24
Apr

Thursday – Gas Preview & Oil Review + More 1Q Earnings

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In Today's Post:

  1. Holdings Watch
  2. Commodity Watch - gas storage preview and oil inventory review
  3. Stocks We Care About Today - NFX Beats, DO Bricks
  4. Odds & Ends

Holdings Watch:

  • (DO) - Added the June $150 calls (DOFW) for $3.70.

Commodities Watch:

  • Natural Gas traded up $0.17 to close at $10.78 in some kind of "last commodity standing" routine. This morning gas is trading off slightly.

Gas Storage Report Preview:

  • My Number: 25 to 35 Bcf Injection.
  • Last Year's Number: No change
      • Weather was similar to the prior week and much warmer than the year ago period.
      • Imports were also close to the prior week.
  • Street Consensus: 30 Bcf. The last 4 reports that were either in line with expectations or more bearish than expected have been met with buying. Hard to see how today is any different unless injections top Consensus by a good margin forcing people to start thinking about current supply and not hurricanes or coming summer heat.

Crude Oil closed up $0.23 to $118.30 yesterday as oil ignored a stronger dollar and a large than expected build in crude inventories instead focusing on bigger than expected draw downs in gasoline and heating oil stocks. This morning crude is trading down a buck.

  • Bad Idea / Slippery Slope Watch:
A report in the Wall Street Journal said that senators Charles Schumer, Byron Dorgan, Bob Casey, and Bernie Sanders, plan to call on President George W. Bush to "use (his) leverage" with Opec nations or "risk Congress holding up multi-million dollar arms deals."
I'm sure Saudi and others can get weapons from China and Russia or would you rather have Iran running the Kingdom. Threatening OPEC is simply a bad, ineffective idea. 
 
The Oil Inventory Review: 

exp-vs-act-041808.jpg

CRUDE OIL: 

Utilization and Refinery Inputs Jump: Last week I said I wanted to see refiners tow the line on keeping utilization down for a few more weeks but they just couldn't do it. I also said a return to more normal levels of utilization would result in refineries consuming as much as 1 mm bopd of crude more than they have been of late. This jump back to work added 0.6 mm bopd of incremental demand which was masked by a return of oil volumes from Mexico.

util-vs-inputs-041808.jpg

Crude Imports Rebound. Note the green line's peaks have been a series of lower highs and lower lows. 


crude-production-041808.jpg

Crude Inventory Levels: Practically Unchanged For Three Weeks.

crude-stocks-041808.jpg

GASOLINE: Bigger Than Expected Draw On Stocks Due To Higher Than Anticipated Demand.

Demand Still Lofty, Nearly 1% Above Year Ago Levels.

gasoline-demand-041808.jpg

Gasoline Stocks: Steep downward trajectory will keep boosting prices. 

gasoline-stocks-041808.jpg

Stocks We Care About Today:

NFX: Crushes 1Q08 Expectations

In A Nutshell: Bottom line beat due to top line volume based out-performance. Production guidance going up while costs remain in check. Stellar ops update to boot including record production from the Woodford Shale and Monument Butte (not big surprises) and not one but two deepwater discoveries in the Gomex and a shallow water discovery off China. Numbers will be coming up.  

See last night's note on NFX here. Conference call at 9:30 EST. 

Range Resources (RRC) Reports Another Record Quarter: Production and CFPS At All Time Highs. Good growth, good cost control.

  • Reported CFPS of $1.56 vs $1.40 expected; EPS of $0.62 (ex items) vs $0.54 expected.
  • Cash margins increased 21% to $7.15/Mcfe (stunning realized price of $9.55 / Mcfe).
  • LOE / Mcfe of $0.96, down 3% YoY but up 1% sequentially which is very respectable.
  • Marcellus acreage now at 700,000 considered prospective, up from 650,000 as of early Feb.
    • 15 horizontal wells completed so far,
    • recent IPs of 2.6 to 5.8 MMcfepd.
  • Barnett shale production up to 95 MMcfgpd net
  • Granite Wash well IP'd at 4.3 mm/d gross, interesting as this is a new focus area for CHK.
  • Conference Call: 1 pm Est.

Diamond Offshore (DO) Reports A Small Miss

  • EPS of $2.09 vs $2.12 expected; numbers have been coming down so this not great
  • Revenues came in at $786 vs $794 mm expected (range of $747-820mm).
  • No guidance provided,
  • Special dividend of $1.25 per share
  • Rig status report shows generally rising day rates
  • Margins remain strong:

do-1q08-op-margins-042408.jpg

  • Conference call: 10 Est

Odds & Ends

Analyst Watch: Slow day, FBR upped price target on (BTU) from $67 to $80 which shot higher yesterday after reporting 1Q08 results only to close lower on profit taking like most everything else energy related.

 

 

 

 

170 Responses to “Thursday – Gas Preview & Oil Review + More 1Q Earnings”

  1. 1
    Sambone Says:

    6:46 am EST

    ICE Brent Crude At New High On Supply Concerns

    By Nick Heath
    Of DOW JONES NEWSWIRES

    LONDON — ICE Brent crude oil futures reversed earlier falls to post fresh record highs in London trade Thursday, as concerns grew that industrial action at a U.K. refinery could halt North Sea oil flows.

