24
Jul

Thursday – Gas Preview & Oil Review + Lots More Earnings

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In Today's Post:

  1. Holdings Watch
  2. Commodity
  3. Earnings Watch - NFX, DO, RRC
  4. Stocks We Care About Today - EAC Sanish Success
  5. Odds & Ends

Holdings Watch:

No change

Commodity Watch:

Natural Gas closed down $0.28 at $9.79 yesterday; despite an attempt to rebound early in the day, gas could not defy the gravity-like influence of falling oil. This morning gas is trading down slightly before the gas storage report. 

The Gas Storage Preview 

  • My Number: 85 Bcf. Last week saw an injection of 104 Bcf which I suspect was an anomaly. The year ago week saw an injection of 70 Bcf.
  • Imports: up 0.8 Bcfgpd from the prior week but still well off (2.9 Bcfgpd) year ago levels. 
  • Weather: 79 cooling degree days last week compared to 80 in the prior week and 72 in the year ago period.
  • Street Consensus: 83 Bcf Injection.

ZComment: Many weeks the inventory numbers are not all that important. After last week's number however, the basic question of whether or not increasing supply has finally showed up in the data is before us. This week's report is the most one to come along in some time as the trading and analytical community are expected gas injections to return to a more "in line" result after last week's big number. In the minds of traders one big number may be an anomaly and may be a warning shot; two big numbers is the beginning of a new trend. A second big number would likely send gas quickly to test the $9 level. I think the number will be closer to the mid 80s this week but if I and the Street are wrong again, gas will get dropped. Degree days were expected to climb to 90 this week (that's very hot) so even if gas does fall we should see a much lower injection next week and the thought of that may enter into traders minds later in the day.

Crude Oil fell $3.98 to $124.44 yesterday as dollar strength and a larger than expected in gasoline inventories pressured the commodity. This morning oil is trading up slightly.

The EIA Storage Review

exp-vs-act-071808.jpg

ZComment: As expected we saw an imports drop yield a somewhat larger than expect drop in crude inventories. This was readily overlooked early after the number cames out as traders took note of another larger than anticipated build in gasoline stocks. Cries of demand destruction range out and crude sold off hard late in the session. The gasoline charts and tables below show a slightly different picture than is being painted in the press and by traders who are now happily short the commodity.

CRUDE OIL: Bigger draw but not really one of note.

Utilization and Refinery Inputs: Utilization dropped to well under seasonally normal levels. Inputs to refiners dropped a commensurate 300,000 bopd.

util-vs-inputs-071808.jpg

Crude Imports: Impossible to maintain the prior week's near record levels....

crude-imports-071808.jpg

...So Given ---That And Inputs Are Not Falling Off A Cliff Stocks Gave Ground.

crude-stocks-071808.jpg

GASOLINE - Production hits a 2008 high imports remain buoyant and demand remains flattish causing a perfect storm for inventories.

 

gasoline-production-071808.jpg

 

gasoline-imports-071808.jpg

 

gasoline-demand-071808.jpg


Gasoline Stocks Continue To Rally

gasoline-stocks-071808.jpg

DISTILLATES: Stocks Continue To Grow Swiftly

Earnings Watch:

NFX Reports Strong 2Q08 Results.

In A Nutshell: Newfield beat top and bottom line Street expectations due to better than expected production volumes and operating cost discipline. Key plays continue to ramp impressive while finding costs and operating costs per unit are declining. If I had to point to anything on my wish list that I didn't get it was news on their first Bakken wells (we'll get it later this quarter and we should get more color on the call).  Aside from that, annual guidance continues to call for 22 to 26% production growth and the upper end of that range is growing more likely due to increased volumes from the Woodford Shale and Monument Butte plays, and a plethora of onshore U.S. plays as well as rising production in NFX's international division (especially in Malaysia). Street estimates here have risen swiftly in recent weeks and this release should help that trend continue although at a more muted pace as analysts may begin to back off some price deck assumptions for the third quarter.

Click here for last night's post reviewing the quarter.

Conference call at 9:30 EST.

(DO) Beats 2Q

  • Reports 2Q08 EPS of $2.99 vs $2.78 expected; Revenues of $954.4 mm vs $928.5 mm expected
  • New Contracts: Landed contracts for 4 new semi-submersibles for $900 mm 
  • Special Dividend: Declares $1.25/share special dividend and says it will announce special dividends, in varying amounts each quarter.
  • Conf Call at 10 am EST today

RRC Reports Operationally Difficult Quarter

  • Don't own it and have not had a chance to look it over closely, looks like in line CFPS and an earnings miss
  • Production in the quarter was severely impacted by pipeline curtailments in the Barnett highlighting the fact that just because you find a pile of gas, it does not translate that you automatically can get it to market. The Haynesville will likely experience this same issue late next year. 
  • Conf Call at 1 pm EST today which I plan to listen to as I like this story and plan to come up to speed. 

Stocks We Care About Today

EAC Reports Successful Bakken/Three Forks Sanish Test. Nice IP of 1,106 Boepd, the well was located 4 miles to the northwest of the best well drilled into the Sanish some 19 months ago by Petrohunt. Good to see the Sanish play being defined over a great spread of the Bakken. This well also had nice shows in the Bakken. A second well has already spud and they will drill 6 before year end on their lease in this area as well as 2 more offsets to the Petrohunt well. This has positive implications for all of the Bakken players (see Screens tab) and particularly for (CLR), (EOG), and (XTO) 

(XTO) Prices Secondary At $48. CEO said they think of their shares as precious on the conference call; not if you sell them down here sir.

(BRY) To Report Quarterly Results Tomorrow.  

Odds & Ends

Analyst Watch: NBR target upped from $46 to $50 at Jefco; otherwise analysts seem to be hiding at this point.

 

 

 

138 Responses to “Thursday – Gas Preview & Oil Review + Lots More Earnings”

  1. 1
    zman Says:

    Thanks Bleemus for the heasup on NBR, my system usually but not always grabs jagnotes and didn’t today. Keep submitting the ones we care about.

    Oil suddenly up a buck. 1) big deal, 2) don’t see a reason for the spike other than short covering.

    ESV out with strong results, sees improving backlog and day rates.

  2. 2
    zman Says:

    Should have added HES and WLL to the list of names likely to move on the EAC Sanish test news.

  3. 3
    davidjeso Says:

    Z – last week you mentioned that you’d likely punt the NFX Aug. $60s before the inventory report. Still planning on doing that?

