12
Jun

Thursday – Gas Preview & Oil Review

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In Today's Post

  1. Holdings Watch - added an opener position in (BRY)
  2. Commodity Watch - Gas Preview and Oil Inventory Review
  3. Odds & Ends

Holdings Watch: The Wiki tab is updated. I'm getting ready to close the remain front month positions and sell back some July exposure.

  • (BRY) - Entered the August $60 calls (BRYHL) for $3.10.

 

Commodity Watch:

  • Natural Gas extended recent gains climbing $0.22 to close at $12.66 yesterday, largely on the back of strong crude prices. The heat wave in the northeast has moderated but more near record temperatures are expected in the South next week. The tropics remain quiet and Atlantic sea surface temperatures are not yet warm enough to fuel more activity just yet.  This morning gas is trading off slightly on a general easing in commodity prices. 

Gas Storage Preview:

  • My Number: 90 Bcf Injection - in line with consensus
  • Year ago: 97 Bcf Injection
  • Last Week: 105  Bcf Injection
  • 5 Yr Avg: 94 Bcf Injection
  • Weather Watch: Cooling degree days rose to 54 last week from 31 in the prior week and 45 one year ago. 
  • Imports: were down 3.5 Bcfgpd from year ago levels (nearly 25 Bcf less per week coming in) and off 0.5 Bcfgpd from the prior week.
  • Exports: hard to get current data here but:
    • Jan 2008 ran 1.0 Bcfgpd above 2007 levels,
    • Feb 2008 ran 1.5               "             "
    • March 2008 ran 0.6            "             " 
  • Domestic Production: up 4.7 Bcfgpd as of March. So it is likely that supply is a Bcfgpd +/- 0.5 Bcfgpd higher than year ago levels. We may be up a little more now as Independence Hub is back in the mix now but not yet fully ramped to the 900 MMcfgpd it was producing before the pipeline link shuttered it back in early April. Had it not been down during this time storage would be roughly 60 B's higher.

 

Street Consensus: 90 Bcf Injection.

  • Crude Oil jumped $5.07 to close at $136.38 on a retreating dollar and stories that post-earthquake China was increasing its call on global supplies of crude during its recovery/rebuilding efforts and finally on yet another unexpectedly large draw down of U.S. crude stocks.  Like I said last Friday, it's amazing how quickly we get used to big numbers. This morning crude is trading off $2 to $3 on a bounce in the dollar.
  • Hugo Watch: Venezuelan "President" Hugo Chavez said oil prices are too high, a fair price would be $100 and warned that oil could go to $200 blaming the U.S. at large for escalating prices.

The EIA Review: 

exp-vs-act-060608.jpg

 

CRUDE OIL: Bigger than expected draw down as imports remain mode.

Utilization & Refiner Inputs: Utilization dipped a little over a point last week which was on my shopping list for things I'd like to see happen before I get more enthusiastic about bottom fishing for refiners.  

util-vs-inputs-060608.jpg

crude-imports-060608.jpg

 

crude-stocks-060608.jpg

Last week I labeled the crude chart as odd looking. Logistical discombobulations along the Gulf Coast, the fact of the matter is that imports are more than demand is and import volumes just don't appear to be working themselves out. While gasoline production may require less inputs to refineries this summer, the gearing up period to rebuild depleted heating oil stocks for next winter (insert groan here if you are a bear and think I'm thinking too far ahead) will be substantial.

GASOLINE: Stocks were in line with expectations but the real surprise was surging demand. Over maybe it shouldn't be a surprise. I watched oil surge $17 in the final two days of last week and my first thought at the closing bell Friday was  "better fill up the cars now," maybe I wasn't alone in that and the U.S. collectively ran to the pump.

Production Ebbing, Not  Approaching Peak Levels As You Would Expect This Time of Year. 

gasoline-production-060608.jpg

gasoline-demand-060608.jpg

In yesterday's piece I was looking for a moderation of refinery utilization/production and demand that is not falling off a cliff. While one week's data does not a trend make this is a good start and another week in 9+ mm bpd demand territory and I will start to get pretty interested in the independent refiner group, at least for a trade.

gasoline-price-061108.jpg

The following graphs look like the ones from yesterday's post but they have one more data point and the titles still applied and I'm basically lazy so I didn't change them. Just wanted to highlight again that in the West Coast region  gasoline stocks are uncharacteristically low. I don't have a graph for it yet but the Rockies regions is getting down towards the lower end of its normal band as well. 

