19
Jun

Thursday – Gas Preview & Oil Review

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In Today's Post:

  1. Holdings Watch
  2. Commodity Watch - Gas Preview and Oil Review
  3. Odds & Ends 

Holdings Watch: Continuing to trim holdings as 1) I'll be out of pocket next week and 2) the energy sectors, while still not expensive, have had a good run. The Wiki Holdings and Performance Tabs (both subscribers only) are updated. 

  • (CHK) - Out the (CHK) July $60 calls (CHKGL) for $7, up 320% since 3 entries beginning early April. I continue to hold the common here.
  • (PQ) -  Sold the (PQ) July $25 calls (PQGE) for $2.50, up 127% since entry in early May. This is still one of the cheapest E&P's out there (4.9x '09 CFPS estimates which have not risen since 2 weeks after the 1Q call) and I would not have sold it but for my trip. I continue to hold the common here. 
  • (CHK) - Entered the (CHK) June $65 calls for $0.90 for a rare WILDZDAYTRADE (extreme high risk of which I think I've only done 5 ytd) after oil retreated upon the EIA reports and the stocks sagged. Even the gassy ones and with a Jefco upgrade at my back (smart guys those fellas) we punted for $1.45, up 61% which is nice for 3 hours of waiting and watching a tick chart which is not what I generally do with my time. 

Commodity Watch

Natural Gas: continued its relentless upward trajectory yesterday as expectations grew that today's storage report would show a near record low injection on cooling load and continued weak imports. Gas rose $0.26 to close yesterday at $13.21 and the 12 month strip is now over the $13 mark ($13.14) as well. Gas is nearly a dime in early trading.

  • Tropics Watch: All clear on the Atlantic front except for some tropical waves which don't appear to have the gas to develop into much more than rain.  

EIA Gas Storage Preview:

My Number: 65 Bcf injection

  • Imports Continue To Swoon. 3.8 Bcfgpd lower than year ago levels as both Canadian piped gas and especially LNG lag. Consensus seems to be that we need to see $15 gas to bump up LNG volumes and I don't disagree.
  • Weather: It was hot with Cooling Degree Days of 74 (which is more July-ish than early June-ish) coming in well above the prior week's 54 and the year ago week's 51. EEI said electricity generation was up 6.8% week to week and 3.8% from a year ago. Other consultants put have the week's generation spiking into double digit % territory.
  • Comps On Injections: 80 Bcf injection last week and a 89 injection in the year ago period. The range for this week over the last five years has been injections of 56 to 114 Bcf. 

Street Consensus: 60 Bcf injection (from the Bloomberg survey). 

  • Relentless Bull Watch: Goldman Sachs sees natural gas prices in the 12.70 to 13.20 for the remainder of the year with risk "skewed to the upside." ZComment: Pretty tepid prediction from GS as that's where we are now, more like an EIA prediction than one from the guys who coined the term "super spike". Goldman did cut their estimate for LNG consumption in the U.S. to 1.54 Bcfgpd (still double what's been taken in all Spring).

Crude Oil: closed up $2.67 at $136.68 yesterday. July crude reversed sharply during the day when word came that Pengassen, the Nigerian oil workers union, was an inch away from striking on (CVX), potentially shutting in 350,000 bopd.  After the close, the union said government intervention brought both sides back to the table. And then ...

  • Nigeria Watch: MEND launched an attack on an offshore Shell facility. Shell has shut in the 200,000 bopd the Bonga field produces. If its not the unions, its the "freedom fighters" ... who obviously have Bloomberg terminals. MEND also said that they may start attacking oil tankers. This morning the strip is rising across the board in early trading.

EIA Oil Inventory Review

exp-vs-act-061308.jpg

CRUDE OIL: Essentially in line draw down. Inventories appear to have peaked early this year. 

Utilization / Refinery Inputs. Refinery utilization recovers slightly to 89.3% and while this is in line with year ago figures and I'd like to see the sector curtail runs further to bump margins before I step back in. I continue to avoid the independent refiners as stronger cracks a few weeks ago got barely a nod from the market in their share prices. I plan to be long at least toe-hold call positions in (VLO), (TSO) and (FTO) for their conference calls but want to see 1) more discipline on the part of the group in terms of utilization (surely you guys have some maintenance to do) and 2) continued stout gasoline and especially diesel demand (read on), before I step in. 

util-vs-inputs-061308.jpg

Imports Rally...Finally...

crude-imports-061308.jpg

Crude Stocks - still in a funky (early) pattern for this time of year.

crude-stocks-061308.jpg

GASOLINE: Demand destruction is modest at best.

Production Remains Light: At present the margins are better for diesel and despite higher utilization gasoline production continues to ebb, albeit slightly.

gasoline-production-061308.jpg

Imports Remain Within Normal Levels Despite Price. Speaks to continued global tightness of refining capacity and a greater trend towards production of diesel.

gasoline-imports-061308.jpg

Gasoline Demand. Still above 9 mm bpd.

gasoline-demand-061308.jpg

gasoline-price-061308.jpg

Gasoline Inventories - Unexpected Drop.

gasoline-stocks-061308.jpg

Or looked at from the EIA's perspective:

gasoline-stocks-061308eia.jpg

 

 

Odds & Ends

Analyst Watch: Goldman is marking their E&Ps to that new price deck; here's the list of players affected that we traffic in around here. How they remain neutral on some of these names (NFX for example) is beyond me and really beyond me when you consider their own prices targets (as in, "we think NFX is going to rise 27%, we feel pretty NEUTRAL about that). Talk about asleep at the wheel. Sorry for the rant but NFX has a number of catalytic events right around the corner (first Bakken tests, Mancos shales tests, and in July their first dual lateral in the Woodford which over time should help drive F&D there from the already low $2 level closer to $1 / Mcfe.  

goldman-chg-061908.jpg

More Analyst Watch: This must be Goldman Sach's day. They're taking the oil service sector to Attractive from Neutral. Wow, what took you so long? I'm likely to re-enter longer dated (NBR) calls and may do a little shopping from the list in driller big picture thoughts in Tuesday's post.   UBS takes (HK) target from $35 to $50.

 

 

 

 

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

  1. 1
    Sambone Says:

    7:11 am EST

    Goldman Sachs Ups 2008-12 Oil Prices

    Dow Jones Newswires

    LONDON — Goldman Sachs Group Inc.’s global investment research team said Thursday it has increased its oil price estimates from 2008 to 2012 in anticipation of continued tightening of global crude supply and demand fundamentals.

    The bank expects a tight supply of crude to push prices to an average of $117 for 2008 from the previous $108 a barrel and to $140 next year from $110 a barrel.

    Goldman has also upped its forecast for long-term oil price, increasing its estimate for 2012 to $85 a barrel from $75 a barrel to reflect continued cost inflation in the sector.

    “We believe the sharp rise in oil prices this year is signaling an urgent need for either faster long-term supply growth,” the analysts said in a note to the market, “or lower long-term demand growth in order to keep long-term supply and demand in balance.”

