my profits.

  62. 62
    zman Says:

    Thank K – hadn’t had a chance to even look yet, fingers on fire.

  63. 63
    zman Says:

    SLB – over 101. My scale in and scale out methodology may leave a little on the table but it keeps me out of trouble too.

    I started the process of lengthening into this rally some time back and am happy with where a am on NBR. I may add more HAL but I won’t lengthen SLB until a little later in the day if it keeps going ballistic.

  64. 64
    isleworth Says:

    Z – PQ not acting real well. Were you able to read the UBS report that put them at HOLD? Any revelations? At 3.9X 2009 CFPS, it is awfully cheap. The UBS analyst must see something else he does not like?

  65. 65
    reefguy Says:

    CWEI up 6% 62$ a triple in a year?

  66. 66
    ram Says:

    ZMAN – HAL 47.5’s at 2.50 or so is where I am looking.

  67. 67
    zman Says:

    Isle – no, did not see it. I think the characterization is unfair though as it is within a hair of its all time high…not acting real well….today? ok, sure, I think it is noise. Volume low and people have to wonder about the report to so it put the brakes on the move. Would love to see it if anyone has it?

  68. 68
    zman Says:

    Reef – yes, those or the 50s, pullback happening now although not much of one on the SLB and DO.

  69. 69
    isleworth Says:

    I guess their PQ target was $20 that I found puzzling – yes it has been a nice mover.

  70. 70
    reefguy Says:

    Cwei- riding the Leor/ECA bossier buyout

  71. 71
    zman Says:

    ELI – if you are around, I never got the PQ piece. Love to see what the justification is for the luke warm rating and target.

  72. 72
    zman Says:

    Was just looking at my cash position. Ah the dangers of trading quickly and doing too many things at once, did not sell half my SLB calls at 4, bought 50% more. Taking them out now.

  73. 73
    zman Says:

    Reef- you liked what you saw the other day at CWEI?

  74. 74
    reefguy Says:

    Yes- I think the Bossier asset get sold for more than current market cap

  75. 75
    zman Says:

    HAL may announced a $200 mm plus acquisition on Monday – Expro (EXPRF)

  76. 76
    zman Says:

    Reef = Wow

  77. 77
    reefguy Says:

    another WTF- REXX at $22.69

  78. 78
    uop Says:

    zman:

    for hal, if there is an acquisition, does this not mean it will drop?

  79. 79
    scoop006 Says:

    Z-#75 how would that affect the stock price

  80. 80
    zman Says:

    Not necessarily. 1) its a pretty small nibble for them 2) its a high end well flow processing company so its synergistic and scalable. I’m taking July HAL $50 calls if they will come down to my price.

    Hey look, even PQ and HK up.

  81. 81
    zman Says:

    Reef – no way I can justify REXX up there. Hypey, hypey, hypey.

    Was just on the phone with a fund manager friend who always puts the fear of hot money leaving into me. I do agree with the point that as the broad market starts to look better than money flows will come out of energy and into things like C and Wachovia etc. Times will not always be this good for the group and we are due a pull back. The question is when does it start and it is a craigy looking top or a nose dive. Also, how much money has retreated to the sidelines that feels like it has missed the energy play and could serve to boost/extend our runs. Again, we aren’t expensive … not at $9 NG and $90 oil, let alone $10.50 NG and $115 oil. Things that I think about late at night and why I constant take profits and extend careully up and out in a market like this.

  82. 82
    zman Says:

    PQ on UBS – ok, like I thought they are basing the $20 on NAV. They are a bit behind the times on the transition from offshore, thinking (guess this 42 page doc took awhile to write, lol). They point to a couple of points of upside potential but give them no credit for it and say that further guidance will be helpful. Do you want to be spoonfed?

    They go on to say their NAV includes 200% reserve replacement (that’s probably light) but does not incorporate accelerated activity, exploration success (I agree to some extent there re Pelican Point) or downspacing (oh come on!).

    Anyway, this is a CFPS growth story with large unbooked reserve potential ….they acknowledge management has id’d 6.5x reserves in its acreage relative to its booked reserves.

    Finally, their price deck is low in my opinion and will likely come up but they are assuming production growth at the top end of management’s range which actually gives them a CFPS estimate for 2008 well above the Street. My thought is that they will get the spoonfed guidance they are looking for on the call and will eventually end up raising their rating as they grow more comfortable with the name.

