18
Jun

Wednesday – Oil Inventory Preview

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In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Stocks We Care About Todayll
  4. Odds & Ends

Holdings Watch: Wiki Tab and Performance Tabs have been updated. As I'll be away from the market ext week I have a convenient excuse to take profits. A better reason would be the number of green days interspersed in the past months trading which tells me there's a lot hot money which knows tickers and charts and not the stories. When they decide it's safe to go back into the banks I want to be in front of my screen and not a few thousand miles from it. Also there is the possibility of a near term discombobulation in oil due to the Saudi's Producer/Consumer summit on June 22-. Other than the one June call position my remaining July and longer calls would likely be held longer were it not for my trip. You're unlikely to see me sell any of the common positions this week. 

  • (NFX) – Added more July NFX calls (NFXGN) for $2.35. Average cost here is now $2.63. I added to my position in the July $70s and continue to hold the September $65 calls after the company upped guidance (again) yesterday. Potential near term catalysts include results from a number of Mancos Shale wells, results from the company's first few Bakken wells and, in July, the spudding of the first horizontal dual lateral for NFX in the Woodshale which could drive F&D costs into the realm of $1/Mcfe. Not bad when you get to sell it for $13. See the Tuesday post for more details on yesterday's release. New subscribers please note there is a handy clickable calendar in the lower left hand toolbar and a search bar at upper left. 

  • (HK) – Added (HK) HK September $40 calls (HKIH) for $4.30. I continue to hold the September $20 calls and the common here.

 

Commodity Watch:

Crude Oil: July crude closed down $0.60 at $134.01. The chorus of top callers pointing to the intra-day reversal on Monday as a sign of oil's near term doom continues to swell (again). This morning crude is trading up about a buck.

  • Nigeria Watch: The Nigerian oil union Pengassan is renewing its threat to strike if no agreement is reached by today with Chevron. Such a strike would likely shut in 460,000 bopd of (CVX) production.

 

The EIA Inventory Review (estimates from the Dow Jones survey)

exp-061308.jpg

ZComment:

  • The #1 most super important thing in today's release = gasoline demand. And it's number #2 and #3 etc, etc, etc… Last week we saw a surprise recovery to 9.4 mm bpd of gasoline demand and I guessed that its possible that the $17 rally in crude prices in Thursday and Friday of that data week had workers running to the pump on the Friday commute home, trying to beat the guy with the long pole to the sign at the corner. If that's correct gasoline demand should fall in this report as by the following Monday U.S. average gasoline prices had reached the psychologically damaging $4 level. If it doesn't fall back look out above.

  • Crude Imports Remain Seasonally Apathetic To Price. Another thing to look, especially this week is imports which have been kind of average for the level of production the Saudis and other OPEC members say they are producing. No bounce here soon and the logistical argument for offloadings in the Gulf Coast begins to look pretty thin.

  • Refiners…So What Would I Like To See, What Gets Me Off The Bench. Gasoline demand at 9.1 mm bpd or better, another dip in refinery utilization and in gasoline production 

Natural Gas:  closed up 2 pennies yesterday to $12.95 as last week's warmer weather prompted many traders to look for a smaller injection tomorrow. This morning gas is trading up well into the low $13's.

Stocks We Care About Today:

S&P Affirms 'B' Rating On (HK) Debt. I generally care about rating agencies unless they act uppity about new debt in front of wave of a play like this as they are overly conservative, seem to have difficulty getting around a reserve report and have no vision with regard to the forward strip. In this case I have no problem with their decision.  

Enhanced Oil Resources Inc (EOR.V) Quick Look.

  • Recoverable CO2 reserves of 15 Tcf between in the St. Johns field straddling the AZ / NM border. CO2 used in "CO2 floods" to enhance oil recovery factors. Big demand here; DOE study saying there is potential demand now for 13.5 Bcfgpd per day of Helium.
  • Latest completion methods paying off with most recent well producing CO2 of 6 MMcfpd vs older wells at 2. They think they will have 2 Tcf reserves proved up by their Phase 1 CO2 drilling program (100 wells should have been done in May).
  • Need takeaway capacity from St Johns to get CO2 to various floods. Proposed pipeline set for completion 2010.
    • initial production target of 0.35 Bcfgpd
    • grows to 0.5 Bcfgpd beyond 2010.
  • Oil Production – 150 bopd net, tiny, but it covers 3/4 of their overhead. 
  • No debt, $15 mm cash. They are going to have to raise just $200 mm through 2010.
  • 143 mm shares fully diluted at $1.35 per share equals TEV of $193 mm. That share count will be going up
  • SD and especially DNR also have large CO2 reserves. Pricing of CO2 here is an unknown as they are takeaway constrained.
  • Its interesting enough to do some more work on but I'm not touching it for now.

(KOG) Quick Look coming soon.

 

Odds & Ends

Analyst Watch: Jefferies on the Haynesville Shale warpath this morning raising price targets for (CHK) from $75 to $85, for (GDP) from $66 to $82, for (HK) from $38 to $49, and for (GMXR) from $63 to $82. (PVA) started at Jefco at Buy with $93 price target.  Credit Suisse slashing estimates for the ethanol producers amid spiking corn prices. 

185 Responses to “Wednesday – Oil Inventory Preview”

  1. 1
    Sambone Says:

    7:47 am EST

    Crude Rangebound, DOE Data Eyed

    By Angela Henshall
    Of DOW JONES NEWSWIRES

    LONDON — Crude oil futures traded sideways Wednesday in light volumes as traders opted to wait on the sidelines ahead of this week’s U.S inventories data.

    At 1114 GMT, the front-month August Brent contract on London’s ICE futures exchange was up 22 cents at $133.94 a barrel.

    The front-month July contract on the New York Mercantile Exchange was trading 32 cents higher at $134.33/bbl.

    The ICE’s gasoil contract for July delivery was down $3.75 at $123.400 a metric ton, while Nymex gasoline for July delivery was 1 point lower at 341.78 cents a gallon.

    Although discussion continues over how many fresh barrels of crude Saudi Arabia is planning to bring to market, this week’s stocks data are set to be the key driver for prices, traders said.

    “They’re sitting on their hands ahead of the data,” said a broker at ICAP. “Most of the focus will be on the gasoline numbers, as this is stuff that’s ready to go, already refined, and gives a more accurate reflection of where the price is headed. Crude is subject to greater delays.”

    The market lacked direction and traded in a relatively narrow range for much of the session Wednesday compared with the wild intraday swings of more than $5 seen in recent weeks.

    The Department of Energy report due at 1435 GMT, is expected to reveal a third straight week of lower crude inventories and higher products stockpiles, according to a Dow Jones Newswires poll of 14 analysts.

    Gasoline inventories are seen growing by 800,000 barrels, according to the analysts’ average, while crude stocks may have fallen 1.2 million barrels on average in the week to June 13, with refinery run rates possibly 0.4 percentage point higher from 88.6% of capacity.

    Since Friday the market has focused on reports the world’s biggest oil exporter is planning to release more crude to ease prices after a summit held between consumers and suppliers in Jeddah, Sunday.

    The move would represent something of a U-turn from Saudi Arabia which has stuck with the line that markets are well supplied since last autumn. Iran has already said it would oppose the move and the majority of Organization of Petroleum Countries members have not given any indication they would match the additional supply.

    One conclusion is that the country has finally bowed under enormous pressure from global leaders to do something about sky-high oil prices. However, it remains unclear whether it will make any discernible difference to physical crude available or whether there is any appetite for the crude Saudi plans to offer.

    Antoine Halff, analyst at Newedge said the success of Saudi’s plan to increase output, will hinge on the detail of its implementation.

    He said these measures could include, on the producer front, steeply deeper discounts for Saudi barrels, notably lighter grades and unorthodox spot sales.

    “At the end of the day, easing fundamentals are likely to force a price retreat,” the analyst said, “but for all parties involved, the challenge will not only be to bring prices down, but to ensure an orderly decline and prevent any disruptive hard landing.”