    —By Angela Henshall, Dow Jones Newswires

  2. 2
    jsaun14 Says:

    I’m sure plenty of you saw this from FBR, but in case you missed it…

    Newfield Exploration Company (NFX–Outperform–$61.94; Price Target: $90.00)
    Material Production Growth Coming; Raising Price Target; Adding to Top Picks
    We believe that production growth from the company’s Woodford Shale program is at an inflection point where success in application of new drilling and completion methodology, in our opinion, will drive material production and reserve growth and will result in significant downward pressure on aggregate F&D costs. As such, we are increasing our 2009/2008 production growth rate to 26% from 18%. We are forecasting 2008 production to be 249 Bcfe, 29% year-over-year growth and above upper end of guidance of 224 Bcfe-234 Bcfe. We believe that the consensus growth rate for 2009 is around 10%, which is a reflection of the Street’s under appreciation of the progress of the Woodford Shale program. Also, we believe that the company could grow proved reserves this year by 27% and report organic F&D of $2.15/Mcfe; compared to $2.90 last year and $3.02 in 2006. As such, we believe that at current stock price levels, investors are not fully appreciating the implications of Woodford progression. Consequently, we are increasing our 2008/2009 EPS/CFPS and our 12-month price target to $90/share from $80/share. Our price target is based on the stock trading at 8.0x 2009 TEV and 80% of our proved + Woodford base case NAV. – Rehan Rashid, FBR

    Also, your favorite analysts at JPMC have a $73+ NAV with their price deck and it’s over $130 w/ futures.

  3. 3
    Sambone Says:

    9:09 am EST

    Nymex Crude Down Slightly On Supply Uncertainty

    From Market Talk:
    [Dow Jones] Call it a wash — Nigerian militants successfully completed a rare attack on an offshore platform, and the Saudis are set to increase production at a meeting on Sunday. With traders unsure about the amount of oil knocked offline or about to be brought on, July crude trades at $136.40, down 28c. (brian.baskin@dowjones.com)

    Reported Earlier:
    LONDON — Crude oil futures edged lower in London Thursday as traders weighed possible impact of yet another production outage in Nigeria against hopes of a supply boost from Saudi Arabia.

    At 1132 GMT, the front-month August Brent contract on London’s ICE futures exchange was down 98 cents at $135.46 a barrel.

    The front-month July contract on the New York Mercantile Exchange was trading 76 cents lower at $135.92/bbl.

    The ICE’s gasoil contract for July delivery was down $32.25 at $124.450 a metric ton, while Nymex gasoline for July delivery was 126 points lower at 345.41 cents a gallon.

    “The short-term trend is sideways and the medium and long term trends remain bullish,” said Andy Riddell, broker at ODL Securities adding that the market is extremely sensitive to Nigeria supply headlines.

    However, a trader of physical West African crude based in London added, “until you know how long it (The Bonga crude field) is down for, it is difficult to say — it could be up in a few hours and, in that respect, it would have little impact.”

    Output from one of Africa’s largest producers, and key supplier to U.S refiners, remains crucial for the global crude market and news militants have successfully targeted Royal Dutch Shell PLC’s Bonga crude facility 120 kilometers offshore is cause for concern.

    However, awaiting further clarification from the company on longer-term impact the market resumed trading within the range established in the last half hour of trading in the previous session. A large amount of support is propping up the Nymex light sweet crude front-month contract at $135 a barrel, said Jim Rintoul at theoiltrader.com.

    “This attack will remind people of the problems Shell had with the EA field,” said Rintoul referring to another Shell offshore facility that was the target for a series of attacks, added that focus will shift later in the session to whether the company will have to force majeure Bonga exports, and if so for how long.

    This cranks up the pressure on Nigeria as a key member of the Organization of Petroleum Exporting Countries, ahead of the meeting between producers and consumer in Jeddah this weekend.

    Nigeria has struggled to hit its OPEC quota for several months, hampered by a spate of attacks on its oil infrastructure that have knocked out more than 500,000 barrels a day of production, this latest attack brings the total up to more than 700,000 barrels a day.

    The Movement for the Emancipation of the Niger Delta, the group that claims responsibility for a number of the attacks has yet to comment on the Bonga disruption.

    While Saudi Arabia may be promising more oil, participants emphasize this may not be the type of crude the market is after. The light, sweet crudes found in Nigeria are highly prized by refiners as they are easy to process into gasoline. The heavier, “sour” types however, some of which Saudi will offer are not in demand, one illustration of this is news Iran has made little headway shifting its own stockpiles.

    Some 25 million barrels of high-sulfur or “sour” crude is thought to be in floating storage in the Persian Gulf, as Iran hunts around for buyers.

    Looking at technical charts the near $10 range established June 6 has engulfed the market, and technical analysts are looking for a close either above or below these levels for crude to break out of its current pattern.

    —By Angela Henshall, Dow Jones Newswire

  4. 4
    Sambone Says:

    NEW YORK (Dow Jones)–Temperatures in the Southwest and from Texas east to the
    Gulf Coast states will likely be above normal in July, the National Oceanic and
    Atmospheric Administration said Thursday.
    Below normal temperatures are expected in parts of the Midwest, including the
    central Mississippi and western Ohio river valleys. NOAA said the immediate
    coastal areas from Alaska to Southern California also are likely to see below
    normal temperatures next month.
    Throughout the east, south to Georgia and west into central Ohio, there are
    equal chances of normal, above or below normal temperatures in July. The same
    forecast holds from Montana south into Oklahoma and for all but the coastal
    regions of Alaska.
    The forecast is based on expectations of a weakening of La Nina conditions.
    That refers to the unusual cooling of temperatures of the equatorial Pacific
    Ocean, which can have broad impact.
    Even as La Nina eases, its impact can persist for months, NOAA said, adding
    this may have a slight impact on expected increased hurricane activity in the
    Atlantic and may slightly surpass hurricane activity in the Pacific. NOAA is
    calling for above-average hurricane activity in the Atlantic this season, which
    runs through Nov. 30.
    Longer-term, from July through September, NOAA said above-normal temperatures
    could continue through the Southwest, extending northward to include much of
    the Great Basin and interior California.
    NOAA said some indicators point to the likelihood of above normal temperatures
    through the summer in the Northeastern U.S.
    Below normal temperatures could continue along the Pacific Coast, not just
    from July through September, but also from September to November, NOAA said.
    For most of country, apart from the southwest and northeast, where
    above-normal temperatures are expected, and for Pacific Coastal regions, facing
    below-normal temperatures, the forecast shows equal chances of normal, or above
    or below normal temperatures.
    – By David Bird, Dow Jones Newswires,
    (END) Dow Jones Newswires
    06-19-08 0926ET

  5. 5
    texana Says:

    i was out most of yesterday & had not read a post till this mrng from yesterday. this is 1st i saw about changeway on kog. wonder if they got paid to write that. i like their land positions but like p&d bs from changewave.

  6. 6
    zman Says:

    JS – thanks, I had. The biggest point they make is the reduction in F&D costs, I think that may be more important than the hike in the volume growth rate.

  7. 7
    zman Says:

    mighty GS smells equity deals to be done, they’re a little late to the party on service names but I guess not if you have a longer term view.

    anybody see the catalyst to drop oil $2 from the open to now?