    Confirmation from unions that strike action at INEOS PLC’s 196,000 barrel-a-day Grangemouth refinery will go ahead Sunday hardened fears the 700,000 barrels–a-day North Sea Forties Pipeline System will have to shut down, due to it relying on steam and power from Grangemouth.

    “When a refinery goes down…it is bullish products and bearish crude — but that doesn’t apply in this case because the concern is more the fact that Grangemouth provides the power and steam for the gas processing plant,” said Michael Wittner, global head of oil market research for Societe Generale in London. “If that goes down there’s been a concern for a couple of days that it is likely it’s going to hit some portion of Forties output.”

    At 1028 GMT, the front-month June Brent contract on London’s ICE futures exchange was up 17 cents at $116.63 a barrel, just off a new record high of $116.87 a barrel.

    The front-month June light, sweet, crude contract on the New York Mercantile Exchange was trading 43 cents lower at $117.87 a barrel.

    The ICE’s gasoil contract for May delivery was up $9.75 at $1,078 a metric ton, while Nymex gasoline for May delivery was down 128 points at 303.79 cents a gallon.

    —By Nick Heath, Dow Jones Newswires

  2. 2
    zman Says:

    crude down $1.30 as dollar shows second day of strength vs euro.

  3. 3
    tater Says:

    Morning. Once again having trouble with a conf call. Cant seem to get on the CLB call. You listening? Is that number going to be considered in line as it has some item subtractions?

  4. 4
    zman Says:

    DO in for an ugly open.

    CLB is in line, penny high ex items. I’m not on the call since I wasn’t in the stock but will listen to the replay. Did you try this?

    http://biz.yahoo.com/cc/2/92042.html

  5. 5
    zman Says:

    CLB Q&A – I’m on now and the call sounds to be going well, saying things like gaining share and record margins are sustainable.

  6. 6
    tater Says:

    Thank you! Was trying to get on via the corporate site and it kept crashing me. i appreciate it.

  7. 7
    reefguy Says:

    z-ioc drilling report out. Set 5 1/2″ liner in antelope limestone. Have penetrated 80′ of objective with shows. Will drill out with 4 3/4″ bit and test

  8. 8
    zman Says:

    Oil getting whacked now., down 2.60 +

  9. 9
    zman Says:

    Reef- Are these IOC guys slow drillers or am I just becoming more impatient in my old age.

  10. 10
    tater Says:

    CLB- Does his description of brittle rock, paleozoic and cenozoic, read Bakken? He says he feels Devonian Appalachian rock is top dog eventually, but is he roundabout saying work for them in Bakken, much in the way he answered the Carioca question?

  11. 11
    uop Says:

    zman:
    GM,
    if DO drops I will sell some calls,

    oil down, good, I still have USO puts,

    hope it drags NG down too.

    Gasoline economics: do you also follow this, how many cents do refiners make per gallon ?

  12. 12
    zman Says:

    NFX bid up, call in 10 minutes. I’ll miss the beginning of the DO call which is going to get dropped at the open…margins were good there as was growth but they did a poor job of reigning in analyst expectations.

    Tater- I had to jump back off that call, will listen to it later but they have been positioning for Canada with a second core test facility and I’d think they are all over the Bakken.

  13. 13
    reefguy Says:

    IOC- paying SLB big bucks to stand around and paint their equipment and get photo ops on the jungle of PNG

  14. 14
    zman Says:

    Uop – do you mean on a retail gallon of gasoline. Not much. At $3.50 I saw someone say this morning or last night that the refinery component of the cost of the gasoline is about 25 cents.

  15. 15
    zman Says:

    Reef – ha, ha, what color are the trucks?

  16. 16
    reefguy Says:

    Big Blue across the service spectrum. I am thinkking about 300-500k a day to paint and snap pics

  17. 17
    tater Says:

    Thanks, kind of hard sometimes to understand the “conference call code-speak” even though this CEO is very straight-forward. Very quick call, over already.
    “Barnett is the leading horse in the race right now, but at the end of the day the Appalachian Devonian shales are what is likely to win the race.”
    Hero and Super-Hero charges, likes the opportunity for market share.
    Demand growth for resevoir studies; very good growth across the board, have 9 different studies going in Brazil wont comment specifically on Carioca but that “if it is pre-salt they are in there” wink wink
    Ramp in activity on recent week shale plays (CHK specifically) says we should see capx growth in N. America.
    Nothing mind blowing, questions seemed to impart that the analysts don’t really know how CLB makes its money or that there’s nothing to hide here, they are growing nicely.

  18. 18
    zman Says:

    Was just thinking they might have switched to gold

    NFX call starting. Even NFX opening down this morning which is I would say absurd. I’ll be adding.

  19. 19
    zman Says:

    ZTRADE: Entered $65 May NFX Calls for $1.35.

  20. 20
    jazzkool Says:

    Z, when is DO conference call?

    jazz

  21. 21
    zman Says:

    DO Call at 10 EST; on NFX call now. Not adding to DO or punting until I know more. Panic is no way to trade and though it was a miss the numbers were not that bad. There is no guidance nor a scrap of flavor in the press release so I wait to act until I know more.

  22. 22
    zman Says:

    NFX Call:

    Mancos shale test results in next few weeks in Monument Butte

    Bakken test data coming soon

    alluding to more plays coming soon, can’t talk about yet

    already heading into the Q&A

  23. 23
    reefguy Says:

    NG trying to go green

  24. 24
    uop Says:

    zman:

    this is a general drop in all petroleum related companies,
    because oil dropped,
    could be a sector rotation ?

