03
Jul

Thursday Half Day – Gas Inventory Preview & Oil Review

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After a most promising opening the energy market fell with a weak broad market which itself fell ill as crude rallied to record highs late in the session. After the close the energy stocks were Cramerized by the Mad Monkey who said he expects a 5 to 10% correction in natural gas stocks in the next 3 to 5 days. Losses on the day were doubled in the after market by lemmings following the sound bites of the Dan Dorfman of this age. No analyst wields similar power, not even in the much vaunted halls of Goldman Sachs.  Cramer advised (advised?, is he a registered investment advisor? hmmm) viewers to take profits in energy stocks. I'm all for taking profits as I do it constantly but I think the call here was irresponsible in a lightly traded holiday week and I would point out that JC was "singing the sector's praises" as recently as Wednesday morning (yes yesterday morning) in this video. Note to Jim: stop watching the minute charts for confirmation of your ideas.

Housekeeping Watch: For new subscribers please note that I use a lot of acronyms, it's endemic to the industry and keeps my fingers from falling off. I will occasionally write out full names of energy regulatory bodies or volume measures but for the most part I don't. Z'Dictionary at left contains many explanations like what I mean by Bcfgpd and if you don't see it there feel free to ask in comments. The only stupid question around here is the one that goes down the elevator shaft (unasked) at the end of the day.

Market Closes at 1 EST today. Expect lackluster volumes and early volatility followed by general boredom into the close.

In Today's Post:

  1. Holdings Watch - busy day
  2. Commodity Watch - gas preview and oil inventory review
  3. Stocks We Care About Today - drillers multiple
  4. Odds & Ends

Holdings Watch: The Wiki holdings tab has been updated.

  • (HK) - Added the (HK) August $55 Calls (HKHK) for $4.
  • (HK) - Exited the July (HK) Calls for $4.00 (HKGJ), up 90% since entry on 6/30. Will be looking to add more longer dated calls on bouts of profit taking.
  • (CHK) - Added July CHK $70 calls for $3.20 (CHKGN)
  • (CHK) - Added August CHK $75 Calls (CHKHO) for $3.60
  • (QBIK) Sold the Cubic common share position for $4.89, up 64% since entry one month ago. I simply can’t come close to defending the price up here. I will revisit if it comes in some but the CHK well rate news was the driver I saw eventually moving it higher and we got that today.

Commodity Watch: Gas Preview and Oil Review

Natural Gas traded down $0.12 to close yesterday at $13.39. Well you've got to have one down day every once in awhile.  This morning gas early morning trading is erasing yesterday's dip.

  • Tropics Watch: Two systems on the radar now. The one in the far Eastern Atlantic has been upgraded to a tropical depression (TD2) and the NHC believes it could become a hurricane within five days. Another new system, a Low over the Lessor Antilles, which while becoming better organized is moving into an area of greater shear and is not expected at this time to amount to anything that spins. You can always go to the weather tab at left for a variety of weather links if you have time to kill and want to play junior meteorologist. I personally leave that to Sambone and Redjack as they swamp my knowledge level on the subject.  

Natural Gas Storage Preview:

My Number: 80 to 85 Bcf Injection

  • Last Week:  90 Bcf Injection
  • Year Ago: 84 Bcf Injection
  • 5 Year Average: 81 Bcf Injection
  • Weather: 65 CDDs (cooling degree days) vs 60 CDDs in the year ago period, up from the prior week's 54 reading (which gave us that 90 Bcf injection report last Thursday.
  • Supply: On a net basis (the sum of the change in production and imports less exports and relative to year ago levels) potential up about 0.5 Bcfgpd net estimated change. This is a tiny change amounting to less than a 5 Bcf incremental rise per week. You'd expect more given the surge in production but the offsets so far have been equally large:
    • Imports running down 3.2 Bcfgpd relative to year ago (mostly due to weak LNG voluesm), flat week to week.
    • Domestic production running up at least 4.6 Bcfgpd, probably more like 5 Bcfgpd YoY.
    • Exports running up about 1 Bcfgpd YoY

Street Consensus:  88 Bcf Injection (from the Bloomberg survey)

ZGasComment: Natural gas remains firmly entrenched in an up channel and is seeking a price that will allow for a greater rate of storage refill than we presently experiencing. That number is probably north of $15/MMBTU but may be higher given that the winter strip in Europe is already over $21, enough to keep the LNG tankers headed to that side of the pond. My sense is that prices will continue to ghost crude but with an increasingly upward bias meaning they can move on there own. Tropical disturbances may play a part in price but summer heat will have more of a fundamental impact unless something big actually makes it into the Gomex.  

Crude Oil: Traded up $2.64 to $143.57 yesterday after the EIA reported a larger than expected reduction in crude inventories (see details below). The initial reaction was muted to down and the most of the rally came late in the day on light volumes. This morning oil is trading $1.50+ above $145 on more of the same rehashed stories about the potential for conflict with Iran and supply concerns highlighted by the International Energy Agency (IEA) earlier this week (see Monday's post.  

