28
Aug

Thursday – Gas Preview & Oil Review Plus Gustav Wobbles, Begins To Restrengthen

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Sentiment Watch: No real change from cautiously optimistic stance. All the green on the screen is storm related and unless Gustav turns into a real beast that green will be fleeting. Overnight Gustav weakened and then restrengthened and the repricing of crude, even at 3 am New York, was nearly instantaneous so I don't have any illusions about what is truly supporting prices here:

  • Gustav first,
  • then Russian vs the West,
  • then the new TD 8 (see below) 

Any more weakening of Gustav or "wrong tracking" will cause a pullback in the commodities and the stocks for you storm-traders out there. As much as I'm tempted to "ride out the storm" with full positions into the weekend I am not going to. I will pare several of them back today and some back tomorrow.

Next week I expect several names in the E&P realm to begin releasing well news and to have interim quarter updates out.

Tropics Watch:

  • Gustav was more beat up by Haitian geography than originally modeled and is now expected to take longer to regain its vigor. The track remains on course for the central gulf (a little more left than before after an overnight wobble to the west) but is once again anticipated to be a Cat 3 at landfall on Tuesday morning.
  • TD 8 has developed in the western Atlantic and is tracking towards an east Florida arrival mid next week. The current track has it coming to Florida headed due West so the thought here may develop that this one crosses Fl and heads into the Gulf.
  • This is looking like what a busy hurricane season looks like, something we have not seen since 2005.

In Today's Post:

  • Holdings Watch
  • Commodity Watch - natural gas preview and oil inventory review
  • Stocks We Care About Today - more coal thoughts
  • Odds & Ends

 

Holdings Watch: The Holdings Wiki Tab is updated.

  • TSO $20 September Calls (TSOID) added for $0.30. The rationale for the trade is pretty straightforward. First the stock has in my sense been overly beat up and I think it recovers with an improvement in cracks this Fall. Second, if the Gulf Coast refiners do take a hit that takes capacity off line for an extended period, those refiners not there (like TSO) stand to benefit.

Just An FYI: Map of U.S. Refineries (click the map if you can't see all of it)

 

  • FRO - Out FRO September $50 puts for $0.55, down 63%. Trade not working and I must be missing something as the downgrades since their call have had no effect. This may be Gustav/Energy hype related and I may position again in puts higher but it has broken trend and I see no sense fighting it.

Commodity Watch:

Natural Gas: October gas rose 22 cents to close at $8.61 as traders ignored weak fundamentals and antcipated the arrival of Gustav into the central Gulf of Mexico early next week. This morning gas is trading up slightly.

  • Weather Watch: August at last seeing a bit of a warm up in the northeast in the 6 to 10 day forecast.

Natural Gas Storage Inventory Preview

  • My Number: 75 - 80 Bcf Injection, well above last year's number of 38 Bcf and the five year average of 57 Bcf meaning this is going to be another week of building surplus to the normal metrics. I'm starting to like UNG puts for a quick trade after the Gustav spike we've had but probably will just opt to stay away as one bad forecast can send gas spiking even higher.

    • Imports: Down 3.6 Bcfgpd from year ago (0.8 Bcfgpd from the prior week). 
    • Production: Up about 5 Bcfgpd from year ago levels.
    • Exports: Up less than 0.1 Bcfgpd from year ago levels.
    • So net available supply relative to year ago levels is probably up about 1.5 Bcfgpd meaning that if the weather were identical we should see injections of about 10 Bcf more per week.
    • Weather: However the weather was far from identical to the year ago week with cooler than normal weather and electricity generation suffered for it falling 11% from year ago levels and 8% from the prior week
  • Street Consensus: 82 Bcf Injection (from the Bloomberg Survey)


Crude Oil surged $1.88 to close at $118.15 yesterday on Gustav worries and after pretty much ignoring the inventory report. This morning oil is trading up $1.00 to $1.50 and is squarely eying a close above $120 going into Friday (would you want to be short over the long weekend?).

  • Russia Watch: Good listing of recent developments can be found here. Russia taking a hard line with Ukraine and Moldova now. Russia also cutting meat imports from the States (lookout Tyson) and warning the West not to send more ships to the Black Sea.
  • Russia Watch 2: Shanghai Cooperation Organization (SCO) - Facing pressure from the West, Russia is meeting with China and this group of nations seen as a counterpoint to NATO for increased support regarding Georgia. Russia wants China to block any U.N. sanctions and also to increase military ties with China. They are also going to review allowing Iran to formerly enter the SCO.
  • The EIA Inventory Review
  • In A Nutshell: Not an uber bullish or bearish report. The most important nugget in the data I saw was products demand which continues to be relatively strong despite high prices. Distillate demand remains especially strong (exports).