  25. 25
    zman Says:

    Reef – coming up as oil comes off the $2 down plus levels.

    Could be, drops came on light volume with a $2 drop in oil and we have had a good run. The key will be to see if this extends beyond a 2 to 3 day deal, uptrends don’t seem to be breaking down, and the selling again is not panic laden. Certainly oil at 117 vs 119 makes no difference to the group, nor does 110.

  26. 26
    Sambone Says:

    9:35 am EST

    Nymex Crude Below $116/Bbl As Dollar Strengthens

    By Brian Baskin
    Of DOW JONES NEWSWIRES

    HOUSTON — Crude oil futures traded lower Thursday, as the dollar strengthened sharply against the euro.

    Light, sweet crude for June delivery traded $2.48, or 2.1%, lower at $115.82 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded $1.88 lower at $114.58 a barrel.

    Futures fell as low as $115.56, a price not seen since April 18, as the dollar strengthened for the second straight day. The dollar is now at a 10-day high against the euro after hitting a record low on Tuesday.

    Investors have used commodities as a hedge against the weakening dollar, as oil priced in U.S. currency becomes relatively cheaper to purchase. Oil rose as high as $119.90 a barrel on Tuesday, when the dollar finally fell as low as $1.60 per euro, though a series of threats to oil production were also a factor. The euro was recently valued at $1.5703, as the U.S. Labor Department reported that jobless claims fell in the week ending April 19, where analysts had expected an increase.

    The dollar has strengthened over the last two days as a consensus emerged among economists that the Federal Reserve had implemented the last of its dramatic interest rate cuts designed to stimulate the U.S. economy. The cuts have a side effect of weakening the dollar, and speculation about the Fed’s actions has driven oil prices many times over the last six months. Most now expect a 25- or 50-basis-point cut next week, following a rare 75-basis-point cut at the previous meeting.

    “Once again we’re dangerously close to selling off big,” said Michael Korn, president of Skokie Energy Corp., a brokerage in Princeton, N.J., noting the two-day decline in prices.

    The dollar has regained its hold on the market in a week where concerns about oil and product supplies sent oil to new highs.

    Traders are watching a potential strike at a U.K. refinery, which if it occurs would cut off gas needed to treat Forties crude produced in the North Sea. BP PLC (BP) has said it is preparing to shut down the Forties pipeline system should the strike occur, potentially disrupting up to 700,000 barrels a day of high-quality oil.

    The strike is scheduled for Sunday, however, which could lead some to balk at buying on the stoppage, in the event of a settlement after markets close Friday, wrote Ed Meir, an analyst with MF Global.

    “We could be in for a short-term pullback for the balance of the week,” he wrote.

    Front-month May reformulated gasoline blendstock, or RBOB, recently traded down 4.42 cents, or 1.5%, at $3.0065 a gallon. May heating oil traded at $3.2821 a gallon, down 4.29 cents, or 1.3%. Both contracts had record settlements Wednesday.

    —By Brian Baskin, Dow Jones Newswires

  27. 27
    zman Says:

    NFX Call notes:

    The two GOMEX discoveries were 5 to 10 mm barrel (lower end of the expected range).
    rates will be 30 to 40 mm/d gross each

    China discoveries – about 10 mm barrels

    Will switch to the DO call now and listen to NFX later.

  28. 28
    reefguy Says:

    ioc- panic selling, i am buying

  29. 29
    Denise Says:

    Good morning,
    Reading quite a few articles about how dollar might firm up-sent to Z

    Also if anyone interested Mr K posting this am his favorite long is Dug and favorite short XOM

    yesterday he pointed out there was a 5 month pattern on crude dropping when the contract rolls with a corresponding graph

  30. 30
    uop Says:

    Housing sales a disaster( who is surprised??), this will cause a selloff.

  31. 31
    zman Says:

    DO: Took delivery of Ocean Shield, late by 6 to 8 weeks from Singapore, substantially on budget. Accepted a 5 month job on the rig, not the original year long higher day rate deal they had planned …they say they are pleased …okkkkaaaa..

    These guys do not think the way I do about reporting either their press release …absolutely no flavor or guidance. You have to help people understand why they should buy your stock. That’s part of management’s job. I give them a D on this. On the call you should start big and work to small (details). The did and always do the opposite and then its a random litany of minutia. Thankfully, the analysts who follow the name are used to this.

  32. 32
    kyleandy Says:

    reef—-so the report from IOC ok? need to translate #7 for us non-oil guys that own IOC

  33. 33
    Denise Says:

    Z,
    or anyone -would it be a good time to buy refiners for a trade now oil is down slightly?

  34. 34
    reefguy Says:

    xco only E on my board green(crr doing well)

  35. 35
    ram Says:

    RE 29 – Any thoughts to bailing on certain names?

  36. 36
    zman Says:

    DO – guidance staying unchanged.

    Denise – I’m barely in to the refiners right now. I did not like to see them increase utilization last week. Gasoline is falling almost as fast as crude so financially they aren’t benefiting much from a dip in oil. I’ll get long some more next week I think.