  • Nigeria Watch: Henry Okah, once the #2 guy at MEND has one the right to a public appeal of his secret terrorism trial. This could serve to placate the group for a few days (maybe they take the rest of the week off too) but a guilty verdict will still them into a frenzy of pipeline bombings and kidnappings later this summer and that verdict is a certainty in my book. 

EIA Inventory Review

exp-vs-act-062708.jpg

CRUDE OIL: Bigger than expected draw down on stocks. Imports remain in the middle of the range

Utilization vs Refining Inputs: Utilization bounces but remains low for this time of year.

util-vs-inputs-062708.jpg

Imports: Held strong at 10.2 mm bopd, not high, not low for this time of year but a little surprising (on the low side) sinc global production is running strong to year ago levels. Further evidence that the major producing countries are increasing their per capita consumption of their own product.

crude-imports-062708.jpg

Crude Stocks Continue To Slip: The chart pattern for crude continues to show an early seasonal peak for storage. At present we are now 15% below year ago stock levels and more importantly 7% below the five year average. Demand destruction? Not really seeing it. 

crude-stocks-062708.jpg

GASOLINE: Another bigger than expected build.

gasoline-production-062708.jpg

Gasoline Imports: At seasonally normal peak levels. I would not expect imports to increase much beyond the normal pattern as non US western hemisphere supplies are unlikely to rise to even normal levels given crude prices.  

gasoline-imports-062708.jpg

Gasoline Demand: Low for this time of year but not falling off a cliff.

gasoline-demand-062708.jpg

 

gasoline-stocks-062708.jpg

DISTILLATES: Bigger than expected build. Inventories remain reasonably well supplied. 

 

Stocks We Care About Today:

Chesapeake Conference Call Wrap (for future reference these notes can also be found at the bottom of the CHK/PXP JV note on the Reports Tab)

 

Drillers: I'm in the land drilers via (NBR) and (UNT). They are cheap and in front of some fundamental trends that should strengthen in the second half and through 2009. I am toying with the idea, especially given yesterday's beating, with the idea of dipping a toe back into the deepwater group. For the most part, rates continue to slowly rise in the out years and estimates for 2010, now the year of relevance, continue to inch higher. Still thinking (DO) - (also a yield play), (RIG) -(approaching the $20 mark on 2010 estimates and rumored to be coming with a big special dividend), and (NE) - (cheap and offering a number of rigs that will roll to higher rates in 2009/10). I won't buy them today but am watching more closely now and may pull the trigger next week. 

driller-multiple-070208.jpg

 

Refiner Multiple: The thumping continues and some have asked why not take puts here. Obviously with hindsight that would have been a nice offset to our longs in E&P and Service. However, bottom fishing abounds and the multiples, though perhaps meaningless as estimates are shifting daily, point to a group that is overly cheap or at least over sold. 

I continue to avoid the group but watch carefully for signs of a turn.  I may repeat this too often but many analysts and investors have bent their pick trying to dig this group out of its current hole and I will say again that sometimes the best trade you make is the one you don't. When I do go back in some form to the refiners it will likely into a Major like COP first and then VLO and TSO.  I'll have more thoughts here on Tuesday.

Odds & Ends

Analyst Watch: Citi ups (ACI) and (BTU) from hold to buy.

 

117 Responses to “Thursday Half Day – Gas Inventory Preview & Oil Review”

  1. 1
    Fiveanddimer Says:

    Z, how would NOV fit into your array of drillers?

  2. 2
    zman Says:

    They build rigs among other things, CHK has a fleet of rigs that it owns as does SD and they said they were scheduled to be receiving newbuild rigs from NOV on yesterday’s call. So are in a good spot in the on and offshore markets. They also set to get slammed at the open along with everything else energy this morning.

  3. 3
    zman Says:

    Re the continued cramerization of the energy segments this am, I think it will be pretty short-lived, but as always will let the market open and settle into trading. I won’t bottom fish in the first half hour unless I see a real crushing. Another one of my favorite sayings is “don’t trade angry”

  4. 4
    zman Says:

    Oil going red.

  5. 5
    Sambone Says:

    8:55 am EST

    Nymex Oil Slips Post US Jobs Data, ECB Rate Hike

    By Lananh Nguyen
    Of DOW JONES NEWSWIRES

    From MARKET TALK:
    [Dow Jones] Nymex crude oil slips toward $144/bbl after key US jobs data comes in lower than market expectations. After surging to nearly $146/bbl in overnight trading, Nymex fell back ahead and held steady around $145/bbl ahead of the European Central Bank’s interest rate decision — it hiked its key rate by 25 basis points. June non-farm payrolls fell by 62,000 versus the market consensus of 55,000. Nymex August crude +93c at $144.50/bbl. (hyunyoung.lee@dowjones.com)

    LONDON — Nymex crude oil futures breached $145 a barrel for the first time in London Thursday as concerns over U.S. crude inventories helped the market rally to new highs.