The EIA Review Slideshow


CRUDE OIL - Inconsequential But Unexpected Draw On Crude Stocks. Inventories fell 100,000 barrels due to a combination of higher demand from refineries, another dip below the 5 mm bopd mark for domestic production, and more seasonable import levels.

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  •  
  •  




GASOLINE: Smaller Than Expect Draw On Stocks As Production Ticked Up and Imports Surged.

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  •  



 



  •  

DISTILLATES - The Street expected a build in but got no change in inventories as demand remains strong and production edged lower (it is still very high).  I would expect (barring a problem with production along the Gulf Coast) for distillate production to stay in the "above normal" realm for the foreseeable future.


  •  


Stocks We Care About Today:

A Few More Coal Thoughts

  • Yesterday I wrote that coal and the coal mining stocks had come off in part due to high prices. I should have added:
  • That the supply dynamics for the two fuels are quite different. While gas is enjoying uncharacteristically high single digit volume growth this year, coal production is only up 1.3% year to date.
  • While I don't see gas continuing to grow at the same rate in 2009 as we have seen in 2008, the fear of that growth is in the market place dragging down gas prices.  No such fear of a glut is in the coal market.
  • Coal prices have held up well despite China's move to restrict imports prior to the Games; gas prices have fallen.

  • And coal stocks often trade with gas stocks, especially in the Summer months when their two respective fuels compete in the electirical genration.
  • Coal demand remains strong in Asia.
  • Just getting ready to get back long the group.

 

Odds & Ends

Analyst Watch: Zip, nadda, nothing. Lazy analysts are at the beach. No, no, not one along the Gulf Coast.

97 Responses to “Thursday – Gas Preview & Oil Review Plus Gustav Wobbles, Begins To Restrengthen”

  1. 1
    zman Says:

    IEA says it will release crude from its stock piles if Gustav hits. You can expect the same release from the EIA’s SPR in that event.

  2. 2
    zman Says:

    Oil now up 2 as another update on Gustav just hit showing pressure is definitely dropping again, back down to 988 mb vs 999 last night.

    Great Book Watch: Isaac’s Storm – novel about the Great Galveston Hurricane of 1900 which is the reason why Houston is the oil capital of Texas and not Galveston which was wiped off the map.

    http://www.randomhouse.com/features/isaacsstorm/

  3. 3
    zman Says:

    Pretty scary looking sat view of both systems (click animate on the right side of the screen)

    http://tropics.hamweather.com/2008/atlantic/gustav/clir/loop.html

    Sam – can you give me a link to the Florida site that models the storm progressions? ty

  4. 4
    bill Says:

    z-on fro

    The trade went against you for 2 reasons

    1. the stock split

    2. the tanker stocks go up with the price of oil, does it make sense? no

  5. 5
    zman Says:

    Bill, I had to remove that as it is a violation of copyright almost certainly plus it just might annoy them. If you have a link that would be great. Thanks.

  6. 6
    zman Says:

    Bill – re FRO – I know and I’ll be back with puts there again soon.

  7. 7
    bill Says:

    ok no problem

    did you find anything useful there?

    tudorpickering.com and sign up for the daily newsletter

  8. 8
    zman Says:

    They are very smart guys, especially Dan Pickering, and while I don’t read it daily they do a great job.

  9. 9
    BossmanG Says:

    Z, question about this:

    “Oil now up 2 as another update on Gustav just hit showing pressure is definitely dropping again, back down to 988 mb vs 999 last night.”

    so pressure dropping means storm getting stronger? gotta do some studying on weather when i get the chance

  10. 10
    BossmanG Says:

    bill, do you have to be a client of tudorpickering?

    “For clients who do not currently receive The Morning Note but wish to,”

  11. 11
    zman Says:

    Bossman – yes, I suggest picking up the book in #2. Great read. If you look at the storm tracks link you can see all the big storms going back in time on the Weather Tab. If you look at 2005 you can see minimum pressures and some of the really big storms, the Cat 5s there, get down into the high 800’s. That’s very low.

  12. 12
    Nicky Says:

    Good morning all. Have CNBC never seen a hurricane in the GOM? Absolutely sensationalist reporting now every twenty seconds. After Katrina I understand the rigs can now withstand a Code 5 hurricane. This is being greatly overblown. Only sensible person I have heard this morning is Addison Armstrong who says whilst he would not go short neither would he go long as much of this is now priced in.