  37. 37
    Denise Says:

    Mr K is just trading-these are short term
    calls

    Things were kind of frothy in energy you have to admit

  38. 38
    zman Says:

    Ram – Not really, I’ve been rolling longer of late (usually I’m a lot more front month than this) and while this is painful I don’t know that this is “the end” for oil. Agree with Denise’s frothy comment which is again why I was extending.

  39. 39
    ram Says:

    Thank you.

  40. 40
    zman Says:

    Denise – I think early in refiners should be bigger rather than smaller name…VLO.

  41. 41
    zman Says:

    Ram – thanks for saying thanks. When I first started trading this kind of day made me want to eat a gun. Now I feel like hunting but with a patient trigger.

  42. 42
    zman Says:

    IOC – they need a drill stem test (DST). People don’t want to hear about shows, they want to know about productive capability of the well.

    XNG and OIH continuing to sell down hard.

  43. 43
    reefguy Says:

    Elk 4 report. SLB got Ioc to set 7″ casing to high in shale section. Well prognosis had 7″ set in Marl between shale and Antelope Ls. objective. When well was drilled out of 7″ shale above objective required about 15# drill mud to stabalize. Popped into Antelope Ls. without Marl present and probably lost returns(mud) as this fractured limestone is at about a 11-12# mud weight enviornment. If they kept drilling at this point, they would have stuck drillpipe. Had they lowerered the mudweight from 15# the shale section exposed would have collapsed.

  44. 44
    ellwodo Says:

    With NFX going down on its good news, does this bode badly for CHK, HK, etc on their upcoming releases?

  45. 45
    zman Says:

    Ellwodo – that would be the basic pattern early in the quarter for reporting so far but XTO sold off yesterday on good results (though costs were high) and again off big today. So you can say all the good news is priced in.

    NFX is a little difference as their news was better and their costs were better. On a flat oil market day this would be well up.

    For HK and CHK it is possible they come down however since they report later and they are already coming in they could get a bounce on comments (probably not so much the numbers but the guidance).

  46. 46
    kiaora Says:

    Z—re. #41, Trigger finger gettin’ ichy!!!

  47. 47
    bill Says:

    drys is getting into ocean rigs

    http://www.irwebpage.com/dryships/files/drys042408.pdf

    whats going on with pq and hk

  48. 48
    Denise Says:

    It seems like the $120 level was “uncle” in my mind-recall that graph I found last week on world gdp % of energy costs.

    I sent Z a column from a bond economist from yesterday ponting out that there were some different comments made at the G7 meeting-that led him to believe there could be possible currency intervention

    If the fed says something next week about holding or raising rates in the future-could lead to dollar up
    and oil down

    This would also bring down other commodities which would help with worldwide food, energy costs ect…

    Sorry so longwinded just sharing things I read-but makes sense

  49. 49
    ellwodo Says:

    Thanks, I’ll hang in there.

  50. 50
    reefguy Says:

    NG leading Cl..

  51. 51
    Denise Says:

    Z-thank you for the refiner opinion(somehow I am always attracted to the down and out)

  52. 52
    scoop006 Says:

    #48 great post Denise

  53. 53
    md Says:

    NG 24 bcf injection

  54. 54
    zman Says:

    I’m watching the XNG and OIH levels quite closely and to me they look like profit taking and not just run from a burning barn type selling.

    K – I’m more patient than 10 minutes.

    Ellwo – I’m not saying to hang in there, that’s just what I’m doing. Sitting on pretty fat (though less so now) profits since mid Feb.

    Thanks D. Hear ya and appreciate the dollar thoughts. Oil off a buck now.

    D – down and out LNG, the company,

    Bill – yep, people seem to like it yesterday, today market weighing.

    Natural gas is just absolutely unreal. Last commodity standing status. Money flowing out of everything else except rice I guess to buy more natural gas. This looks like a speculative blow out to me. Will not add a short as it could go on through the ceiling, roof etc.

    DO call still going on … fairly upbeat.

  55. 55
    Nicky Says:

    Morning all.

    CNBC trader (RayCarbonne) that supplies are very tight in nat gas – what are these guys smoking???

    Denise totally agree. Gold and silver already rolling over – in fact I think both are on the cusp of a very sharp decline.

    If the Fed doesn’t cut next week then watch for a big commodity sell off and even if they only do a quarter cuts are now over so I still expect a sell off.

    That said energy complex looks in need of a higher high to finish off this move.

  56. 56
    zman Says:

    Thanks MD, lost track of time.

    Morning Nicky, got any levels for us on the broad market?

  57. 57
    reefguy Says:

    Elk 4- I bought 2500 shares today because: Well has pipe set into pay section and is about 800 high to gas/water contact( my view) seen in Elk 2. Questions to be answered are reservoir type(fractures, matrix and quality) These answers will result in the flow rates on DST’s that will be conducted shortly.

  58. 58
    zman Says:

    Denise – if you want down and out that’s WNR in the refiners.

  59. 59
    Denise Says:

    I wanted to thank Nicky for her on target wave down gold call-saved me some $

    If memory serves me correct I believe she said possible $112 for oil

  60. 60
    Nicky Says:

    Nat gas is testing monthly resistance at the 10.972 – 11.045 area and this could mark the top. A close below 15.570 would confirm.

  61. 61
    Denise Says:

    Z-banned myself from that ugly dog
    been there lost $

  62. 62
    zman Says:

    RE WNR – I would not touch it either. Down and out not going to work in energy for some time.