    There has been muted reaction among traders to news the Commodities Futures Trading Commission has moved to make London traders of the benchmark U.S. oil contract meet the same position requirements as their U.S. counterparts, perhaps indicating just how preoccupied the market has become with the Saudi talk.

    This is the latest in a series of actions the futures regulator is taking to stamp out “excessive speculation” in the oil markets.

    “It shows that the trend for regulatory change is increasing and at a faster pace than expected,” said Olivier Jakob analyst at Petromatrix adding that he sees an increasing risk for a change of categorization of index traders before the end of the year.

    Meanwhile, 150,000 barrels a day of oil and liquids production from Norway’s North Sea remains offline following a fire at the Oseberg A platform. Operator, StatoilHydro ASA says the output may return by the end of the week.

    —By Angela Henshall, Dow Jones Newswires;

  2. 2
    Dman Says:

    Hi Z – so what’s your take on the forthcoming Saudi talkfest?

  3. 3
    zman Says:

    Sambone – welcome back

    Dman – honestly I don’t see much good coming out of it, nothing near term to do about prices. I do think they may try to shock the market lower.

  4. 4
    italyinvestor Says:

    Zman – how do you pick your focus stocks? Fundamental screen or by basin play? I am starting to research the Utica Shale play as the next mini-haynesville emerging play. Have you looked into this area. Seems as if the play is locked up by FST and TLM with lots of little Canadian micros twisted into the mix.

  5. 5
    zman Says:

    bids slow to develop for HK and haynesville company this am. Group turning cautious in front of inventories and a down market. Profit taking starting in many of our favorite names.

    Italy – no screens, just research from the ground up. I come across more mentions of the Utica of late, I think the Mancos is another to watch.

  6. 6
    Dman Says:

    Seems to me that anything they can cook up to shock the market would be counteracted by the next run-o-the-mill MEND action or whatever. Although it is true that any kind of negative shock would at least have novelty value at this juncture.

    Speaking of MEND and similar folks elsewhere: one point I haven’t seen mentioned is that as oil moves higher, the stakes they are fighting for get ever higher as well. There is less and less incentive to play nice.

  7. 7
    texana Says:

    pva started at buy by jeffries, have app bakken find with their recent well that they are offsetting. offset operator said that they had made a good well.

  8. 8
    zman Says:

    Pq through $27.
    CHK through $65.
    HK rebounding nicely now, that one can fall pretty hard next down day.

    Texana -thanks for the color re KOG last night and PVA this am.

    GMXR – wow, maybe its better not to even drill the wells, just let the stock price soar daily and talk about drilling them in the future.

    Tater – thanks for the email, let me know when you think NFX is technically improved. I’m going to hold this through my trip unless it fails TA this week.

  9. 9
    VTZ Says:

    italy/Z- the Utica isn’t exactly a mini play with and extimated 140 tcf in place. 30 recoverable?

  10. 10
    tater Says:

    xto broke 70

  11. 11
    zman Says:

    Tater – add OII to my list of TA look requests.

    Thanks VTZ

    NBR may be pulling back into range.

  12. 12
    tater Says:

    is that O L L ? I need glasses

  13. 13
    Dman Says:

    Z – I don’t know if you consider this useful but I have a scenario to run past you.

    Let’s say the oil bears are right and the recent bumpy ride portends a pullback of some duration. Not saying it’s so but just supposing it is. Do you think that there might then be a parting of ways with NG, since it is supposed to be local while oil is global?

  14. 14
    reefguy Says:

    gmxr up 8%..

  15. 15
    tater Says:

    OII oceaneering got it

  16. 16
    italyinvestor Says:

    VTZ – FST was comparing it to the Barnett, so to me I’m thinking mini in comparison, but there could be a lot of high BTU gas there which is close to the NE markets. I also think there are too few wells drilled at this time to know how big the area is. What i do know is, if you want to see parabolic stock charts look at some of the tiny canadian cos that hold interests in the area.

  17. 17
    zman Says:

    Reef – you can thank the Jefco analyst for today on GMXR

    Dman – I don’t think you get to BTU parity or anything like it but I do think they may diverge a bit. NG may stop rising as rapidly or ebb slightly in that event but not fall as much as crude. All eyes are on the storage rebuild (or lack thereof)

  18. 18
    texana Says:

    nog, is catching an updraft they just announced 20k net ac lease purchase south of the parshall field. they pd $ 400/ac and now have60k net ac. will have wi on some upcoming eog austin wells in the parshall field.

  19. 19
    ellwodo Says:

    XCO still looks like a relative bargain.

  20. 20
    dooch Says:

    Zman, what do you think of a long dated PQ position? say Jan 35s?

  21. 21
    zman Says:

    Thanks Texana , don’t see options at NOG, correct?

    CHK feeling the love and my finger is on the trigger to punt those July’s

    Dooch – I’m holding the common for a long term play there now but might think about doing something like that when I get back. I will be selling my remaining July position shortly.

  22. 22
    zman Says:

    wow OII.

    Sambone, anything in the Atlantic you see that the weather guys don’t?

  23. 23
    davidjeso Says:

    texana – thanks for the KOG and BEXP thoughts last night.

    Really like the collective input from this group.

  24. 24
    zman Says:

    ZTRADE: Out CHK July $60 calls for $7, up 320% from the average of three entries beginning late April. Still holding the common here.

  25. 25
    texana Says:

    no options on nog. bexp got a well with partner cwei in south la and r spudding 2 more. they could us the money. they have huge williston basin land position & no money to exploit it

  26. 26
    tater Says:

    OLL –
    5 year monthly chart – pretty obvious, Oct 2007 = 85.88 = resistance (look for pullback, however temporary it may be)

    3 year weekly chart shows nothing extra that monthly doesn’t say

    1 year daily chart – Seems to have behaved in coincidence with S&P for 2007, and in concert with E&P for 2008. Visually, the current uptrend since Feb has a mirror image appearance to the downswing of Oct ‘07 to Feb ‘08, only speeded-up (inference is that it may continue, leading to credence in a pullback at 86ish)

    YTD – RSI good, OBV good, Slow Stoch getting a bit oversold but that is what strongly trending stocks do (see CLR)
    Uptrend is accelerating. Pullbacks to previous high, moving in a seemingly staircase action.

    Gun to head = Good uptrend, with pullbacks to previous highs. Look for it to make a run at Oct high of 85.88 and make a pullback to 79ish before moving ever higher.

  27. 27
    Dman Says:

    Z – since you are getting out of front month options & buying stocks: how about CLB. Still below its highs from last November, it’s been coiling up lately above the 100 day, having crossed above it beginning of April. Earnings in about 5 weeks. Currently 18.8 x ’09 EPS. MACD flatlining, which is a bit odd, but maybe part of the coiling thing. I would guess that the fundies here are, to put it mildly, positive.

  28. 28
    VTZ Says:

    Italy- Forest was only comparing the TOC and clay content and free gas and the other aspects of the reservoir. They also show an overlay and the barnett fits into a fraction of the deposit. The other thing is that the Utica is way more shallow than the Barnett. They were only comparing reservoir aspects to imply favorable reservoir qualities.

  29. 29
    zman Says:

    Thanks Tater, that downswing last fall in OII was predicated by in line earnings numbers and a deceleration of earnings growth. This is a good company but a hypey driven stock and a good chunk of their earnings were from repair business following Katrina/Rita. Much salivation and $5 moves in the stock can be caused by even small storms steering toward the Gomex.

    Dman – Those guys are going to do scads of business in the shales for everyone but CHK. I like it long term and will revisit when I get back.

  30. 30
    VTZ Says:

    Also Italy, regarding the parabolic stocks in the Utica, I own 1 of them and yeah it went parabolic but it has corrected nicely and if they have even a fraction of the reserves under their land it’s a 10 bagger or more if you value their reserves anywhere from 2-3$/mcf.