  13. 13
    zman Says:

    Green open but natural gas off slightly an hour before inventories.

  14. 14
    Nicky Says:

    PF – this is posted on a public web site for viewing –
    The Energy Report for Thursday, August 28, 2008

    An eerie calm before the storm. Energy prices soar ahead of Gustav but at least with the oil one might wonder why traders are not more nervous.

    Oh sure the market rallied but considering the track of the storm on the National Hurricane Center map and the somewhat supportive Department of Energy inventory report, the gain seemed somewhat modest. Could it be that weak demand is trumping the fact that a category 3 or 4 storm could be hitting at the heart of the US refining industry? Is it possible the market believes that the storm could be a bigger threat to demand than to supply? Now I know that a sound a bit crazy but that is exactly what happened after another Labor Day weekend storm like the devastating Hurricane Katrina.

    As America watched with horror Hurricane Katrina devastated New Orleans and Mississippi it seemed that they were in no mood to take a vacation. Americans stayed home that weekend and watched with stunned disbelief the events that were unfolding. When the oil market reopened that Sunday night the electronic market surged to 7085 which turned out to be the high for the rest of that year. Oil then fell back to a low of 5990 in December. Going into Katrina the nation had rapid demand growth that seemed to be grinded to a halt after the storm. Releases from the International Energy Agency as well as the US reserves helped to calm the market. Not only that the US oil industry is better prepared to deal with this type of storm. Today’s Wall Street Journal says, “While the threat to key energy infrastructure is real, the industry is more prepared this time around, suggesting it may take less time to recover from a minor hit or cope better with a more devastating one. The very active Atlantic storms of this decade have played a role in burnishing that learning curve, though much will depend on the severity of any blow to energy infrastructure.” The Journal goes on to say, “During the onslaught of Hurricanes Katrina and Rita, as well as 2004’s Hurricane Ivan, rigs left their moorings, their loose anchors destroying pipelines. Now rig owners in the Gulf of Mexico have complied with federal regulations that mandate stronger anchors and upgraded mooring systems.” The WSJ quotes John Breed from Nobel Corp as saying “We’ve installed tracking devices on all our deep water rigs.” Which of course if you remember was a problem finding some wayward rigs after the storm.

    Now with US demand faltering could a strike from Gustav make things even worse? Yesterday in the Energy Information Agency report “This Week in Petroleum” the Agency made some interesting observations about the weak demand for gasoline. The IEA said that for the first time in 16 years the continuous growth gasoline consumption has ended in late 2007. The IEA says that should continue to decline at least through the end of 2009. The decline in consumption they say is the result of slowing economic growth combined with the rapid increase in retail gasoline prices. For the first 6 months of 2008, consumption declined by over 130,000 barrels per day, or 1.5 percent from that of the previous year. And looking to the near-term future, growth in economic activity is projected to be slow. In 2008, real gross domestic product is projected to climb by only 1.7 percent and by an anemic 1.2 percent in 2009. This assumes no additional economic stimulus package — enactment of such a package could improve chances for more robust economic growth next year.

  15. 15
    zman Says:

    Nicky – One of the reason’s I don’t watch them much. Stocks are pulling back early as much of this is priced in and inventory numbers still matter. Agree with the not ready to go short yet though as I imagine we will see more short covering prior to the long weekend.

    On the platforms I would say 4 and up will cause trouble for some platforms on the Shelf, and you have rigs which will be locked down but still get blown about. I would not say everything can withstand a Cat 5 but that yes, they are better prepared and that the damage will be less severe. Last time we had major storms all kinds of crazy things happened and it only takes one thing breaking to mess up 3 other things like pipelines on the sea floor having junk dragged across them, etc. Wyoming has some great photos I’m sure.

  16. 16
    zman Says:

    Nicky – In the future, please just provide a link for those kind of things. Thanks.

  17. 17
    Nicky Says:

    Z – I don’t disagree but if they run the price up into the event then this is all priced in. I think its going to be a case of buy the rumor and sell the fact which is why oil is not exactly on a tear cos they all know it…

  18. 18
    zman Says:

    Nicky – agree with 17 but it also depends on what gets bent onshore. Refineries flood, loose power. That track goes into the heart of refinery country as per the post map.

  19. 19
    Wyoming Says:

    If anything happens, I am sure my inbox will get flooded. Hurricane evacs are not fun; choppers at full rotor, grab what you can wear (remember your keys and wallet). Know of a couple incidents of people drowning when the fell in swinging from the Texas deck during an evac.