gasoline-stocks-060608aaa.jpg

 

DISTILLATE - Bigger than expected build.

dist-stocks-060608.jpg

Odds & Ends

Analyst Watch: (ACI) cut to hold at JPM, GS raises (APC) to buy, Merrill takes (MRO) to buy from underperform, GS adds (EOG) to its "Conviction Buy" list and takes (COG) off of it. Lehman looks to be marking numbers to market for the 2Q as it is raising price targets on a swath of E&P names (although they are still behind the curve and their prices barely get them to current levels which is shameful or at least gutless in this highly discount E&P environment).

95 Responses to “Thursday – Gas Preview & Oil Review”

  1. 1
    ellwodo Says:

    Z have you done a “why I like PQ” piece you can point me to?

  2. 2
    zman Says:

    Re PQ: this was in Tuesday’s post.

    PQ – Common Stock, July Calls

    * One of the least inexpensive small cap E&P names around – see initial piece on the reports page.
    * Haynesville position, small in terms of acreage but it makes them one of the most leveraged to the play given their smaller reserve bookings.
    * Not the best option trader but patience has paid off here time and again
    * Did I mention it is very cheap: 4.4x 2009 consensus estimated CFPS
    * I expect them to bump production guidance on the 2Q call.

  3. 3
    ellwodo Says:

    thanks.

  4. 4
    zman Says:

    E&P & Service down on very light volume as of yet.

    Refiners getting a small bounce.

    DRYS and gang getting absolutely pummeled yet again.

  5. 5
    ram Says:

    So the E&P stocks are looking at oil.

  6. 6
    ram Says:

    It looks like DRYS broke the second neckline and might head to the upper 50’s again – IMNO.

  7. 7
    reefguy Says:

    mmr-BB repermited to 35,000′

  8. 8
    zman Says:

    Morning Ram – I think they are looking at a combi of a reversal in oil, though not yet through yesterday’s gains, and a higher broad market so you have a little bit of grass is greener effect so the heard runs over there. Volume is very light and there have already been a couple of attempts to stem the decline in several E&Ps.

    NG is trading off a dime pre #s

    Thanks Reef – missed that, very slow news day today other the machinations of Merrill and Goldman.

    Also saw Morgan Stanley taking the E&P sector from Overweight to Market Weight.

  9. 9
    Bleemus Says:

    MMR McMoRan Expl announces 4th successful well at Flatrock (34.01 0.91)

    Co announces its fourth successful well at the Flatrock field located on OCS 310 at South Marsh Island Block 212 in ten feet of water at the Flatrock No. 4 (“C” location). The Flatrock No. 4 (“C” location) infill development well, which commenced drilling on April 9, 2008, is located between the Flatrock No. 1 discovery and the Flatrock No. 2 wells. The No. 4 well has been drilled to 15,315 feet and log-while-drilling tools have indicated hydrocarbon bearing sands in the proven hydrocarbon column in the Rob-L section approximating 135 net feet over a total approximate 246 foot gross interval. The well will be deepened to a proposed total depth of 18,500 feet to evaluate additional targets in the Rob-L and Operc sections

  10. 10
    isleworth Says:

    Z – any new thoughts on WFT? Tks.

  11. 11
    zman Says:

    Isle – re WFT, nothing new fundamental side, SLB has been weaker with the broad market despite several broker upgrades and that will weigh on a stock like WFT. I’ll wait to see if it can hold the $43 level or so before adding to the longer dated calls and I’ll likely go ahead and take the hit on the Junes in the near future.

    Bemuus – Flatrock news swamped by the fear that they still haven’t found what they’re looking for at Blackbeard.

    CHK, HK trying to lift as oil comes off lows.

    Nat gas down a nickel now. Gas storage number could come in a little light given the heat and slack imports, and if it does I could easily see gas diverging from crude today (heading higher)

  12. 12
    Brian08 Says:

    Hey Z…This is a little off topic, being a natty gas day…But forgot to ask about crack spreads when you posted…Why is there a difference between West Coast cracks, NY Harbor cracks, etc.? Thanks.