    Basically the play comes down to whether you think they can multi-frac and put horizontals like they have done elsewhere.

  31. 31
    VTZ Says:

    Correction, I should have said if they can convert a fraction of their gas in place to reserves.

  32. 32
    zman Says:

    Oil inventories in about 8 minutes.

    For Ram:

    Cash:55%
    Stocks: 23%
    Call options = remainder.

  33. 33
    VTZ Says:

    I like the cash/stock/option distribution as well Z, I think it’s for everyone.

  34. 34
    tater Says:

    Is this the one that Navillier always pushes every spring?

  35. 35
    Dman Says:

    #33 Agree: very useful.

  36. 36
    zman Says:

    Ya know who has been left out of the recent shale mania (after their initial pop) is EOG and they are looking to be big in the shale in Canada. Stock looks to still be digesting their analyst day rally but they will likely have more catalytic news out in July on the 2Q call from the Bakken and from other shales.

  37. 37
    zman Says:

    oil down 1.2 mm barrels, in line
    gasoline down 1.2 also…wooops
    dist up 2.6, that’s high

  38. 38
    zman Says:

    gasoline demand retreated to 9.25 mm bpd, not too shabby given prices.

    crude imports finally back to where they should be at 10.3 mm bopd.

    oil looks confused on the data, probably due to the uptick in refiner utilization and the dip in gasoline inventories.

    Sane – let me know if you get the API

  39. 39
    zman Says:

    Bush speaking about lifting the offshore ban and increasing refining capacity.

    Saw a reuters poll saying 57% of Americans now think drilling off the coast is a good idea, up from 44% in 2003. Price discovery works.

  40. 40
    Jason Says:

    Hi Z – Missed the the CHK July exit with you at 7. How do you feel about direction of CHK given today’s inventories?

  41. 41
    zman Says:

    ok, will try to post weights more often. One important consideration is that the asset class weighting I show are in my option account. The do not include some energy stock holdings in other accounts. The reason I say this is important is because while I don’t consider the options account to be expendable I do consider it to be “at risk”. Everyone should consult their financial adviser to decide how much capital should be allocated to this type of trading. Sorry for the PSA but I want to stress that in aggregate, the options I hold are not as high a percentage as #32 would imply.

    Now that that’s as clear as mud, the group is weakening with oil.

  42. 42
    zman Says:

    Jason,

    Did you get the blast? That should have been fixed prior to send out.

    Fundamentally it has no impact on the stock. Ok maybe very very small impact. Psychologically for the group its inspiring profit taking. Were I to be in town next week I’d most likely buy it back or even more likely, I would not have sold it in the first place.

    PQ goes red and I punt the $25 calls.

  43. 43
    Sambone Says:

    #22 – Watching mass at 46W, 10 N. May hit some shear if it moves north. Also watching wave just coming off Africa. Nothing else of interest at this time.

    http://www.ssd.noaa.gov/eumet/eatl/loop-rb.html

  44. 44
    Dman Says:

    Broad market not happy. But then, when are they happy? Wonder what today’s gripe is.

  45. 45
    sane Says:

    API

    Crude Down 3.1
    Gasoline Down 2.4
    Distillate Up 1.4

  46. 46
    BossmanG Says:

    Z, what do you think about your wildtrade for HK? hmm re-entry

  47. 47
    texana Says:

    hk on sale today. out of all the stocks i watch this is the biggest star

  48. 48
    italyinvestor Says:

    VTZ – Agree with all. I do think that the FST presentation is drawing too a big circle and the sweet spot is likely to be in the space between the Yamaska Fault and Logan’s Line. I hope i’m wrong, but only after I get a good position in! Not much options activity in FST, some in TLM. Since there are several test wells that started or are starting soon, it should be an exciting fall as people react to the news.

  49. 49
    Jason Says:

    Re 42 – Got the blast….pesky real life job duties got in the way of timing. Just what I was looking for on the commentary. Love to hear any ‘wish I was here’ potential trades that cross your mind.

  50. 50
    Sambone Says:

    Banks See High Oil Prices To Year-End

    By Matthias Goldschmidt and Natalie Obiko Pearson
    Of DOW JONES NEWSWIRES

    LONDON — Banks and financial institutions this month have sharply raised their oil price forecasts through 2009, predicting that crude oil prices aren’t set to fall back from triple-digit figures any time soon.

    In a Dow Jones Newswires poll compiled from around 30 banks and other institutions in recent days, the median 2008 price for the benchmark U.S. crude futures contract — West Texas Intermediate — was revised up $11.70, or 11.3%, to $115 a barrel in June compared to the previous month’s survey. The fourth-quarter median WTI price was revised up a whopping $23.10 to $120.10 a barrel.

    For the first time, median 2009 oil price forecasts entered triple-digit territory above $100 a barrel. In the first and second quarter of 2009, WTI is projected at $108.50 a barrel and $103 a barrel, respectively. For the year, WTI is projected at $107 a barrel, revised up by $11 a barrel from the May poll.

    Analysts have attributed the surge in crude oil prices to a spreading perception that the global oil supply outlook is set for an extended period of tightness. That perception is based on the fact that demand growth is outpacing the speed at which new oil production is being brought on line.

    Lehman Brothers in a recent oil market report said “perceptions of tightness this year and into the indefinite future” and momentum have driven the market and provided the basis on which many analysts have increased their price forecasts this year.

    Contributors to the poll said such high prices — WTI hit a new record high of $139.89 a barrel this week — would eventually affect consumption patterns and depress demand. However, they said that effect may take a while, especially since governments subsidize the cost of fuel for consumers in most developing countries where demand is growing fastest.

    “Current prices are not sustainable, as demand will slow down with slowing economic growth, while high prices will curtail consumption of oil. However, many countries have fuel subsidies…Thus, the supply and demand balance will remain tight for some time. Ongoing dollar weakness will also work to keep prices elevated,” said Thorsten Fischer, an analyst at the Royal Bank of Scotland.

    Thina M. Saltvedt, an Oslo-based analyst at Nordea Bank AB, said high oil prices aren’t expected “to take a toll on demand before the second half of next year.”

    Forecasts for Brent crude futures followed a similar pattern to WTI: the median 2008 Brent crude price was raised to $115 a barrel from $101.50 a barrel and the 2009 forecast was raised to $106 a barrel from $95.80 a barrel.

    —By Matthias Goldschmidt and Natalie Obiko Pearson, Dow Jones Newswires

  51. 51
    Garyinhou Says:

    Morning All.. Z.. I am sure it’s somewhere but wondering who the least hedged NG names are that benefit from $13 gas….
    Thanks,
    Gary

  52. 52
    zman Says:

    Thanks Sambone re Tropics, water still a little cool yet?

    Dman – no kidding, still seeing guys on CNBC saying buy financials and short energy. Those guys like less transparency than I do I guess.

    Thanks Sane, that roughly matches up

    Bossman – too wild for my blood but maybe if it gets really cracked to $39 or so. Ya gotta figure some guy is waiting in the wings to downgrade the Hayneville players and try and make a name for himself so I certainly would not be looking at an overnight in near terms right now. All he has to say is “fully discounted blah, blah, blah” which is not true but it would take at least 5% out of each of them.

    Jason – cool.

  53. 53
    zman Says:

    Gary – this is off the top of my head and may be off but in the big caps I think EOG is the least hedged having stopped their hedge program for 2008 and beyond back in Feb or March.

    Among the small mid caps I think MCF used to have a policy against hedging.

    I look at it terms of sensitivity to CF and my last update from a friend of the site was in April, then GDP and BBG had the most sensitivity to change in gas price.

    Will do a little digging (I’ll call someone and have them send me the latest list) as that’s a good point and I have not looked at it in a month or two. That’s the kind of job for an intern which I don’t yet have

  54. 54
    Garyinhou Says:

    Thanks Z.. we can put together a Z University Endowment ofr the Intern.