    I see nothing revelational here after a 10 minute read of this fairly cookie cutter, number laden report but will continue to look. I’m holding what I’ve got.

  83. 83
    ellwodo Says:

    HK – I’ve seen references to UBS new price projection for HK linked to 2008 earnings of $3.20 but I can’t find it in print anywhere. Can anyone confirm that’s their estimate and if so how they reconcile it to the $0.69 average analysts’ estimate for 2008 posted on HK’s own site?

  84. 84
    ellwodo Says:

    HK – meant to link it to the $35 UBS projection.

  85. 85
    zman Says:

    Just can’t get HAL to come in on a day like this…being patient, canceled $50 July call order and will wait for it to drop.

    Elwode, that’s their CFPS estimate (and it is actually 3.25), their EPS estimate is $0.80

  86. 86
    Nicky Says:

    morning all. have CNBC finally started some responsible reporting. Miss Epperson calmly reporting that this pipeline in Nigeria is insignificant and the reaction overdone…

  87. 87
    ellwodo Says:

    Thanks. Still a nice bump up.

  88. 88
    zman Says:

    Elwo – and again, UBS price deck is probably light on both oil and natural gas.

  89. 89
    Denise Says:

    Z-just read an interesting opinion on the long euro/short dollar trade is looking done

    this would support your fund mgr friend’s opinion a rotation out of the energy space is likely or probable

  90. 90
    zman Says:

    Denise – he by the way is in here and is a huge fan of Doug Kass’

  91. 91
    Denise Says:

    Bloomberg reporting hal in talks to acquire expro and would top Candover Partners 3.2b offer

  92. 92
    zman Says:

    ZTRADE: HAL July $50 calls (HALGJ) for $1.75. May add more lower, this was done with the stock up $2 and earnings are Monday before the open.

  93. 93
    zman Says:

    Denise, thanks, reading it now

  94. 94
    Denise Says:

    Mr K is good-but no idea of his market thoughts gone for Passover-this must be the Gentile site!
    Even Cramer mia

  95. 95
    zman Says:

    $3.2 B. oops, that’s bigger than the story I saw or what I show their mkt cap to be. Seems to be well know for days now and not holding the stock back but again, a lot bigger acquisition than I was thinking. Unlikely to take my second piece on that as you may get a kneejerk on Monday lower…but again, well known to everyone but me on the size.

  96. 96
    Nicky Says:

    Denise, the charts support that too. Take a look at the metals today. Gold and silver look to have put in a reversal. Its too early to confirm and the $ does look in need of one more move to the downside – it certainly would look odd if the rally continued in the $ from here. But ultimately the $ downleg is on borrowed time and we are in for a sharp reversal. Metals and energy will turn with it.

  97. 97
    Sambone Says:

    11:46 am EST

    Nymex Crude Hits Record On Supply Threat

    By Gregory Meyer
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures reversed early losses and sprang to a new record above $116 a barrel Friday as the traders fretted over supply concerns in Nigeria.

    Light, sweet crude for May delivery was recently up 70 cents, or 0.6%, at $115.56 a barrel on the New York Mercantile Exchange after rising to $116.10, a new intraday record high.

    June Brent crude on the ICE futures exchange was trading 55 cents higher at $112.98 a barrel, also hitting a new intraday record at $113.57 a barrel.

    After selling off early, the market started digesting unconfirmed reports of an explosion in Nigeria, Africa’s largest oil exporter. Oil’s months-long rally has derived strength from outages and uncertainties in producer nations.

    “Any kind of geopolitical tension is going to pump up the market,” said Mark Waggoner, president of Excel Futures in Huntington Beach, Calif.

    In Nigeria, where some 500,000 barrels a day in capacity remains offline because of sabotage and security concerns, the Shell Nigeria Joint Venture received a report of an explosion in the Cawthorne Channel area of the Niger Delta Thursday, a spokesman for the joint venture said. The Cawthorne Channel is located in the southern part of the Delta, near the Bonny Light crude oil shipping facility.

    The report follows a claim earlier Friday from militant group the Movement for the Emancipation of the Niger Delta that it had sabotaged a pipeline at Adamakiri, located in the Cawthorne area.

    Front-month May reformulated gasoline blendstock, or RBOB, was down 3 points to $2.9575 a gallon. May heating oil rose 1.65 cents, or 0.5%, to $3.2839 a gallon.