  13. 13
    BirdsofpreyRcool Says:

    the Su for FTO rumor making the rounds again

  14. 14
    texana Says:

    buying hk gdp on dip . great item on the hs in yesterday’s blog. thx t

  15. 15
    zman Says:

    Brian – good question. Three basic things at play here. Cost of inputs, local market pricing of product and the fact that some regions are 3-2-1 cracks (3 barrels crude, 2 gasoline, and 1 distillate) while in others a different ratio applies (like 2-1-1 on the east coast).

    Thanks Bird and welcome to the show. I probably would be dipping a toe back in the group if I weren’t headed out of town for the last week of this month. Stars are lining up there but I’d like to see another week of data, especially gasoline demand and utilization before getting more interested.

  16. 16
    reefguy Says:

    i read the BB news as no pay zones behind pipe, looking for primary objective below 32,000′. Source says there are resistive sands, no porosity logs could be run, behind pipe

  17. 17
    zman Says:

    Reef – which is why they timed the deepening news with the Flatrock well news, lol. Now starting to doubt the wisdom of Moffett showing up as Jack Sparrow at that meeting you mentioned.

  18. 18
    Brian08 Says:

    Thanks for the tutorial Z…I got the first one, that woulda probably gotten me a “pass” in one of my classes…
    Didn’t know there was anything other than 3-2-1…

  19. 19
    BirdsofpreyRcool Says:

    playing the refiners is a tough call… a lot more moving parts than straight e&p. consumer, oil prices, differentials, crack spreads, RBoB requirements vary, utilization and efficiency differences, diesel volatility, marginal imports, political pressure… to name a few. don’t blame anyone for staying away. got to watch the position too much. pretty volatile. pretty much a swing-trader play right now.

  20. 20
    BirdsofpreyRcool Says:

    that said, FTO does make a nice hurricane hedge…

  21. 21
    zman Says:

    Bird – agreed and I generally don’t play the catch a falling knife play. I like the positioning and management of FTO and that rumor deal makes good sense. But to work rumors need to make sense and are about impossible to play effectively with options as the timing can be today or next year.

    Re Hurricane hedge, yeah, its hard to imagine something getting that far inland, lol. Of course, this is the one industry where you can flood a plant or blow it up and have your stock rally.

  22. 22
    BirdsofpreyRcool Says:

    Z – agreed… falling knives hurt!

    and refiners are the penultimate “event-driven” stocks… basically, a refiner is a vast parking lot full of high-temp, hi-pressure “bombs.” lots of stuff can happen (in addition to what i said b/f)

    FTO mngmt is smart. they could have used that pile of cash they have been building on various stupid acqtns over the years, but didn’t. Personally, i dont’ put any credence in the SU rumor. it’s just nice to have it make the rounds while i own the stock. if SU bought FTO, i think that gives them too much of the Denver retail mrkt… FTC would never go for it.

  23. 23
    BirdsofpreyRcool Says:

    anyone follow SNG? they must have made a nice presentation yesterday. unless there is more news out of T&T…

  24. 24
    zman Says:

    dunno, FTC allowed WNR for GI when I thought they wouldn’t.

    gas numbers in 5 min

  25. 25
    BirdsofpreyRcool Says:

    Z – good point. thanks.

  26. 26
    zman Says:

    80 Bcf, gas should jump

    Street and my best guesstimate at 90 Bcf

  27. 27
    zman Says:

    Large Cap E&P trying to go green here which may filter down later in the day.

    That gas number shows you what a hot patch of weather can do despite record production which now appears to be balanced out by slipping imports and strong exports to Mex. It’s also the first divergence from consensus of late that I would not call rounding error. I’m surprised Efferson on CNBC isn’t apoplectic.

    Gas up $0.20 from up $0.05 at the time of announcement.

  28. 28
    zman Says:

    Re 27 – oil tripping lower is trumping gas move. Alway love to see nearly pure plays in natural gas, especially the cheap ones like CHK (92% gas and 70+% hedged), get caught in an oil downdraft.

  29. 29
    zman Says:

    CHK has a new lawsuit today so that may be part of it.

  30. 30
    Dman Says:

    Hi Z – maybe the CHK gap gets filler sooner that we thought. If it gets back to $56 I will take the gift, no questions asked…

  31. 31
    kaman Says:

    DRYS getting pummeled has usually meant a buying opportunity -if you have at least a 90 day horizon.

  32. 32
    kaman Says:

    Let me amend that, it also has to get below $60….yeah.