  4. 4
    ddaley Says:

    For what it is worth:

    WSJ reports the collapse this week of SemGroup may have played a role in crude oil’s 14% drop over the past 10 days. The co filed for Chapter 11 bankruptcy protection Tuesday, citing among other financial woes a loss of at least $2.4 bln in crude-oil futures. Changes in its hedging strategies coincided with big moves in oil recently. The company had taken out short positions, or bets that crude prices would fall, as a hedging strategy for oil it intended to move through a subsidiary’s pipelines and sell to refiners, according to an affidavit filed in Delaware bankruptcy court by Terrence Ronan, SemGroup’s senior vice president, finance. Then, when oil prices rose, SemGroup moved to “cover” its short positions by taking out equivalent long positions, or bets that oil prices would rise. Eventually, SemGroup was unable to put up collateral for its swelling bets and sold its futures account to Barclays Capital on July 16, according to the affidavit.

  5. 5
    zman Says:

    David – No, that was before we melted down. Those are close enough that we could see a substantial recovery between now and expiry, maybe not enough to get back to even and I’l swap them for something else if the opportunity arises…want to listen to what they have to say about the Bakken and Mancos as there wasn’t a lot of new data there in the pr, CC in 15 minutes.

    Thanks DD, sounds like what happened when that kid blew up in NG a couple of years ago.

  6. 6
    Sambone Says:

    8:56 am EST

    Crude Holds Steady But Demand Fears Persist

    By Reza Amanat
    Of DOW JONES NEWSWIRES

    LONDON — Crude futures strayed little from Wednesday’s closing levels in London trade Thursday as lingering concerns that demand for crude may be slowing amid soaring prices and economic slowdown dominated the crude market.

    Prices touched fresh seven-week lows as traders continued to consider Wednesday’s data revealing U.S. consumers’ appetite for crude products is waning. The U.S. government data added to the revival of bearish sentiment that has helped prices drop more than $20 from their record highs of nearly two weeks ago.

    At 1218 GMT, the front-month September Brent contract on London’s ICE futures exchange was 64 cents higher at $125.93 a barrel.

    The front-month September contract on the New York Mercantile Exchange was trading 87 cents higher at $125.31 a barrel.

    The ICE’s gasoil contract for August delivery was $4.75 lower at $1,165.50 a metric ton, while Nymex gasoline for August delivery was up 56 points at 304.00 cents a gallon.

    Earlier fears that Hurricane Dolly — which reached landfall near the Texas-Mexico border Wednesday and was downgraded to a tropical storm thereafter — would disrupt supplies had fully eased Thursday, after Gulf of Mexico oil and gas production facilities were left virtually unaffected by the storm’s progress.

    “With hurricane Dolly having little influence on supply along with slowing demand fears due to a world economic slowdown coming to the fore, traders have become happier to short this market,” said Andy Riddell, energy broker at ODL Securities in London. “The “buy the dip” mentality appears to have left the market at the moment.”

    While U.S. Department of Energy figures showed crude stocks fell by 1.6 million barrels Wednesday, a counter-seasonal build in gasoline inventories helped further illustrate that oil demand in the world’s largest consumers is continuing to wither. Gasoline stocks rose by 2.8 million barrels, despite a reduction in U.S. refinery capacity utilization, while distillate stocks showed a build of 2.4 million barrels.

    “The report highlights again that high prices amid an economic downturn in the U.S. are impacting demand,” said Michael Davies analyst at Sucden brokerage.

    As demand concerns gather, market participants have grown less responsive to bullish geopolitical and supply signals — such as the stalemate over Iranian nuclear talks last weekend and Wednesday’s threat of militant attacks on Nigerian oil and gas facilities — some said Thursday.

    “Warnings like (the Nigerian one) normally would spook the markets into pushing higher, and although yesterday’s session at one point did see an impressive upside reversal, the fact that the gains fizzled was not encouraging,” said Edward Meir, analyst at MF Global in New York. “We can only suggest that the market, finally weighed down by the specter of decreasing energy demand, may not be as responsive to geopolitical headlines as it once was.”

    In a further sign of the changing focus of the crude markets, reports that Turkish warplanes bombed Kurdish rebel targets in northern Iraq overnight, failed to prompt an oil price reaction Thursday.

    Other market participants however argued that the current weakness in the oil markets is a short-term trend, and suggested prices could recover in view of continued non-Organization for Economic Cooperation and Development demand growth and supply constraints.

    Expectations of continued demand growth in emerging market countries, a lack of a resolution over Iran’s nuclear program and the progression of the Atlantic Hurricane season, are among issues slated to keep losses on the crude markets limited, Harry Tchilinguirian, senior oil market analyst BNP Paribas said.

    “We do not see much change; the supply constraints on the market are not lifted and there is no sign that demand is faltering in the summer/autumn period where it matters most i.e. China, India, the Middle East and Asia…so the current correction likely sets up the stage for another rally given the bullish elements,” he added.

    Expectations of robust crude demand were further supported Thursday by comments from Mousa Marafi, a member of Kuwait’s Supreme Petroleum Council, who said the current drop in oil prices is only “temporary” as global demand is set to drive prices higher, Kuwait’s national news agency, or Kuna, reported Thursday.

    Traders will also keep a close watch on developments with the U.S. dollar, recent strengthening of which has helped pressure crude prices. The greenback was mixed against most major currencies Thursday, leaving crude without a clear directional signal.

    Meanwhile geopolitical risk concerning Iran’s nuclear program was once more in focus, after Iran reportedly requested a meeting between International Atomic Energy Agency chief Mohamed ElBaradei and Iran’s director of the Atomic Energy Organization, Reza Aghazadeh, Thursday.

    —By Reza Amanat, Dow Jones Newswires

  7. 7
    Dman Says:

    CLB reports:

    Core Lab Reports EPS of $1.51 Ex-Items for Q2 2008, Increases 2008 EPS Guidance, and Initiates Dividends
    6:00p ET July 23, 2008 (PR NewsWire)
    Core Laboratories N.V. (NYSE: CLB) reported second quarter 2008 net income of $33,711,000 and earnings per diluted share (EPS) of $1.38, including a one-time, non-cash, after-tax charge of approximately $3,200,000, related to its 2006 issuance of $300 million Senior Exchangeable Notes (the “Notes”). Excluding the charge for the Notes, Core’s operations generated net income of $36,940,000 and EPS of $1.51 during the quarter, both increases of 28% over year-earlier second quarter totals. Year-over-year quarterly revenue increased 17% to a record $197,688,000, and operating income increased 31% to a record $55,019,000. Second quarter operating margins, defined as operating income divided by revenue, increased approximately 300 basis points over second quarter 2007 levels to a record 28%. Year-over-year quarterly incremental margins, defined as the quarterly change in operating income divided by the quarterly change in revenue, were 45% for the second quarter of 2008.

    The record second quarter results were due to increased demand for the Company’s Reservoir Description services, especially those related to internationally based crude-oil developments, and increased demand for Core’s Production Enhancement technologies used to optimize reservoir performance for tight gas sand and gas-shale developments in North America. In addition, Core’s Reservoir Management operations initiated a detailed joint industry project to evaluate the potential of the Haynesville gas shale and laterally equivalent sequences at the request of 12 major acreage holders in the area.