  20. 20
    zman Says:

    Morning Wyo – perfect person to ask. I read a lot of MMS proclamations about increased Rig and Platform strengthening for hurricanes but not a lot of follow up on what had been done. What are your thoughts on a Rita or a Katrina plowing through? Less damage I assume but I would not say we’d be anything close to trouble free.

  21. 21
    zman Says:

    Tater – FRO opened at 61.03. I think I will wait a little longer but take puts again next week, maybe Octobers and $55s…of course, if Gustav messes up refining supply I would think OPEC would go ahead and trim supply to prevent an even more rapid build in inventories than what they already see.

  22. 22
    jsaun14 Says:

    Do they outsource the evac to the service folks or is it done internally?

  23. 23
    zman Says:

    Several private (LLC’s) helicopter companies move out thousands of workers in just a few days. Companies like Chevron have there own fleet of helicopters.

  24. 24
    zman Says:

    Just an FTI, got a note saying historically TDW and BRS have benefited historically from increased demand for boats and helicopters to do the evacs.

    They also said the jackup leveraged operators stocks do well during storms listing HERO, ESV, RDC, PDE.

  25. 25
    Wyoming Says:

    Took a Vaca day.

    I’m not too up on the added rig mod’s. Adding tracking sonds only means that they can find their listing/sunk floaters/ships. They still have to move them back and find their wellheads, if nothing got damaged on the disconnect. Deep subsea is expansive for a reason. Cameron FMC don’t know much about Drilquip and Oceaneering to help all the lost rigs.

    We have 1 platform (not a rig) completely plowed over, the bending is amazing to the support members. we have not been mandated to shore up the structure.

    Shutins mean start ups; coiled tubing, slickline, eline work….

    HAL, BHI, SLB

  26. 26
    tomdavis12 Says:

    Z: CSFB took KO off focus list due to current and expected US$ strength. Smith Barney had comments from Tobias L. That he expects continuing US$ strength and expects energy and materials to underperform. We have had seven US$ weak years. Maybe the end?

  27. 27
    Wyoming Says:

    I met some of the HOS people one day, pretty impressive guys. They used to provide our services before we sold off the deepwater.

    For those who are interested, never did any DD
    http://www.hornbeckoffshore.com/

  28. 28
    bill Says:

    bossman#10

    no im not a client–i just went to web site and signed up for it

  29. 29
    bill Says:

    basically they like chk and hk and Haynsville

  30. 30
    zman Says:

    Tom – Could be, I could argue either side but that’s not really my bag. I would tell you that while the weak dollar has helped this crude rally of the last few years it is not the central cause (rising global demand meets supply constraints) and that if the dollar does rebound long term it will happen with a stronger economy.

    My read is that the dollar is rebounding now relative to other currencies because those countries didn’t slip into slower growth mode until after the U.S. As the U.S. strengthens (some day), then you have nearly one-quarter of the globe’s demand for oil strengthening. I don’t buy the structural change argument on gasoline consumption and think that a strong economy will get me and fellow citizens behind the wheel more.

    Note also in looking at fuel efficient cars that the tax incentives on all of the US hybrids have not been scaled back yet…this means they have not sold enough to reach quotas. This is not true for Honda and Toyota but it does point to the fact that Americans are not just leaping into hybrids at an incredible, game changing rate.

  31. 31
    zman Says:

    Oil making a run on red. Good for refiners.

    I think without damage from this storm E&P gives back 5 to 10% muey pronto next week.

  32. 32
    zman Says:

    Hey Nicky, have you looked at products from a Elliot perspective in a while? Just wonder your levels on HO and Gasoline.

  33. 33
    zman Says:

    MD – don’t know if you saw my comment last night but I was thinking of doing a 10 or 20K portfolio with a start date in mid September. I’d do it for Tuesday but this environment is a little nutty and I’m going out of town yada, yada, yada.

    The basic idea would be to show cash, positions with number of contracts (just options), entries, exits. It will be volatile but transparent.

  34. 34
    zman Says:

    102 Bcf injection – horrible number for natural gas.

  35. 35
    tater Says:

    re 21 FRO –
    I went back in and played the gap real quick but the spread ate up all my profit. Waste of time. Though I am 100% ignorant of their biz, I agree with your assessment of how it is trading. Better places to play today. Added some refiners and majors to the charts. I will try to get some of the E&P done this weekend, but baseball, brats, and beer loom very large.

  36. 36
    zman Says:

    ZTRADE: Out HK $35 Calls for $2.60, up 24%.