  33. 33
    bill Says:

    re drys

    Rates are going down slightly

    It pays to avoid these downdrafts which could be 50 to 60 % off prev high

    Id stay away until it hits the 60’s but at 72 its not oo far off

    The ceo has done some self serrving deals which have soured me on the position

  34. 34
    kaman Says:

    Right on. there’s just too many better places to play until it gets a 6 handle.

  35. 35
    zman Says:

    Bill – was there not a sense that demand would slow in front of the China Olympics and that this would punish rates.

    I was thinking of moving back in around that range but in other names, not DRYS.

  36. 36
    zman Says:

    ZTRADE: Closing last of DUG calls.

    Sold the DUG $30 June calls DZGFD for $0.70, down 42%.

  37. 37
    kaman Says:

    ICO moving nicely today

  38. 38
    zman Says:

    HK toying with holding the Tuesday close at abour $34. I may fish one more time here for a quick trade but it will likely be July’s and I won’t hesitate in punting the Junes if we tumble below 33.60 as they will get eaten alive. Holding them for now.

  39. 39
    ram Says:

    Nice update on HK – thanks.

  40. 40
    zman Says:

    Bird – re #23, sorry no, I don’t track the pipeline and storage names, just don’t feel like I’m a value add there.

    Ram – I played the Junes too cavalierly there yesterday. Irregardless of price action today so that’s 20/20 hindsight talking. I don’t suffer from the trap of needing to get back to even to sell as there is no logic to it and they will go overboard sooner (today or more likely tomorrow) regardless of sale price.

  41. 41
    zman Says:

    Nigeria oil union renews strike threat, says talks not going well with CVX. These guys must have live quotes.

  42. 42
    ram Says:

    I can’t remember the last time I laughed so hard. Thanks ZMAN.

  43. 43
    zman Says:

    Ram … and to think I wasn’t kidding. I’ll bet the union and MEND both have Bloomberg terminals. MEND actually publishes press releases of threats and bombing responsibility directly to the newswires.

  44. 44
    BirdsofpreyRcool Says:

    Z – re#40… actually SNG is a canadian E&P. i don’t own it, so i don’t follow it closely… just noticed a huge move today. the company is doing some elephant hunting in Trinidad & Tobago… but i don’t see any news on that. just wonder if anyone out there followed the name. thanks!

  45. 45
    zman Says:

    Bird – my bad, my system pulled it as a majority owned sub of EP, Southern Natural Gas (transportation and gas storage).

    Is this the SNG run by Greg Noval, of Canadian 88 fame?

  46. 46
    zman Says:

    I wrote this back in December on SNG. The site is searchable via the toolbar at upper left.

    Canadian Superior (SNG) reviewed for Doc. Good luck Doc, I’m taking a pass on this one. Greg Noval is colorful. He can build companies and I see he is taking a more active role now. But their core area in Canada is showing little growth YoY, costs are up on a per unit basis, and prices therr stink. The “high impact” (their quotes not mine) exploration they are doing offshore Trinidad is certainly in big gas country and results should be right around the corner according to their website. But as you know the old oil adage “a barrel is not a barrel is not a barrel” so too does that ring true for a Tcf off Trinidad is not the same as a Tcf in the states. Ask EOG, where the realized price for their Trinidad gas was $2.20/Mcf this past quarter. Also, when I see a picture of a giant gas flare on the cover of a company’s website I generally move on. Beyond flattish production in Canada and 3 exploratory shots in Trinidad they are looking at opportunities in Nova Scotia, Libya, and Tunisia. Hmmmm. Again good luck with it. I don’t have the kind of analytical control here that I like when playing the little ones. By that I mean everything is on the come like a biotech. They just did a secondary to boost drilling activity in their core region. But the management has called the core Canadian operations good cash flowing assets so that’s a head scratcher. Their balance sheet looks better than I would have expected but give that time and the share count just keeps mounting. Management here is experienced but the stock seems to be trading only an exploration. Next week I’ll have a piece out on an itty-bitty small cap with big potential (no options, just stock) where I’ve had extensive experience with half of management in my former life while the other half of management was definitely what you would call “smart money”. Perhaps I’m being overly harsh but the language SNG employs in their presentation and press releases is “hypey” and I simply prefer a more under-promise and over-deliver style vs the “multi-Tcf” language I see repeated on just about every other page of a 30 something page power point presentation. If they hit in Trinidad, congrats, it probably tops $4 or even $5 and for a long term bet Noval may do it again but for now, I’m going to pass.