  55. 55
    zman Says:

    Gary – I’m all for that! The trick is teaching the to write; lots of kids can do the math as its mostly 8th grade at best but the language skills are lacking these days. Of course, my last boss said I couldn’t write either so maybe I’m not a good judge.

    CHK going to even, may be a trade in there and HK as it thinks about $39.

    I’m a little surprised the guys at Jefco didn’t push the Haynesville players upgrade back a day so as not to step in front of the EIA report, especially given the run. They must be uber confident in their new metrics and if anyone sees that report or the numbers used in looking at EURS and risking I’d love to have it for my flight.

  56. 56
    Brian08 Says:

    Z, I coulda used that job last summer!!!

    Speaking of hedging we actually had a discussion about that in our corp. finance class last year…It was an interesting discussion…I kind of agreed with the philosophy that these companies should be unhedged because we are buying the companies because they produce commodity X and get revenues from those commodities…Granted the revenue streams would be all over the place and the betas would have to reflect this, but that’s why we buy these guys to get the exposure to the commodities…

  57. 57
    ellwodo Says:

    hkfh – trying your wildtrade one more time, in at $0.75

  58. 58
    gbennett Says:

    Z,
    What do you think about adding CLR here (70.5).

  59. 59
    Sambone Says:

    11:10 am EST

    Oil Edges Lower After Mixed Inventory Data

    By Gregory Meyer
    Of DOW JONES NEWSWIRES

    NEW YORK — Oil futures edged lower Wednesday after a government report showed U.S. crude stockpiles and gasoline demand both declined last week.

    Light, sweet crude for July delivery was recently down 31 cents, or 0.2%, at $133.70 a barrel on the New York Mercantile Exchange. August Brent crude on the ICE futures exchange traded 9 cents lower at $133.63 a barrel.

    In its closely watched weekly oil report, the Energy Information Administration said U.S. crude stockpiles fell by 1.2 million barrels to 301 million barrels, meeting analyst expectations. It was the fifth straight week of declines.

    The data also showed a surprise 1.2 million barrel drawdown in gasoline stockpiles, bucking analysts’ expectations of an 800,000 barrel rise.

    “But the draw in gasoline basically deserves something of an asterisk next to it, because demand for gasoline last week was really quite poor,” said Tim Evans, energy analyst at Citi Futures Perspective in New York. The data showed gasoline demand declined by 1.7% in the week ended June 13 to 9.251 million barrels a day.

    Evans warned the initial selloff may not last. “We don’t necessarily look for a price response in the first 15 minutes’ after the data’s 10:35 a.m. EDT release, he said.

    Crude futures have traded choppily this week, with the Nymex contract making a new record trading high of $139.89 a barrel Monday before settling lower for the past two days. Traders are on edge over the size and scheduling of a potential production boost from Saudi Arabia this summer. On Sunday, the Saudis are hosting a meeting of oil producing and importing nations and the chief executives of major oil companies to discuss the the forces behind oil prices, which have surged 40% so far this year.

    Many expect Saudi Arabia will announce additional output totaling at least 200,000 barrels a day after the meeting, to be held in the coastal city of Jeddah. But Saudi leaders have been publicly reticent on the issue.

    Supply remains constrained in the North Sea, where 150,000 barrels a day of oil and liquids production from a StatoilHydro ASA (STO) facility is offline following a fire on a platform. StatoilHydro says the output may return by the end of the week.

    Front-month July reformulated gasoline blendstock, or RBOB, rose 17 points, or 0.1% to $3.4196 a gallon. July heating oil fell 4.30 cents, or 1.1%, to $3.7792 a gallon after the data showed U.S. distillate fuel stockpiles rose by a larger than expected 2.6 million barrels last week.

    —By Gregory Meyer, Dow Jones Newswires

  60. 60
    Sambone Says:

    Z – While your gone next week, are you going to want me to post my Dow jones stuff, on the general page, or just wait til you get back?

  61. 61
    zman Says:

    Sam – please do, chat it up too.

    Re CLR – I’m waiting to reenter until I get back, its been hotter than I would have thought and they are do a rest.

  62. 62
    zman Says:

    ZTRADE: Out PQ July $25 calls for 2.50, up 127% since entry May 8.

  63. 63
    zman Says:

    WILDZDAYTRADE: CHK $65 JUNE calls. Huge risk but the stock is at $64.60 after reaching $66 this morning.

  64. 64
    Bleemus Says:

    Z – Do you send an email on the Ztrade exits? Checked spam filter and still nothing. Just curious.

  65. 65
    zman Says:

    Bleemus – absolutely. Please send your exact email address to me at zmanalpha@gmail.com so I can verify we aren’t sideways in the contact list.

  66. 66
    Bleemus Says:

    Email sent. Thanks for looking at it.

  67. 67
    zman Says:

    Bleemus – that is what I have. Usually it’s yahoo that likes to block us and I don’t recall comcast being a problem. You may have a security setting turned up too high but if it is not in your spam bulk mail I’m stumped. Have you added the address given in #65 to your address book and or safe list? Other than that you might consider getting a gmail account as they are extremely fast and seem to like getting mail from other gmail accounts.

  68. 68
    zman Says:

    Re #63, that was done at $0.90.

  69. 69
    Bleemus Says:

    Odd. I did receive Zblasts the first day and nothing since. Not in spam folder and just checked my Comcast settings online and it isn’t being trapped there either. Hopefully it will sort itself out. I get plenty of mail from gmail accounts of friends.

  70. 70
    Bleemus Says:

    correction – received Zblasts and Ztrade emails for first few days. Last one I got was “ZTRADE: Added July $70 NFX calls” yesterday afternoon.

  71. 71
    zman Says:

    Bleemus – Don’t know what to tell you but I can promise you are in the list and the trades did go out. Sometimes the internet is a strange place.

  72. 72
    irished Says:

    ZMAN Two things. Had hard time reloading your site and last blast subject said HK but buy was CHK. You need a new “typewriter”!!

  73. 73
    douglas51 Says:

    Zman…what about EAC…buy here?

  74. 74
    zman Says:

    Irish – Maybe you need a new PC. I do my best on the typing but try to get it out as fast as possible. I don’t think anyone is buy HK $65’s just yet.

    Douglas – I’m not buying it, I’m not close enough to their whole story to make an intelligent decision. I would respectfully ask that people refrain from the “buy now?” question style as I’m not an IA and don’t want to be forced into being one.

    CHK trying to crest $65, up a buck now. I might overnight that call but if it goes to the old highs by the close you can bet I’ll be history.

  75. 75
    zman Says:

    Ok, I’ll play nice. Anybody else getting a slow refresh on the site?

  76. 76
    reefguy Says:

    ng- why up .20 when oil down a buck?

  77. 77
    BossmanG Says:

    Z, I had a moment of about 20 minutes where I couldn’t refresh your site…not sure if thats on my end or the volume of visitors to your site

  78. 78
    davidjeso Says:

    KOG popping up 10%…supposedly a buy report with a $9 price target…

  79. 79
    zman Says:

    Reef- thought is very small withdrawal tomorrow on big heat last week.

    Thanks Bossman – unlikely the volume, more likely a slow space at my host. I take it is normal now? Also, did you see any process that was slow to load in the bottom of the browser? Sometimes my meter or google checkout delay the refresh and if that is the case I can temp disable.

  80. 80
    Hoss Says:

    KOG – up ~15%

  81. 81
    jack Says:

    refreshing fine for me

  82. 82
    zman Says:

    KOG = wow. Oh well, can’t kiss all the girls.

  83. 83
    zman Says:

    wow, welcome back oil.

    NG continue to shoot the moon at $13.20

  84. 84
    Dman Says:

    Bleemus – gmail is the ticket if you want to see your emails fast. My 2 cents: give it a try, ya won’t regret it.

  85. 85
    crysball Says:

    Z, & BossmanG,
    Refresh [using F5] takes less than 4 seconds on my PC connected to High Speed cable.

    One VERY BIG difference is using the Firefox Mozilla wbe browesr [in lieu of Internet Explorer].