  37. 37
    zman Says:

    Man that was an ugly gas natural gas number, easily a record for this week in history. Gas would be $7 were it not for Gustav.

  38. 38
    Bleemus Says:

    10:48ET Tropical Storm Hanna forms in western Atlantic-NHC [ RTR http://tinyurl.com/5aq74q ]

  39. 39
    zman Says:

    ZTRADE: Adding to TSO.

    Added TSO September $20 calls for $0.45.

  40. 40
    zman Says:

    SATELLITE IMAGERY INDICATES THAT THE CLOUD PATTERN ASSOCIATED WITH
    THE CYCLONE HAS IMPROVED DURING THE LAST 6 HOURS AND LATEST DVORAK
    INTENSITY ESTIMATES INDICATE WINDS ARE NOW NEAR 35 KT. BASED ON
    THIS INFORMATION…THE DEPRESSION IS UPGRADED TO TROPICAL STORM
    HANNA. VISIBLE IMAGERY SHOWS THAT HANNA’S LOW LEVEL CIRCULATION IS
    PARTIALLY EXPOSED ON THE WESTERN EDGE OF THE DEEP CONVECTION
    INDICATING WESTERLY SHEAR…ASSOCIATED WITH AN UPPER-LEVEL LOW TO
    THE WEST IS IMPACTING THE SYSTEM. SINCE THE OCEAN IS PLENTY
    WARM…THE INTENSITY FORECAST IS PRIMARILY A FUNCTION OF HOW HANNA
    INTERACTS WITH THE UPPER-LEVEL LOW. GLOBAL MODELS FORECAST THE
    UPPER-LEVEL LOW TO MOVE WEST-SOUTHWEST OVER THE NEXT SEVERAL DAYS
    PLACING HANNA IN A LOW VERTICAL SHEAR ENVIRONMENT WITH AMPLE
    DIVERGENT FLOW ALOFT. SUCH AN ENVIRONMENT WOULD FAVOR
    INTENSIFICATION SHOULD IT MATERIALIZE. HOWEVER…AS IS OFTEN THE
    CASE…THERE IS A FINE LINE BETWEEN A FAVORABLE AND UNFAVORABLE
    ENVIRONMENT FOR STRENGTHENING. THE OFFICIAL FORECAST ASSUMES THERE
    WILL BE SUFFICIENT SPACING BETWEEN THE UPPER-LEVEL LOW AND HANNA TO
    PROMOTE STRENGTHENING. BY DAY 5…UPPER-LEVEL OUTFLOW FROM GUSTAV
    COULD IMPART NORTHERLY SHEAR OVER HANNA POSSIBLY AFFECTING THE
    INTENSITY.

    HANNA HAS BEEN MOVING TOWARD THE WEST-NORTHWEST…OR 300/10…DURING
    THE LAST 6 HOURS. HOWEVER…A MOTION TOWARD THE NORTHWEST IS
    EXPECTED OVER THE NEXT 2-3 DAYS AS HANNA MOVES AROUND THE
    SOUTHWESTERN PERIPHERY OF THE SUBTROPICAL RIDGE. THEREAFTER…THE
    TRACK BECOMES MUCH LESS CERTAIN AS IT REMAINS TO BE SEEN HOW HANNA
    WILL INTERACT WITH A MID-LATITUDE TROUGH FORECAST TO MOVE
    OFF THE U.S. EAST COAST. MOST OF THE DYNAMICAL MODELS SHOW HANNA
    BEING LEFT BEHIND IN AN AREA OF WEAK STEERING. HOWEVER…THE
    TRADITIONALLY GOOD PERFORMING GFS FORECASTS HANNA TO TURN
    NORTHEASTWARD AT DAYS 4 AND 5. THE OFFICIAL FORECAST ASSUMES THE
    FORMER OF THOSE SCENARIOS AND SHOWS A SLOW WESTWARD TRACK.

  41. 41
    zman Says:

    Oil suffering a bout of natural gas price induced profit taking.

  42. 42
    isleworth Says:

    Z- with oil down and cracks likely getting healthier, why are refiners getting hit so hard?

  43. 43
    tater Says:

    If being ahead of the game means buying NG before the storm = already done.
    2 steps ahead of game means price already factors in the storm, so sell NG = done.
    Does 3 steps ahead of the game mean to buy NG because the sell-off is already done?

    TSO .62 Fib is 17.4 and best horizontal support is 17.15 FWIW.