    —By Gregory Meyer, Dow Jones Newswires

  98. 98
    Nicky Says:

    Not sure whether anyone in here is interested in the metals but this could be the start of a very sharp C wave lower for gold and silver. If so gold will move towards $800 very fast.

  99. 99
    zman Says:

    Hey Nicky, hard to believe #86

    Holdings Wiki tab updated

  100. 100
    Denise Says:

    I am Nicky-I also bought a little uup today-
    Thx

  101. 101
    texana Says:

    bexp3d.com is having a good conf call giving great detail on bakken play

  102. 102
    Nicky Says:

    Aye Z – I am sure it won’t last. Someone must have given her some valium.

    I continue to look for the elusive top in energy. If higher highs are in store possible target areas are 117, 118.90 and 119.65. A break of today’s lows at 112.72 would be the first indication of a top being in.

    Nat gas still looks bullish (heaven knows why fundamentally!) – 10.70 area may be it.

  103. 103
    zman Says:

    texana – they’re not in Parshall or Sanish are they? Or are they 60 miles to the West in the HES, MRO, COP, CLR area?

  104. 104
    zman Says:

    Wow NBR up a whole buck now. May not sound like a lot but on this stock that’s a move.

  105. 105
    zman Says:

    Nicky – maybe the check from TBP bounced. Nahh, not possible.

  106. 106
    Nicky Says:

    Broader markets – this move up has been on very low volume so beware! Resistance at 1399 give or take a couple of points. I still think the SPX is ultimately targeting the 1416 – 1435 region before this rally is done but this cycle is due to top out on Monday so we may see another pullback and then a further run at the target areas.

  107. 107
    zman Says:

    Nicky – agreed re broader market. I am concerned that energy (equity) names are seeing a bit of a speculative blowout. If we get an intraday reversal you will see me raise scads of cash as the selling will last for days. I don’t think its Monday obviously but I think it is approaching.

  108. 108
    Nicky Says:

    Denise re gold – it would be good to see a move below 907.30 now as we could then count five waves down from the 95.20 high.

  109. 109
    Nicky Says:

    956.20 high that should have read.

  110. 110
    Nicky Says:

    Monday may only be a short term top Z.

  111. 111
    zman Says:

    Texana – cheapest play in the Bakken is NBR, the biggest rig operator there.

  112. 112
    bill Says:

    Up 500 on the Hal blast

    thank you z,

    buy on the blast and ask question’s later

  113. 113
    zman Says:

    Bill – its been a good little run but very volatile. Started a new account for a relative in late Feb and took it from $20K to 25, back to 13, now over 55.

  114. 114
    bill Says:

    Make sure you relative only looks at it once a year :))

  115. 115
    zman Says:

    Too right!

  116. 116
    apbd Says:

    I don’t love my relatives that much!
    apbd

  117. 117
    scoop006 Says:

    will you adopt me

  118. 118
    zman Says:

    A – I saw your Christmas card so I know you are lying, LOL!

  119. 119
    zman Says:

    Scoop – Sorry, full house.

  120. 120
    T-Tupp Says:

    z are you betting on some more upside for hal mon morn? think she stil has some more steam after this run/.?

  121. 121
    zman Says:

    May take EOG off the table as I have a little more E&P exposure than I need right now and I get cheaper exposure to Bakken via NBR.

    T – I think so, yep. SLB seemed pretty comfortable with considerably higher N. American rig count in coming months.

  122. 122
    VTZ Says:

    http://www.bloomberg.com/apps/news?pid=20602099&sid=awRCRh04Ag.U&refer=energy

    Joke article?

  123. 123
    ram Says:

    RE #111. If the CC’s of all the players in the Bakken keep an upbeat tone to future development, then NBR could have room to run it seems.

  124. 124
    BossmanG Says:

    Zman,

    Missed your NBR call, its around $2.05…do you still recommend adding? You bought at $1.55…
    or wait for a small dip

  125. 125
    Sambone Says:

    Oil Bears Talk Of Bubble, Lonely Voices Amid Red Hot Rally

    By GREGORY MEYER
    Of DOW JONES NEWSWIRES

    NEW YORK — As crude oil prices edge further into uncharted territory, life as a bear has become lonelier than ever.