    The price surge extended gains from Wednesday, when the U.S. Department of Energy reported a surprise 1.98 million barrel decline in crude oil inventories.

    “The crude draw was taken as highly supportive in the backdrop of both the current geopolitical climate and longer-term fundamental picture,” said Andy Riddell, an energy broker at ODL Securities in London.

    At 1119 GMT, the front-month August contract on the New York Mercantile Exchange was trading $1.84 higher at $145.41 a barrel, down slightly from the all-time high $145.85 a barrel.

    The front-month August Brent contract on London’s ICE futures exchange was up $2.07 at $146.33 a barrel after earlier hitting a fresh high of $146.69 a barrel.

    The ICE’s gasoil contract for July delivery was up $31 at $1,323.75 a metric ton, while Nymex gasoline for August delivery was up 361 points at 358.55 cents a gallon.

    The DOE’s crude figures helped boost market sentiment despite plumping gasoline inventories.

    “It’s given the bulls in this market some encouragement,” said an oil broker based in London.

    The European Central Bank’s interest rate decision due 1145 GMT Thursday, and its effect on the U.S. dollar, would also provide a key price signal going forward.

    “The ECB making good with a rate increase would provide the easy excuse to bid up oil again,” said Olivier Jakob, managing director of Swiss consultancy Petromatrix. But he said an ECB rate hike was already partially priced into the oil market.

    One crude oil trader in London said prices were surging on an influx of investment money into crude oil futures at the start of the second half.

    “It’s the start of the second half and there’s a lot of speculation that oil should gyrate towards $150 a barrel,” he said.

    “Funds want to be long,” and are buying the ICE Brent crude oil contract, shying away from investment in U.S. crude futures as regulators look to clamp down on energy speculation, the trader said.

    “If we close the week above $145 on Nymex, that’s hugely bullish going into next week…technically you can’t say it’s anything other than mega-bullish,” said Jim Rintoul, an independent oil trader in London.

    “Today’s high-price, tight-credit, weak-demand environment…(and) recent inventory draws seem to reflect a rational bid by refiners to cut operating costs in response to price signals’ and reduce their downside price exposure, said Antoine Halff of Newedge Group.

    Crude stock draws have occurred at the same time as exceptionally low refinery runs, indicating “demand cover is not quite as tight as absolute stock levels would suggest,” Halff said.

    —By Lananh Nguyen, Dow Jones Newswires

  6. 6
    Fiveanddimer Says:

    At 8:30 the ECB announced a 25 BP rate cut. Looks like a “sell the news” rally in the dollar followed immediately. That seems to be pushing commodity prices down across the board (gold and silver particularly).

  7. 7
    zman Says:

    Thanks, Dollar index bouncing 0.75% now, by no means a breakout.

    Sam – you see TD2?

  8. 8
    uop Says:

    zman;

    the big drop yesterday seemed to have been the anticipation of the ECB raising interest rates,
    that makes the $ go down and oil up.

    Today: what is going to happen ?
    your guess is as good as mine.

  9. 9
    isleworth Says:

    z- any valuation info on on PXP? Tks.

  10. 10
    Sambone Says:

    Z – I havn’t look at the weather since Monday.

    92L – Looks OK for development, but computer models show it going to mid atlantic. Could become a TD by Friday morning. Shear is low, temp is good. Spin shown.
    http://www.ssd.noaa.gov/eumet/eatl/loop-rb.html

    The one that just caught my eye is 93L. 14.1N, 62.1W (Just west of St. Lucia). Moving 25 mph WNW. Computer models have this one heading into GOM. Shear not bad and temp above avg. This is the one to keep an eye on currently.

    http://www.ssd.noaa.gov/goes/east/carb/loop-rb.html

  11. 11
    uop Says:

    what is going on with HK ?

  12. 12
    ram Says:

    HK may be giving a buying opp?

  13. 13
    zman Says:

    Isle – PXP is cheap, a little surprised by the early action. I still like CHK better near, med, long term. PXP has a lot of other projects that I am not as familiar with including a couple of deepwater projects that may impose timing risk this year. At times like these, I prefer the names I know well. CHK will be raising estimates on its 2Q call in 3 weeks.

    Uop – Cramer re HK. Don’t think it lasts long as per today’s post.

  14. 14
    BossmanG Says:

    NFX/OII turning into a scud?

  15. 15
    zman Says:

    Re HK – don’t watch them in a vacuum, watch the groups as they trade in tandem. GMXR, GDP, CHK, etc… all down on Cramer’s take profits rant. I won’t bottom fish early as this is a half day, holiday light volume etc and you just don’t know which way the wind will blow. I’ll ride this out with a little frustration but no sense of panic and I may add closer to the money calls later in the day.

  16. 16
    Dman Says:

    Just sold my HAL Jan 50s solely because HAL hasn’t been trashed yet and they were in the green.

