09
Sep

OPEC Tuesday

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Sentiment Watch: Red. No help for the commodities seen coming today from OPEC and Hurricane Ike is bending west towards Brownsville, Tx and away from Gulf Coast and central Gulf of Mexico oil and gas and refining infrastructure. With the dollar at a one year high against the Euro fund managers see no reason to go long the energy names right now.  I'll be eying those (DUG) calls again today.

OPEC Meeting Watch: No change in quotas expected. The concept of a between meeting meeting is now on the table meaning the group may get together before the December conference to discuss output if prices fall too far.

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Stocks We Care About Today - NFX holds investor conference and ups guidance again.
  4. Crack Spread Update
  5. Odds & Ends

Holdings Watch: No changes yesterday.

Commodity Watch:

MMS Watch: As of yesterday at 11:30 am:

  • Crude oil production in the Gomex was79.4% shut in (still about 1.03 mm bopd off line). This is the highest level since Gustav started forcing shutins at the end of August and I would expect oil production to be 100% shut again in the next few days. The impact of the Gustav shut ins will likely be a 1+ million bopd dip in U.S. production in this week's EIA report. That probably gets extended at least one more week as Ike halts efforts to turn wells back on and forces another round of evacuations. 
  • Natural gas production was 64.2% shut in (4.7 Bcfgpd offline) . Same 100% shut in expectation as Ike approaches. I would expect the Gustav shut ins to result in a dip in injections vs what they would have been on the order of 30 to 40 Bcf.

Tropics Watch: Ike appears to be heading to Browsville which will take the storm risk premium (not that there was a lot) of the oil and natural gas.

Crude Oil traded in a $5.19 range yesterday but closed essentially flat at $106.34 as Ike pulled prices higher and a surging dollar pushed them lower. This morning OPEC's lack of news and Ike's direction are pushing crude down $1.50 to $2.00 in early trading.

Natural Gas traded up $0.08 to close at $7.53 yesterday on hopes fears that Ike would shutter most Gulf production and do some damage to infrastructure. As the damage part of that statement now appears unlikely gas is rapidly retreating and is down $0.30+ morning.

  • Imports Watch: were 2.1 Bcfgpd lower than year ago levels.
    • Canadian volumes of 8.1 Bcfgpd were 0.5 Bcfgpd light of year ago levels
    • LNG volumes of 0.8 Bcfgpd were 1.6 Bcfgpd less than year ago levels.
  • Weather Watch: Cooling degree days remained mired at 59 last week for the third consecutive week so don't expect a lot of help from cooling load. Last year August was hotter than normal and that heat lingered into September. This year August was very cool and that too is lingering. NOAA is looking for cooler than normal temps for the next two weeks and Climate Prediction Center's forecast for this week shows HDD's of 49, 10% less than year ago levels.

Stocks We Care About Today.

NFX Holds Investor Day, Kicks Off With Boosted Guidance.

  • 2008 volume guidance moves up to a range of 238 to 242 Bcfe; the mid point is up 4 Bcfe from prior guidance and the hike is the third one this year. The mid-point represents 26% growth over 2007.
  • 2008 guidance started the year at 215 to 230 Bcfe.
  • 2009 early guidance given of 260 to 272 Bcfe, 8 to 13% YoY growth.
  • Hedges:
    • this winter: Gas = 2/3's hedged at $9; Oil = 55% hedged with fixed prices around $129 and some floors down to $107.
  • NAV calculated by them in their investor day pack: $65 to $103. Assumptions look reasonable if not conservative when looking at it from a reserves standpoint since they are using YE07 figures.
  • Capital being shifted increasingly to the Woodford (works at low gas prices) and to oilier plays in areas where gas is less economic (like the Rockies).
  • The presentations for the investor day are available on the Newfield site and I'll be listening to the investor day presentations off and on this morning starting at 7:30 EST. While the story continues to improve it will take a back burner to OPEC and the energy markets this morning.