  8. 8
    VTZ Says:

    Re 4 and 5 – I read an article citing the similarities to what happened to the guy in the copper market in 2006 as well.

  9. 9
    tater Says:

    I think the NFX Weekly chart at the bottom of page one is worth a quick look (very simple chart, only 3 lines!)

    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2933882&cmd=show%5Bs145861085%5D&disp=O

  10. 10
    zman Says:

    Thanks Dman – had not yet looked at, expectations look strong for the year but in line to weak for the 3Q. Their coring business must be booming with all the shale activity as just about everyone but CHK uses these guys.

  11. 11
    zman Says:

    Thanks Tater, so you are thinking small bounce and then an uphill battle? Seems like the same applies to the rest of the group. What do you make of the huge volume in the CHK downdraft yesterday. Highly distributional in my book and not a good sign normally. Could be the capitulation we need to get out of the way. Group looks due a pretty good bounce as we are at or below levels when all the “good news” came out.

  12. 12
    zman Says:

    Take a picture of your screen right now and go to the beach.

    NFX call starting any minute now.

  13. 13
    Dman Says:

    Z – my amateur take on the CHK volume is that because it occurred *after* a big down move, it could mark the capitulation, as you said. A big volume down day following a period of sideways trading or a lengthy rally would be a red flag, but that certainly isn’t the circumstance here.

  14. 14
    tater Says:

    NFX – Playing with charts last nite, wanted to get some targets and the weekly seems to tell a better story. I think it might help people from getting washed out. NFX could take another week of downside, but it sure looks ready to start upward to me.

    This is also a pretty good signal that if it doesn’t move soon, get out and ask questions later. To me, the down price channel is too thin compared to the up channel. It really needs to play in a range, even on the way down, and it hasn’t done that yet. (Translation: the chart looks like it needs a pop up)

  15. 15
    zman Says:

    NFX Woodford:
    Reflecting the BP/CHK Woodford transaction:

    Valuation: $35,000 per flowing MCFE, on this basis it would value NFX’s asset at $4.6 billion

    or

    $3.5 billion on an acreage basis

  16. 16
    Dman Says:

    CLB up 6.5%

    Z – can you clarify from #10: whose expectations for 3Q do you mean? Management or analysts?

  17. 17
    reefguy Says:

    15- this is 1/2 to 2/3 of market cap

  18. 18
    zman Says:

    CLB citing some ranges for 3Q which looks low to analyst expectations but their 2008 number is way high to analysts which is probably more important…basically they are back end loading the year.

  19. 19
    zman Says:

    That EAC well is popping the Bakken group. That I think is the further north the Sanish has been seen so far and is a big number.

  20. 20
    Fred Says:

    Some Dolly impacts:

    http://www.upstreamonline.com/live/article159711.ece

  21. 21
    zman Says:

    Reef – I know and I pointed it out last week and it just does not matter right now. Maybe I should start a contest for “who takes out NFX”

  22. 22
    zman Says:

    NFX:

    Mancos Shale deep well at TD, preparing to test. I was worried it was dry.

    Oil starting to rule the day again, ng down 12 cents. Ug.

  23. 23
    reefguy Says:

    21- if the Mancos works, my bet is BP

  24. 24
    Dman Says:

    Z – excuse my ignorance: does “preparing to test” actually mean it isn’t dry?

  25. 25
    Dman Says:

    Group wobbling after initial green. Fear of the NG number and recent history.

  26. 26
    zman Says:

    NFX Q&A starting.

    Woodford well cost down $1mm. Where did the non-pad drilling savings come from? Just learning curve, so expect costs just to keep falling. Drilling with casing a help, cost reductions coming in the vertical section of the wellbore.

    Average IP’s of 5 to 6 mm/d
    EUR still stick with > 4.5 Bcfe

    Too early on the dual-lateral

    30% of their Neeson Anticline Bakken acreage prospective for the TFS

  27. 27
    zman Says:

    Dman – yeah, just got down to 17,000 feet a little slower than I expected.

  28. 28
    reefguy Says:

    ECA- rumored to have a 15MMCFPD Hy horizontal. Anybody confirm?

  29. 29
    zman Says:

    Re logistics of growing the woodford:

    they have term contracts in place for transportation,

    pipe alliances for steel and they are in a preferred customers situation in the area

    rigs – they are contracted for the move from 12 to 17

    HAL will continue to frac all their woodford wells.

  30. 30
    zman Says:

    Reef – I got nothing on ECA / Haynesville, JR, if you are around can be we get the latest scoop from the ground?

  31. 31
    Dman Says:

    Nicky mentioned yesterday that Iran had fallen off the radar and was bound to come back sometime in the next few weeks due to the West’s demand for a response to their negotiating offer.

    Whilst I’m sure that there will be more news and maybe more chest-beating, I suspect that a big part of the recent drop in crude has been the market accepting that the military option is, in fact, off the table. An article by Aluf Benn in Haaretz suggests that the Israelis now think that the Bush administration has turned toward diplomacy and did so without coordination with Israel:

    http://www.haaretz.com/hasen/spages/1004518.html

  32. 32
    zman Says:

    NFX – call over, went very well, analysts sounded pleased.

    On DO call now.

  33. 33
    ddaley Says:

    Part of the picture, from briefing:

    “Somehow the dollar has to keep from rallying today if we’re to get some pullbacks in the rotation theme. But I don’t know how it’s going to do it, considering how europe is sliding. So much concern now about an overvalued euro that German govt having trouble selling debt even at almost 5% yields. And if the euro is ready to crack, the dollar is ready to jump. That would only extend the recent rotation, which means financials could pop still higher, and all these great numbers out of coal, steel, ag co’s will result in nothing but more selling. But if the dollar fails to rally today, might see some reversion.”
    “Yesterday saw an exuberant follow through rally on the NASDAQ indices early on. Volume was superb. But while the market scored decent gains the finish well off session highs speaks to at least a temporary waning of bullish sentiment. We don’t have to see a hard pullback, but I mentioned yesterday that at some point we will see a reflexive bounce in commodities and that will test the bulls. But clearly the move is on out of the late cycle plays. The Commodity Research Bureau Index (CRY0) began its latest uptrend last August, but for the time over the last week has failed to find support at its 50 MA on a pullback. Last week we noted that the US Dollar Index (DXY0) flashed signs of bottoming and yesterday the index scored a break away gap above a one month downtrend line. While it is not necessarily clear sailing for the buck from here, it appears that the dollar will mount an assault on the highs from early this year, which should help continue to unwind the late cycle inflation plays. Meantime it’s a good idea to trim long positions or hedge them and look for swing opportunities on the inevitable pullback.”

  34. 34
    zman Says:

    NG consensus expectation is still 83 Bcf injection. Phil at Alaron is dragging the number up slightly with a 105 Bcf expectation.

    Stocks trading scared in front of the number.