    BTW, the Mad Monkey has been telling his AAPlus subscribers (yesterday) to buy NG stocks on a price dip. Guess he decided to create the dip.

    Since I’ve been buying EOG calls I decided I’d better find out how hedged they are. Not very hedged as it turns out:

    Full Year 2008 and 2009 Financial Hedge Position*
    -North America Natural Gas 2008 31% at $8.51
    2009 26% at $8.99
    -Total Company Crude Oil 2008 26% at $92.05

    http://www.eogresources.com/media/slides/InvPres_0608.pdf

  17. 17
    loop Says:

    CHK now lower than before they made the deal with PXP

  18. 18
    zman Says:

    BossG – the july NFX and the OII, yep, right now they are.

    Dman – re Cramer, I know, see video in today’s post.

    Re EOG, they stopped hedging just before the 1Q call with Mark Papa saying NG was headed higher and he did not want to limit his upside. So far he has been spot on with that move and with the move to a greater % of their production profile to liquids via the Bakken and some other oil plays. They should have more data on the Barnett oil play on the 2Q call.

    Bloodbath of a red day with no weakness in oil and a 5 cent dip in gas. Continuing to watch and wait. Less than 1 mm shares traded on CHK with the stock down 7%+.

  19. 19
    ram Says:

    CHK was in the mid 30’s last year. Now it has a $10 swing in less than 2 days – WOW.

  20. 20
    Garyinhou Says:

    Hope Cramer’s taking a bath… he stinks

  21. 21
    zman Says:

    Bottom fishing round 1 has started. Volumes still holiday like. Opportunities for the abound for the nimble.

  22. 22
    VTZ Says:

    I just find it amazing that he either:
    a)was right and “smart money” would sell or
    b)managed to drop billions off of the market caps of gas stocks

  23. 23
    zman Says:

    however options spreads are wider than usual as well. Starting to look at some near term calls.

  24. 24
    Brian08 Says:

    Always nice to see that fire sale selling…Looks like we are getting a bounce here…

  25. 25
    zman Says:

    V- I find lots about his show and the regulations governing investment advisers amazing. The lemminglike fashion with which people listen to his tepid arguments is another matter too. He knew what he was doing and he picked one of the most thinly traded days of the year (its in the top 5) to do it to create a dip all the while telling his customers to buy into it. Nice.

  26. 26
    VTZ Says:

    How that’s legal is beyond me…

  27. 27
    Sambone Says:

    What I find funny today is that the “fair weather” investors seem to be bailing out of the “Oil patch”. The US$ goes up slightly and I guess the party is over. If RIG gets to 135 I’m all over it. I’ll start adding to my CHK eithet today before the close or early next week. My new target is 150, from 80 on CHK long term. Shake out the weak sisters is my motto.

  28. 28
    zman Says:

    Brian – as a matter of experience I have learned to not trust the first V shaped bounce on days like this. Could still be a lower low in store (but I kind of doubt it) and I’m likely to fish in earnest if we hold the previous intraday low. Sheesh, now Cramer’s got me watching the minute charts, lol. Monday’s are generally the biggest day for news flow in the sector and also for analyst defensiveness so we may get a bounce then as the fund managers return from the Hamptons.

    QBIK off 11% back into the low $4s.

  29. 29
    jazzkool Says:

    Got 10 August 29 DUGs. Thinking about loading up. Alternatives? I am getting crushed, although a lot of my calls are Augusts.

    Jazz

  30. 30
    ddaley Says:

    HK
    Petrohawk Energy tgt raised to $72 at UBS (45.09 -3.26)

    UBS says HK’s first horizontal test, was put on production at 16.8 MMcf/D, flowing from 11 stages, and had 5,600 psi of backpressure. Three more wells are in progress and they believe this datapoint will raise the bar on Haynesville wells. The firm previously ascribed $11/share in value for HK’s Haynesville position (150,000 net acres). Using the current 275,000 acreage position, 70% prospective, EURs of 6/Bcf per well and average IP rates of 6.5 MMcfe/D translates into $32/share, a 15% discount to the Chesapeake/ Plains Exploration joint venture. Firm says that based HK’s added acreage position in the Haynesville, they estimate that the co will need to double its rig count and regional capex outlay next year in order to get enough wells down to hold this increased acreage position. The firm raises their tgt to $72 from $50.

  31. 31
    scoop006 Says:

    What a difference a day makes

  32. 32
    zman Says:

    VTZ – I know a bit about the law and I’d guess he has some kind of protection as a media personality. Sometimes newsletter writers have the same treatment. But he used the words “I advise you” which my lawyers tell me is a very bad idea. Anyway, not constructive to bash the guy any more and his franchise obviously works for him. I think it is oily (not in the good sense) and irresponsible but then, so is CNBC these days.

    Sam – agreed re CHK and the $150 number is equal to Aubrey’s self disclosed NAV. Given that they usually trade at a severe discount to NAV I could see $120 in a year here. Lots of other projects in the hopper there it sounds like plus an upcoming boost to guidance is a certainty on the 2Q call.