    The stock did well after I wrote that and Doc was undaunted by my negativity.

  47. 47
    zman Says:

    In an addendum to 46 I should add that I recently learned that Doc passed away. He was a thinker and he and I had many spirited conversations on the phone as he didn’t really like to type. He will be missed.

  48. 48
    tater Says:

    Question in relation to SLB and oily names such as CLR. Have to believe it’s not all technical (red moves) today as I believe market paying attention to “windfall profits tax” rumblings.
    Do you know how such a tax might effect gassy names?
    I am pretty sure that SLB said to look out for this on their last call.

  49. 49
    ram Says:

    It is sort of odd to request a moment of silence in this type of forum. Doc was always inquisitive about the off the beaten path energy stocks. Indeed he will be missed.

  50. 50
    Fred Says:

    Z – Wonder if that SU rumor isn’t moving WNR? I realize that WNR doesn’t process SU’s heavy crude but maybe an upgrade.

  51. 51
    zman Says:

    Afternoon Tater. First let me say I don’t think that’s it. I think the all red, all green days we seem to be back to are a function of the broad market and hot money. Today the Dow is up and the money crowd uses their gains in E&P like an ATM or source of funds to chase tech after 4 losing days.

    But to answer the question re gassy not as great an impact as would the subsequent rally in oil and gas prices have on the positive side for them. The windfall tax is a combination of items 1) is a straight up tax on an arbitrary basis that only hugo chavez could be proud of, 2) a “renegotiation of certain incentives that are contractually binding on the federal govt and yet apparently open to change. That’s mostly an offshore thing. The gassier names like CHK would not be as effected unless you have a state level change in the grace period for severance and ad valorem taxes allotted to shale wells (for example) and I really don’t see Tx and any other state looking to crush a cash cow by burdening these companies in such a manner.

    Nigerian cha-cha in fully swing.

  52. 52
    GCcfa Says:

    I’m really curious what the speculative position in oil futures is like. A lot of the “talking heads” have very different views. I’d be interested to see some actual data. Thanks.

  53. 53
    zman Says:

    Fred – there is another rumor at work there but that’s the type of thing moving that one.

    Oil down $1.50.

    G – open interest on the CFTC site was near record levels for the non-commercials about 2 weeks ago and I heard it came off but I don’t pay much attention to it as you can’t see all the ICE trades there. Wish I had those numbers too.

  54. 54
    scoop006 Says:

    Z Sorry to hear the Doc news. Did he also go by the name Phil Davis?

  55. 55
    tater Says:

    Thanks Z, but I’m a bit slower between the ears than you give me credit for. If you could bring out the Crayola box for me, I’d appreciate it. Here’s what I think you said:
    Big integrated = kick in the nutz
    Smaller and Med E + P = depends on location and focus
    Offshore = groin shot
    Gassy = pretty much OK

    Please correct me above and
    Question; Do you think the market will understand this or just sell off the whole energy complex?

  56. 56
    zman Says:

    yes, but not the my famous friend Phil Davis. If you see posts on the site now it his son who took over the account.

  57. 57
    zman Says:

    Tater – way to cut through my flotsom. For now its a moot point as the senate will read the Koran in filibuster before they’d let a vote happen and they don’t have the votes to get cloture or override a veto.

    Were they to pass it then the whole complex gets a brief kick in the crotch to use your description of how I will feel that day. Then XOM and COP and CVX and a host of others will announce capex reductions that they would have been threatening at that point for several months. The production chart in the U.S. for oil will slide through 5 mm bopd, prices will rally and unless the windfall profits tax proceeds actually get the fairy dust engine to work demand in the U.S. will continue higher.

  58. 58
    tater Says:

    Thanks, lol. I’m just reading a bit of trader talk and seeing people at least saying that the issue is effecting their trading theory.

    CLR tech
    I actually had to be dragged kicking and screaming over to the TA crowd, but if anybody cares to take a look at CLR action today
    Opened right at 20 EMA sold off down to exactly 50 EMA and bounced up and is now moving up toward 20 EMA again. I’m actually disgusted whenever I see movement like that, people giving computers their money, but oh well, if that’s how it’s done

  59. 59
    zman Says:

    Oil tried to go flat on day. Nicky, that’s your kind of conspiracy move!

    I’m not bottom fishing this yet at the stocks are acting like they have not faith in the move. Tempted to nibble HK.