  35. 35
    Jay Reynolds Says:

    Z re #30

    I have been busy in the NW corner of LA, not so connected at the moment to Elm Grove, Caspiana.

    I CAN tell you that there are a host of new players combing the woods up here looking for larger blocks of acreage to grab and they are not being shy about the offers. Nobody is even listening or leasing at <16K/ac.

    Full page ads running for brokers and aggregators such as http://www.louisianagasandoilleaseholdouts.com

    Expecting to farm out my deep rights in the next 30 days.

    JR

  36. 36
    zman Says:

    Thanks JR, good luck with that!

  37. 37
    tater Says:

    Added weekly and daily CHK charts (middle of page 1, pushed NFX to page 2).

    CHK volume yesterday looked like a “give up” as everybody knew that 200 MA was just below. Black box probably thinking that might be a better place for the Alamo.

    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2933882

  38. 38
    Bleemus Says:

    I see that Phil guy from Alaron mentioned quite a bit and hear him on the radio now and then. He seems wrong more times than not. Do you use him as a contrarian indicator? Just want to catch up is all.

  39. 39
    Sambone Says:

    10:15 am EST

    Nymex Crude Flat As Demand Concerns Linger

    By Tatyana Shumsky
    Of DOW JONES NEWSWIRES

    NEW YORK — Nymex crude futures are trading flat Thursday, as concerns about U.S. gasoline demand lingered and tensions with Iran continued to ease.

    Light, sweet crude for September delivery was recently up 15 cents, or 0.12%, at $124.59 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 47 cents higher at $125.76 a barrel.

    Iranian Vice President Reza Aghazadeh said Thursday that talks with the West could address issues beyond Iran’s nuclear capabilities.

    “If the negotiations get under way, then solutions could be found for many problems like Iraq, Lebanon or fuel prices,” said Aghazadeh, also the head of Iran’s Atomic Energy Organizations.

    Encouraging comments from one of Iran’s top officials are a dramatic shift from hawkish rhetoric and missile testing dominating world news just two weeks earlier.

    “Any type of friendly talking coming from Iran would soften the marketplace further,” said Tony Rosado, a broker at GA Global Markets in New York.

    Oil prices have dropped more than $20 since reaching an all-time settlement high of $145.18 a barrel on July 14. While many in the market expect oil to reach $120 a barrel, the move lower has been choppier this week.

    A further drop in crude prices, below $120, would ease strain on the economy and consumers.

    “There was quite a bit of panic and turmoil once we were in the $140 area,” Rosado said.

    U.S. gasoline inventories shot up by 2.2 million barrels in the week ending July 18, according to government data released Wednesday, far exceeding analysts’ expectations. Swelling inventories have confirmed concerns in the market that U.S. demand is dropping.

    Not everybody is enjoying the pull back in crude prices. A top Kuwaiti official was reported saying “the current drop in prices is only temporary,” by the country’s national news agency.

    Kuwait’s Supreme Petroleum council member Mousa Marafi said that long term global demand is on the rise and “is not likely to subside over the next five years.”

    “It looks like Kuwait is trying to talk prices back up. Just goes to show they were never really interested in helping prices go down,” said Peter Beutel, president at Cameron Hanover, an energy risk management firm in New Canaan, Conn.

    Front-month August reformulated gasoline blendstock, or RBOB, traded 1.36 cents, or 0.5%, lower at $3.0208 a gallon. August heating oil traded 32 points, or 0.1%, higher at $3.5533 a gallon.

    —By Tatyana Shumsky, Dow Jones Newswires

  40. 40
    zman Says:

    Bleemus – I think he talks his bok. So if he is short, his estimates which are part of the consensus for oil and natural gas will often attempt to set up a disappoint or an easy beat. He often talks the bull side only or vice versa if he is bullish or bearishly positioned. I like to look at all the influences and then decide. He’s just not my style.

  41. 41
    Bleemus Says:

    EIA Natural Gas Storage Data
    Total (07/18/08): 2,396 Bcf
    Total (07/11/08): 2,312 Bcf
    Change: 84 Bcf
    Year ago stocks: 2,743 Bcf
    % diff to yr ago: -12.7 %
    5-year avg stocks: 2,418
    % dif to 5-yr avg: -0.9 %

  42. 42
    zman Says:

    84 Bcf – whew! Gas falling anyway, does not make a lot of sense to me at all.

  43. 43
    zman Says:

    Gas should reverse soon, gas prices have been discounting another trip digit injection and next week the injection should be much smaller as CDDs rise from 79 to 90+.

    Gas was off $0.25 at the release, now off $0.45. It actually pulled down oil too.

  44. 44
    Dman Says:

    Was the market expecting all the gas is storage to have been stolen by smurfs or something? Yeesh.

  45. 45
    bill Says:

    ng bouncing off of 9.32

    good chance for chk to unwind their hedges

    does lower ng prices encourage future inv builds

  46. 46
    Sambone Says:

    Talks Collapse On US Senate Oil Speculation Bill

    By IAN TALLEY
    Of DOW JONES NEWSWIRES

    WASHINGTON — Talks between Senate Democratic and Republican leaders collapsed Wednesday on a bill that would give the U.S. energy futures regulator more power to rein in speculation in the oil and gas markets after lawmakers failed to agree on drilling amendments.

    Democrat and Republican aides say that unless a “miracle” happens in the next few days and the parties suddenly reach a surprise compromise, the bill’s outlook is grim and expected to officially stall on Friday in another procedural vote that would limit debate and allow a final vote on the bill.

    Republicans have been trying to use a swell of public support for increased petroleum production — including areas currently closed on the Outer Continental Shelf — to break Democrats’ opposition to lifting a decades-old drilling moratorium.

    Although the bill is still being debated in the Senate, Republicans have indicated they would use a procedural tactic to prevent a final vote on the legislation if Majority Leader Harry Reid, D-Nev., didn’t allow the GOP to offer a series of amendments to the bill that would increase domestic production.

    After more than a week of talks between senior party leaders, Reid filed a petition late Wednesday afternoon that would only allow a vote on the speculation provisions, preventing Republicans from attaching their provisions.

    “Republicans refuse to let us address one of the most critical priorities of the American people,” Reid said on the chamber floor. “Republicans’ plan…is to drill, drill, drill.”

    The Democrats’ legislation would require the Commodity Futures Trading Commission to set limits on the amount of speculative trades that participants who aren’t hedging delivery of the actual commodity can make.

    Reid blocked seven amendments proposed by Minority Leader Mitch McConnell, R-Ky., including one that would lift the moratorium on the Outer Continental Shelf — giving states the right to choose whether to drill off their shores — and to sweeten the deal — a hefty share of the revenues from production. Other proposals include provisions that would allow commercial development of an estimated 800 billion barrels of oil shale, exploration of closed areas in and around Alaska — where the country’s last major oil fields are expected to lie undiscovered — new nuclear power and incentives for coal-to-liquids.