 

Crack Spread Update - Movin' On Up. Cracks are at their highest level of the 3Q ...The refiners won't get a lot of help from Ike as product prices plunge today as Ike moves away from the heartland of the Gulf Coast refining business but recent price elasticity displayed by consumers relative to pump prices and continued strong support for distillate demand in the export market has combined with the pull back in oil prices to show the refining segment a  light at the end of the tunnel. I'll have a post out a little later this week with more thoughts on this space.

....And In Some Cases, The Highest Level of 2008.----

 

 

 

Odds & Ends

Analyst Watch: (MEE) cut to hold by FBR.

141 Responses to “OPEC Tuesday”

  1. 1
    Sambone Says:

    By Nick Heath
    Of DOW JONES NEWSWIRES

    LONDON (Dow Jones)–Crude oil futures shed more than $2 in European trade
    Tuesday, weighed by expectations that OPEC will leave current formal production
    levels unchanged at its Tuesday meeting and as the U.S. dollar clung onto much
    of its recent strength.
    Despite the presence of Hurricane Ike off Cuba – whose path is predicted to
    take it into the southeastern Gulf of Mexico Wednesday – prices dropped to
    their lowest levels since early April this year.
    “I am a little surprised because I expect products in the U.S. to remain firm
    ahead of Ike,” a London-based oil trader said. “But this move has momentum at
    present. The U.S. dollar is still strong and the technicals on (Nymex crude)
    are looking for $100 in the near term.”
    At 1059 GMT, the front-month October Brent contract on London’s ICE futures
    exchange was down $1.13 at $102.31 a barrel, having earlier dropped to a
    five-month low of $101.27 a barrel.
    The front-month October light, sweet, crude contract on the New York
    Mercantile Exchange was trading $1.11 lower at $105.23 a barrel, up from an
    earlier $104.23 a barrel, it’s lowest since April 4.
    The ICE’s gasoil contract for September delivery was down $7.25 at $950.75 a
    metric ton, while Nymex gasoline for October delivery was down 603 points at
    269 cents a gallon.
    Comments accompanying the arrival of officials from Organization of Petroleum
    Exporting Countries in Vienna ahead of their Tuesday meeting added to
    expectations that the organization will leave its production quotas unchanged.
    Saudi Arabia’s oil minister Ali Naimi Tuesday called the global oil market
    balanced and said the kingdom’s production increases have been successful in
    taming scorching oil prices, his comments suggesting the world’s largest oil
    exporter isn’t seeking a cut in current OPEC production levels.
    But with OPEC currently producing beyond its quota levels and global supplies
    looking more comfortable, discussion between delegates could concentrate on
    stricter adherence to output limits. A number of analysts suggested that an
    informal output cut from Saudi Arabia, OPEC’s largest producer, would not be a
    surprise.
    “(OPEC and Saudi Arabia) do not want to see crude prices take another run at
    $150 a barrel; they are legitimately concerned about high oil prices acting as
    a drag on economic growth and ultimately on oil demand,” said Societe Generale
    analysts Michael Wittner and Remy Perrin.
    “However, they also see that prices have dropped by $40 a barrel in less than
    two months, and with economic growth already slowing and U.S. demand already
    dropping by over 1 million barrels a day year-on-year in June, it is not hard
    for them to conclude that oil supply should be cut back.” An informal cut
    would allow the Saudis to preseve their flexibility and avoid political
    problems with consuming nations, they added.
    The formal OPEC meeting is not scheduled to begin until around 1900 GMT,
    Tuesday, the late start in observance of the Islamic holy month of Ramadan.
    Hurricane Ike weakened to a category 1 hurricane Tuesday and is expected to
    move over western Cuba later Tuesday, finding its way into the Gulf of Mexico
    by Wednesday. While the system is expected to strengthen again over the warmer
    waters of the Gulf, latest projections from the National Hurricane Center show
    Ike tracking further west than previously predicted. This is possibly away from
    the bulk of offshore production, much of which still remains sidelined due to
    precautionary evacuations ahead of last month’s Hurricane Gustav.
    “The path of Ike will still see some changes but if it was to be a no-show we
    could expect to see a sharp move down as the dollar has moved sharply higher
    during the recent storm disruptions,” said Olivier Jakob of Petromatrix. He
    suggested that without the presence of hurricanes Gustav and Ike, the recent
    strength in the dollar would have pressured Nymex crude prices to below the
    $100 a barrel mark.
    The greenback lost some ground against major currencies Tuesday, as the
    initial euphoria surrounding the U.S. Treasury bailout for mortgage giants
    Freddie Mac and Fannie Mae Monday faded, helping pull crude back off its
    intraday lows. At 1106 GMT the euro was worth $1.4175 having slid to a new 2008
    low of $1.4046 overnight.
    -By Nick Heath; Dow Jones Newswires Swartz in Vienna and Nicholas Hastings in
    London contributed to this item)