    Benchmark crude futures have registered an electric performance so far this year and now — near $115 a barrel — hover well above some of the highest near-term forecasts among market professionals. The speed of the ascent has caught many market participants off guard and forced banks and brokerages to repeatedly revise their oil price outlook.

    Yet some analysts continue to cry foul, warning that oil prices are teetering close to a steep fall — at least back nearer $80 a barrel. For these observers who see the world’s oil supply-and-demand balance loosening and weighing on prices, the red-hot rally is nothing short of astonishing.

    “I personally think this is the mother of all bubbles,” said Michael Lynch, president of Strategic Energy and Economic Research Inc., a consulting firm in Amherst, Mass. He expects prices to pull back to $80 a barrel by late June, and in the long run step down to $50 as pent-up supply in Iraq, Nigeria, Venezuela and other underproducing exporters starts to flow.

    For Tim Evans, an energy analyst and inveterate bear at Citigroup in New York, that bubble is “still expanding,” filled with sentiment that seems to ignore signs of what he views as a supply surplus through the end of this year.

    “There’s no supply-demand deficit,” Evans said.

    The case for lower oil prices is straightforward: the prospect of a deep U.S. recession or even a marked period of slower economic growth in the world’s top energy consumer making a dent in energy consumption. Year to date, oil demand in the U.S is down 1.9% compared with the same period in 2007, and high prices and a weak economy should knock down U.S. oil consumption by 90,000 barrels a day this year, according to the federal Energy Information Administration.

    The International Energy Agency, the Paris-based energy watchdog of the world’s richest nations, last week lowered its forecast for world oil demand growth by 460,000 barrels a day and now envisions it will total 87.2 million barrels a day this year, nearly 1.3 million barrels a day more than last year. The IEA also sees supply from outside the Organization of Petroleum Exporting Countries growing by 815,000 barrels a day, about 50% more than 2006 and 2007 levels and the strongest growth since 2004, leading bears to contend the world is amply supplied.

    All About The Dollar
    The bulk of the oil market doesn’t seem bothered by this argument. Buyers have been emboldened by what they see as faltering supply, with OPEC members holding oil production steady and supply from outside the cartel, while growing, still up more modestly than earlier expected.

    On top of supply and demand considerations, funds have entered the market for reasons unrelated to powering cars, jetliners or generators. As the dollar weakens against other currencies, investors have snapped up crude and other hard assets as a hedge against its decline. Oil is priced in dollars, meaning exporters are encouraged to adjust prices upward for crude. When they recycle their profits into euro, it pressures the dollar further.

    While the Federal Reserve’s aggressive interest-rate easing cycle is aimed at stimulating the economy at a dangerous impasse, the oil market has taken its monetary policy cues squarely from the weak dollar. As fears gather that the rate cuts are leaving the U.S. economy extremely vulnerable to inflation, the rise in the price of oil is also seen by some as an early harbinger of those gathering prices pressures, reminiscent of the commodity price spike in the early 1970s.

    Then there’s the China factor. Bulls point to the pivotal role played by strong demand for a slew of commodities from emerging economies, principally China. Oil demand growth in the world’s most populous nation has become a “security blanket” for those pushing prices higher as U.S. demand flags, said Paul Ting, president of Paul Ting Energy Vision Inc., a research and consulting firm in Short Hills, N.J. The IEA predicts China’s oil demand will rise 4.7% to 7.9 million barrels a day this year in spite of a slowdown in the U.S. economy.

    Just as demand from the Asian giant has been a big force behind the rise in oil prices this decade, evidence that the U.S. slowdown is chilling China’s export-heavy economy is a major potential tipping point that bears think could send oil prices sliding. Thus far, that evidence hasn’t appeared.

    “China’s export sector can arguably weather falling U.S. demand, as long as demand elsewhere remains buoyant,” the IEA says in its latest oil market report.

    Sowing Seeds Of Collapse
    In the U.S., stockpiles of gasoline have declined five straight weeks, while stocks of distillate fuels, which include heating oil and diesel, have fallen in nine of the last 10 weeks, which some say points to a market with shrinking wiggle room and another reason for high prices to hold.

    While acknowledging the uncertainty of non-OPEC production, Lynch at Strategic Energy argues the dynamics of supply and demand justify a price of $30-$40 a barrel, while jitters in unstable exporting regions might reasonably double that price.

    “But $114? I mean the run-up in in price we’re seeing in the last six weeks or so has happened while the fundamentals have generally speaking gotten bearish,” he said.