  8. 8
    Sambone Says:

    #7 – US$ up

  9. 9
    zman Says:

    I show the $ index up 0.15%, shouldn’t be snapping oil back like that.

  10. 10
    Sambone Says:

    Crude down on China fuel price hike, Dow Jones

  11. 11
    Fiveanddimer Says:

    Re #7 and 8. Don’t think the small bounce in the dollar is playing a role. Gold and silver, which are very sensitive to moves in the US$, are still very strong this morning.

  12. 12
    zman Says:

    ah, thanks Sam re #10, much more likely

    Goldman has more swing in energy and the energy names than just about anyone. Unreal moves in CHK to SLB.

  13. 13
    isleworth Says:

    Z- where does TSO make sense? – it has been killed of late….

  14. 14
    jsaun14 Says:

    Chicken here…Took the July NFX $70 off the table.

  15. 15
    Sambone Says:

    LAGOS, Nigeria (AFP)–Nigeria’s most prominent militant group claimed
    responsibility Thursday for an attack on Royal Dutch Shell PLC’s (RDSB) main
    offshore oilfield.
    “Gallant fighters from MEND overran the supposedly fortified Bonga offshore
    oil fields operated by the Shell Petroleum Development Company,” the Movement
    for the Emancipation of the Niger Delta said in a statement to the press.
    The group said its main objective had been to blow up the “computerized
    control room” coordinating operations from the field but had been unable to
    access the target.
    They had then considered setting fire to the facility, but decided against in
    order to “avoid loss of life,” the statement said.
    MEND threatened a new attack on Bonga and said it wouldn’t spare the facility
    next time round.
    “We therefore ask all workers in the Bonga fields to evacuate for their safety
    as the military cannot protect them,” it said.

    (END) Dow Jones Newswires
    06-19-08 0945ET

  16. 16
    zman Says:

    Isle – I had thought it made sense two weeks ago and higher than here but I did not bite. Then W. Coast cracks fell back and it and the others got whacked. I’m holding off until I see more data along the lines of lower utilization, sustained driving demand.

    Part of the issue is more psych than real. Demand is off but not that much and only from elevated levels last year. But what fund manager wants to hold a big slug of TSO or VLO shares going into the close of the quarter for everyone to see and say “what an idiot” and then sell the fund. Nothing stinks like losing money in an “energy stock” in this market. So maybe they turn in July…I’m still waiting.

  17. 17
    zman Says:

    JS – can’t fault ya there, stock still acts hinky despite all the nice things people say about them. Needs to break out with conviction.

  18. 18
    zman Says:

    Re #15. Their slogan should be “MEND. A kinder, gentler, terrorist organization”

  19. 19
    Dman Says:

    Z – regarding Goldman swing: is it a one-day wonder or do the footsldiers keep following orders for a while?

    As for timing, I think GS noticed that OIH has been consolidating just under the 220 level for 3 weeks & they were worried it would leave the station without them. The question is will their swing push it thru or is there more consolidating there?

  20. 20
    Sambone Says:

    BEIJING (Dow Jones)–China may raise domestic gasoline and diesel retail
    prices by 17-18% from Friday, the first hike in seven months, according to
    Beijing Jcache Energy Information Services.
    The National Development and Reform Commission, China’s top economic planning
    agency, will raise retail prices of gasoline and diesel by CNY1,000, or
    $145.35, a metric ton from June 20, Jcache reported Thursday, citing a rumor
    circulating in the market.
    The NRDC wasn’t immediately available for confirmation.
    Should it happen, the hike will be first since Nov. 1, 2007. The scale of hike
    will also be the largest in more than four years.
    Despite the surge in international oil prices, the government has been
    reluctant to loosen its grip on domestic fuel prices, partly due to concerns
    over runaway inflation.
    However, with crude oil prices heading towards $140 a barrel, the government
    is now facing heavier financial burden on fuel subsidies.
    The government is also under growing international pressure, especially after
    many neighboring countries raised pump prices over the past months. Major oil
    producers and consumers will meet this Sunday in the Saudi Arabian city of
    Jeddah at which price controls will be among issues in the spotlight.

    -By Sherry Su, Dow Jones Newswires;
    (END) Dow Jones Newswires
    06-19-08 0958ET

  21. 21
    zman Says:

    Crude down $3 on China lifting fuel prices. The Chinese government gets how to control demand. Note SNP and PTR getting their first break in quite some time on this news.

  22. 22
    jsaun14 Says:

    Ole Etrade caught the ask right a few days ago so I can’t complain…

    I hope it stays hinky over the next week or two. I’ll be watching for it and will re-enter the longer calls.

  23. 23
    isleworth Says:

    Tks mucho Z – downside risk versus upside potential beginning to look compelling.

  24. 24
    zman Says:

    Tempted to take a July out of the money call position in PTR. The 150 or 155 as the stock has ben consolidating for months now as high oil smacks them around.

  25. 25
    ram Says:

    ZMAN – I missed that pop on WFT. Down oil dragging everything down?

  26. 26
    zman Says:

    Ram – yep, me too, still waiting. I’d think they start buying in earnest in the GS names as long as oil doesn’t slip though the support line at 132.

  27. 27
    ram Says:

    Thank you. All packed, shots if needed taken care of?

  28. 28
    Sambone Says:

    By Tatyana Shumsky
    Of DOW JONES NEWSWIRES

    NEW YORK (Dow Jones)–Crude slid in morning trading on reports that China is
    raising diesel and gasoline prices.
    Light, sweet crude for July delivery recently traded $2.52, or 1.8%, lower at
    $134.16 on the New York Mercantile Exchange. Brent crude on the ICE futures
    exchange traded $2.52 lower at $133.92 a gallon.
    China will increase fuel prices on Friday, according to a Chinese news
    service. While most of China’s neighbors have reduced subsidies in the last few
    weeks, China was seen as capable of weathering the recent upswing in energy
    costs without raising prices. Higher prices are seen reducing consumption,
    which would be especially worrisome in the giant Chinese market, traders said.
    “This is enough to scare the market,” said Ray Carbone, president of Paramount
    Options. “This is not what people who are long want to hear.”
    The sudden uncertainty about Chinese demand comes as market participants
    expect Saudi Arabia to announce an increase in production on Sunday. Such a
    move would add new supplies of lower-quality oil to the market, potentially at
    a discount.
    China’s move overshadowed the shutdown of 225,000 barrels a day of production
    in Nigeria, following a militant attack on an offshore oil installation
    Thursday.
    “If this is going to last a while and really put a dent in supply the market
    will react accordingly,” said Matt Zeman, with Lasalle Futures.
    Front-month July reformulated gasoline blendstock, or RBOB, traded 8.06 cents,
    or 2.3%, lower at $3.3861 a gallon. July heating oil fell 8.31 cents, or 2.2%,
    to trade at $3.7769 a gallon.

    -By Tatyana Shumsky, Dow Jones Newswires; Dow Jones Newswires
    06-19-08 1008ET

  29. 29
    ram Says:

    I hope HK is not being set up to be pinned at 40.