  63. 63
    Nicky Says:

    Broader market – I think the market is on borrowed time but still expect this rally to test 13,050 in the Dow and 1416 in SPX. This is conditional on 12656 holding on the Dow and 1370 holding on SPX.

  64. 64
    zman Says:

    Seeing a nice rally in XNG and OIH off the lows since gas storage release.

    DO call still going on. This is not a bad call and the analysts seem ok with the quarter results and the outlook here.

  65. 65
    Nicky Says:

    #60 – a close below 10.570 would confirm (mistyped previously!)

  66. 66
    Nicky Says:

    Denise not sure where that 112 number comes from in oil?

  67. 67
    zman Says:

    Thanks for the levels. If the Fed thinks the economy is strong enough to do without further rate cuts would this not signal the market that there is a light at the end of the tunnel. I think the economy is weaker than the fed thinks it is.

    DO call over. Stock down $4 at end of call, been down $4 to $5 during it. Will watch closely and may punt remaining May calls if it weakens.

  68. 68
    xweto Says:

    Z: Re: pullback – any interest/level on buying more PBR calls; and what’s your trigger level to buy those dastardly UNG puts

  69. 69
    reefguy Says:

    CRR up 6.63% before earnings call

  70. 70
    Sambone Says:

    Z – #67, I agree. That light at the end of the tunnel is a train.

  71. 71
    Nicky Says:

    Rate cuts are not going to be enough to save the economy imo Z. But yes initially it could offer a glimmer of hope to the market if the Fed says they do not need to cut – more like they are running out of bullets and what difference is a 0.25% cut going to make on top of the 3% already cut.
    At some stage it seems likely we see a rotation out of commodities and back into stocks and I suspect that will be the second half of the year.

  72. 72
    zman Says:

    X-man – PBR comments on the CLB call regarding Carioca discovery were very interesting. They obviously think the Street is missing the boat on PBR’s activities in the offshore, deep environment. I’ll wait for a little more reason to enter as that’s a stock that can move $5 to $10 either way in an environment like this. But I’m holding what I’ve got (hindsight says should have sold 2 days ago)

    Re UNG – they obviously want $11 NG, if that proves to be a hard ceiling I may add NTM puts but that will probably drive gas to $15.

    Reef – that deep shale demand for CRR’s proppant must be very strong.

    Nicky – I did not mean to imply they were. It’s just the fed’s bandaid and in the meantime it jacks inflation. But I think the administration will have a hand in the decision and managing the stock market is at least as important as goosing the economy in an election year. Sorry to be jaded like that but, well, there you have it. Rate hikes stall stocks

  73. 73
    scoop006 Says:

    DO making a comeback

  74. 74
    Nicky Says:

    Euro starting to fall very hard now. It is possible that the $ short trade is done. Interestingly the euro did make it to the 1.60 target (a spike) on misinformation given by an ECB official that they were going to raise rates. This was later retracted and replaced with ‘rates could go either way’! The EUR/$ chart does look complete to the upside to me now.
    Energy still not responding to the rise in the dollar…

  75. 75
    uop Says:

    xweto:

    UNG puts: a key question is whether the “EVENT” of NG prices will happen the next 4 weeks or late, this will determine whether you wnat May or JUNE puts,

    I am considering roling my Mayy puts out to June.

  76. 76
    Nicky Says:

    Z – re #72 – I could’nt agree more with your comments re the Fed, election years and certainly I do not expect to see any rate hikes this year.
    I still expect to see an absolutely huge rally in stocks in the second half of the year – where it starts from remains to be seen!

  77. 77
    zman Says:

    Nicky – if the E/$ chart was a stock I would say it based at 1.56 to 1.57 for a month, broke out to the $1.60 level and is down 1.22% today to $1.57. If it were a stock I’d say that was the top end of support.

  78. 78
    uop Says:

    Nicky;

    is energy responding to the dollar or is the dollar responding to energy and commodities in general ?

    have you seen the downgrade of growthrates for EU countries ? This lower growth will, despite inflation concerns, cause eventually an easing of interest rates in the EU and that will cause a decline in the EURO.

  79. 79
    zman Says:

    OIH gaining ground.

    Scoop – don’t call it a comeback!!!

    Goodpoint UOP – did you see CNBC yesterday talking about how much it costs to eat a meal without wine in Venice in $ yesterday. $287 bucks for one person at a nice restaurant. Looks like I’m headed back to Honduras this summer.

  80. 80
    uop Says:

    zman:
    was in Honduras on Roatan a few years ago SCUBO diving, was bit by a dolphin,

    where do you go there ?

  81. 81
    Denise Says:

    Nicky,
    I think the $112 must of been from another Elliotician I started reading on another site I subscribe-sorry for confusion
    His name is David Waggoner (he is new on site) or could have been J Cooper

  82. 82
    reefguy Says:

    z- you know that dolphins bite to intiate mating activity…

  83. 83
    Nicky Says:

    Z re # 77 – yes right regarding levels. But the dreaded elliott wave pattern has v waves now complete…..

    uop – I think energy is in a world of its own to be honest and every now and again they say that oil is up due to the dollar falling but to be honest they are so decoupled its not true. And it has to be said that on the days that the $ has gone up energy has almost never fallen.

    Euro falling is now taking metals with it. I think gold will be at 800 or lower within a month.