    The benchmark crude futures contract on the New York Mercantile Exchange first touched $100 a barrel on Jan. 2 and has reached ever higher since. Nymex crude has risen 20% this year and 88% since the start of 2007, settling at $114.86 a barrel Thursday after touching a new record intraday high of $115.54. On Friday, the front-month contract was trading roughly flat at $114.82 after several record-breaking sessions for energy contracts.

    Kyle Cooper, director of research at IAF Advisors in Houston, expects prices to eventually fall 50% from their highs, but is reluctant to say when, noting that investment is unlikely to stop flowing into the oil market while the Fed is still cutting interest rates.

    Even with red flags on the horizon and oil prices shattering predictions, the rally has generated a sort of self-fulfilling momentum.

    “We’re stuck in this rut of an upward market until something major changes in the macro picture,” said Adam Robinson, an energy research analyst at Lehman Brothers. After revising up, Lehman sees the Nymex benchmark crude averaging $89 a barrel this quarter and $93 in 2008.

    To Evans, of Citigroup, those factors are already here. Higher prices are sowing the seeds of their own collapse, he says, as consumers start cutting back and producers search for oil that once was too costly to extract. Even OPEC members, whose steady output has helped install a floor beneath crude prices, may be tempted to leak more barrels on the market.

    “We can’t expect OPEC to be disciplined with their production at these prices,” Evans said. By his reckoning, oil should be trading between $70-$80 a barrel. “We don’t need any further evidence for this market to turn lower,” he said.

    —By Gregory Meyer, Dow Jones Newswires

  126. 126
    zman Says:

    VTZ – certainly a joke article.

    Bossman G – I think it has good long term potential as I’m holding May and Junes but we don’t use the R word around these parts.

  127. 127
    zman Says:

    NBR is cheap to the group, has rigs available to be deployed as plays in N. America heat up.

    ZTRADES:

    Out TLM April $20 calls for average $0.50, down 74%.

    EOG Getting out around $8.

  128. 128
    ram Says:

    ZMAN – Even if the momentum leaves the E&P guys, the suppliers to these CO’s should still have legs as their backlogs swell.

  129. 129
    zman Says:

    Ram – agreed. I am consoled by the fact that the group is moving up with the broad market and not down against it. My smart friend has proposed, and rightly so, that the energy names in aggregate will be a source of funds when the market decides to really like the financials and other beat up sectors. Much like everyone’s house served as their back up check book until 2006.

  130. 130
    zman Says:

    Look at HAL on a monthly chart. Big breakout from a base that started back in late 2005. Could be some legs here kids.

  131. 131
    zman Says:

    Paulson ethanol comments killing corn. That should be bad news for AGU, TRA at least from a sentiment standpoint

  132. 132
    zman Says:

    sorry, meant Bodman, not Paulson in 131

  133. 133
    zman Says:

    Not sure what Bodman said exactly but CNBC reported he said U.S. should move away from corn based ethanol. How he figured that out I have no idea.

  134. 134
    VTZ Says:

    On a life cycle basis the energy use to create corn based ethanol does not make sense, especially when you consider you could use the land for other profucts.

    I believe he is implying that they should be using waste products not food products.

  135. 135
    Bob Says:

    Crude trying to close at high of day

  136. 136
    zman Says:

    VTZ – exactly, cellulosic, there’s a nice plant running down in La.

    The nitrogen consumption of corn is such that if demand for corn were to decline a bit while natural gas (fertilizer’s #1 cosst) were to stay up here then you are looking at a double whammy for TRA, AGU.

    Oil running into the last half hour of NYMEX trading, up 1.30 at 116.11

  137. 137
    uop Says:

    Zman:

    did I read this correctly:

    there are comments to lighten up on
    some E&P, oil/gas related companies,
    even metals and agri was mentioned.

    I see that soon money will go into financials and other beaten down areas, mthe $$$ have to come from somewhere: rotation out of sectors which had a runup.

  138. 138
    zman Says:

    Lot of volatility for opex day.

  139. 139
    zman Says:

    Uop – that’s the risk but so far it has not materialized and today would have been a very good day for it to have started using the SLB “miss” as an excuse to pound the group and shift to others sectors.

    On E&P, they are not overvalued BUT they have had a good run and could see some profit taking as earnings come out.