    NG treading water down a nickel prior to the numbers out in 25 minutes. A smaller than expected injection could provide a little boost to this rally which is sort of stalling at the moment.

  33. 33
    Brian08 Says:

    Z, agreed…Not that I know much, but I’ve gotten burned on that one before…

    Like Ram said, CHK moving $10 in 2 days…Same thing with HK, a high teen stock at the beginning of the year moving like $13 in 2 days…So, so nuts…

    It’s really amazing…Oh we have all this acreage in Haynesville, well tests good, etc. and these stocks just get woodshedded like crazy…Morons…

  34. 34
    Sambone Says:

    Off subject – Since this is my Friday, here is my video of the week.

  35. 35
    Fred Says:

    ECB raised 0.25 to 4.25%.

    http://news.yahoo.com/s/ap/20080703/ap_on_bi_ge/europe_interest_rates

  36. 36
    Dman Says:

    Usually I find a good indicator of when selling has gone crazy is when the short leg of a call spread has suddenly gone green after being in the red forever. So on that basis I just bought back my Oct 30 calls in PQ.

  37. 37
    zman Says:

    Thanks Sam, best 4 minutes of my day so far.

  38. 38
    Garyinhou Says:

    Great video. Perspective successfully installed.. Thanks Sam.

  39. 39
    zman Says:

    GMXR down $10.50, 13%. Talk about an unloved Haynesville player today.

  40. 40
    Dman Says:

    Also found my PDS call spread with the short leg in green (Jan 30s) & bought ’em back. We’ll see how well this patented indicator works …

    ECB decision bad for the dollar, so why is gold down? Selling the news?

    How about KWK at $35? Seems like a bargain except it hit $34 only a few minutes ago. Doh!

  41. 41
    zman Says:

    GMXR just filled a big gap from 3 days ago. Don’t know if someone said something negative or if the selling is purely technical. This is one that plans to drill verticals on their acreage this year with the first horizontal not schedule until early 2009. I may do a wildz here.

  42. 42
    texana Says:

    wring some of the spec out of the e&p i’m buying chart support hk 42.5. eog 120

  43. 43
    zman Says:

    ug, re GMXR spreads this am, worse than usual.

  44. 44
    scoop006 Says:

    From CRAMER ACTION ALERT PLUS NEWSLETTER JULY 2, 2008 12:25PM. “I would be buyingCOG@$67, DVN under$120, SWN under$47, XTO @$67, NOV. under $87.” I think his hedge fund friends are loading up today and next week will be selling these back to today’s sellers

  45. 45
    texana Says:

    i’m more of stock than option man. & yesterday reminded me why, no offense

  46. 46
    Brian08 Says:

    Scoop RE 44, you know it!

  47. 47
    zman Says:

    85 Bcf injection, at my high end, just below the street. Gas up 6 cents

  48. 48
    zman Says:

    Texana – here ya re options and you know that is where I tuck profits…in the common.

    Scoop agreed.

  49. 49
    zman Says:

    Losses cut by a little over half now in the portfolio. Will add to August CHK position soon or another August strike. Price passing opening levels.

  50. 50
    Dman Says:

    Added to the NFX Sep 65 @4.20. I figure I can call Cramer names or I can buy the bargains he created.

    BTW, in a post yesterday, Cramer actually wrote that the selling in strong sectors (i.e. oil/gas) “….is the sort that creates more selling” (I’m paraphrasing from memory but it was something like that) and then he decided to use his megaphone to make sure of it. He is actually a lawyer and retains good lawyers, not to mention CNBC’s counsel, so I’m sure he is covered somehow.

    Broad market happy with Cramer’s handiwork.

  51. 51
    zman Says:

    Raymond James – CHK price target to 100 from 85.

  52. 52
    Sambone Says:

    By Hyun Young Lee
    Of DOW JONES NEWSWIRES

    OTTAWA (Dow Jones)–Crude oil futures fell back after breaching $145 a barrel
    for the first time Thursday on the dollar, which was boosted by key U.S. jobs
    data and a lack of indication of future rate hikes from the European Central
    Bank.
    Light, sweet crude for August delivery was up 73 cents, or 0.52%, at $144.30 a
    barrel on the New York Mercantile Exchange, after minting a new record at
    $145.85 a barrel. Brent crude on the ICE futures exchange was 92 cents higher
    at $145.18 a barrel.
    Nymex crude was taking its direction from the dollar, briefly slipping into
    negative territory as the greenback firmed against the euro. U.S. non-farm
    payrolls shrank by 62,000 in June, the Labor Department said Thursday, the
    sixth loss in as many months. While close to market expectations of a 55,000
    loss, the data quashed growing fears of steeper losses given soaring energy
    prices and the still-fragile housing and financial markets.
    “The numbers were pretty close (to expectations), perhaps a little better, so
    the dollar got a bit of a kick,” said Tom Bentz, an energy broker at BNP
    Paribas in New York.
    Investors have increasingly looked to commodities, especially oil, to hedge
    against the weakening dollar as well as expectations of rising inflation, and
    crude oil prices have frequently fluctuated in sync with currency movements.
    Earlier, the ECB raised its key interest rate by a quarter of a percentage
    point to 4.25% to combat rising inflation, despite slowing growth across the
    15-nation euro zone.
    Speaking at a press conference after the decision, ECB President Jean-Claude
    Trichet said he wouldn’t commit to any more rate hikes, as downside risks to
    growth remain despite concerns about inflation. His comments pushed the euro
    down to as low as $1.5742 from $1.5880 late Wednesday.
    Despite the dollar’s surge, however, the bias for crude oil remains firmly on
    the upside, and few participants want to be caught out ahead of the
    Independence Day weekend in the U.S.
    Floor trading will be closed on the Nymex on Friday, and trading activity is
    expected to be minimal with many Americans on holiday.
    “We’ve all been watching crude to see if this is the beginning of a
    turnaround,” said Gene McGillian, a broker and analyst at TFS Energy Futures in
    Stamford, Conn.
    He noted some profit taking from the overnight highs following the U.S. jobs
    data release but “at these levels, a $2 move down is not a turnaround…any
    kind of pullback is still seen as a new buying opportunity.”
    Front-month August reformulated gasoline blendstock, or RBOB, was up 1.06
    cents, or 0.3%, at $3.5600 a gallon. August heating oil was 2.25 cents higher
    at $4.0940 a gallon.

    -By Hyun Young Lee, Dow Jones Newswires

  53. 53
    bill Says:

    this is a buying opportunity, imho

    all these names will be up on monday

  54. 54
    texana Says:

    i know people like to give cramer hell, but if they put every one of my bad trades up on the board that would be ugly,tooo

  55. 55
    antrimshale74 Says:

    ACI is actually higher now.

  56. 56
    cadillac Says:

    Tex,

    I’ll second that.

  57. 57
    antrimshale74 Says:

    The dollar is just ripping vs. the Euro today.

  58. 58
    Dman Says:

    OK, I can buy the bargains *and* call Cramer names: I remember some article a long time ago (when he was a hedgie) that he mentioned there was a particular stock where his own trading had been so large that he had created his very own feature on the chart. Well, if his ambition all along has been to create novel chart features, today is his day.

  59. 59
    scoop006 Says:

    Cramer just bought COG & NOV

  60. 60
    Dman Says:

    #57 maybe they were expecting more than .25% from the ECB

  61. 61
    antrimshale74 Says:

    Let’s see how long this “rally” lasts when we hit resistance soon at yesterday’s close.

  62. 62
    zman Says:

    ZTRADES:

    CHK July $70 calls(CHKGN) added for $2.60, doubling yesterday’s entry.

    HK July $50 calls (HKGJ), sold yesterday for $4, reacquired for $2.20.

  63. 63
    bill Says:

    stocks are recovering..

    cramer noticed late day weekness and yelled fire

    pre holiday trading caused severe drop on opening and i bet all in the green by the end of the day.

    But a lesson was learned, take profits on news breaking up days and buy back on the correction

    i bot 50 calls on chk oct 55 and 64 calls in pq

    fast hot money is now moving into gas sector which isn’t good.

    chk as z said is in the first inning

    anyways gla and have a nice weekend

  64. 64
    el_vogel Says:

    It’s not just Cramer –

    This morning on Bloomberg they were showing a chart talking about oil stocks going down as the price of oil was going up. Personally I found it very curious, given the stocks we collectively monitor and trade on, but I’m sure that blurb didn’t help…

  65. 65
    tater Says:

    Just want to chime in a bit for the TA perspective. Most of the names followed on this site have, at worst, only been pushed back into a trading range, not really a big deal if you’re trading month to month time frame.
    Others are bouncing nicely, somebody said something about a V bottom. The V bottom is just fine if the sell-off was panic and on low volume, fits the bill on a bunch of names. The candle that shows that would be like the one in HK right now, called a hammer (if the higher price holds as is). Problem is that the low of the day’s trading is the support price, kind of late to the dance now, but feels good nonetheless to have some kind of support nearby. Maybe use it later as a buying price target?
    My 2 cents. Good luck and have a great 4th.

  66. 66
    Dman Says:

    Scoop: dang, I was looking at NOV but there were too many bargains all at once & I missed it.

    My 1st reaction to #58 was an incredulous belly-laugh. Second reaction: this gives a whole new meaning to “creating your own performance”

    Tex, caddy: I’m normally quite pro-Cramer and I’m not criticizing his trading performance (which is OK but not a patch on Z). Sometimes his rapid hedgie-style switcheroos morph into hypocrisy and that’s what I’m noting now. But enough about Cramer (from me, anyways).