    And yes agree re interest rates and euro. In the next 6 – 12 months I expect the $ to be much stronger against both the pound and the euro.

  84. 84
    zman Says:

    NFX performing the best of any E&P post report of 1Q numbers, down $0.20.

    HAL approaching HOD, down $0.70. This is why when trading you have to have a thesis. Most of my names are 1) cheap, and 2) in front of some sort of wave. In the case of HAL and NBR (and I should be in CRR but oh well and CLB) the wave is the increased drilling in North America. On days like today, that thesis did not change just because of the color of the ticker. Not trying to be preachy, just thinking out loud. And again, I don’t need $120 oil to keep the thesis hole. It helps keep the hot money flowing to the stocks for sure but they are only seeing improving fundamentals for the short and medium term at least.

  85. 85
    zman Says:

    Uop – I hear Schwarzeneggar keeps a place at Roatan. I stay across the water at Trujillo in a hotel built by Ollie North for the Iran-Contra deal. I see more barracuda than dolphins.

  86. 86
    zman Says:

    DO now rapidly climbing out of Doooohhhhh land from this morning.

  87. 87
    uop Says:

    Nicky;

    big money has been piling into commodities and that includes oil,
    now, and more in the next 6 months, and if $$$-equities look attractive again, money will leave commodities and go into the stockmarket: That is the driving force for the dollar value,
    if that rotation gets combined with lower interest rates in the EU: we have a bull market.

  88. 88
    Denise Says:

    Z-How about taking the wife and kids to Papua New Guinea to check out a slowly being dug well?

  89. 89
    zman Says:

    Thanks Reef re Dolphins. I never get even a nibble.

  90. 90
    zman Says:

    Denise – hahahahahahaha. I go with a group to Honduras. Would not my kid to either of those places.

  91. 91
    Nicky Says:

    #87 – yes was saying the same thing in an earlier post. Except I don’t expect a new bull market to be honest. Yes a very good rally but it will be no more than a dead cat bounce. Sectors may rotate but the problems have not gone away. And I also do not expect to see energy hold up alone whilst the rest of the commodity market falls. (I think you are saying that money will continue to pile into this sector in the next 6 months). I expect to see a top by no later than the end of next week and it be a 3 – 6 month top. Just my opinion but nothing goes up in a straight line forever.

  92. 92
    zman Says:

    HAL attempting to go green on day.

    DO ditto.

    NFX up $0.50 and best in group.

  93. 93
    ellwodo Says:

    Zman, Thanks for NFX. I got in and out of the May 65s this morning for a quick 25%. I imagine here is more to be had, bt I’m happy.It helps ease my (hopefully temporary) nervousness about CHK.

  94. 94
    uop Says:

    zman:
    when you are in Honduras, what do you do there ?

    SCUBA is ok, not the best,

  95. 95
    zman Says:

    Uop – construction work and I play a little soccer with the kids. No stock market, no internet. Clears the brain. I go in late June and I don’t post for a week.

  96. 96
    Nicky Says:

    uop – just thought I better add that I am talking actual commodity price and not individual energy shares….

  97. 97
    apbd Says:

    My pal, Steve Irwin, wishes he had been bit by a dolphin instead.
    apbd

  98. 98
    Denise Says:

    Hmmm… just read this thought from T Crescenzi-(wrote of G7’s change)on currency intervention-that the best time to intervene is when markets are already moving in the desired direction-because it pushes speculators beyond there pain threshold
    goal is to inflict enough pain on speculators to restrain their speculation in the future, in this case, in both the dollar and commodities.

    He says if dollar continues up(as today) and Fed stands pat-conditions would line up
    thinking I will remain long dug

  99. 99
    zman Says:

    Tempted to take a little SWN call action before tomorrow’s conference call. Unlikely to have bad news, stock has fallen back to support. But I think I’ll hold off as I’m also tempted to raise cash in cash dollar recovery takes hold as you guys have been saying and crude takes a breather.

  100. 100
    reefguy Says:

    CRR up 9.38% wow

  101. 101
    zman Says:

    oil getting kicked in head again as euro sinks to 1.565.

  102. 102
    zman Says:

    CNBC guest just said oil demand is falling apart. That’s patently false.

  103. 103
    VTZ Says:

    That’s not blatantly false, that’s grade A reporting…

  104. 104
    Nicky Says:

    wti support below the intraday low is at 115 and then 112.35.

  105. 105
    kaman Says:

    More of a met coal play vs steam, but my ICO calls are getting a second chance.

  106. 106
    zman Says:

    Anybody know who brokerage/research firm Peters & Co is? Upgraded NBR today but I don’t know them.

    K – nice.

    Nicky – thanks, would not be surprised to see it close below $114 or above $117 today.

    V – the same guy said “maybe you shouldn’t listen to me since I’ve been saying to stay away from energy for a year now but I don’t get the oil thing” No kidding.

  107. 107
    VTZ Says:

    Peters and Co. is an energy investment bank based in Calgary. They specialize in small caps and mid caps. They are involved in IPOs, M&A and research. They are big in Calgary.

  108. 108
    zman Says:

    Thanks V, heard the name before, did not know the reputation. Would you say it is more like a Simmons or Howard Weil south of the border or like a Tristone Capital?

  109. 109
    VTZ Says:

    More like a Howard Weil. They are more of a boutique into small cap E&Ps, but as they are all getting gobbled up in Canada. Therefore, they are moving up the market cap chain.