    “What is the reluctance of the majority to tackle the number one issue in the country,” McConnell asked Reid on the floor. “I am perplexed…and I don’t know why we should be afraid of this,” he said.

    If the bill fails to gain traction, the legislation — which drew the ire of Wall Street banks and financial industry groups — could still be revived after the August recess.

    —By Ian Talley, Dow Jones Newswires;

  47. 47
    bill Says:

    its unbelieveable for me to understand why ng price fell from 13.5 to 9 in 3 weeks.

    maybe speculators did push prices up

  48. 48
    bill Says:

    ng now 9.13!! down 65

    ITS CRASHING!!

  49. 49
    zman Says:

    Gas is going for $9

    Bill – yes to your first as they want to tuck it away to get higher prices in winter less the monthly cost of storage.

    On the second point, agreed, pullback way to sharp. As far as speculators go, they were short all year. Way short. Should be a large covering rally soon as the shorts went to record levels.

    Crude falling now, possible influence by NG

    Sam – that figures.

  50. 50
    Hoss Says:

    HOUSTON, July 24 (Reuters) – The U.S. Commodity Futures Trading Commission will announce the results of an enforcement case related to its nationwide probe of crude oil markets, the agency said Thursday.

    “The CFTC will host a press conference to provide the details of an enforcement case related to the crude oil and other energy markets,” the agency said, giving no other details.

    It scheduled a press conference for 11:00 a.m. EDT (1500 GMT).

    The agency in May took the unusual step of revealing that it had been pursuing a nationwide investigation of crude oil markets since December 2007. CFTC usually does not confirm ongoing investigations until it announces results.

    At the time, the agency said the probe was into “practices surrounding the purchase, transportation, storage, and trading of crude oil and related derivative contracts.”

    The agency has been under pressure from the U.S. Congress to investigate allegations of manipulation of oil markets as U.S. crude oil futures hit a record high of $147.27 a barrel on July 11.

    Oil prices have dropped more than $23 a barrel since then, the biggest fall in dollar terms since crude futures began trading in New York in 1983. (Reporting by Chris Baltimore; Editing by John Picinich)

    http://uk.reuters.com/article/oilRpt/idUKN2442661320080724

    CFTC – Interagency Task Force on Commodity Markets – Interim Report on Crude Oil

    You can cut to the chase and read their conlusions on page 35.

    Here’s your onions Sam.

    “The view that financial investors have pushed prices above fundamental values is also difficult to square with the fact that prices for other commodities that do not trade on established futures markets (such as coal, steel, and onions) have risen sharply as well. ”

    http://www.cftc.gov/stellent/groups/public/@newsroom/documents/file/itfinterimreportoncrudeoil0708.pdf

  51. 51
    texana Says:

    watch the xle there is a multi million $ bet that it goes down before aug exp. this is a big fin inst buying 25 & 50 k blocks of puts @ a time. think they may something that we don’t? forced me to punt some eog aug calls with the thought rollout longer cheaper.my chart on xle says that it has not bottomed out & target is 71.5 then 68.75. back of the napkin says these guys have made over 10 million $ since yesterday

  52. 52
    zman Says:

    I would think that covering begins in the level just above $9, if we hold $9. The shorts have taken a bath all year long and suddenly get a 20 day, 40% down move.

  53. 53
    zman Says:

    Texana – Watching NG and oil pretty closely. An real reversal can cause a cover . Agreed re your sentiments on the higher strikes. Group is just hated now. Still looking for a red day turned well green by the close to signal a new direction. Soon the stocks will be needing a govt bailout.

  54. 54
    Sambone Says:

    Weather – Nothing much to report at this time. “All is well”! Kevin Bacon, Animal house.

  55. 55
    reefguy Says:

    z- took advantage of gas drop to escape my $7.80 gas….wahoo

  56. 56
    ddaley Says:

    UNG touched, for one second, the 100% retracement at 41.85

  57. 57
    texana Says:

    need to call eog & get them to postpone erngs report for a week till we stabalize. as we can see fromm xto & nfx nothing really matters . these seems to be a falling bomb that explodes on contact when u catch it , instead of a falling knife. eac negative now. i’m still hearing a lot of good things about eog oil production, they r getting a lot of 200bopd wolfberry wells in permian , pxd wells avg ip is about 90bopd. probably go for oct eog tomorrow

  58. 58
    jsaun14 Says:

    Added CHK common…

  59. 59
    Garyinhou Says:

    The entire energy industry is apparently entering a deep dark recession, as the world no longer needs oil and gas to get by. Who would a thunk it?

  60. 60
    bill Says:

    HK DOWN ANOTHER 10 %

    pretty soon it will be a 5 dollar stock

  61. 61
    Sambone Says:

    Started buying RIG here.

  62. 62
    rseidman Says:

    Sam: Regarding your RIG purchase, could you be more specific, Which option, or common? And thanks in advance

  63. 63
    bill Says:

    hk trying to hold 30

    did anyone ever expect to see the 20’s for hk??

  64. 64
    bill Says:

    didnt do it

    now in the 20’s aarrrrrrrrrggggggggg

  65. 65
    VTZ Says:

    Anybody follow Potash? They beat earnings and guided up massively and they are down another 5%. Nobody needs food anymore either so fertilizer is useless… and earnings… pffft… earnings are for chumps.

  66. 66
    VTZ Says:

    HK is shooting for 100% retracement! lol

  67. 67
    Garyinhou Says:

    record earnings = 30-40% mkt cap plunge

  68. 68
    zman Says:

    ZTRADE: Out HK $45 Calls for $0.20, down 95%

  69. 69
    VTZ Says:

    Ford lost 8.7 billion dollars and is down less % than HK hahaha

  70. 70
    zman Says:

    Not planning to sell any service calls at this time as per yesterday’s post. Earnbings will matter when this turns.

    Going to take some August $30 HK Calls soon.

  71. 71
    reefguy Says:

    HY Players- They are at or near pre CHK announcement in March. It is as if the market gives zero value to this play!

  72. 72
    zman Says:

    ZTRADE: Added HK $30 August calls small to start at $3.50 with the stock down another 9% today.

  73. 73
    ddaley Says:

    keep your eyes on the XLF SKF XLE trade. first two are trending down, XLE up.

  74. 74
    reefguy Says:

    BTW- oil strip trading at 13.2 multiple to gas strip(BTU is 6 to 1) Historical range is 4(Katrina) to about 16 to 1.

  75. 75
    zman Says:

    ZTRADE: Out CHK $75 calls for $0.05, down 99%. Group continues to get washed out and I plan to take what little is left of the higher strike calls taken earlier this month of the table while they still have bids.

    Also punted the HK $45 Calls, down 95%

  76. 76
    texana Says:

    ddaley what time frame r u speaking of regarding these charts?