  30. 30
    zman Says:

    Ram – not packed, shot should be good from last year.

    I am in the wrong tubular play or at least it seems that I am. WH doing nothing but flat to down. TS up daily. Ug.

  31. 31
    zman Says:

    Ram – I would guess that it is. All of the HS players weaker today and though they are gassy, oils move will trump anything but a very small injection out of the EIA in 20 minutes.

  32. 32
    tater Says:

    FTO
    Huge support around 25.

    CLR
    Candlestick from yesterday called a “hanging man”, if confirmed by a close today lower than the head part of the candle is supposed to point to more downward action as the people who bought at yesterday’s high area begin to feel “hung” about their purchase and add to the selling.
    As well, this could result in a temporary “double top” look to the recent chart, leading to at least a modest pullback to the 20 EMA (high 60’s) or even the 50 EMA (high 50’s) while still maintaining the integrity of the strong uptrend.

    NOT a forecast, just an analysis

  33. 33
    zman Says:

    there goes PTR

    thanks Tater. How do you like the PTR chart by the way?

  34. 34
    uop Says:

    zman:
    don’t you want to play PTR now?

  35. 35
    zman Says:

    Uop – yes but I missed the bid a couple of times and was waiting on a pullback. I’m just being cheap. If I was going to be in town next week to quarterback ithe trade I wouldn’t be so chintzy

  36. 36
    ellwodo Says:

    NBR – Z, I like your NBR possibility. As of 5/21 Morningstar liked NBR except for its “overwhelming reliance” on the “mature” North American land rig market. Sounds like just the reliance needed for today’s more “youthful” shale plays. I just added the Sept 47.5s, would appreciate your current comments on the company.

  37. 37
    Dman Says:

    China upping prices, Saudi promising more oil, Bush wanting more drilling …the grand anti-speculator World Govermint Conspiracy is comin’ together. Why isn’t the (energy) market quaking in it’s little boots? Seriously though, a slightly more than token selloff in energy might be appropriate ahead of the June 22 oilfest. World Govermint gettin’ no respect here …

  38. 38
    zman Says:

    on a call, back in 10 minutes

  39. 39
    tater Says:

    PTR

    I won’t be a lot of help here.

    This is a stock that has made a huge retreat, so question is the obvious, is this the bottom? Who knows, so take this for what it is, speculation about a stock that probably needs to do more work.

    3 year monthly chart – Still in uptrend. Spike and retreat from late ‘07 did not destroy uptrend line.

    Daily chart – Support at 130ish, March ‘08 low of 115 is next price support area.

    Descending triangle formation from Oct ‘07 to March ‘08, downtrend line break to upside, return to support, then another descending triangle from April ‘08 to present, then today’s trendline breakout to the upside.

    Today’s breakout has now moved above both the 20 and 50 EMA with the 200 EMA still hanging above at 152ish.

    Too hard to say what this stock will do, but I would certainly expect that it should at least pullback at the 200 EMA for a rest (150 ish).

  40. 40
    sane Says:

    Nat Gas 57bcf

  41. 41
    ram Says:

    Numbers good or bad?

  42. 42
    sane Says:

    Roughly inline with the street. Low for this time of year

  43. 43
    zman Says:

    Elwo – I think they will move higher in conjunction with the rig count. They have a greater percentage of high horsepower rigs in their fleet which is what’s needed now. I like UDRL as well but no options there. Mornstar and S&P say things like that (reliance on mature rig mkt) which I find completely useless. Good use of “youthful” there.

    Thanks Tater

    Thanks Sane…I was asleep at the wheel on that. Gas not reacting positively which may just the oil effect today. There was a lot baked into the number but that is just 1 Bcf off the record low for this week

  44. 44
    Nicky Says:

    Morning all. Oil still rangebound despite all the ‘good’ news. Agree Dman it should be down more. Will the Saudi’s disappoint I wonder.

    Broader market trying to get off its butt. Looks like we need to see at the least a bounce towards 1355 – 1360 on spx. Dow back towards 12200 and potentially 12400.

  45. 45
    zman Says:

    ZTRADE: Entering NBR September $47.50 calls for $4 with the stock at $47.30.

  46. 46
    ellwodo Says:

    Thanks

  47. 47
    zman Says:

    QBIK through $4.

    Morning Nicky. Not sure Saudi’s have much more to add at that meeting. Biggest thing they can do is raise numbers and they’ve done that.

  48. 48
    Bob Says:

    Broader Market tanking on C writedowns-CNBC not reporting news from 10 mins ago yet

  49. 49
    Nicky Says:

    Broader market could take until Monday to bottom and spx may be at 1295 by then. But its options expiry and quite often if we see a sell off before the market will rise into expiration.

  50. 50
    Sambone Says:

    By Christine Buurma
    Of DOW JONES NEWSWIRES

    NEW YORK (Dow Jones)–Natural gas futures slipped Thursday, with a
    smaller-than-expected build in U.S. gas storage proving insufficient to buoy
    the market amid falling crude oil prices and forecasts of mild weather in the
    major gas-consuming regions.
    Natural gas for July delivery on the New York Mercantile Exchange was trading
    24.1 cents, or 1.82%, lower at $12.969 per million British thermal units
    Thursday after the EIA reported an injection into storage of 57 billion cubic
    feet.
    Analysts and traders in a Dow Jones Newswires survey had predicted a 61 bcf
    build. The five-year average injection for this time of year is 90 bcf,
    according to the EIA. In the same week last year, 90 bcf of gas were added to
    storage.
    “The context though may be less bullish, as the upcoming reports will be more
    neutral than this one,” said Tim Evans, an energy analyst with Citi Futures
    Perspective in New York, in a note to clients Thursday.
    With moderate weather expected over the next two weeks in the U.S. Northeast
    and Midwest, the smaller-than-expected build wasn’t enough to sustain a rally
    in natural gas.
    The latest injection brings the total amount of gas in storage to 1.943
    trillion cubic feet, 16.2% below the five- year average and 2.6% below last
    year’s levels.
    Meanwhile, falling crude oil prices were also pressuring natural gas lower
    Thursday. Nymex light, sweet crude oil for July delivery was trading $2.22, or
    1.62%, lower at $134.46 a barrel Thursday on reports that China was raising
    diesel and gasoline prices.

    -By Christine Buurma, Dow Jones Newswires, Dow Jones Newswires
    06-19-08 1110ET

  51. 51
    kaman Says:

    QBIK: In with Z at 3.15, set limit to trade out at 4.10 (probably executed by now) since that was calculated to be the logical “value” of the stock….thanks Z.