    They merged Canetic, for example.

  110. 110
    zman Says:

    thanks, bucket shops out there its hard to keep up.

    oil failing 115 now.

  111. 111
    Denise Says:

    Interesting tidbit from Lehman today
    they suggest that the price of oil has been pushed to these levels by an influx of $40 billion into index commodity funds, much of it coming from Mideast sovereign wealth funds. If this is the case they have doubled-up their exposure.

  112. 112
    zman Says:

    Denise – saw the other day East (China) sovereign funds in the multi-billions into oil as well.

  113. 113
    uop Says:

    zman:
    that UNG drop looks good.

  114. 114
    zman Says:

    true, long way to fall in my opinion, lot further than oil.

  115. 115
    zman Says:

    CNBC talking about the two solar ETFs launched in the last week. Solar names might make a decent hedge here if you think oil is toast for awhile. They’ve had a huge run and if strong results aren’t working so well for the energy and ag stocks, solar may be the next buy the rumor, sell the news group.

  116. 116
    uop Says:

    zman:

    HK and PQ my biggest looser today so far.

    what’s your take ?

  117. 117
    zman Says:

    my take is that the group is red and those are little names that have shot up disproportionately to the group so they are giving back more (about double) today’s down side in the gassy names. Both of those names I want to be long for earnings and I’ve taken profits off the table and rolled mostly longer in HK. The PQ I should have taken more profits in the Mays and if it falls another 50 cents, I’ll consider taking the next month out, bearing in mind market conditions. We went for a long time without a true red day and they stink but there is nothing related to these stocks’ fortunes that has changed for the worse, just group action.

  118. 118
    zman Says:

    T Boone saying wind is the way (again). Says US could reduce dependence on foreign oil by 38% if NG used to power cars and solar and wind are ramped up. I would have picked a round number.

    Ram’s ZOLT looks ready to run now.

  119. 119
    uop Says:

    Zman:
    lets analyse;

    assume oil falls further,
    the enrgy demand/supply situation does really not change a lot, oilo price will not fall below say 90$,
    at these levels alternatives will still have to be pursued,

    question; what will happen to solar and coal ?

  120. 120
    Sambone Says:

    1:34 pm EST

    Nymex Crude Falls As Investors Shun Commodities

    Dow Jones Newswires
    From Market Talk:
    [Dow Jones] Nymex crude is trading at about $115 a barrel as the surging dollar sends investors out of commodities and into equities, says Peter Donovan of Vantage Trading. “Just as we overreact on the way up, the sudden down drafts can also be panicky and abrupt,” he says. The euro, at $1.5656, is at a 17-day low, while U.S. equities are up about 1%. June crude trades at $115.14, down $3.16, up from an intraday low of $114.25. (brian.baskin@dowjones.com)

  121. 121
    Sambone Says:

    Hmmm, the “Crowd” seems to be exiting.

  122. 122
    zman Says:

    Sam – they’ll be back. Let them go get burned in houses, retail, or ABK…and then they’ll be back.

  123. 123
    Sambone Says:

    Z – Oh I agree. I think in the short run the overall market will go up and then we’ll see lower lows. On the short run, our patch may suffer, but I’m in it for the long run anyway. Been there done that. The lows in our patch have higher lows, so I’ll just sit back and buy more on dips.
    My only question is what to buy outside the patch? Banks, nope, Drugs, no new supply so nope, Materials, too high, etc. Maybe tech, but not quite sure.

  124. 124
    ram Says:

    I hope they are back soon.

  125. 125
    reefguy Says:

    118-z, yesterday Boone MESA Wind purchased 667 GE wind Turbines at about $2.5MM each. The down payment was $165MM. First delivery in 2010. Said to be largest single wind turbine puchase ever.

  126. 126
    zman Says:

    …and ZOLT makes the blades for turbines like these, right?

  127. 127
    uop Says:

    Sambone:

    Tech is were action is,

  128. 128
    apbd Says:

    T Bone, always going round and round.
    apbd

  129. 129
    zman Says:

    Very orderly selling again, no panic, well off lows.

    GE up strong, that’s a big order

    CLR going positive, NFX within a hair, again,

    Service down about 2%, HAL down half that (cheaper working) and NBR down equal to group (even cheaper not working today due to Cramarians running for cover probably)

    Big cap E&P getting hit the worst and we are mostly not there right now although its only off b/c its had the big move. CHK is cheaper falling less etc. PQ is even cheaper but falls more due to its small size and sector fear. If this goes on for a couple of more days the little names will start to really underperform as funds switch to fewer names with overall less exposure, but more concentrated in the big names in the group.

    I like that CLR is performing due to future promise of Bakken… the selectivity there and in NFX tells me that there is rationale thought already coming to play.

    I like DO is outperforming RIG which has not reported yet.

  130. 130
    reefguy Says:

    126- not sure, will find out.

  131. 131
    zman Says:

    Oil closing a nose over $116, down $2.25.

    Reef – thanks.

  132. 132
    ram Says:

    I belive ZOLT makes the chief components in the blades. So they are at the bottom of the money chain.

  133. 133
    zman Says:

    May trade some May calls for cash soon. Don’t trust this dollar not to gap up in the morning. On the fence about and when in doubt, sell half.