  77. 77
    zman Says:

    Ddaley – hear ya, watching that

  78. 78
    zman Says:

    Stocks off their LOD, once again participants just watching oil for direction. Need to break that cycle.

  79. 79
    Sambone Says:

    R – #62, common

  80. 80
    rseidman Says:

    Sam: Thanks

  81. 81
    ddaley Says:

    Tex,
    for # 73, intraday. For #56, UNG and last nights mentioned “retracements”, 6 month, to the March 24 beginning.

  82. 82
    Sambone Says:

    So it begins

    http://www.reuters.com/article/etfNews/idUSN2450661620080724

  83. 83
    zman Says:

    Thanks Sam, looks we have a good beginning of the long awaited intra day reversal. Need crude to close higher. HK erased a 12% loss…need a green close there.

    XLE even now

  84. 84
    ddaley Says:

    Volume on UNG is nearly 14,000,000. 10 day average is 4,300,000.

  85. 85
    zman Says:

    ZTRADE: Added August $50 CHK calls (CHKHJ) for $2.70.

  86. 86
    el_vogel Says:

    changing my name to icarus

  87. 87
    Sambone Says:

    Off subject – Looks like WM will be the next to go under IMO.

  88. 88
    zman Says:

    glass half empty would be better; how about phoenix?

  89. 89
    Dman Says:

    Sam, can’t wait to see them investigate shenanigans on the short side. Not holding my breath. Also, it would be nice to know exactly what rule they broke… according to the article they bought something and then sold something. Criminals!

    I await further enlightenment ….

  90. 90
    Sambone Says:

    D – No way. Nobody is gonna investigate the biggest player out there by the name of Goldman Sachs.

  91. 91
    el_vogel Says:

    I hope I can phoenix my way back! πŸ™‚

  92. 92
    ddaley Says:

    HK and CHK now running into the ten day downtrend. UNG is around 47

  93. 93
    Dman Says:

    Just looked at the daily UNG chart going back to its inception in Apr 2007. Nothing even remotely like today’s volume on any day in that period.

  94. 94
    zman Says:

    Dman – there are a lot of things about the last three weeks that are relatively unique. Volumes but also magnitude of moves. Again, the reflex rally will be sharp however this may not be it. Need the intraday turn in my opinion to get the analysts out of their hidey holes.

  95. 95
    breakhound Says:

    Z you think the market is starting to realize how low our inventory of crude stocks is? CHK is a monster today

  96. 96
    zman Says:

    break…on oil I think it is short covering, maybe some geo-pol risk factoring back in. The group action looks to me like funds bottom fishing. CHK volume on pace to beat yesterday’s surge.

  97. 97
    Nicky Says:

    Afternoon all. Broader market as said yesterday was due to top out in this timeframe and see a correction into the 29th – 30th of the month. Cycles still point to a larger low being seen in the market in the 9 – 10th August timeframe. I think the spx is likely to make lower lows and the Dow possibly make a higher low in that time frame, nasdaq perhaps has the best chance of a lower low.
    Dman agree re Iran and no military attack but I think some sabre rattling next week ahead of a response from Iran will be enough to put a floor under the oil market temporarily. Resistance at 12840 and 132.80.

  98. 98
    zman Says:

    Afternoon Nicky – got any thoughts on crude in here? The rally looks like a bit of short covering after a 20 + point quick drop.

  99. 99
    zman Says:

    The comp chart of XLF vs XLE is pretty telling, either on a daily or tick basis they are running pretty counter to each other.

  100. 100
    zman Says:

    Broker notes I’m seeing on oil service recommending sticking to the big cap names in the space at present. SLB, HAL, BHI, hard pressed to disagree with the logic. Some analysts suggesting HAL instead of SBL on a valuation basis but at this point both are cheap to their prospects and serve somewhat different parts of the same industry. When the OIH rallies they should both benefit..

  101. 101
    Nicky Says:

    Z – anything above 12840 points to a more complex correction going on. Until then the trend remains down.

  102. 102
    Sambone Says:

    Uncle Phil/Mr. Right

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

  103. 103
    zman Says:

    Nicky – today’s move in crude looks like noise to me, sentiment still very negative / nervous.

    Houston Ship Channel reopens to traffic.

  104. 104
    zman Says:

    Sam – do you trade the UYG?

  105. 105
    Nicky Says:

    Z – agree. At some stage I still expect a decent rally – could come from lower levels or from here – but it will just turn out to be a selling opportunity. We saw it with natural gas and look where that is now! Oil is way behind right now.

  106. 106
    zman Says:

    Maybe a near term reason to sell but from a fundamental standpoint I think any recovery in the U.S. will see higher consumption…as you can see in the post, demand destruction is a widely tossed about and much over used statement. We’re just not off that much and inventories of crude are low here and low in the OEDC. I think we end the year at higher prices. If you are talking a shorter time frame, say the next month, I understand, but demand is not permanently shifting about.

  107. 107
    zman Says:

    Nicky – re Nat gas, the move up was too much, now the move down is overdone as well. On the gas front, nothing has changed, if anything today’s in line storage build took away a concern I had that supply was finally showing up in the numbers as a problem. We are still understored to last year (which is not much of a concern as that year was bloated) but also to the five year average. October peak storage has crept higher in each of the last several years and a low peak this year will put gas on the bubble for a big rally should we get a anything resembling a winter. Just trying to throw a little logic on the wall. Agree with your calls short term on the price action. By the way, what is your short term call on nat gas since we broke 9 this am and then popped, just from a TA perspective? Thanks.

  108. 108
    Nicky Says:

    Z – I don’t disagree. I can tell you I am not looking at fundamentals at all! At some point we are going to be much lower than where we are now.

  109. 109
    zman Says:

    Nicky, now you’ve got Hugo in your camp! Chavez now says $100 oil just about right. Step one in falling out of favor with his buddy in Iran.

  110. 110
    Nicky Says:

    Sorry Z 108 is in relation to oil.
    Nat gas – I thought it would push sub 9 before we saw a low. I suggest it chops a bit before finding a final low but I believe it will be in the region we were earlier today. Then we should see a very good bounce….cycles calling for a low in August. We could bounce back close to the highs again but certainly 12.00.

  111. 111
    zman Says:

    CHK up 5% on 43 mm shares with over an hour to go. Wow.