  44. 44
    zman Says:

    The often move initially with oil but in this case products are off more than oil so cracks are down at the moment. They also moved strongly the last few days so the pullbacks will be good sized. TSO was up 12% yesterday and is off 3% today.

  45. 45
    zman Says:

    Tater – that gas number was very big … the numbers get squishy when people are not using their AC in August so gas could go lower. I’m not adding any more NG exposure right now. The stocks may bounce on the storm but that’s iffy and gas would be a lot lower were it not for Gustav.

  46. 46
    VTZ Says:

    Z – I can answer a lot of your questions… can you send me back a copy of the article and I will incorporate answers appropriately.

  47. 47
    tater Says:

    Goofing around. Seems like the market is getting a bit too cute for itself though.

  48. 48
    zman Says:

    Oil selling off hard now (sold off $2 in 1 minute), refiners should begin to pick up soon but it depends on how much lower they take the complex. This looks like wild trading in a trader light environment.

    VTZ – will do.

  49. 49
    md Says:

    Portfolio – I look fwd to it

    LNG – I was thinking that Freeport export cetificate request was a plug for CHK and the likes. However it’s strictly to export whatever they import and not domestic supply. What restrictions are there for exports. There was a Platts article that has some tidbits about the TUA ( Terminal User agreement) with COP , DOW and Mitsubishi. It would be interesting to know whether these guys will actually import the stuff or not. Cheniere’s facility also had a TUA with Total France and 1 other name. Reason for my curiosity is to see what if any LNG will make it to NA.
    Coal- intersting foot note. Electricity futures PJM has come down a lot from the highs. Any insight
    Electricity report came out this week for April . The NG number was revised downwards by approx. .5 BCFPD for the month.

  50. 50
    zman Says:

    added a little more TSO $20 calls at $0.40.

    MD – I don’t know about export restrictions on LNG. Someone ships some out now don’t see why we could not ship more but I really don’t know the deets there.

    Electricity down just due to cold August weather. Year to date, generation is now only up 0.1% (through mid August) vs last year.

  51. 51
    Bleemus Says:

    NEW YORK, Aug 28 (Reuters) – U.S. crude oil futures fell back more than $4 a barrel on Thursday, as the International Energy Agency’s readiness to tap reserves if Tropical Storm Gustav damages oil installations helped temper market concern.

  52. 52
    zman Says:

    Bleemus – I see they are blaming that for the drop now but the IEA said that before the open when oil was up $2 so the swing makes little sense. Also, if you release crude it won’t matter if the facility to refine it is flooded, lol.

  53. 53
    Bleemus Says:

    So true. They always have to speculate. Makes for boring news to say “lots of sell orders”. 🙂

  54. 54
    zman Says:

    Bleemus = thanks for the laugh 😉

  55. 55
    md Says:

    Here was the article re: export certificate of LNG. Has some other stuff of interest re: imports

    http://www.platts.com/Natural%20Gas/highlights/2008/ngp_lng_081408.xml

  56. 56
    Garyinhou Says:

    Z – is it possible the injection number earlier today reflects any storage/price play by gas marketers/traders?

  57. 57
    zman Says:

    Gary – you mean like story now, sell later?

  58. 58
    Garyinhou Says:

    Yes, if that number could reflect holding off on some significant volumes for a few days just in case price spikes a great deal..

  59. 59
    Nicky Says:

    Z – haven’t really studied products for a while now but will take a look later and get back to you.

    This pullback is interesting. Having thought earlier it was buy the rumor and sell the fact we could now see the opposite especially if TD8 hots up over the weekend. But it also shows a very nervous market in both directions I think – traders happy to take profits off the table very quickly rather than suddenly being caught offside.

  60. 60
    zman Says:

    Nicky – could not agree more.

    Gary – I do think there is a little tuck into storage and sell higher later going on but also demand has stunk. Fay did nothing to help either, shutting in nothing and keeping the southeast wet and cool.

  61. 61
    zman Says:

    N – to clarify, could not agree more with your nervous mkt, happy to take profits thought.

  62. 62
    Eagle Says:

    Z Earlier you mentioned you expect some mid quarter updates out of E&Ps. 2 Qs, which companies usually give mid quarter updates, and when do you expect the updates to occur?

  63. 63
    zman Says:

    Eagle – I was not thinking of specific companies as much as I was increased news flow from the group…right now there is radio silence. All of them have done it but CHK, HK, NFX, seem to favor the mid quarter update and they usually get something out before the end of September but they have to have something to say. I think HK and NFX fall into that category more than CHK who has lots of little things to say but probably will save it for the Q. CLR and SD could talk to but I’m just speculating there since they are newer to being public and have not really established a pattern.