    Dow Jones Newswires
    09-09-08 0735ET

  2. 2
    Sambone Says:

    Oil Supplies Seen Falling Sharply

    Dow Jones Newswires

    NEW YORK — U.S. crude oil stocks are expected to fall sharply in data due Wednesday from the Department of Energy, according to a Dow Jones Newswires survey of analysts.

    The data, put out by the department’s Energy Information Administration unit and covering the week ended Sept. 5, are due at 10:35 a.m. EDT Wednesday.

    Crude oil inventories are expected to decline by 4.8 million barrels, according to the mean of nine analysts’ forecasts. All expect a decline. Forecasts range from a 10.6-million-barrel draw to a 1.2-million-barrel draw.

    Gasoline inventories are seen falling by 4.3 million barrels, according to the analysts’ average. Stocks of distillate, which includes heating oil and diesel fuel, are expected to drop by 2.2 million barrels. All analysts forecast a decrease in gasoline, with eight expecting a draw on distillate stocks. One analyst sees no change in distillates. Forecasts for gasoline range from an 8.9-million barrel to a 1.5-million-barrel draw, while analysts see distillate stocks anywhere from 4.7 million barrels lower to unchanged.

    Refinery use is seen dropping 7 percentage points to 81.7% of capacity, with all analysts predicting a decrease.

    Hurricane Gustav forced the partial or total shutdown of most Gulf Coast refineries last week, which is expected to lead to large draws in gasoline and distillate inventories. The storm also forced offshore producers to shut down and closed ports along the coast, including the Louisiana Offshore Oil Port.

    Analysts expect next week’s numbers to be similarly skewed by the lingering effects of the pre-Gustav shutdown, as well as any precautions taken by the energy industry ahead of Hurricane Ike. The latest storm is forecasted to reach the Texas or Louisiana coast by the end of the week, potentially as a major hurricane.

    “We’ll see another crazy week next week,” said Jim Ritterbusch, president of the trading advisory firm Ritterbusch & Assoc. in Galena, Ill. “Gasoline will take the brunt of it .. the Gulf Coast refining system places more emphasis on gasoline.”

    —By Brian Baskin, Dow Jones Newswires

  3. 3
    zman Says:

    Sam – got any thoughts on the IKE course at present? Blood red opening due to this move to the west.

    Nothing out of OPEC yet.

    NFX presentation an hour in and very nice, won’t matter today. Stock off more than peers on the initial 2009 guidance which is low to Street expectations but short sighted on the part of Analysts since these guys have jacked estimates 3x so far this year. Anyway, Woodford economic down to $5 gas, not a lot of shale guys can say that.

  4. 4
    Sambone Says:

    THE EVENT:

    The Organization of Petroleum Exporting Countries, gathering Tuesday night in
    Vienna for its third meeting of the year, is widely expected to hold output
    steady as it surveys oil prices that have fallen sharply over the past few
    months. But the group may informally pare back on oil output, enforcing greater
    adherence to production targets. The history of quota enforcement in OPEC is
    patchy and the wording of any statement on quota enforcement will be closely
    watched, particularly as Saudi Arabia, the group’s de facto leader, is pumping
    most of the extra oil. Saudi oil minister Ali Naimi said early Tuesday that the
    oil market is fairly well balanced and that production increases by the kingdom
    have helped tame scorching oil prices.