  112. 112
    Sambone Says:

    By Brian Baskin
    Of DOW JONES NEWSWIRES

    NEW YORK (Dow Jones)–A record downturn has shaken the oil futures market from
    its lengthy quest to push prices to new record highs.
    Oil prices have lately been rattled by signs that U.S. economic weakness is
    cutting demand from the world’s largest oil consumer. Crude futures in New York
    have ended lower in six of the last seven trading sessions, and the drop from
    the July 11 record high of $147.27 a barrel to Wednesday’s settlement at
    $124.44 is a record correction in dollar terms. Oil prices were trading at
    $125.31 Thursday.
    But even a $23 correction hasn’t sparked talk of a return to the relatively
    cheap oil prices of a year ago. Instead, oil is perched at the exact midpoint
    between two symbolic price levels that analysts say is likely to form a trading
    range for the rest of the year. The oil market has discovered that crude cannot
    top $150 a barrel without hurting demand, perhaps permanently. An equally solid
    floor is forming around $100, where refiners and other commercial buyers would
    start buying out of concern for the world’s tight spare supply capacity.
    “Oil started to seem like a one-way bet,” said Rachel Ziemba, an analyst with
    the RGE Monitor, a financial research Web site. “Now some people are starting
    to…question whether $145 a barrel is sustainable.”
    The drop began on July 15 as Federal Reserve Chairman Ben Bernanke told
    Congress that the U.S. economy would likely remain mired in a downturn through
    the end of 2008. High oil prices were partly to blame, he said, by making
    inflation unpredictable and reducing consumer spending.
    U.S. oil demand already reflected the weakness Bernanke described. Gasoline
    inventories have grown for four straight weeks, even though refiners are
    processing crude into gasoline at a 17-year low rate for July.
    The extent of the problems in the U.S. economy was well known by the time
    Bernanke spoke, yet the oil market had paid little heed up until last week.
    Traders figured that crude supplies, rejected by cash-strapped U.S. consumers,
    would find their way to expanding economies in the developing world. The
    International Energy Agency and other leading industry observers still back
    that view, predicting that world demand will grow faster than new supplies
    through 2009.

    Supplies Not Secure

    Supplies are no more secure than they were two weeks ago, either. Nigerian
    militants threatened new attacks on Wednesday, and Hurricane Dolly earlier this
    week became the first storm to enter the Gulf of Mexico this year.
    “I don’t think things have changed that much in the oil market,” said Harry
    Tchilinguirian, senior oil market analyst at BNP Paribas in London.
    “Geopolitical tensions are unresolved, and we have yet to go through hurricane
    season.”
    Bernanke’s testimony, while no revelation, provided a cue for the market that
    the rally could go no further. So did fuel price hikes by governments across
    Asia in early June.
    Demand has yet to fall, though the market is watching how Chinese demand fares
    after the Summer Olympics end in August. But the act itself – coming when oil
    was trading between $120 and $130 a barrel – provided an early hint that oil
    was nearing a price cap.
    “That high of $147 came after the fundamentals had already turned bearish, it
    had the look of a last-gasp investment rally,” said Darin Newsom, senior
    analyst at DTN, a market information service in Omaha, Neb.

    Finding A Center

    Oil may have little room to rise, but it may not have much further to fall,
    either. U.S. gasoline demand has stabilized at about 2% below 2007 levels, and
    could quickly bounce back should gasoline prices – currently holding just over
    $4 a gallon on average nationwide – at the pump fall.
    “Our expectation is that U.S. gasoline demand has not been destroyed,” wrote
    analysts at Barclays Capital. “The demand would return with lower prices.”
    Near-term oil futures traded at a premium to their outer-month peers when oil
    prices rose to $120 from $80 a barrel, indicating that refiners and other
    buyers believed that oil supplies were tight. As U.S. demand weakened and Asian
    fuel prices rose in May, the supply situation was seen easing, and the market
    structure flipped.
    Now that oil prices are dropping, the front-month premium is again narrowing,
    a clear sign that the market is finding a price range where supply and demand
    are more balanced, Newsom said.
    Any equilibrium found this summer would likely be shattered by early 2009,
    however.
    The IEA expects world oil demand to rise by 860,000 barrels a day next year,
    while new supplies outside the Organization of Petroleum Exporting Countries
    are seen increasing by only 640,000 barrels a day.
    Bernanke also said last week that he expects the U.S. housing market to bottom
    out by late 2008 or early 2009, which should help the wider economy recover.
    Tchilinguirian, with BNP Paribas, noted that there were still considerable
    contracts open and betting on prices going higher.
    “Open interest is bunched around $150 and $200,” said Tchilinguirian, with BNP
    Paribas. “We’re only at the beginning – perhaps that rise to $145 came a little
    too quickly.”

    -By Brian Baskin, Dow Jones Newswires;

    Dow Jones Newswires
    07-24-08 1442ET

  113. 113
    Nicky Says:

    SPX has support in the low 1250’s – we should see a bounce there…

  114. 114
    Nicky Says:

    House rejects attempts to release oil from SPR. You would think oil would bounce on that not sell off…

  115. 115
    zman Says:

    Cramer giving a nod to the energy names, saying watch XTO vs C. That is the kind of mkt we are in. Very black and white, very either or. I will continue as always to write about the details because “the world isn’t black and white, Jack, it’s gray”

  116. 116
    Fred Says:

    Sam DSL may go first, saw line up today in Albertson’s market branch at opening.

  117. 117
    Sambone Says:

    3:24 pm EST

    Crude Stabilizes After Two-Day Plunge

    By Tatyana Shumsky
    Of DOW JONES NEWSWIRES

    NEW YORK — Nymex crude oil futures eked out a slight gain Thursday, halting a two-day plunge as traders searched for direction.

    Light, sweet crude for September delivery settled $1.05, or 0.84%, higher at $125.49 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange closed $1.15 higher at $126.38 a barrel.

    Crude futures idled around the $124-a-barrel mark through the day Thursday, after the front-month contract lost a total 5% this week, and 14% since its record Nymex settlement at $145.29 on July 3. But after booking around $20 a barrel in losses, many traders are wondering whether crude prices have much lower to go.

    “Do you want to be a seller after we’ve dropped twenty- plus dollars? I don’t,” said Ray Carbone, president at Paramount Options, a Nymex brokerage.

    Some traders welcomed a break from the sharp downswing of the last eight trading days.

    “A little stabilization here is to be expected after such downside pressure,” said Jonathan Benjamin, senior analyst at New Wave Energy. “I’m advising my customers to protect against downside movement by using put options.”

    Also absent from the crude market was the record volatility that saw prices whipsaw by as much as $10 in one day in the last six weeks.

    “We still have a $3 range, which is I guess flat these days,” Carbone said. “That’s not quiet, but it’s not $6 or $8 either.”

    Some supply fears resurfaced in Nigeria, after a leading militant group Wednesday said that more oil infrastructure attacks are on the way in the next month.

    Market watchers are also eyeing talks between Iran and Western powers, due to restart in two weeks. Thursday’s comments by Iranian Vice President Reza Aghazadeh that the negotiations could address issues beyond Iran’s nuclear capabilities underscored the easing geopolitical tensions.

    Yet many market participants are wary of calling this retreat in prices an end to crude’s historic bull rally.

    “This is nothing but a small correction in that big uptrend,” said Tom Bentz, senior energy analyst at BNP Paribas. “A lot of the fundamentals that got us up here are still in play.”