  134. 134
    zman Says:

    Cramer talking up timber and tomorrow’s farm bill. Sam, this might be your play, he mentioned WY and LPX, both of which I would not play but also TIM. I happen to know they are working on some interesting cellulosic tech involving …diaper tailings.

  135. 135
    reefguy Says:

    134-I have six kids..diapar tailings are a play on birth control

  136. 136
    zman Says:

    now they can power your suburban

  137. 137
    zman Says:

    wow XCO

  138. 138
    reefguy Says:

    XCO- gotta pay for college somehow

  139. 139
    uop Says:

    zman, your 133,

    which companies?

  140. 140
    zman Says:

    any of the May contracts, haven’t decided to do it yet, just thinking about it.

  141. 141
    reefguy Says:

    IOC May $15 calls..Look at bid/ask volumes

  142. 142
    scoop006 Says:

    Z any thoughts on SWN April $40C’s?

  143. 143
    zman Says:

    Reef – what am I looking for? decent size

    Scoop – I’m holding off.

  144. 144
    reefguy Says:

    143- way bigger than i have seen

  145. 145
    Denise Says:

    Reefguy,
    Big buyer of May 15 puts
    Think it means anything?

  146. 146
    reefguy Says:

    How big? seems like some biggish shares being bought/put to protect downside

  147. 147
    Denise Says:

    I know little about reading options but isn’t the days volume in May’s about 2 to 1 on the put side?

  148. 148
    reefguy Says:

    122 si

  149. 149
    Denise Says:

    I take that back someone just bought a slug of 25’s

  150. 150
    reefguy Says:

    May 25 calls?

  151. 151
    zman Says:

    Ugly day, they are selling energy down a bit further into the close, not to lows on the day yet but approaching. Volume looks average.

  152. 152
    Denise Says:

    Yes-I give up
    do not have a clue what I am saying or if it means anything.Please ignore my IOC posts-as I said no nothing about options

    On another note Mr K goes to a 3-3 on the market

    /

  153. 153
    reefguy Says:

    Denise- I am sure IOC management has no clue as well

  154. 154
    scoop006 Says:

    Denise What does a 3-3 mean?

  155. 155
    Denise Says:

    Sure seems that way-thanks for the laugh!

  156. 156
    Denise Says:

    Scale of 1 to 10
    10 is the most bullish and 1 most negative
    First number his short term view and second number is his intermediate view

    Believe last market rating was 5-3
    So he is getting more bearish-said he added to his shorts today mostly rth kind of names

  157. 157
    scoop006 Says:

    D many thanks

  158. 158
    zman Says:

    Ok, I say they are selling off into the close and then the groups decides to put on a last 10 minute bottom fishing rally.

    The names that keep getting recharged quickly when the market rallies are HAL and NFX.

  159. 159
    Denise Says:

    Sorry for the off energy –
    But Mr K did post he went long C(has been buying last two days)
    no reasoning given-almost fell off my trading chair reading that!

  160. 160
    ram Says:

    So the switching of monies from energy to financials might have begun.

  161. 161
    zman Says:

    Ram – Hard to tell. The dollar strengthened like this around March 20 and everyone said oil was dead and the equities fell and then dollar failed within about 5 days and the energy equities went on to new highs.

  162. 162
    Nicky Says:

    I am with Mr K Denise. Looking for some sort of technical contraction in volume and breadth on any new highs going forward. Volume today came in higher than yesterday which does indicate higher highs still out there but this rally is now on borrowed time..

  163. 163
    Denise Says:

    I think it is just a trade-he is a short only hedge fund-rarely buys anything

    But yes it looked that way today-big % moves in financials-look at GS up 5% and C 4.5%-shorts still unwinding?

  164. 164
    Denise Says:

    Nicky,
    If this is just a bear market rally it makes perfect sense-but everyone I read is thinking the same thing which makes me nervous

  165. 165
    reefguy Says:

    IOC after the close, 25,000 sh@17.21 and 29,800 sh at 17.58

  166. 166
    Nicky Says:

    Yes I understand that Denise. That said it is only the technicians I read who seem to be bearish – if you turn on CNBC they seem to be turning more bullish by the day and constantly arguing that we have a bottom in place.
    I don’t actually see the market falling apart this year (that is reserved for next year and the year after) – so it is possible that the lows for the year are in and we just go down for a retest. If we do fall further then I don’t see it as much further. But I could be way wrong as the bearish count says we are just about to embark on a wave 3 down which could be big.

  167. 167
    Denise Says:

    Was catching up from yesterday-Mr K on Kudlow last night-he makes some good pts-
    http://www.cnbc.com/id/15840232?video=720767458
    Says no leadership in market if we lose energy

  168. 168
    zman Says:

    Agree with 167…this year the market has not been able to put together a run without the energy names. They are still cheap relative to all the other flotsam out there.

    SWN with a good sized beat on the tape.

  169. 169
    zman Says:

    So if MSFT is a miss, does that mean people will be rotating out of technology into energy, lol?

  170. 170
    zman Says:

    NFX notes from a chat with management and the conference call added to last night’s post. Will likely buy more tomorrow or Monday (bearing in mind the market) as the confidence level here is increasingly high, numbers are coming up, and so will ratings. They are going to be achieving finding costs of $1 this summer in the Woodford as they move to dual laterals + Bakken potential + Mancos shale which is a low cost, low, low risk play.

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