  86. 86
    tater Says:

    I know you guys ran through which companies take the biggest collection poop should a hurricane strike, can’t remember which day. Am I remembering correctly that XTO is top of list? Think that my Aug calls might be too far out if so.

  87. 87
    john11 Says:

    KOG got a Changewave pump.

  88. 88
    zman Says:

    Thanks Jack

    Agreed Firefox and Gmail only way to fly.

    Tater – not sure I understand your question. Are you looking for companies that go up or go down if a hurricane enter the gulf?

  89. 89
    tater Says:

    Should read “collective poop”. What the hell is a collection poop? ANYWAY, would like to know if XTO gets clobbered in the event of a traumatic hurricane in the Gulf. Thanks

  90. 90
    zman Says:

    Pengassen (Nigerian oil union) just said talks with Chevron failed and they are seeking govt intervention. Ready to strike at “any time”

  91. 91
    ram Says:

    KOG is reacting to a TOBY push.

  92. 92
    zman Says:

    XTO should go up, way up, in that event, especially if you are talking actually production limiting offshore damage. OII too.

  93. 93
    tater Says:

    Thanks, and if anybody is wondering why a TA fan like myself is a subscriber, that answer is exactly why. Appreciate it, as my immediate thought was 180 degrees in the opposite of your answer.

  94. 94
    Bleemus Says:

    Update – the CHK blast just arrived so I am guessing it is Comcast having an issue with delay today. Am sure they will sort it out. THanks all.

  95. 95
    zman Says:

    Tater – stick around a sec for logic run through. on the phone.

    Bleemus – tell them to credit your bill, lol.

  96. 96
    Sambone Says:

    12:30 pm EST

    Nymex Crude Dips As US Demand Stumbles

    By Gregory Meyer
    Of DOW JONES NEWSWIRES

    NEW YORK — Oil futures slid Wednesday after a government report showed U.S. demand continues to falter in the face of high prices.

    Light, sweet crude for July delivery was recently down $1.31, or 1%, at $132.70 a barrel on the New York Mercantile Exchange, after falling as low as $131.82. August Brent crude on the ICE futures exchange traded 83 cents lower $132.89 a barrel.

    In its closely watched weekly oil report, the Energy Information Administration said U.S. crude stockpiles fell by 1.2 million barrels to 301 million barrels, meeting analyst expectations. It was the fifth straight week of declines.

    The data also showed a surprise 1.2 million barrel drawdown in gasoline stockpiles, bucking analysts’ expectations of an 800,000 barrel rise.

    “But the draw in gasoline basically deserves something of an asterisk next to it, because demand for gasoline last week was really quite poor,” said Tim Evans, energy analyst at Citi Futures Perspective in New York. The data showed gasoline demand declined by 1.7% in the week ended June 13 to 9.251 million barrels a day.

    Overall, total U.S. oil demand is down by 1.3% in the last four weeks compared with the same period a year ago, the EIA reported.

    “The demand destruction everybody has been waiting to see solid evidence of is beginning to occur,” said Peter Van Cleve, president of brokerage T.W. Energy Consulting in Kansas City, Mo.

    Still, most analysts project world oil demand will keep increasing along with Asian and Middle East economies. Fears producers are limited in their ability to produce enough to meet that rising demand have helped drive prices up 40% this year. Nymex crude made a new record trading high of $139.89 a barrel Monday before settling lower for the past two days.

    Traders are on edge over the size and scheduling of a potential production boost from Saudi Arabia this summer. On Sunday, the Saudis are hosting a meeting of oil producing and importing nations and the chief executives of major oil companies to discuss the the forces behind oil prices.

    Many expect Saudi Arabia will announce additional output totaling at least 200,000 barrels a day after the meeting, to be held in the coastal city of Jeddah. But Saudi leaders have been publicly reticent on the issue.

    Supply remains constrained in the North Sea, where 150,000 barrels a day of oil and liquids production from a StatoilHydro ASA (STO) facility is offline following a fire on a platform. StatoilHydro says the output may return by the end of the week.

    Front-month July reformulated gasoline blendstock, or RBOB, fell 3.79 cents, or 1.1% to $3.3800 a gallon. July heating oil fell 7.03 cents, or 1.8%, to $3.7519 a gallon after the data showed U.S. distillate fuel stockpiles rose by a larger than expected 2.6 million barrels last week.

    —By Gregory Meyer, Dow Jones Newswires

  97. 97
    zman Says:

    Re XTO:

    Big onshore, gassy player. If their peers in the GOMEX get popped natural gas prices soar and the unaffected onshore guys get to sell at those prices. APC and others with deepwater exposure will generally get a “get out of jail free pass” for downed production, like they did recently for the 2 month snafu at Independence Hub. However, high seas mean delays in delineation drilling (costly) and in development project start up timing. The Street is less happy with those but the offset is those higher prices. If you are onshore, its just all good.

  98. 98
    zman Says:

    Wow, I disagree with the DJ reported on that last one. He quotes a short who last week was no doubt mum about the pop in gasoline demand. At these prices I would think gas demand would be sub 9 mm bpd but Americans simply can’t stop driving. Plus, we are getting hit at the grocery store and now in other places. The guy is wishing demand destruction but it is modest at best.

  99. 99
    zman Says:

    Hey look, oil up $0.20, probably need to send Pengassen a free sub to the site, lol.

  100. 100
    tater Says:

    Gotcha. Confused APC with XTO in trying to remember last weeks discussion.
    KOG players: All I can say is keep your stops tight. Playing with fire when you follow the pump and dumpers.

  101. 101
    zman Says:

    Reuters reporting Nigerian works poised to strike and that CVX volumes in the country are 350,000 bopd, not the higher number I have in the post.

  102. 102
    zman Says:

    Texana – do you know HLND?

  103. 103
    ram Says:

    I can’t believe the amount of contracts traded on CHK’s JUN 70’s.

  104. 104
    zman Says:

    Don’t see it on the wire but I’d say they struck as oil is up $2 in a flash.

  105. 105
    Dman Says:

    #98 Could be the guy studied too much economics, a discipline that often gets wishes and reality all confused.

  106. 106
    Sambone Says:

    DOW JONES NEWSWIRES

    The U.S. isn’t planning to tap the Strategic Petroleum Reserve, despite
    “whatever the price oil achieves,” U.S. Energy Secretary Samuel Bodman said in
    an interview on CNBC Wednesday. “(The SPR) was never meant to be used as a tool
    for combating high prices,” Bodman said. The front-month crude contract in New
    York was trading around $134.49 Wednesday, after hitting a new high of $139.89
    a barrel June 16.
    Web site: http://www.cnbc.com/

    201-938-5500

    (END) Dow Jones Newswires
    06-18-08 1330ET

  107. 107
    elijahwc Says:

    RE; 91 Here is your Toby push

    Changewave newsletter jamming KOG —

    ChangeWave Investing Alert (KOG)
    June 18, 2008

    ACTIONS

    ALTERNATIVE ENERGY WAVE
    Kodiak Oil & Gas (KOG) — Buy Under $4.50; $9 Target price

    IN SHALE WE TRUST

    Dear WaveRiders,

    The U.S. shale plays are hot for a very good reason. The economics of horizontal drilling in the best areas — like the Bakken shale oil discovery — are bringing in wells that pay off all drilling and initial production costs in seven to eight months with very high returns on investment.

    We are two-for-two in our oil shale recommendations. Both Brigham Exploration (BEXP) and Northern Oil and Gas (NOG) are up nicely so far with plenty of room to run.

    Some of the plays in this area are more productive than others, but now appears to be a great time to take a look at an emerging Bakken shale play that’s a little higher on the risk-reward scale: Kodiak Oil & Gas (KOG).

    THEY’VE ONLY JUST BEGUN

    Kodiak is a riskier pick because they are just coming on line with their Bakken operations. But they also have a joint venture with Devon Energy (DVN) in the Baxter shale formation in Wyoming’s Vermillion Basin, another hot area of gas shale exploration. Devon is one of the best major independents in the world focused on unconventional energy exploration and production.