  67. 67
    el_vogel Says:

    I don’t know if this is a media-induced fear or not, but lately as I watch NFX whipsaw back and forth, I wonder if we are going to experience a catalyst in the coming months that brings oil prices back to $100, as the talking heads seem to keep predicting over and over…

  68. 68
    antrimshale74 Says:

    XLE broke positive and OIH is almost there.

  69. 69
    Sambone Says:

    New ETN’s

    JO – Coffee, Trading in JO just started but coffee futures have been around a long time and futures turned up sharply in June. It is now winter-time in Brazil, the world’s largest grower, and the risk of adverse weather can be a significant supporting influence.

    Other new ETN’s;

    iPath DJ-AIG Aluminum ETN JJN
    iPath DJ-AIG Cocoa ETN NIB
    iPath DJ-AIG Cotton ETN BAL
    iPath DJ-AIG Lead ETN LD
    iPath DJ-AIG Platinum ETN PGM
    iPath DJ-AIG Precious Metals JJP
    iPath DJ-AIG Softs ETN JJS
    iPath DJ-AIG Sugar ETN SGG
    iPath DJ-AIG Tin ETN JJT

  70. 70
    Dman Says:

    UNG in the green

  71. 71
    bill Says:

    pq really got slammed today– its now up 2 from its lows but still down 7 %, so at one point it was down more than 15 %.

    why doesnt this stock get any respect?

  72. 72
    italyinvestor Says:

    Oddly enough PXP is up today – irony.

  73. 73
    zman Says:

    DUG now down, happy to avoid that one as a hedge thought.

    If we close here this would be nothing more than a typical red day in the energy sector.

    Bill – PQ has been getting respect, all time high yesterday morning. I own the common in the low $23s and have though about adding into this weakness but will wait out the weekend there. The higher profile names usually benefit from the bounce first while the less names may stay longer on the punt list. Analyst says buy CHK and people will buy it even in a shabby little market like this. Analyst says by PQ and fund manager looks at the illiquidity of the issue and says “uh, yeah, ok, call me next week”

  74. 74
    zman Says:

    Tater – re V bottom, I agree but was just commenting that I have less faith in them on low volume holiday days like today.

  75. 75
    VTZ Says:

    Z – CHK doesn’t seem to be low volume? I see 12 million traded already. same with HK at almost 7.5 million.

  76. 76
    zman Says:

    VTZ – It was low volume when it opened and ran down 5 points. Most of the volume today has been buying.

  77. 77
    italyinvestor Says:

    Z – Other than general buying pressure, what’s the next big catalyst to watch for the Haynesville before the Julys expire? Will HK have to follow suit with some well results?

  78. 78
    scoop006 Says:

    Cramer “buying on the cheap” just bought FWLT, SWN, & DE

  79. 79
    Bleemus Says:

    PXP Plains Exploration tgt raised to $95 at Sterne Agee (70.56 +1.21)

    Sterne Agee raises their tgt to $95 from $95, following news that PXP and Chesapeake Energy (CHK) announced they had agreed to a joint venture in the Haynesville Shale in North Louisiana and East Texas. As a result of the joint venture, they note that PXP’s current reserve base has the potential of increasing by more than 150%. The Net Asset Value should roughly double, from the firm’s prior estimate of about $115 per share to about $225 per share.

  80. 80
    cadillac Says:

    Sam,

    Is there a source were I can see all of the ETN’s now available?

  81. 81
    zman Says:

    HK just had results in the HS so I would not expect anything out of them pre expiry. GDP may be the next to drop well news on the region on the market. Not saying that will happen but it could. APC, ECA, Shell, DVN could all speak as well. Really the motivator at present will be the upward revisions to CFPS and NAV that are now being filtered through the analyst community. Stock prices held constant, let alone falling yields cheaper multiples here even as the growth rates of all the big names leveraged to the play expand.

    Thanks Scoop and Bleemus

  82. 82
    italyinvestor Says:

    Z – Thanks for all.

  83. 83
    uop Says:

    how much more time is there until the market closes??

  84. 84
    zman Says:

    Lehman takes CHK target to 79 from 71 (pretty limp response to the numbers in my book), maintains overweight. Have not yet seen GS reaction.

    Stocks taking a little more negative action now as oil goes flat again. Mid to late week should will give a much better indication of the direction of the sectors than today.

  85. 85
    Garyinhou Says:

    1 hr 20 min…

  86. 86
    zman Says:

    Market closes at 1 pm EST so 1h20m.

  87. 87
    zman Says:

    Interesting move in the Major, all up 1%+.

    Indie refiners continue to suffer.

  88. 88
    uop Says:

    G:

    txs

    I need to cover some of my positions.

  89. 89
    Sambone Says:

    Cad, I use Dorsey/Wright, which is behind a paywall. You might try http://www.etfconnect.com.

  90. 90
    Sambone Says:

    Now I feel better!

    http://www.cnsnews.com/ViewNation.asp?Page=/Nation/archive/200807/NAT20080703a.html

  91. 91
    apbd Says:

    Praise the Lord and pass the ammun…
    er… gas can.