    Service stocks seem to be a little less further along in the near term move to me.

    I have been long E&P and very light in service so I’m transitioning to: 1) a little more cash and 2) a little less E&P and a little more service/driller weighting. Plus I added that small slug of TSO this week in the refining patch. Have not yet decided if I’m around in that patch through earnings.

  140. 140
    zman Says:

    CLR down 3%, another day like that Monday and I take some calls.

  141. 141
    Nicky Says:

    New highs for rbob. If they close energy up here broader market may see some profit taking – something has to give here.

  142. 142
    uop Says:

    zman:
    i have:

    E&P: CHK, PQ, HK
    Explo: HAL, SLB
    Ref: TSO, COP
    these are all green,

    NG:only RED: UNG,
    OIL: short: DUG, USO, also RED.
    on these I wait for action.

  143. 143
    zman Says:

    Nicky – you would think so.

  144. 144
    Nicky Says:

    Very scary stuff. Well we had our one of only 2 down days in nearly two weeks yesterday so i guess be very thankful for that 12 cent fall I think it turned out to be.

  145. 145
    seymoujs Says:

    zman, regarding your long stock positions, do you have a timeframe for holding in mind or just keep holding until fundamentals/markets materially change? It looks like all your investment-grade holdings are doing very nicely? Thanks.

  146. 146
    ram Says:

    ZMAN – Where you thinking May or June on CLR?”

  147. 147
    zman Says:

    Seymoujs

    I will hold the NFX and HK until they are gobbled up. The others I may retire if I think a medium term top is forming – like 6 months and I just don’t see it now.

    The SD and CLR aren’t cheap now but I think they will be. SD will sneak up on people.

  148. 148
    Nicky Says:

    Z – how come i cannot see yesterdays posts?

  149. 149
    zman Says:

    Ram – May for their earnings call. Maybe some June at the same time to hold after punting the Mays.

  150. 150
    zman Says:

    Nicky – dunno, what do you see? Did you try clicking on Thursday on the calendar in the left sidebar? I just looked at both.

  151. 151
    ram Says:

    CLR is as bad as PQ in trying to split the spread. A real Knucklehead at the options desk for CLR.

  152. 152
    Nicky Says:

    Sorry found them now… oil going for 117 after the close.

  153. 153
    ram Says:

    Actually, CLR is worse!

  154. 154
    zman Says:

    Ram – I end up waiting hours on names like those. What’s worse is when they are going down. Rapacious.

  155. 155
    zman Says:

    I am more likely to add to NBR than anything else right now but I’m done positioning for the day…I think.

  156. 156
    zman Says:

    Anybody have a good source for pretty current sector money flows? Used to know one but can’t remember it.

  157. 157
    zman Says:

    Nicky, note the change on the day in the crude and natural gas contracts. Just move the decimal point over on crude one space to the left and you get the change on natural gas. With a few exceptions, its been like that for weeks now. Completely screwy.

  158. 158
    VTZ Says:

    If we get a greater than 50 bcf injection this week comign up are people still going to be able to continue driving the NG bandwagon?

  159. 159
    ram Says:

    ZMAN – Any last thoughts on HAL before earnings?

  160. 160
    zman Says:

    VTZ – search me?! CNBC citing LNG, Canada, conveniently leaving out domestic supply which is booming. May as earnings roll out people look at the YoY growth of the top 10, 20, 50 gas producers and say, “wait a moment!” but the traders will be sputing off about hurricane forecasts.

  161. 161
    Nicky Says:

    The nat gas story is just absurd Z. And I don’t understand why again everybody seems so bullish. Dennis Gartman again reiterated he was long last night – why I ask myself???

    Okay broader markets. Potentially bullish count is this. We correct from here towards the 12750 area. We then take off in a very powerful move up towards about 13500 on the Dow. This move is negated with a move under 12567. A move under 12646 would be an early warning sign.

  162. 162
    zman Says:

    HAL – I’m holding the rest of my May position which is up about 100% and today’s buy of the July’s which is flat. One of the things SLB said is that they are seeing cost pressure coming to a stop on pressure pumping. If HAL confirms I think the stock goes higher.

    Nicky – it seems to be a lot easier to make a good trade if GE gets your back via CNBC, lol.

  163. 163
    Nicky Says:

    Regarding bullish count equivalent levels in spx are a correction in spx in a 3 wave move to 1375 area. Then up we go. Early heads up this count is wrong would be a move below 1366 and a move below 1357 eliminates it.