    Tater – I hear ya. Group’s a bit extended though not expensive (both E&P and service). When pure T/A takes over it tells me not a lot of thought going into the buy decision and same on the sell. So little differentiation of stories, just baby and bathwater out the window.

  60. 60
    BirdsofpreyRcool Says:

    Z – re#46… excellent overview. i hold much the same opinion. it was pointed out to me by a friend about 5 yrs ago. lots of hype, little actual production. one thing my friend did point out, however, is that Greg Noval brought in a new CEO from BG who seems to have a lot of credibility. only time will answer that question, of course. anyway, i’m comfortable watching SNG from the sidelines. too many other companies out there that make more sense. thanks!

  61. 61
    BirdsofpreyRcool Says:

    ok… just bought a micro-one. it’s both oily and gassy, but only $40mm mrkt cap so i’m not promoting it. but if anyone else follows FTRS, i’d like to know. thanks!

  62. 62
    zman Says:

    oil green first 4 months now and run ning higher quickly, probably kills the DJIA/S&P rally here.

  63. 63
    reefguy Says:

    ioc- well has been testing a a weeklong, surface constraint rate of 14 mmpd 175 bcpd at 2500# ftp. With a bottom hole pressure of 3700#. Dst #2 is an indicator of good reservoir

  64. 64
    BirdsofpreyRcool Says:

    here’s an interesting headline: “Gasoline Gains as Midwest Floods Threaten Ethanol Producers”… i forgot to add corn to the list of refining variables.

  65. 65
    zman Says:

    Oil closed to the plus by about $0.50 on the strip and with that done the groups are slowly climbing out of the hole. I doubt they’ll go full green and I don’t see a compelling case to bottom fish on this kind of day which feels very summer like in terms of trading activity (like watching paint dry). If the groups do suddenly rally I will be pleasantly surprised.

    Who wanted comments on GLBL the other day?

    Also, Occam, I mislaid a ticker you asked me about and wanted to put it in the post tomorrow or this weekend.

    BRY moving into green territory.

    Large caps thinking about making another run as people are starting to listen to GS on EOG where they now have a $180 target.

  66. 66
    occam Says:

    Bird – I also have some FTRS. They don’t talk much. Not sure why it is off so much today.

  67. 67
    tater Says:

    Mr Z
    Looking for a fundamental reason to go away from SLB. Technically it looks like time to take a bite to me, but I defer to the master as I remember you grabbing a chunk on April 15 at 90.

  68. 68
    occam Says:

    re 65 – eor.v

  69. 69
    kyleandy Says:

    reef re 63 so this is good news for IOC ?

  70. 70
    jack Says:

    Z – current thinking on HK calls?

  71. 71
    reefguy Says:

    kyl- more than enough for Train 1

  72. 72
    zman Says:

    Tater – re SLB, bit of conundrum, I’m holding what I’ve got for now (July $105). It’s not pricey for it and the fundamental picture in North America and offshore and international on and offshore all looking better than beginning of year. They make quite a bit of coin from international offshore wells and definitely don’t see a problem there. North of the border, the Canadians are mobilizing to take advantage of (finally) higher prices and imports are pointing to supply falling off up there (also finally).

    Occam – thanks. A Vancouver stock exchange ticker?

    Jack – no change from #38, #40. Probably shoot the Junes off tomorrow at a loss. Plan to continue to hold the Septembers deep in the money calls and may add something in between after disposing of the Junes.

  73. 73
    tater Says:

    Thanks, want to own some common so selling July puts to get the discount. Appreciate your comments

  74. 74
    ram Says:

    ZMAN – Alot of activity on JUN 60 CHK’s. I wonder if people are getting out or piling in.

  75. 75
    ram Says:

    Now the E&P’s are looking at the S&P – come on!

  76. 76
    zman Says:

    Ram – Could be option monster talking about it. Big volume in the July $55s as well which could be part of a spread.

  77. 77
    BirdsofpreyRcool Says:

    occam – re#66. thanks for your response.

    it’s taken FTRS an awful long time to come clean on the GB well. heard they were supposed to release well info “around Wednesday.” i guess it was the “around” part that is most important. anyway, heard there is a price-insensitive seller who was just tired of waiting. we shall see if the wait was worth it.

    i don’t think the well proved up a Tcfe… but i do think it will be economic. hearing they are planning on drilling 2 more wells from the same pad as the GB-4.