    WHAT’S CHANGED SINCE LAST TIME

    OPEC ministers last met March 5 in Vienna, where they held production
    unchanged with oil price levels not far from where they are now. As oil prices
    rose during the summer, Saudi Arabia hosted a hastily convened oil producer,
    consumer summit in Riyadh in June, where it announced a 250,000 barrels a day
    increase in the kingdom’s oil production, bringing a total Saudi increase to
    over 500,000 barrels a day. Oil futures hit all-time highs above $147 a barrel
    in July and have since fallen hard, partly due to the Saudi increases.
    ENERGY FUTURES FALL:

    Crude oil futures were down more than $2 in European trading at $104.24 a
    barrel on the New York Mercantile Exchange, weighed by expectations that OPEC
    will leave current formal production levels unchanged and as the U.S. dollar
    clung onto much of its Monday advances. Despite the presence off Cuba of
    Hurricane Ike – whose path is predicted to take it into the southeastern Gulf
    of Mexico Wednesday – oil prices dropped to their lowest levels since early
    April.

    SAUDI OIL MIN: MARKET BALANCED, OUTPUT HIKES SUCCESSFUL

    In his first public comments in months, Saudi Arabia’s oil minister Ali Naimi
    Tuesday called the global oil market balanced and said the kingdom’s production
    increases have been successful in taming oil prices, suggesting the world’s
    largest oil exporter isn’t seeking a cut in current OPEC production levels.
    Saudi Arabia announced a unilateral additional 250,000 barrels a day output
    increase at a hastily-convened summit of oil consumer and producer nations in
    June in Riyadh. The decision may have helped drive oil prices down from
    all-time highs above $147 a barrel hit in July.

    OPEC NEEDS QUOTAS ADHERENCE -IRAN OPEC GOVERNOR

    Members of an OPEC advisory group generally agreed Monday night that OPEC
    needs to stick to its formal production quotas, Iran’s OPEC governor Mohammad
    Ali Khatibi said. OPEC will have “long discussions” on the subject of sticking
    to quotas when it meets Tuesday night, Khatibi told Dow Jones Newswires.

    VENEZUELA OIL MIN FAVORS KEEPING OUTPUT UNCHANGED

    Venezuela favors keeping OPEC’s production unchanged, even though the global
    oil market is oversupplied by 1 million to 1.5 million barrels a day,
    Venezuelan oil minister Rafael Ramirez said Tuesday. Oil inventory levels are
    “sufficient,” said Ramirez. He added that the equilibrium oil price (at which
    producers’ and consumers’ needs are balanced) could be at $100 a barrel and may
    be reached without changing OPEC output. But he cautioned that OPEC should
    closely watch the oil market in the coming months and that rising oil
    inventories in early 2009 could create market distortions.

    WHAT THEY SAID

    “There is plenty of oil on the market. Everybody agrees there will be an
    oversupply of between a half to one-and-a-half million (barrels a day).” – OPEC
    President Chakib Khelil.

    “We have worked very hard since June, to bring prices to where they are now.
    We have been very successful.” – Saudi Arabia’s oil minister Ali Naimi.

    “The Saudis are already responding to what the market needs, and I think they
    dropped their output from 9.7 million to about 9.4 million (barrels of oil per
    day) in August because of slower demand – so I believe that returning to quotas
    would be best in light of forecasted decreasing demand.” Iran’s OPEC governor
    ETIMEOUT
    Mohammad Ali Khatibi.

    “We could still be within equilibrium territory and keep the level of output
    unchanged. Maybe we could arrive at an equilibrium at a price close to $100 a
    barrel.” – Venezuelan oil minister Rafael Ramirez.

    “PFC Energy has learned that OPEC has in principle agreed to trim production
    from current levels above official output targets. PFC Energy understands that
    a cut in actual production could be on the order of 500,000 barrels a day, but
    that the communique text will likely focus on the need to abide by agreed-upon
    production targets rather than on numerical targets for cuts.” – Analysts at
    PFC Energy.