    Drive carefully and efficiently and have a great 4th.
    apbd

  92. 92
    zman Says:

    Tropical Storm Bertha

    http://www.crownweather.com/tropical.html

    http://www.wunderground.com/tropical/tracking/na200702_flashtool.html?extraprod=flashtool#a_topad

  93. 93
    zman Says:

    Thanks A, back atcha.

  94. 94
    Sambone Says:

    #92, still think Bertha will go north. This FAQ doesn’t bode well for the rest of this season. See second paragraph.

    http://www.aoml.noaa.gov/hrd/tcfaq/G7.html

  95. 95
    zman Says:

    I think we grabbed all the bios from when I was gone and put them on the bio tab. Its a new feature that people asked for and if you recently subscribed and want to share a little info about your self send Petra an email at zmanadmin@gmail.com. Vague is fine and if you care to remain anonymous that is of course fine too. We have a lot of interesting folks in the site from in and around the industry. Please know that we will never divulge who any of you are to anyone else unless granted permission by you. The bio tab, at upper left is your chance to take me out of that loop entirely.

  96. 96
    Sambone Says:

    Z – Here’s a new tool for your weather tab. It’s used by UK scientist.

    http://www.tropicalstormrisk.com/

  97. 97
    zman Says:

    Thanks Sam.

    Energy back to all red with OIH down 2%, XNG down 3%.

  98. 98
    Sambone Says:

    Ok, I’m shutting down for a long weekend. Keep it between the lines and keep the chalk off your shoes. See ya Monday.

  99. 99
    BossmanG Says:

    Z, who’s Petra?

  100. 100
    VTZ Says:

    I just want this week to end. I am fairly disgusted at myself for the way I played the trading this week, but I think I learned something.

  101. 101
    zman Says:

    Petra is my admin and marketing chick.

    That link is added on the bottom of the weather tab. Thanks again Sam and have a safe one.

  102. 102
    BossmanG Says:

    Z, with these weather reports (on bertha), is their a plan on how to play them?
    i.e. spike in NG, service companies, etc.?

  103. 103
    zman Says:

    Bossman – Good question. I don’t talk about tropical weather for a trade but instead as influencing factor for natural gas and in some events crude. Right now this one is a quarter of the way around the globe and less than likely to hit the Gomex.

    From a stock standpoint if a TS or Hurricane steers towards the Gulf the initial reaction is often up and you really need to be positioned to benefit from them before they turn as invariably the report comes out overnight and the stocks soar in the pre market. But again, I generally don’t play that game. I am positioned to benefit from it from the swath of natural gas producers I hold for other, non storm related reasons.

    The one name I do hold as a play on Hurricane Season is OII which the recent slapping in the group was not working but wasn’t the scud it now looks like it will be. They have the potential to expand earnings in a given year by up to 50% should something truly wicked enter the Gulf and wreak havoc with platform and pipeline infrastructure. This is well known and the stock will generally rise as the E&P stocks start evacuating personnel. Anyway, that’s my one play on the concept and I’ll continue to add OII longer dated calls throughout the summer. When if it hits, the gains can often wipe out a few bad months in the name. From a fundamental standpoint, I like the stock anyway (#1 ROV operator in the world) as you need an increasing number of ROV’s with each deepwater rig that is put in service and you know how those trends are going.

  104. 104
    zman Says:

    Look for the weekly wrap combined with the gas storage wrap sometime early tomorrow. Have a fun, safe holiday.

    Normally I don’t give advice but do not hold, light, and throw explosives over the weekend. It’s not smart.

  105. 105
    ram Says:

    Thank you for that advice Z! Everyone be safe!

  106. 106
    Bob Says:

    Lehman raises PXP target price to $112, 57% above current (another firm raised it to $95 earlier today)

  107. 107
    italyinvestor Says:

    Z – I assume I can still drop bombs and shoot artillery over here. The Taliban don’t take the 4th off…

  108. 108
    zman Says:

    Italy – please do. I should have said civilians without proper training should not hold, light, and throw explosives. Stay safe and thanks for everything you do.

  109. 109
    zman Says:

    Bios for APBD and Sane added. Thanks guys.

  110. 110
    scoop006 Says:

    italyinvestor, Thank you for serving and keep safe

  111. 111
    Garyinhou Says:

    Buying puts on the taliban

  112. 112
    zman Says:

    Gary. That’s funny.

    Beer thirty! Have a happy 4th!

  113. 113
    bill Says:

    http://ng-report.com/

  114. 114
    Garyinhou Says:

    Have a great weekend…

    “And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.”

  115. 115
    isleworth Says:

    Have a great Fourth Z!!

  116. 116
    sane Says:

    Have a good 4th everyone

  117. 117
    Popeye Says:

    I just got back and it’s over? Everyone have a good safe fourth even if you are not in the US.

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