    Front-month August reformulated gasoline blendstock, or RBOB, rose 2.50 cents, or 0.82%, to $3.0594 a gallon. August heating oil increased by 1.70 cents, or 0.48%, to $3.5671 a gallon.

    —By Tatyana Shumsky,Dow Jones Newswires

  118. 118
    el_vogel Says:

    i made some great returns riding DSL down…

    Z, on a side note, have you ever considered using something like Google Charts to post your data/graphics with?

    http://code.google.com/apis/chart/

    Personally I stick with custom controls since my day job is software development, but i thought it might make for a nice UI enhancement to your posts…just throwing it out there πŸ™‚

  119. 119
    occam Says:

    RIA Novosti reported that Russia’s government has approved a rise in Russian oil export duty of USD 97.8 to a record USD 495.9 per tonne as of August 1st.

    That is raising the tax from $13 per barrel to $67 per barrel. Might have some effect on exports, particularly if the price begins to approach $100 per barrel.

  120. 120
    zman Says:

    El-V , sorry no, I was raised on Excel….old dog, new trix, no mix. But I can change the color of the backgrounds if you’d like πŸ˜‰

    Thanks Occam. They do that from time to time as a way of influencing global prices. At 10 mm bopd, they are right up their with Saudi. Good catch I did not see. They have made a mint off higher oil and have no desire to disrupt this market.

  121. 121
    md Says:

    #112 Monthly product supplied is closer to 4% reduction in demand. Double the 2%
    With each passing week and month there will be more destruction. There’s a reason that Ford and CO. are closing down truck assembly lines as they announced today and switching to 4 cylinder cars. It’s called demand destruction.

    SPR is what’s keeping the prices down. Otherwise the CL would be going to China and India. Look at the exports of distillate. We’d have 13 Million barrels less than a year ago if not for the SPR. It’s costly but every time MEND blows up a pipeline it’s good to know we have insurance.

  122. 122
    zman Says:

    CHK off its highs but still up 4% on 51+ mm shares. I’m not TA guy but it looks like it bounced off its 200 day sma and then everyone got some confidence.

  123. 123
    zman Says:

    MD – I think the term should be demand growth destruction. The press would have you believe consumption is falling off a cliff. It is not.

  124. 124
    Sambone Says:

    Tini time

  125. 125
    zman Says:

    On the car lines, sales are off, that’s why they close them down, because the consumer has the attention span of a gnat. Last summer everyone was buying prius’ and by winter, when gasoline prices had retreated, they were offering incentives to get them off the lot.

  126. 126
    zman Says:

    Md – just looked at monthly files from the EIA, I see April Total Products Supplied was down 2% in April YoY, which is the most recent data available, not 4%. Here’s the link:

    http://tonto.eia.doe.gov/dnav/pet/pet_cons_psup_dc_nus_mbbl_m.htm

    I don’t follow your SPR comment. SPR is a sliver of weekly or monthly oil consumption.

  127. 127
    kaman Says:

    No explanation for OXY positive earnings reaction today vis-a-vis COP the other day…sure isn’t predictable from TA of the price of oil.

  128. 128
    Jay Reynolds Says:

    Today’s Shreveport Times:

    Bossier City to put their 3,300 acres deep rights out to bid.

    Minimum bid? $27,500/ac @ 1/4 royalty.

    Firm bid in for my acreage at $6K, well away from heart of play, about 30 miles distant. Will wait on completion of well drilling to the E along Hwy 1.

    JR

    JR

  129. 129
    zman Says:

    K – agreed, things are all over the place right now. Need to let them settle down a bit. Very random walk in the group with every 1 out of 3 names up.

    Big blocks of XTO bought late in the day. 55 mm shares traded there as well and the stock closed up, much like CHK.

  130. 130
    md Says:

    Monthly data April 08 barrels PD 19,768
    April 07 barrels PD 20,579. Reduction of 811 or 4%
    SPR- my comment was in response to Nicky.

  131. 131
    zman Says:

    MD just trying to follow you. My figures are just for finished product supplied which is gasoline, distillate etc taken in by the consumer. Your number includes crude and finished products. I think the finished products supplied is a better indicator of demand than the number that includes crude. You can send out less crude to the refiners to make the gas if you eat through inventories…which is what we’ve done in lieu of importing more and keeping inventories more flattish.

  132. 132
    zman Says:

    PBR on the tape saying they see 1 mm bopd from their subsalt discoveries at the Tupi field. Doesn’t give a time line but know they want to conduct longer term production test which will amount to a small amount of production sometime around late 09 / early 2010. I’d bet the 1 mm bpd is a decade out.

  133. 133
    md Says:

    I have to understand this better. The Top line reduction inc. NG liquids ( inc. ethane and propane) and Other oils which is essentially unfinished oils.
    The unfinished oils dropped 180000. Would that mean as you’re saying that they’re using every last drop. How does this hold true for NG liquids
    You are correct if you use Finished products as opposed to Crude and finished products.
    Can you elaborate a bit more on your last sentence. Txs

  134. 134
    md Says:

    Re : Unfinished. Would this not mean that they’re refining everything in to finished product. But at end of day there still selling supplying 180,000 less off the top and that would filter through to the lower levels. Adding up to 811000 less than prior years.
    Appreciate the explanation and will hopefully check it out in the AM

  135. 135
    zman Says:

    SPR bill defeated.

    MD – I will look at it after dinner, braindead now.

  136. 136
    Nicky Says:

    md – not sure I understand you re the SPR. I am unclear about the fact that you say it is keeping the prices down – how can 147 dollar oil be perceived as keeping the price down??? By adding to the SPR over the last year it helped push the price up surely?
    My comment was more a short term reaction to the SPR news. Many have argued (rightly or wrongly) that opening up and selling off some of the SPR would psychologically be bearish for oil prices. I would have expected a knee jerk reaction to the upside to any news that they were not going to do this even though I don’t think it was ever really expected and now prices are off a touch its probably not needed.

  137. 137
    Bob Says:

    FTI Beat estimates. $0.81 vs estimate of $0.73 vs last year $0.55. Included $0.04 from spin off of JBT and $0.05 from foreign currency contracts mark to market. Their Energy Systems has a $4.6 billion backlog.
    They increase full year estimate by 20 cents to $2.60-$2.70, or Y-O-Y 36% growth.

    Trading up AMC on light volume to $69.75

  138. 138
    md Says:

    Nicky my belief is that SPR has had a negligible if not positive effect on the price of oil. It is much needed insurance that acts as a check against NIMVY (Nigeria,Iran,MEND, Venezuela,)etc. and that through the building of oil inventory kept oil in US that would otherwise be shipped to the highest bidder be it China, India and Europe in the form of CL or distillates.
    Without SPR our YOY inventory would be 16 million barrels poorer than it already is.

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