    The Vermillion Basin is a natural-gas-rich area, and Devon will handle the drilling while KOG keeps 50% of the working interest. The regulatory process is on schedule, and drilling permits are on target for completion later this year.

    The Vermillion project has potentially 2 trillion cubic feet of natural gas. Questar (STR) pioneered this resource play and has trillions of cubic feet in natural gas reserves in this area. And Questar noted that this area has “more gas in place per section” than any other gas shale play.

    Vermillion drilling gives Kodiak multi-year drilling inventory, and this alone is worth about $5 a share in reserve value using $8 natural gas prices.

    KOG also holds nearly 50,000 net acres in the Bakken shale in the Williston region — the same hot area we’re following with Brigham Exploration.

    At the end of the first quarter, Kodiak had acquired 38,686 gross acres and 28,957 net acres on the Fort Berthold Indian Reservation. In addition to the approved leases, Kodiak has approximately 8,800 net acres classified as pending by the Bureau of Indian Affairs. Subject to securing a drilling contract and equipment, drilling in the area is expected to begin soon.

    What does this mean for KOG? Well, at $90-per-barrel oil, this play can add $3-$4 a share in value.

    A PRE-EARNINGS STORY

    This is an early stage E&P play that is riskier than more established companies. But the technological breakthroughs in horizontal drilling and production techniques are a ChangeQuake in the shale patch, and KOG has substantial exposure to two very hot areas where this innovation will provide a huge upside.

    Kodiak is not an earnings and cash flow story at this time. But we can take advantage of the short sellers who are attempting a long bond/short stock play due to a recent debt offering.

    These short sellers don’t understand the quality and upside potential for KOG from the plays in the Bakken and Baxter shale areas. We believe this is why two of the best energy investment firms, Wellington Management and Fidelity, own around 18% of KOG’s outstanding shares.

    You can also take advantage of these short sellers by putting a $10 “good until cancelled” sell order on the shares you buy. This will remove shares from the shorting pool that are borrowed by short sellers — that’s how you fight the shorts.

    Don’t be surprised if Kodiak moves to raise capital once more sometime in the next three to nine months. But if KOG is wise, that offering will be coordinated with positive news updates on the Vermillion and/or Bakken projects.

    Buy Kodiak Oil & Gas (KOG) under $4.50 with a Target price of $9.

    In shale we trust — let’s keep our winning streak alive!

    THE CHANGEWAVE EFFECT

    The stock we’ve recommended today could see sharp movements in its price as our army of WaveRiders places orders to grab shares. This means that now is as good a time as any to remind you that you have to exercise discipline when building your ChangeWave Investing portfolio positions.

    We don’t want you to chase our new stocks as the prices move higher and possibly beyond our recommended levels. Remember, a great stock at a bad price is still a bad investment. We want you to be smarter than that.

    So, this means that our traditional advice applies for buying this stock: Don’t rush in and try to build your positions all at once. Build positions in chunks that represent a third of your position. It’s OK to cheat a little on the price or start with a one-third position if the price runs up a little.

    And don’t panic if the price of this recommendations zips above the Buy Under — it often drops after the initial buying frenzy ends. Buy smart as you add this stock to your ChangeWave portfolio.

    Hit ‘em straight,

    Toby Smith
    Executive Editor

    Joshua Levine
    Editor
    ChangeWave Investing

  108. 108
    Dman Says:

    Sam, I think they have another use in mind for the SPR, so they can’t afford to blow it all out just yet.

  109. 109
    ram Says:

    ZMAN – Could SWN also behave like XTO in a weather issue?

  110. 110
    zman Says:

    Thanks Eli …same guy who helped to double BEXP. Detest that style of writing and the greater fool theory it works. Not sure how he does not go down for market manipulation especially since he says his rec will move the market and not just the fundies. No knock on KOG but changewave = ug. You can of course make money on it up until the music stops and then you better be able to find a chair quick.

  111. 111
    zman Says:

    Ram – absolutely. And maybe more so as there is less float.

    Fair warning on those CHK calls, I will punt on next weakness, bid now $1.25 which is a nice few hours work.

  112. 112
    kyleandy Says:

    i learned something from toby smith re put a high GTC sell order on your stk if u are in a heavily shorted stk like IOC. i assume he’s correct about that takes it out of the “pool” to borrow.

  113. 113
    zman Says:

    nevermind, 111, lost the bid faster than I could punt, holding.

    anybody see a strike notification from Nigeria?

  114. 114
    Dman Says:

    Z – re #110. Agree with “ug” and it sure is brazen. Wonder if he is ever investigated for dumping into the recs.

    Cramer also tells his audience not to buy on the initial rec. So he too acknowledges that he is moving the stock, but numerous investigations of his TV and web recs never found any dumping into them. Wouldn’t like to bet that way on changewave, judging by the ickiness factor …

  115. 115
    zman Says:

    Coal just on fire. If there is one thing I would beat myself up over this year, and I don’t do that, it would be the move in coal which was highlighted here at the lows in I think Feb. BTU near double since then and rest of group very strong. Will take another look in July.

  116. 116
    ram Says:

    ZMAN – As a lazy rule, I put 25 to 50% of the profits into longer dated calls to maintain a little exposure. For instance, I purchased PQ OCT 30’s with some of the profits to have exposure. I wrote this to give others something to think about.

  117. 117
    Sambone Says:

    1:53 pm EST

    Nymex Crude Pares Losses, Nigeria Worry Emerges

    DOW JONES NEWSWIRES
    From MARKET TALK
    [Dow Jones] Crude sheds losses and trades within a nickel of $136/bbl, as worries mount that a worker strike could crimp Nigeria’s oil production. Traders seize on aspects of a US oil inventory report they perceive to be “moderately bullish” for crude, in the words of Societe Generale. Nymex Jul crude +$1.71 at $135.72/bbl. (greg.meyer@dowjones.com)

  118. 118
    Sambone Says:

    By Gregory Meyer
    Of DOW JONES NEWSWIRES

    NEW YORK (Dow Jones)–Crude oil futures jumped above $136 a barrel on
    Wednesday, bolstered by the risk of new short-term cutbacks in Nigerian supply
    and a drawdown in U.S. crude oil inventories.
    Light, sweet crude for July delivery was recently up $2, or 1.5%, at $136.01 a
    barrel on the New York Mercantile Exchange. August Brent crude on the ICE
    futures exchange was trading $2.10 higher at $135.82 a barrel.
    Crude marched upward as a strike loomed at a unit of Chevron Corp. (CVX) in
    Nigeria. Workers were poised to go on strike after talks with the company
    failed, Reuters reported Wednesday. An official of Pengassan, the senior
    Chevron workers union, said talks “have broken down,” according to Reuters.
    Nigeria produced 1.9 million barrels a day last month – 2.2% of world supply,
    according to the International Energy Agency. Sabotage and unrest have forced
    the country to shut in more than 500,000 barrels a day in production,
    contributing to oil’s rise this year. Nigeria is the source of a crude variety
    favored by U.S. refiners for the ease with which it can be refined into light
    products, such as gasoline.
    “This Nigeria strike talk is big because it’s the crude that we want,” said
    Tony Rosado, an energy broker with GA Global Markets in New York. Whenever
    Nigeria’s light crude “is involved in the picture, crude will move,” he said.
    In its closely watched weekly oil report, the EIA said U.S. crude stockpiles
    fell by 1.2 million barrels to 301 million barrels, meeting analyst
    expectations. It was the fifth straight week of declines. The rate at which
    refineries process crude, known as refinery runs, rose.
    Societe Generale described it as a “slightly bullish crude report on the
    pickup in runs.”
    The data also showed a surprise 1.2 million barrel drawdown in gasoline
    stockpiles, bucking analysts’ expectations of an 800,000 barrel rise.
    “But the draw in gasoline basically deserves something of an asterisk next to
    it, because demand for gasoline last week was really quite poor,” said Tim
    Evans, energy analyst at Citi Futures Perspective in New York. The data showed
    gasoline demand declined 1.7% in the week ended June 13 to 9.251 million
    barrels a day.
    Overall, total U.S. oil demand is down by 1.3% in the last four weeks compared
    with the same period a year ago, the EIA reported.
    Front-month July reformulated gasoline blendstock, or RBOB, rose 2.81 cents,
    or 0.8%, to $3.4460 a gallon. July heating oil climbed 1.93 cents, or 0.5%, to
    $3.8415 a gallon.