  78. 78
    zman Says:

    Bakken players getting tossed today, CLR, WLL especially.

  79. 79
    BirdsofpreyRcool Says:

    people are selling major gainers ahead of margin calls, i would guess.

  80. 80
    tater Says:

    Just noticed I said something about CLR before, correct range was 10 EMA and 20 EMA. Sorry had different screen up at the time, point was valid though about TA

  81. 81
    bhr5491 Says:

    That was me on the glbl…no hurry though, thanks

  82. 82
    doc Says:

    I am out of sng, too speculative for my blood. I may buy some nov soon

  83. 83
    zman Says:

    Thanks bhr.

    Pretty light volume sell down in the group today.

    Gas review out in a few hours.

  84. 84
    zman Says:

    CHK says today’s lawsuit completely without merit after the close.

  85. 85
    tater Says:

    Because I know that you haven’t heard enough from me today:
    Crude up .47 now at 5pm eastern. Last 5 day pattern on WTI and USO looks like a little triangle congestion zone, the top line of which is where we ended the regular session today. Breakout above this measures to 120ish on the USO, 143ish on WTI.

    Not saying it is going to do this, only that if it does, these could be good targets for the price action, and that it should get there in a hurry considering the angle of the chart.

    As for the gap on the USO chart, contrary to the maxim, not all gaps get filled (continuation gaps). Especially one that tracks a futures price that did not have a gap.

    Enough from me, good luck tomorrow

  86. 86
    zman Says:

    Tater – your voodoo is always welcome.

  87. 87
    occam Says:

    Z re 72. Yes, but likely to list in the US as soon as things get going. Could be the next DNR.

  88. 88
    zman Says:

    Occam – gotcha, thanks.

  89. 89
    Nicky Says:

    Tater – I like your triangle count. We may have another leg lower (e) to come before the breakout higher. If so 138.00 should cap the upside and then we should head down to somewhere between 134.00 and 132.30. Then upwards out of the triangle to anywhere between 140 and 142.50. Could be over very quickly and doesn’t look like ‘the’ top – just 3 of 5.

    If 4 is already complete then we have just seen a flat which ended at today’s low and we go straight up from here to your target areas by early next week.

    Then likely a more lengthy correction back into the low 120’s before the final wave higher towards the 150 area and possibly beyond.

  90. 90
    texana Says:

    alot of puts bought @ the ask on sep WLL yesterday & last week. mostly in 500 lots, so i stepped out of the way. i think it was a bet on the drop in the price of oil in an overextended stock. my wll sep 95s r down $3 from where i sold them yesterday. will reload later on wll & clr at lower cost hopefully if i don’t miss an up gap on some big well news which is coming….. bought common in hk & gdp because the news on the hys wells is like a beach ball under water and its coming to the surface quickly. these r ones that u want to hold long term for the development…1 other thought, i don’t believe that hk & chk bought over 700,000 acres that don’t cover the hys section that they intend to develop. this would only apply to hbp leases , unless reef r jr know something different about the leases than is common knowledge. thx t

  91. 91
    Nicky Says:

    There is a more bullish count of course! Means we are still in iii in which case we are likely to go much higher on this next move up ie immediately above 150.

  92. 92
    Nicky Says:

    http://www.istockanalyst.com/article/viewarticle+articleid_2284404~zoneid_Home~title_UPDATE:-US-Senate.html

  93. 93
    zman Says:

    How I despise knee jerk legislation. Guest on CNBC earlier in the day made a point of saying that raising margin requirements on oil trading will have no impact as the big boys, he specifically cited Goldman, do not trade on margin. Can’t verify the veracity of his claim but I don’t doubt it either.

  94. 94
    Nicky Says:

    http://blogcritics.org/archives/2008/06/12/221201.php

    Looks like they voted against legislation anyway Z.

  95. 95
    zman Says:

    Nicky – far be it from me to defend current prices … but … whose to say that oil wasn’t under priced all those years. How does one separate price discovery (which engenders technologies and risk taking to increase recovery factors of original oil in place) from speculative excess which is “evil”. Everything I have seen from congress has been spun from the “oh come on now!” angle and little (that I have seen) has been done to mathematically prove that the speculators are inherently “evil”. Restrictions on trading would seem to reduce liquidity which the Washington crowd may come to regret in a time of a true constraint.

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