  52. 52
    srp Says:

    While my expertise is not natural gas, my zman subscription has really allowed me to learn by drinking through the fire hose. The CRS is the knowledge base of the library of congress. Politicians can request detail reports on any subject they want and the subject matter experts will write a summary. These reports are supposed to be public, but are difficut to find. I came upon this one concerning natural gas. While it may not lead to a profitable trade, I found it useful. Maybe as a good read after beer thirty. A summary and the link is below
    Summary:
    The functioning of the natural gas market in 2007 appeared relatively stable and infrastructure development continued at an appropriate pace. A tighter demand/supply balance for 2008, however, has generated more upward spot price movement in this latest period. From the beginning to the end of the 2007-2008 heating season, the average wellhead price rose more than 30%, according to Energy Information Administration estimates. In the foreseeable future, weather and economic performance appear most likely to influence prices. Natural gas provided about 22% of U.S. energy requirements in 2007. It will continue to be a major element of the overall U.S. energy market for the foreseeable future. Given its environmental advantages, it will likely maintain an important market share in the growing electricity generation applications, along with other clean power sources. As Congress seeks to address energy security issues, the increasing importation of liquefied natural gas (LNG) is also a matter deserving careful attention. In 2007, LNG imports reached a record high and plans are to increase this fuel source. This report provides an update to Congress on recent natural gas market developments and trends that have implications for important energy policy considerations, such as prices, natural gas use for power generation, and liquefied natural gas imports. From 2006 to 2007, the average wellhead price reported to the U.S. Energy Information Administration (EIA) remained essentially unchanged at $6.39 per thousand cubic feet (mcf), down $0.01. The average citygate price increased about 3% to $6.98 per mcf. Domestic production grew, up about 0.8 trillion cubic feet, and domestic consumption increased more than 1 trillion cubic feet. This was the first increase in end-use consumption since 2004, according to EIA. Natural gas use for electric power generation increased in 2007 by 10.5% and for the first time became the largest sector for natural gas consumption in the period covered by EIA records. Residential use increased 8.2%, with weather as a major factor. Commercial and industrial consumption also increased, by 6% and 2%, respectively. The industrial growth reversed a decline of 1.5% from 2005 to 2006. On the supply side, onshore production in areas such as the Rocky Mountains and the Barnett Shales of Texas grew and liquefied natural gas (LNG) imports increased. LNG imports reached a record level of 0.8 trillion cubic feet. EIA’s Short Term Energy Outlook anticipates the Henry Hub spot price increasing almost 20% in 2008, reflecting strong demand, relatively low working gas in storage, and domestic production growth of almost 3%. The Henry Hub spot price did increase about 20% between the first quarter 2007 and first quarter 2008. This report will be updated.
    http://opencrs.com/document/RL34508

  53. 53
    uop Says:

    zman:
    there are a few new facts which will influence oil prices and prices of oil stocks:

    India, China etc, big users are letting gasoline prices rise,

    USA demand is down,

    Saudis supply more oil,

    what will this do to energy stocks soon ?
    they will probably go down.

    The demand/supply equation will change.
    We can only hope there is a worldwide concern about recession if energy prices continue to rise and therefore the demanb/supply equation requires change.

    What do you think ?/

  54. 54
    reefguy Says:

    NG 56 looks slightly bullish, doen .30 for July?

  55. 55
    Nicky Says:

    Did anyone notice that yesterday showed another 400,000 had been added to the SPR – what the heck is that about??

  56. 56
    uop Says:

    zman:
    is HK low enough to be attractive again ?

  57. 57
    zman Says:

    srp – thanks will have a look.

    uop – change takes a lot of time to occur. The demand destruction case is overblown, just not seeing it in the numbers as per post comments. Higher prices will slow but not reverse India, China path to higher per capita consumption.

    Nicky – As I understand it, it was already under contract as a RIK payment.

  58. 58
    Dman Says:

    Nicky, er, I didn’t see that … where do you look for your SPR updates? Excuse my ignorance but how does 400k barrels stack up in the overall SPR scheme of things?

  59. 59
    Nicky Says:

    News alert on CNBC saying the Saudis will increase production by 200,000. Didn’t they already do that??

  60. 60
    zman Says:

    HK – I hold enough now, the HS players are all due some profit taking time. I’m not going to try to step in on a red day (early at that) and try to pick a bottom for a new entry.

  61. 61
    Nicky Says:

    My point Dman was that several weeks ago now the Senate agreed not to add anything further to the SPR until oil was back below $75.

  62. 62
    zman Says:

    There are 704.7 million barrels in the SPR.

    You find that data in this report:

    http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/txt/wpsr.txt

  63. 63
    ram Says:

    What happened to the HS players, wow.

  64. 64
    zman Says:

    So much for GS.

  65. 65
    kiaora Says:

    Where can I find a list of the HS players?

  66. 66
    ram Says:

    ZMAN – you’re not kidding about NFX being hinky/jerky.

  67. 67
    zman Says:

    There is a ticker list in graphic format with relative exposure to the Haynesville on the E&P tab near the bottom:

    http://zmansenergybrain.com/subscriber-data/e-p/

  68. 68
    Pete Says:

    Z, Is PTR coming back down into a buying range?

  69. 69
    Dman Says:

    Nicky #61, OK now I see what you mean & Z’s response that it was preexisting.

    Nearly $4 swings in CHK, OII. Yikes. Was tempted to buy back the OII but it’s a crazy beastie so passed for now.

    NBR sure looks like it wants to obey GS but some headwinds out there.

    NFX crazy as usual. Tempted …

  70. 70
    zman Says:

    Reef – Nothing changed on gas except that was about the worst number we could have been looking for. So its buy the rumor and sell with the fear in the crude market. It could double its loss, now down 0.37 and still not break trend. $16 gas this winter seeming more likely as we appear to be set to peak somewhere in the 3.1 to 3.3 Tcf range which is no longer deemed to be real full but only sort of full.

  71. 71
    zman Says:

    P – re PTR, considering I was trying to buy it up $4 and now its up $8 I think I’ll wait, lol.

  72. 72
    zman Says:

    Dman – yep, on days like today there is no certainty to a recovery bounce even if oil makes it off the lows. Names like HAL and SLB which remain up are likely to move higher if we see oil bounce a bit, others may lag, just looking at it from the very short term perspective.

  73. 73
    reefguy Says:

    z- liquidated my lousy July NG collar($7.90) today. If NG ramps down more peeling off rest of year.

  74. 74
    zman Says:

    news flash: kaman calls top in QBIK

  75. 75
    Fred Says:

    Nicky this excerpt is from yesterday’s Phil Davis in case you missed.

    Yesterday it was Goldman Sachs (GS) and today it is Royal Bank of Scotland (RBS) that is taking down the markets as they have advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyzes the major central banks. “A very nasty period is soon to be upon us – be prepared,” said Bob Janjuah, the bank’s credit strategist. A report by the bank’s research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

    Well, that’s slightly below my estimates and very scary, we’ll see if our markets can shake it off but, like I said, it’s all about the price of oil today, we’ll worry about full-fledged global crashes tomorrow!

  76. 76
    Dman Says:

    Cramer has an article up on the Saudi meeting, titled: “All the king’s horses and all the king’s men”, which tells you the flavour pretty clearly.

    I think it makes sense that energy sells off ahead of it but apart from that, just a good way for politicians to *appear* to be doing something.

  77. 77
    Sambone Says:

    N – Market defending 12,000 on the Dow.

  78. 78
    zman Says:

    Wow, big GS price target and OIH sector upgrade getting completely snubbed by oil.