    -By Gregory Meyer, Dow Jones Newswires; Dow Jones Newswires
    06-18-08 1423ET

  119. 119
    zman Says:

    Thanks Ram. As you know I normally take profits and roll back in a few days being a creature of habit if I still like the name. PQ still cheap, cheap by the way.

    Group stalled between, hooray oil and boo bad market. Bet the pin action sets in mid day tomorrow.

  120. 120
    ram Says:

    Is the assumption that all JUNES will be out pre pinning?

  121. 121
    Dman Says:

    I love the “asterix next to it” for gasoline (Tim Evans in #118). Now there’s an idea for politicians: “Solve the fuel crisis, just put asterix next to pump price”

  122. 122
    zman Says:

    BRY trying to test record, quietly drifting higher. Not expensive here on pretty low price decks.

    Yes, the WFT and CHK go over the side at first still moment.

  123. 123
    uop Says:

    zman: what is “over the side” ?

  124. 124
    zman Says:

    Brain Re #56. You really can talk both sides of the the “to hedge or not to hedge” argument. Some managements say you, the shareholder, pays me to do a job and I’m not going to limit your upside if I do a good job. These guys have either been burned in the past on hedges or they have very little debt or a capital program that is otherwise easily funded.

    Then you have the guys who say that they hedge to ensure their capital program and want to take the commodity price risk out of the stock. From my experience you can ensure the capital program with hedges but the stock will still fall with the others if commodities slide. For one thing, too much hot money that doesn’t know or care about hedges but sells when they sell oil or gas fall and buy when they see them rally.

    I personally favor costless collars especially for the smaller players as it limits downside while giving the commodity a little room to run. I think the managements, good though they might be as operators, are playing roulette if they have not hedge program.

  125. 125
    zman Says:

    “over the side (of the boat), out of the building” = sold.

  126. 126
    zman Says:

    Wow HK clawed all the way back to even.

  127. 127
    zman Says:

    TSO getting dropped and that does not make a whole lot of sense to me, worse than group.

    Corn at $8 / bushel. So not only should you fill er up before Saturday but you should make a trip to the grocer as well.

  128. 128
    Dman Says:

    re # 56 & #124

    If we just want exposure to the commodities we can use UNG, USO, futures etc. So I figure we really want exposure to the best expertise in exploiting the commodities and hedging can be part of that.

  129. 129
    Nicky Says:

    Afternoon all. Broader market seemed totally spooked by oil up $2. Not quite sure why when we have been around this level for a week now.

    1331 was very important support level for spx. If it holds we could see a move back to 1360 – 65. My view is that we are within 10 days of seeing the start of a huge move to the downside.

  130. 130
    Dman Says:

    Z – I just closed an OII position, because I can’t see what is making it run here and the chart looks kinda weird: lots if sharp run ups (like now) followed by drifty down segements. If someone could tell me why it has run up I’d look at a new position (still have small placeholder).

  131. 131
    zman Says:

    Afternoon Nicky, my guess is the broad didn’t like the velocity of the reversal.

  132. 132
    Hoss Says:

    Z

    Back in Feb. First Reserve,Petroplus,and Blackstone put together ~$2B with the intent to purchase U.S. refinery operations – were you aware of this or have you heard anything.

    Rumor yesterday was Sanford Bernstein implied MRO was a buyout candidate and they were looking to sell two of their refineries.

    The buyout I don’t know, but the refinery sale jives with their “asset review” indicated in their last presentation.

  133. 133
    Nicky Says:

    Oil – I don’t believe the upside is done. That said nothing to say we can’t chop around a bit more in a correction (we could even go back to the 122 area) before we launch higher.

  134. 134
    Nicky Says:

    Nat gas – I think could get as high as the 13.750 region before we are done.

  135. 135
    BigJim Says:

    Zman Any ideas why {Rig} is running today.

  136. 136
    zman Says:

    Hoss – nope, wasn’t aware of it, why have they not bought some of VLO’s for sale assets? I think we are approaching further consolidation in the space but I’m not sure how it goes down at all.

  137. 137
    zman Says:

    Bigjim – other than its cheap no. It is divergent from DO, NE, ATW so maybe a broker comment I can’t see.

  138. 138
    zman Says:

    Nice run on CHK here, about to come out.

  139. 139
    zman Says:

    of the June calls.

  140. 140
    zman Says:

    ZTRADE: Out CHK June $65 calls (CHKFM) for $1.45, up 61% since purchase earlier today.

  141. 141
    ellwodo Says:

    Wildtrades – I should have done today’s, but a replay of yesterday’s HKFH worked out fine, in at .75 and out at $1

  142. 142
    irished Says:

    Wish other options/stock were as “easy” as CHK makes it seem. ZMAN 50+% very good for little work. If only I could do something about all the other reds. LOL

  143. 143
    Dman Says:

    Hey Nicky, where’ve ya been? We’ve had nobody to ‘splain the broad market to us :)

  144. 144
    Nicky Says:

    If 137 is taken out to the upside on crude oil we could be at the 141.50 area very quickly.

  145. 145
    md Says:

    refineries- Do we have a vicious cycle here. Finished products Demand lower. So Keep Just In time inventory of raw material. Market sees low inventory of raw material and bids up price.

  146. 146
    jiveyjr Says:

    PDO that I mentioned yesterday is up another 28% today…not much info. on it I can find…63% owned by mgt. nutso trading in this thing

  147. 147
    Dman Says:

    Here come that “sea of energy love” again.

  148. 148
    Nicky Says:

    Lol Dman – you do a very good job of the broad market on your own!! But I do think this next – what should be pretty small move up – is going to be the last rally to sell into. We should then go below the March lows….

  149. 149
    ram Says:

    WFT has a little wind to it’s back.

  150. 150
    Nicky Says:

    Resistance for the spx is at 1350 – 53.

  151. 151
    zman Says:

    Irish – ?? I don’t understand your comment.

    From time to time my port is all red but at present I’m down on MMR and WFT positions.

  152. 152
    irished Says:

    ZMAN We (you) did good. But many others that I alone picked are doing awful. It has been a red day on my options where I seem to be on the wrong side. Just some Irish humor!!!

  153. 153
    zman Says:

    Irish, ah, I see. I personally am content to raise cash here, trip or no trip.

    NG – at 13.26. Man did I not see this coming back in January.

    Go BRY Go.

    SD = wow.

  154. 154
    zman Says:

    QBIK at $4. Holding through an expected spike when CHK comes clean about their wells although that may turn into a buy the rumor, sell the news event.

    sea of energy love is now trademarked.

    UDRL – rebreaking out, Tater or any TA please have a look.

  155. 155
    Dman Says:

    Z – re #130, any clues on what’s goin’ on with OII? Or is it just the time-of-year and the “sea of energy love” sloshing about?

  156. 156
    tater Says:

    Z do you have any intuition on coming news release or analyst release by or about CLR in next 2 days?

  157. 157
    Jay Reynolds Says:

    I REALLY, REALLY want some longer dated HK and CHK exposure here.. There are about 1,000 people running around in Elm Grove/Caspiana with their hair on fire.

  158. 158
    zman Says:

    OII I think is just technical, could be Sam’s winds out in the Atlantic, its only up double the OIH today and it has been a stalled since the fall.

    Tater. No I do not.