  164. 164
    zman Says:

    One thing I’ve learned in my time on and off the Street is not to beat your head against a wall. I know I’m right on supply in natural gas. At least more right than the bulls in the press. Fine. And they keep taking up. Rules to live by: Don’t trade angry. Don’t be impatient. The market will figure this out and if it does from $12 instead of $9.50 it will just have further to fall.

  165. 165
    zman Says:

    Refiners not enjoying this rally, oil outpaced gasoline 3 to 2 today…VLO signaling a retrenchment, TSO flat and i’ll hold through the weekend to see how it reacts to west coast cracks on Monday.

  166. 166
    Nicky Says:

    That’s how I feel about the whole energy market Z!

  167. 167
    zman Says:

    Nivky – when you say energy market you mean the commodities right, not the equities.

  168. 168
    dooch Says:

    Why is HK missing the rally?

  169. 169
    Dman Says:

    Hey Z,

    quite a day. Transfer of market “oomph” from E&P to service makes sense as a catch-up. If things are so red-hot in shale-land it must go thru to the drillers eventually & the market has to anticipate that.

    Regarding blow-off versus craggy-top versus still somewhere on the slopes: interesting than no gaps-up to be seen in NBR, HAL, SLB. If those gaps start appearing next week it would start to feel more bubbly.

    Main headline on Yahoo Finance talks about GOOG & C, not energy names.

    Realmoney frontpage isn’t screaming about energy, just a few SLB articles.

    It certainly ain’t an across-the-board commodity blow-off, with GLD & SLV down and miners like AUY looking sickly.

    I was going to add that it is weird seeing a market going up without Cramer screaming about it… but after promising to be away from Realmoney this week, the Cramerdebeast couldn’t stay away today..

  170. 170
    Nicky Says:

    commodities yes Z

  171. 171
    zman Says:

    Dooch – same reason CLR is, they already had one and are resting, been flatlined all day.

    Dman – I really separate producers from service and while I think neither group is expensive they are less cheap than they were and E&P has had a big run, due a small pull back and then higher highs is my thought.

    Service may be just getting started on what will be a really good sized moved.

  172. 172
    zman Says:

    Scoop – I hate to ask re PQ

  173. 173
    Dman Says:

    Many service names nowhere near all-time highs and some that are (RIG) are *cheap*. The only flaw in the service thesis for the last few years has been North America & that seems to have resolved itself…

  174. 174
    Sambone Says:

    3:37 pm EST

    Nymex Crude Settles At Record After Pipe Leak

    By GREGORY MEYER
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures settled at their fourth record high in five sessions Friday after a flurry of buying instigated by supply worries.

    Light, sweet crude for May delivery settled $1.83, or 1.6%, higher at $116.69 a barrel on the New York Mercantile Exchange and rose as high as $117.00 after the pit session closed. June Brent crude on the ICE futures exchange settled up $1.49 at $113.92 a barrel, also a fresh record.

    Oil markets were rattled by a pipeline leak in Nigeria, a major exporter of the kind of light crude that underlies the Nymex benchmark. A spokesman for Royal Dutch Shell PLC (RDSA), part of the joint venture that operates the line, said the damage appeared to have been caused by explosives and a “small quantity” of production had been shut down to allow repairs to proceed.

    Though involving a tiny amount of the world’s crude flow, the leak was the latest reminder of the instability that has plagued supply. The pipeline announcement followed a Nigerian militant group’s claim it had sabotaged a pipeline in the area run by the joint venture. About a fifth of Nigeria’s estimated production capacity of 2.47 million barrels a day is on hold because of security concerns.

    “It just goes to show the geopolitical tensions still exist. They’re not going to go away,” said Nauman Barakat, senior vice president at Macquarie Futures USA in New York.

    Still, many market participants groped for firm reasons behind the day’s swing, saying it reflected a bias toward buying into declines as recent selloffs have proven ephemeral. Oil futures have risen 15% in April and 22% in 2008, topping forecasters’ most aggressive price predictions.

    “Every time it dips the buyers come back in, and before you know it you’re making new highs,” said Tom Bentz, a broker and analyst at BNP Paribas Commodity Futures in New York. “You just continue to sustain this up-move.”