    Reef – back when you took that on I bet no one would have thought it was lousy. No one saw LNG coming (or not coming as the case may be).

  79. 79
    zman Says:

    Dman #76. Exactly my thoughts your last line.

    SLB and HAL succumbing to the weight of the energy market.

  80. 80
    zman Says:

    those wildz chk calls sold yesterday for 1.45 are offered at 0.35. Sort of tempted.

  81. 81
    Sambone Says:

    LONDON (AFP)–Saudi Arabia said Thursday it planned to increase daily oil
    output by 200,000 barrels a day, according to a statement posted on the
    country’s London embassy Web site.
    “Saudi Arabia recently announced a plan to increase oil output by 200,000
    barrels per day,” the statement said, ahead of a weekend meeting of consumers
    and producers in Jeddah to discuss sky-high crude oil prices.
    On Sunday U.N. Secretary General Ban Ki-moon said Saudi Arabia had told him it
    would increase its oil output by 200,000 barrels a day in July.

    (END) Dow Jones Newswires
    06-19-08 1136ET- – 11 36 AM EDT 06-19-08

  82. 82
    uop Says:

    zman:
    based upon the market today,
    if you would not be away next week, is there something attractive ?

  83. 83
    zman Says:

    Thanks Sam, yes Nicky, it looks like those are the 200,000 bopd they already announced.

  84. 84
    Sambone Says:

    SINGAPORE (Dow Jones)–China said Thursday it would boost fuel prices, which
    are regulated by the state, to “ensure domestic supply” at a time when
    record-high crude prices are inflicting heavy losses on the country’s refiners.
    The hikes – the first in eight months – are aimed at rectifying the “domestic
    oil price regime, ensuring domestic oil products supply and promoting
    conservation of oil reserves,” according to a statement from China’s National
    Development and Reform Commission, the country’s top economic planning agency.
    Retail gasoline and diesel prices will both rise by CNY1,000, or about 18%,
    effective Friday. The new average price of retail gasoline is set at CNY6,980 a
    metric ton, while the diesel price is CNY6,520.

    -By Sherry Su, Dow Jones Newswires Dow Jones Newswires
    06-19-08 1147ET

  85. 85
    kyleandy Says:

    crude at LOD

  86. 86
    zman Says:

    Uop – that’s kind of a loaded question, eh? LOL. I guess I’m going to have to dig up an english newspaper to see what happened on the 22.

    CHK, EOG all pretty interesting here. Obviously I like NBR.

    Very short term we might be back into household names outperform, little guys like PQ tread water. Or today may just be a blip on the way up. I don’t think we are headed significantly lower on the commodities from anything that gets said, promised, etc at the meeting. I think this is profit taking, plain and simple, both in the commodity and therefore in the stocks.

    …I should have grabbed those CHK calls again.

  87. 87
    reefguy Says:

    z- Did i tell you my lousy $78 oil hedge stinks too!

  88. 88
    texana Says:

    buying sd sep55 on dip, hk common @38.85

  89. 89
    zman Says:

    wow, those CHK calls now bid .65 form offer .35 in $.80 above.

  90. 90
    srp Says:

    Sambone – re84, The increase will raise the domestic guideline price
    for gasoline from about the equivalent of $93/Bbl to $111/Bbl, but the current Singapore price for 92
    octane gasoline is $138/Bbl, so even with the rise, gasoline will still be well below world prices. For
    gasoil, the increase in guideline price will push Chinese domestic prices up from about $98/Bbl to about
    $118/Bbl, but the current Singapore price for 0.5%S gasoil is $166/Bbl. Again, the new domestic
    guideline price will fall substantially short of world prices. With the guideline increase, the losses
    currently being faced by the major Chinese refiners in addition to the marginal teakettle refiners, who
    rely partially on imported straight run resid as feedstock, will be reduced, but will not be eliminated. Incremental domestic supplies may rise only slightly, from what they had been, and help ease
    some of the shortages. This may prove to have a slightly positive impact on measured oil consumption.
    This will be offset by consumer response to the 20% product increase. However, the net impact on
    demand is likely to be limited given the upcoming Olympics, continued strong economic growth, and
    demand growth that was somewhat constrained by limited supplies.

  91. 91
    reefguy Says:

    mmr at $29.25 i like

  92. 92
    tater Says:

    MMR checks in nicely with TA, Z you have any luv for them?

  93. 93
    zman Says:

    MMR, at that price I like it for what it is without Blackbeard. I’m continuing to hold way out of the money and deeply in the red Aug calls there. Probably need to reposition.

  94. 94
    zman Says:

    I agree with all of #90

  95. 95
    reefguy Says:

    MMR bought common at 29.20

  96. 96
    zman Says:

    Calling all pros. You guys know who you are and you know that I’ll never out you. But I get a lot of requests via email to know who does what for a living around here. So without being too specific I thought it would save me a lot of trouble if I put a bios tab on the site for those who wish to respond. I put this in a post the other day and Petra tells me we got 0 response. So either no one reads the daily post or people like their anonymity. I will say that we have a broad set of folks around here from completion engineers to E&P presidents to petro chemical engineers. If you have any interest drop petra a short sentence or two, no firm names please, at zmanadmin@gmail.com. Thanks.

  97. 97
    davidjeso Says:

    Z – housekeeping question. In your absence next week, I assume there won’t be a daily blog that everyone can comment on (as seems to be the usual way to keep up with things), so where should the rest of us comment so we can try to stay afloat til you return?

  98. 98
    doc Says:

    Do you check put to call ratio when buying an option or is that only important at experation?

  99. 99
    zman Says:

    Nicky – got crude levels for us. I was thinking it needed to hold 132 based on my simplest of simple TA skills.

    david – Good question. I’ll post the weekend wrap as normal and comments will go there. Last year Nicky and Sam did a good job of keeping the flow going.

    I simply cannot believe I didn’t throw a dart at that CHK call again. Ug

    Doc – no, I have not found put/call ratios or the greeks to benefit my trading. I had a couple of options courses in school and the theoretical vs the reality is astounding.

  100. 100
    zman Says:

    ZTRADE: CHK July $65 calls taken for $3.50.

  101. 101
    uop Says:

    zman: why is PBR doing so badly?
    thought they found a lot of new oil.

  102. 102
    zman Says:

    PBR – they did and it’s mostly sub salt in very deep which may make those barrels some of the more expensive ones to ever come up a drill pipe so as some people cast stones at speculators I would point out that without these high oil prices that oil will be delayed in coming to market.

  103. 103
    Sambone Says:

    U – PBR drilled one hole and it crushed a dozen diamond drill bits (hardest known substance known to man), crushed the pipe (18,000 psi), had temps from almost 500 F, to one of the deepest holes ever drilled. It’s cheaper to send an unmanned probe to Mars than drill in that field.

  104. 104
    zman Says:

    Embarrassed to say I’m chasing those other CHK calls higher. Unreal. Now bid 0.95.

    On the PBR it will run again, but it is going to be uber sensitive to oil prices. They are world class discoveries (Tupi, Carioca) and PBR is set to spend, last I saw, something on the order of 0.25 to .5 Trillion $ to develop them and they are jacking deepwater rig rates in the process.