  64. 64
    Eagle Says:

    Great. TY.

  65. 65
    zman Says:

    Jamaica looks to be taking a beating, could further slow Gustav. I’ve seen Hispanola and Jam completely kill a storm before…does not look that way this time.

  66. 66
    zman Says:

    Refiners starting to go even or positive.

  67. 67
    doc Says:

    I ordered a toyota prius hibred in july for december delivery. Saturday I cancelled the order to buy a honda fit. I will be getting the honda in 2weeks. The fit gets very good gas milage, costs thousands less to buy and does not run on a $4,000 battery

  68. 68
    zman Says:

    Doc — wow. $4,000? Were you able to get a tax deduction for the Fit?

  69. 69
    john11 Says:

    Z referring to 63 looking at my notes I see a few companies like GMXR CLR BZP XTO NBR and others at conferences next week. (Lehman and MK). Also I’ve got a note that NFX is doing an investors day on 9/9 in NYC. So I guess if they want to say something new the opportunities will be there.

  70. 70
    zman Says:

    john – thanks much for the reminder on the NFX day.

  71. 71
    zman Says:

    E&P spiked lower after the gas number and has pretty much walked back up (still red but much less so) since. Very light volume however.

    the GDP and GMXR which have outperformed this week, presumably due to small floats and high short interest, got whacked worst of all today so to some degree things make sense. This may be the opp I’ve been waiting for in GMXR but I’m pretty happy with what I’ve got now.

  72. 72
    apbd Says:

    What’s happening? Why can’t we make money on two perfectly good hurricanes?
    That’s what we’ve all been waiting for.
    lol.
    apbd

  73. 73
    doc Says:

    no tax decuction on the fit because it is not a hybrid

  74. 74
    zman Says:

    A – market’s just resting here…calm before the storm(s).

    Ok doc, didn’t know if it qualified. Saw the Jetta diesel gets a deduction and it is not a hybrid. My sis in law has a Fit and loves it.

  75. 75
    zman Says:

    I think there is probably another leg up in crude before the weekend. Current track has Gustav threading the needle between West Cuba and the Yucatan as a Cat 2 by Saturday morning and a mid Louisiana landfall at a Cat 3 on Tuesday morning.

  76. 76
    zman Says:

    Latest on Gustav is pressure dropping, winds picking up, almost a Cat 1 again as it crosses Jam and heads to the Caymans, track remains same. Stocks are just marking time to the close right now.

  77. 77
    zman Says:

    China and other Asian countries reject Russia’s plea for support over Georgia.

    http://news.yahoo.com/s/ap/20080828/ap_on_re_eu/georgia

  78. 78
    Dman Says:

    Jim Kingsdale on the new cold war:

    “Bush is like a jilted lover – he thought he saw Putin’s soul but the calm glint in Vlady’s eyes was only naked ambition slaked by his knowledge that Russia is gaining the advantage every day according to their bank deposit records.

    I think Putin is smart enough to know that it does not pay to push too many buttons when your opponent is both heavily armed and an idiot.”

    http://www.energyinvestmentstrategies.com/2008/08/21/the-times-they-are-a-changing/#more-675

  79. 79
    crysball Says:

    Bought a 2008 Prius in late January {1 week wait at that time), but did not secure the Hybrid purchase credit as Toyota had already sold enough 2008 Prius to use up the allocation allowed by the USA.

  80. 80
    zman Says:

    Crys – which I think is 60,000 hybrid vehicles per manufacturer per year. The U.S. isn’t exactly pushing the idea with such a low threshold.

  81. 81
    tomdavis12 Says:

    Z: OH Great. Now we have 3 – 4 months of “We are oversupplied with NG” just like the last two months of “Demand Destruction” for gasoline.

  82. 82
    doc Says:

    bush is being rewarded for not embarissing china at the olympics

  83. 83
    Dman Says:

    And now for something completely different (if you need a break from Hurricane Watch). Sometimes you see a headline & it’s so bizarre, you know it must be real. No-one could make it up:

    “Italian museum defies pope over crucified frog”

    http://news.yahoo.com/s/nm/20080828/od_uk_nm/oukoe_uk_italy_frog

  84. 84
    Nicky Says:

    This is too funny not to share:(hope you don’t mind Z)

    Here are the top nine comments made by NBC sports commentators at
    the Summer Olympics that they would like to take back:

    1. Weightlifting commentator: “This is Gregoriava from Bulgaria. I
    saw her snatch this morning during her warm up and it was amazing.”