    Jay – any more 20 to 30 mmcfgpd rumors?

  159. 159
    ram Says:

    Good visual JR

  160. 160
    zman Says:

    Yes, they should not have stood so close to the gas flares.

  161. 161
    tater Says:

    UDRL

    3rd time push through Feb gap at 20 finally successful. Today’s run broke through resistance of Feb high of 22. HORSESHIT volume today if it is being reported properly, so be careful (only 82K v. avg of 240K).
    (This is a quick look by me)

    CLR – just thinking of a day trade and don’t want to walk into something

  162. 162
    Fred Says:

    I think this is what Hoss is refering to as Petroplus is teamed up with Blackstone and they’re interested in MRO or whatever. I think the general idea is the U.S. is “FOR SALE” with the dollar so cheap and I am sure they especially would like to low ball something they can pick up for pennies on the already reduced dollar.

    Thomson Financial News
    Petroplus on the look-out for acquisitions
    05.08.08, 10:31 AM ET

    ZURICH (Thomson Financial) – Petroplus Holdings AG wants to continue to grow via acquisitions, chairman Thomas O’Malley said during a conference call following the release of full year results.

    O’Malley said that Petrolus has screened a number of attractive targets in the U.S. but there was currently little of interest in Europe.

  163. 163
    zman Says:

    KOG up 40%

  164. 164
    zman Says:

    Look like a lot of the single digit midget crowd is moving up today. Generally when the flotsam floats you want to be moving the other direction. Again no slight KOG intended.

  165. 165
    ram Says:

    I asked about Kodiak the other day. That darn Toby.

  166. 166
    zman Says:

    I remember Ram and Texana had a nice little blurb about it last night.

    SLB calls on the chopping block tomorrow. Nothing personal, just raising a little cash.

  167. 167
    italyinvestor Says:

    Zman – What are your thoughts on the open interest for HK DEC 55s. Much larger open interest than the nearer strikes and a pretty deep target. Is this normal for HK? Any meaning? I also like the fact that there aren’t many open puts out that far.

  168. 168
    Hoss Says:

    Z

    Any thoughts on COG – a little rattled on secondary news. Proceeds going towards recent East Texas acquistion. Joining S&P 500 after close Friday.

  169. 169
    Hoss Says:

    Old news, but some may have missed it.

    RBC Energy Conference “Bakken Shale” Presentation included KOG,BEXP,WLL,BJS

    Worthwhile, if you haven’t heard it – gotta register though.

    http://www.wsw.com/webcast/rbc90/register.aspx?conf=rbc90&page=panel7&url=http%3A//www.wsw.com/webcast/rbc90/panel7/

    You’ll be emailed username and password, but here it is.

    Username: rbccm
    Password: energy08

  170. 170
    Bleemus Says:

    dumped most of my KOG in last few minutes, was meant to be a long term play but this is ridiculous, the rest is playing with house money now, jeepers

  171. 171
    doc Says:

    Are you selling july 55 nfx before vacation?

  172. 172
    zman Says:

    Italy – did you mean CHK?

    COG, that company, not real close to the story of late.

    Doc – I don’t have those but I plan to keep the Sept $65 NFX calls that I do have. I may or may not punt the July 70s

    Beer Thirty!

  173. 173
    italyinvestor Says:

    Z – No HKLK. Just trying to figure out why the big interest out there relative to the 45 and 50.

  174. 174
    zman Says:

    Italy – oh ok, just looks like a bet to me, September OI are higher across the board more near the money. Maybe its sold against an open position but I suspect its a takeout bet. The stock could easily be that high by then.

  175. 175
    zman Says:

    back later.

  176. 176
    doc Says:

    I hold some royl drilling partnerships. Not a very good investment but the common traded 3 million shares today and royl has only 8 million shares outstanding

  177. 177
    BossmanG Says:

    doc, how do you get into participating in drilling partnerships if I may ask? is that something open to public?

  178. 178
    Jay Reynolds Says:

    Rumors aplenty but nothing hard, looks to be initially pipeline capacity constrained. I’m told that of the two new 42″ pipelines going in at Three States (AK, LA, TX juncture)and under construction that one is already fully booked.

    My note about “hair on fire” is that having been in the biz for a while there is a tangible difference now, knowing grins, INSPIRED feverish activity, that “I know how the game is going to turn out/we’re gonna kick some arse” maybe once in a lifetime kind of smugness afoot in the field.

  179. 179
    doc Says:

    I bought the drilling partnership from royl about 5 years ago. You get a really big tax deduction the first year. But now with capital gains tax 15% now drilling parnerships not a good deal.I get a check every month. The first year I got 30% of my money back. Since then the checks have been very small. Production dropped a lot after the first year. royl common stock ran from 2-11 this year That may be the way to go. Also I It would be difficult for for me to sell the partnership. But I wil try since the stock made such a big run

  180. 180
    texana Says:

    kog: vol today 9.6 mil/ avg dv is 1.3m, 2mil trade within 20 minutes with several big block trades. no news officially, couple of rumors. i have traded this stock for a while and it can move quickly either way. it broke thru resistance @ 14.5 then ran to next rest. @ 15.5 & pulled back. the 14.5 rest goes all the way back to 2006 & 07. the block trades look like somebody knows something. i am long the stock, thx t

  181. 181
    texana Says:

    if u go to the web address listed above by hoss for bakken conf & listen to the kog part, they were offered the parshall prospect before eog & they passed on it. boy can i have that 1 back.

  182. 182
    zman Says:

    Strike averted in Nigeria.

  183. 183
    zman Says:

    Texana _ I remember listening to that presentation a few weeks back. The KOG guy sounded pretty “well, hell” about it.

  184. 184
    texana Says:

    sorry about that, that” boy” was me saying that. the bakken is very litely explored east of the nesson in the fairway shown on the conf map. there should be a lot of good wells announced probably with 2nd qtr erngs. kog thinks that the multi stage frac &stim will result in better wells than the 12,000′ laterals with 1 stage that mro is now doing. eog is king of the well comp & usually has better wells than offset operators in the same fields. eog & wll should have blow out 2nd qtr results. u probably saw that ward had already bought his 100mil$ of stock in sd in about a 30 day period. the co2 will be huge in the permian basin as there r still huge oip reserves to be produced by eor. its a little crazy on these prices on some e&p cos. some justified some not, our job to siff the chaff. i’m working the bossierville & bakken with some pretty good success. 183 today guess its working for u 2.thx t

  185. 185
    Hoss Says:

    Tex

    Thanks for the information.

    Missed the run on KOG and will not chase it, but I’ll keep on eye on it.

    I spent some time browsing the North Dakota Industrial Commission, Department of Mineral Resources, Oil and Gas Division website.

    https://www.dmr.nd.gov/oilgas/findwellsvw.asp

    First time at this and I probably left more than a few stones unturned – need to subscribe for the real deal. Used the GIS Map Server and overlayed the Ft. Berthold Reservation Boundries and found the only KOG Reservation location to be TALL BEAR 16-15H and it’s status was “confidential”. KOG’s Patterson indicated there would be no drilling until the rig they had ordered was delivered in Aug/Sept unless they were able to get a “window” on a rig from somewhere else earlier. Any significant news will probably be from an adjacent operator or another operation altogether. I think they are expecting news from their JV with DVN in the Baxter Shale/Vermillion Basin end of June.

    I came across the abridged RMOJ story on Peak’s Tekakwitha well near the Mandaree Field – rumored 1,000 bopd. It’s about 20 miles NW of KOG’s site. Also noticed Peak had three or four other sites in a southerly direction from Tekakwitha and I would guess someone could draw the conclusion that the discovery could work its way south towards KOG’s site. Peak is set to have a hearing to determine temporary spacing on that well on Wednesday, June 25, 2008 @ 9:00 a.m. – you can apparently listen live with RealPlayer . I think the MRO wells Patterson was refering to in the presentation are about 15 miles SW of KOG’s site in the Bailey Field.

    Good luck

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