  105. 105
    Sambone Says:

    For Nicky – Had to look it up. Quadrillion

    “The Bank of International Settlements recently reported that the amount of outstanding derivatives has now reached the $1.14 quadrillion mark ($548 Trillion in listed credit derivatives plus $596 trillion in notional [or face value] OTC derivatives)”.

    N – Just imagine if just 1% defaulted. That would equal 1.14 trillion, not billion?

  106. 106
    Sambone Says:

    Z – PBR currently has 80% of worlds deep rigs contracted.

  107. 107
    zman Says:

    HK going green, definitely a lot of willingness to bottom fish the group here.

    WILDZDAYTRADE: I know I said I wouldn’t do it again but I’m out next week and saw the opportunity. In CHK June $65 calls for $0.94 average cost. This is a completely risky hate your money trade given the time to expiry.

  108. 108
    zman Says:

    Sam is all over the PBR trade. I’d listen to him and not just for movie quotes. Just read his bio.

  109. 109
    scoop006 Says:

    Z re#107 Had you entered @.$50 where you you exit price/time.TY

  110. 110
    zman Says:

    Scoop – I’d be gone by now just from a profit protection standpoint. If the stock can hold or bounce off of $65 I think it has a shot a something close to green after crude closes in 3 hours. I’m pretty unlikely to hold into the close.

  111. 111
    scoop006 Says:

    Thanks for lesson #110

  112. 112
    zman Says:

    Re #111. He buys at half my level and says I gave a lesson. That’s rich. You obviously don’t suffer from Zman hesitant trigger finger syndrome.

  113. 113
    zman Says:

    Someone just sent me a note noting KOG down 10% today. If it will come off another 30% I’ll buy some.

  114. 114
    Nicky Says:

    Hi Z – yes I agree 132.00 is very important. If that fails we could see 130.75 quickly. Support below that is 128.00.

    I would say that at present we still have a chance at another slingshot higher but if 132.00 goes that becomes less likely.

  115. 115
    Nicky Says:

    Fred re #75 – yes I saw the pieces from RBS and GS yesterday. I think it was partly to blame for lower markets yesterday.

    I have to say the charts look dead on for it too!

  116. 116
    Sambone Says:

    Z – Dumb question, where is “Bios”?

  117. 117
    Sambone Says:

    China Fuel Hike Aims To Up Supply, Leaving Demand Unscathed

    By BRIAN BASKIN
    Of DOW JONES NEWSWIRES

    NEW YORK — China’s unexpected announcement Thursday that it hiked fuel prices marks a last-ditch attempt to avoid shortages during the Olympic Games, though the hike is seen increasing supplies rather than cutting demand.

    China will raise retail diesel and gasoline prices by 18% starting Friday, the first increase since Nov. 1 and the largest in four years. Many had expected China to put off a price hike until after the Olympics in August.

    Oil prices, which traded near $140 a barrel on Monday, fell more than $4 following news of the price hike, on fears that Chinese consumption, a tentpole for world oil demand over the last four years, would fall in response.

    Recently, light, sweet crude for July delivery was $4.11, or 3% lower at $132.57 a barrel on the New York Mercantile Exchange after falling as low as $132.06.

    With China planning to subsidize many heavy users of fuel, the price hike appears aimed at boosting output by domestic refiners in order to alleviate regional fuel shortages. By satisfying pent-up demand in those areas, the increases are likely to encourage consumption by making more supplies available.

    In the long run, if China continues to raise domestic prices to the point that they approach those dictated by record-high crude oil, the country’s demand could take a serious hit and take oil prices down with it.

    However, Thursday’s increase isn’t big enough by itself to rein in demand and oil futures prices that hinge the country’s demand staying strong. China’s government said it will continue to subsidize some industries, transportation systems and those with low incomes, ensuring that despite higher prices, fuel will remain affordable at the margins.

    “We need to see the impact on Chinese demand before the market says .. this is indeed having a major (effect),” said Nauman Barakat, vice president at Macquarie Futures.

    Eyes On Diesel Demand
    Energy markets are closely monitoring for any shift in supply or demand of diesel, which for months has been the lone bright spot for refiners worldwide. Strong demand for diesel and other distillate fuels from Asia and Europe helped lead oil prices 40% higher this year, and countered shrinking gasoline consumption in the U.S.

    China’s farmers, fishermen and forestry workers will receive subsidies to offset the hike, as they have in the past. In the most likely scenario, any demand lost due to the increased price will be made up for by increased consumption in regions that were low on fuel.

    “The rise might knock off some (demand), but if you improve supplies, the net effect .. might be minor,” said Costanza Jacazio, an energy analyst at Barclays Capital in New York. “Certainly the November rise did very little in terms of curbing effective demand.”

    In November, China raised fuel prices by about 10%.

    According to the International Energy Agency, China’s crude oil demand grew by 300,000 barrel a day in the fourth quarter of 2007 from the same period in 2006, to 7.6 million barrels a day. In the first quarter of 2008, China’s oil demand totaled 7.9 million barrels a day.

    Olympic Balancing Act
    China is facing growing fuel shortages in several key provinces, and had a short window to balance supply and demand in time for the Olympic Games.

    “If they were going to move on prices, that was the time to do it,” said Damien Ma, an analyst with the Eurasia Group consultancy.

    The price hike was necessary not so much to reduce demand, but to convince refiners who had been forced to sell fuel at a loss to increase supply. The previous price increase, in November, brought China’s diesel price to about $2.40 a gallon. Diesel prices in the U.S., which aren’t subsidized, now stand at $4.69 a gallon. China began to see fuel shortages in March, including in the economic powerhouse province of Guangdong.

    “The adjustment has been overdue for quite a period of time,” said JinMing Liu, an analyst with New York-based research firm Ardour Capital Investments, LLC.

    Even with the price increase, refiners will still be selling diesel below production cost. But the gap is small enough that with a bit of “gentle persuasion” from the government through additional tax breaks, refiners are likely to step up output enough to reduce shortages, said Paul Ting, president of U.S.-based consultancy Paul Ting Energy Vision LLC.

    —By Brian Baskin, Dow Jones Newswires

  118. 118
    zman Says:

    Nicky and Fred. I guess it helps you write the report if you helped engineer the inflation in the first place, lol.

    Strong bottom fishing going on E&P names.

  119. 119
    zman Says:

    Sam – I haven’t created it yet. You’re the only person who has sent one to Petra. Hopefully we’ll get a some more, however general in nature from the gang. I’m going to put it in the subscriber only part of the site if that matters to anyone and we will have call names only and no company names unless you guys want to say where you once worked.

  120. 120
    Sambone Says:

    Good deal

  121. 121
    scoop006 Says:

    Z re#112 Unfortunately I do not have your knowledge as to what to buy and when to sell it.Sold all my July $60 CHK on Teusday for $4.70 I recall you sold @$7.

  122. 122
    zman Says:

    Scoop – while we’re in mutual admiration mode, I recall you buying X the other day, your first posted trade. Nice.