    2. Dressage commentator: “This is really a lovely horse and I speak
    from personal experience since I once mounted her mother.”

    3. Paul Hamm, Gymnast: “I owe a lot to my parents, especially my
    mother and father.”

    4. Boxing Analyst: “Sure there have been injuries,and even some
    deaths in boxing, but none of them really that serious.”

    5. Softball announcer: “If history repeats itself, I should think we
    can expect the same thing again.”

    6. Basketball analyst: “He dribbles a lot and the opposition doesn’t
    like it. In fact you can see it all over their faces

    7. At the rowing medal ceremony: “Ah, isn’t that nice, the wife of
    the IOC president is hugging the cox of the British crew.”

    8. Soccer commentator: “Julian D!cks is everywhere. It’s like
    they’ve got eleven D!cks on the field.”

    9. Tennis commentator: “One of the reasons Andy is playing so well is that, before the final round, his wife takes out his balls and kisses them… Oh my God, what have I just said?”

  85. 85
    zman Says:

    So the Dow goes up 200 on financials feeling the economy is stronger than they thought. If the economy is stronger isn’t that good for crude? Whatever.

    Beer thirty!

  86. 86
    zman Says:

    Nicky – thanks and of course not. It’s August.

  87. 87
    VTZ Says:

    Z – I have good answers and links for your questions.

  88. 88
    zman Says:

    Thanks VTZ – I’ll try to dump your original in with some of the link answer and send back to you, hopefully tomorrow but the idea of the beach is calling me (not that there is one near me) but how about a post mid next week?

  89. 89
    VTZ Says:

    Yeah I’m in no rush. I have the original at home so don’t worry. I’d rather you post it after Hurricane mania so more people actually read it.

  90. 90
    Nicky Says:

    Fast Money had the guy from Planalytics on. He reckons Gustav hits about 50 miles west of New Orleans (which would not be good for NO!). He recommended buying rbob, staying away from natural gas or waiting to go short natural gas on any pop from the storm. FWIW he reckoned it could strengthen to a 4…

  91. 91
    crysball Says:

    Hanna’s projected path is shown making a left turn [to the South] and appears to slow down as it makes the left turn

  92. 92
    zman Says:

    yep, Gustav looks to be gather a little strength now off Haiti, forecasters mention Cat 4 or 5 possible once in Gulf.

    Russia is also rumored to be considering cutting oil exported to Poland and Germany so crude is trading up 0.90 to 1.40 tonight.

  93. 93
    zman Says:

    Russia just denied the rumor, sent crude off 0.70 in a minute. Yeah sure, and they are pulling out of Georgia too, lol.

  94. 94
    zman Says:

    oh and Invest 96 just formed off Mexico in the southern Gulf of Mexico.

  95. 95
    zman Says:

    MAXIMUM SUSTAINED WINDS REMAIN NEAR 65 MPH…100 KM/HR…WITH HIGHER
    GUSTS. STRENGTHENING IS FORECAST DURING THE NEXT 24 HOURS…AND
    GUSTAV IS EXPECTED TO BECOME A HURRICANE LATER TODAY OR TOMORROW.
    GUSTAV COULD BECOME A MAJOR HURRICANE BEFORE REACHING WESTERN CUBA.

  96. 96
    crysball Says:

    Z,
    US Natural Gas: The New Outlook might be of interest to subscribers

    An Interactive, Online Webcast
    August 28, 2008 | 11:00AM PDT | 2:00PM EDT | 18:00 GMT

    Just a few years ago, the US gas outlook was for rising demand, steady at best domestic production, falling pipeline imports from Canada, and a consequent surge in imports of LNG. Things have changed. Domestic production, thanks to surging development of unconventional and deepwater reservoirs, is rising. And the expected LNG boom, partly because of developments elsewhere in the world, hasn’t materialized. This webcast will examine the US gas picture from a number of perspectives: the international events affecting LNG, the unconventional and deepwater gas plays, and the technology making the new gas plays possible.

    Speakers:
    Bob Tippee (Webcast Moderator), Editor, Oil & Gas Journal
    Warren True, Chief Technology Editor LNG/Gas Processing, Oil & Gas Journal
    Alan Petzet, Chief Editor Exploration, Oil & Gas Journal
    Nina Rach, Drilling Editor, Oil & Gas Journal

    It is intended for Oil & Gas Journal Subscribers……….here is the website for registration:
    http://www.iian.ibeam.com/events/penn001/27574

  97. 97
    wet basement Says:

    wet basement

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