    The oil markets have managed to shrug off data portraying demand under pressure as the economy slows. In the U.S., the world’s largest energy consumer, oil demand is down 1.9% year to date from the same period in 2007, the Energy Information Administration reports. Some analysts speculate that fast-growing nations such as China will pick up the slack.

    Oil fell early in the day as traders took profits after a strong week. Now $120 is under discussion as a price target for the market, perhaps as soon as next week.

    “The inability of the market to hold its early weakness is supportive, and potentially indicative of further gains next week,” said Eric Wittenauer, energy analyst at Wachovia Securities in St. Louis.

    Oil’s higher close contrasted with weakness in other commodities such as gold, silver and copper. It also ran up as the dollar made gains for the day against the euro. The dollar’s months-long decline has fueled the crude market, blunting the effects of higher prices on consumers using other currencies.

    “It’s all the more impressive when energy is up despite an up day in the U.S. dollar,” said Walter Zimmermann, an analyst at ICAP/United Energy in Jersey City, N.J. “When you have a good rally in the dollar and crude oil is up, that’s significant.”

    Gasoline and heating oil futures were borne along with the crude rally, both settling at new records.

    Front-month May reformulated gasoline blendstock, or RBOB, settled at $2.9893 a gallon, up 3.15 cents, or 1.1%. May heating oil rose 2.49 cents, or 0.8%, to $3.2923 a gallon.

    —By Gregory Meyer, Dow Jones Newswires

  175. 175
    scoop006 Says:

    Ask away; added them to the bank, broker & builder puts that I was so confident of 2 weeks ago. Lessoned learned? Just listen to ZMAN. Luckily I had GOOG calls.

  176. 176
    zman Says:

    Sambone – did you notice not quote from Flynn in there. Hmmm.

    Scoop – I wasn’t saying that at all. Far be it from me to rub salt. Just hoping you got out at all.

  177. 177
    Sambone Says:

    Uncle Phil – I guess he’s over at Fox now, so Dow Jones don’t like him! LOL

    Leaving early today, had as much fun as I can. Have a good weekend! Tini time!

  178. 178
    Dman Says:

    HK edging into the party. CHK: did we get the dip already? Was that it yesterday?

  179. 179
    zman Says:

    Beer Thirty!

    Have a great weekend everyone!

  180. 180
    scoop006 Says:

    Z, Actually I had a profitible month with the energy trades. Many thanks

  181. 181
    Jason Says:

    Z – I’m with scoop…unbelievable run here. I can’t thank you enough!

  182. 182
    seymoujs Says:

    GOOG April $500 calls up 72-fold today..that’s what i call a nice trade!

  183. 183
    Jay Reynolds Says:

    Z-

    Who’d a thunk it? Buying NG to store? Somebody never heard of futures?

    Now if I can just leave NG puts before July with anything resembling my posterior intact I’ll be both happy and wiser. All mine, I own it no matter the outcome.

    Many thanks on all the excellent work.

    Much appreciated.

    Let you know after the Lake O meeting.

  184. 184
    Jay Reynolds Says:

    Three new papers from Matthew Simmons

    http://www.simmonsco-intl.com/research.aspx?Type=msspeeches

  185. 185
    Dman Says:

    Energy setiment:

    184 posts today & counting suggests a fair bit of excitement in the energy in-crowd that inhabits the Z-universe.

    But check out the “Top Ten Most Searched Stocks on TheStreet.com”:

    GOOG AAPL C GE AUY POT MSFT FSLR V MO

    Just one of the ten is an energy stock & FSLR isn’t exactly in our patch just now.

    What does it mean? Dunno but I thought it worth mentioning.

    Here’s the very peppy vid if you haven’t seen enough market happy talk already 🙂

    http://www.thestreet.com/_rmswtile/video/strategysession/10412805.html#10412805

  186. 186
    Nicky Says:

    Not sure whether anyone on here has a positive or negative opinion on Dennis Gartman but he appeared on Fast Money tonight as he has done almost every evening this week and proceeded to talk up natural gas (he is long of course) – no reasons given at all which I find maddening – just that it is going up so it has to keep going up! Also bullish on oil which he pretty much said he saw never coming down (also quite ridiculous) although I know he said last night he has no position. How can they pay these guys to come on and say nothing except buy and give no reason. What gets me about Gartman is that he is almost revered in commodity land – I don’t get it really. Nothing technical and nothing fundamental mentioned.

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