  123. 123
    Sambone Says:

    Uncle Phil

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

  124. 124
    scoop006 Says:

    #122 and now I’ve taken 3 bites at this apple for an average cost of $6.25. It will fall in price

  125. 125
    zman Says:

    OIH more than half components green now, led by PTEN. SLB, HAL, NBR inching up. This is an all time high for NBR which remains cheap to the group. You just can’t keep a good Goldman call down.

  126. 126
    MMarkkk Says:

    quik note: lots of wild swings. over lunch was able to jump in and out the HK June 40’s for .25 then sold for .65. Trying on the CHK June 65’s with you but missed the entry point. Still have some DUG June 27’s in the red. exiting bits on the dips in oil co’s. That one will hurt though. Never forget to sell!!!

    I’ll be completely out sometimes next week as I just don’t like the look/smell of the market over all. Enough tied up in incentive pay that I can’t manuever.

    Lunchtime trading is pretty intense! trying to cram the entire trading day into one hour!!

    I like NG and the names in NG much more than I do oil and I prefer the onshore guys more than those with exposure to the water. And differentials are blowing out again in the Rockies so maybe I’m saying I like Aubrey’s thesis!! EOG has some oil but a lot of gas and I really like how they’ve built their portfolio. SWN owns Arkansas and the Fayetteville (or is it vice versa?). And XTO wants to own everyone. With the heat we are seeing and the drought out west, I see NG staying in pretty good shape for a while. Next winter is going to brutal as a consumer of NG!!! Maybe $15 or so at the HH?

  127. 127
    zman Says:

    Re 123. I see he’s still trying to short crude since he called a top at $97. Funny how you don’t see him on TV as much these days.

  128. 128
    Sambone Says:

    He’s over on Fox, which nobody watches, BTW

  129. 129
    Sambone Says:

    LAGOS (AFP)–The U.S. national kidnapped overnight in oil-rich southern
    Nigeria has been released, a U.S. official said Thursday.
    “A private American citizen who was working for an international company was
    kidnapped from a U.S.-flagged vessel off the coast of Nigeria,” he said.
    “It is our understanding he has subsequently been released.”
    The official, who asked to remain anonymous, could not confirm the identity of
    the man kidnapped.
    Earlier, the Movement for the Emancipation of the Niger Delta (MEND) said it
    had kidnapped a US national, whom it identified as Captain Jack Stone, but
    added that it intended to release him later in the day.
    -Dow Jones Newswires, 06-19-08 1358ET

  130. 130
    zman Says:

    Mark – I think I said $16 for winter above, lol.

    Sambone – oh yeah, they have a bizness channel now, right.

    Oil just kicked through $132

  131. 131
    Dman Says:

    Just bought some NFX exposure when it was at $64.40. That gave it an excuse to drop a quick 1%

  132. 132
    BossmanG Says:

    Z, any thoughts on NFX?

  133. 133
    Dman Says:

    Z – do you think CAM was on the GS list? CAM and FTI doing well on a difficult day.

  134. 134
    Dman Says:

    My USO chart has a spike down to 104 in it (about 10 minutes ago). Is that reflected in WTI?

  135. 135
    zman Says:

    Re NFX – Nothing to add to my comments in the post about near term catalysts but lousy day in a stock that seems to trade worse on lousy days.

    At Goldman
    CAM went from pt $50 to $60, still rated neutral.

    FTI went from $63 to $69, rating Sell. Guess they don’t think the demand for subsea trees warrants this valuation.

  136. 136
    zman Says:

    Re USO vs WTI. Yep, Crude fell across the 12 month strip at that time, July crude now down 4.80 at 131.80

  137. 137
    redjack Says:

    Tenaris making a nice move today…blew right through their 52 week high on heavy volume…

  138. 138
    zman Says:

    Redjack, thanks I know. I seem to be in the slow boat to China pipe story instead with the WH.

  139. 139
    Dman Says:

    #135 & 136. Thanks Z.

  140. 140
    zman Says:

    Re 74. I just realized that could be taken the wrong way. Just commenting that it fell right after he commented on selling it.

  141. 141
    ram Says:

    ZMAN – What do you make of the E&P guys mulling on where to go?

  142. 142
    crysball Says:

    Is Sambone trading PBR common or options?

  143. 143
    zman Says:

    Taking a bath on that last WildZ now. Will not double, if at all, until after crude closes.

    Ram – not sure I follow, can you rephrase that?

  144. 144
    occam Says:

    X puts as a hedge. Hearing that steel prices people in construction are paying may be coming down. Also, could go down strongly in a market sell off. Opinions on out of the money X puts vs. other hedges against a sharp market decline?

  145. 145
    apbd Says:

    Can we please end this trading session?
    I’m tired of seeing RED.
    apbd

  146. 146
    ram Says:

    You answered in the first sentence.

  147. 147
    italyinvestor Says:

    Z – I couldn’t help myself and went deep with the HK DEC 55s to keep myslef from getting into any wild trades.

  148. 148
    ram Says:

    Where did crude settle?

  149. 149
    zman Says:

    anyone see CRK news?

  150. 150
    jsaun14 Says:

    In the steel fab biz…X still sticking it to us despite heavy volume leverage.

    Went long the NFX Sept $65 a little too early this am. Ouch.

  151. 151
    zman Says:

    around 132, drifting a little lower in the after market, I was looking at clock that was off an hour when I wrote 143.

  152. 152
    kyleandy Says:

    z golfing buddy of mine moved to shreveport 3 weeks ago to help his cousin run a restaurant/bar he owns. told him i owned hk and chk and keep his ears open about any news about those companies. he called yesterday, put his cousin on the phone, and he told me i am in the right two stks and also if i was a gambler to look at BDGR, which trades at .05. i told him it had to be garbage if it was only .05, but he said they owned a lot of old wells, on some good acreage. he also said he has heard the wells CHK drilled were between 18-25 which sorta goes along w/rumors of monster wells. who knows what he knows, but thought i;d pass it on.

  153. 153
    zman Says:

    Days like today are why you don’t see more WILDZ’s, lol. Just gave back yesterday’s wildz profits. Will hold through morning.

  154. 154
    zman Says:

    Thanks Kyle. Agree $0.05 stock generally toxic. Regarding the rates, with so many rumors about high teens and even 20s IPs you’ve gotta think we may see a dip if Aubrey comes to cc with less.

  155. 155
    reefguy Says:

    crk is a late HY runner I think

  156. 156
    zman Says:

    CHK testing LOD, down 4%

  157. 157
    Dman Says:

    Couldn’t resist some more NFX calls

  158. 158
    zman Says:

    Tomorrow definitely a TGIF post.

    Beer Thirty.

    Hear Dman. Rarely have I seen a Goldman call go so unloved as this one on the E&Ps and Oil Service

  159. 159
    doc Says:

    hp best stock in the secter this week. nfx got crushed

  160. 160
    Garyinhou Says:

    Raymond James ups CRK target to $90

  161. 161
    bill Says:

    WHAT HAPPENING WITH IOC UP 10??

  162. 162
    Fred Says:

    Rollercoaster ride IOC powered down $7.62 after hours.

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