    -Leia Parker, Dow Jones Newswires
    (Grainne McCarthy contributed to this report.)

    Dow Jones Newswires
    09-09-08 0912ET

  5. 5
    zman Says:

    Nicky – your lower lows on oil are in…$103.75 and weakening into the meeting.

  6. 6
    bill Says:

    more carnage..more losses

    i need a coffee

  7. 7
    isleworth Says:

    Z – PQ at 2.59X 2009 CFPS……….wow….new all time low trough valuation?

  8. 8
    zman Says:

    Isle – “they” are not looking at valuations right now. PQ mentioned in the NFX presentation as stepping up in the Woodford, good place to be with lower gas prices.

    NFX was down 11% a minute ago, nothing to it but the 2009 guidance. Huge drilling cost benefits being displayed but no one cares beyond that headline.

  9. 9
    zman Says:

    NFX: will have comprehensive thoughts later today. Of interest aside from the cost reductions on a per later foot basis

    Dual lateral drilling now, then a stacked later with Caney Shale (Caney is the Barnett in Oklahoma) on top and Woodford below, and in the 4Q talking about a super extended lateral 9,000+ . So in addition to saving on the well costs due to pad drilling, they are looking at reducing the number of vertical wellbores via these 3 methods.

  10. 10
    zman Says:

    PQ is drilling a super lateral now – 7,500 foot horizontal section. NFX has permitted their first and will spud 4Q.

  11. 11
    BirdsofpreyRcool Says:

    ATLS just announced a $50mm stock buyback. Good to see some of this.

  12. 12
    zman Says:

    Morning Bird, you on the NFX call? Economics getting more spectacular. No one cares today but…

  13. 13
    reefguy Says:

    I guess we pissed this boom off too…

  14. 14
    BirdsofpreyRcool Says:

    thx for asking. no. NFX is not one i follow closely. it’s a great company and very very well run. but their conservative bias in reporting reserves keeps the stock from outperforming. that said, i fully expect one day people will figure out how good these guys are.

  15. 15
    zman Says:

    Reef – Street has got this way out of proportion.

    Bird – hear ya on the conservatism. Think reserve growth surprises this year, know finding costs will move from 3rd quartile to first. They’re about to discuss their Bakken stuff.

    http://www.newfld.com/pdf/invpres_rm.pdf

  16. 16
    BirdsofpreyRcool Says:

    (z – the great thing about being buy-sider is that you only have to follow the ones you want to… So I really appreciate the hard work you sell-side guys do!)

  17. 17
    zman Says:

    Sellside no more. You should try the “myside”

  18. 18
    zman Says:

    No bankers, no compliance department… of course, no net if you are wrong.

  19. 19
    BirdsofpreyRcool Says:

    z – ha! i understood. still… you have to cover a lot more than “just the ones you want to.”

  20. 20
    BirdsofpreyRcool Says:

    there are some pretty stupid “rules” of the game… it’s not really set up to make people money. just to follow the rules for rules sake. that’s why HFs got so popular.

  21. 21
    zman Says:

    Saw an article saying HF’s getting record low inflows. Not surprising. We have to be near fund collapse for several in the commodity arena.

  22. 22
    zman Says:

    Re 19 – keeps me frosty on the group if not very interesting at dinner parties.

  23. 23
    zman Says:

    NFX – 473,000 net acres with Bakken, TFS potential.

  24. 24
    BirdsofpreyRcool Says:

    LOL. know the feeling…

  25. 25
    BirdsofpreyRcool Says:

    any comments re: bakken/tfs communication?

  26. 26
    zman Says:

    starting with Uinta, Williston in 10 minutes.

  27. 27
    BirdsofpreyRcool Says:

    there is a serious heading for the exits in commodity-linked stuff, across the board today. TRA (and the other ferts) down hard. TRA down over 17% on no news (that i can see)

  28. 28
    zman Says:

    Re 27 – complete woodshedding in the groups today. CHK below $40, many E&Ps off 50% from recent highs now. Price trends look like they are going out of business. Coal doing same, another day of 15% declines.

  29. 29
    BirdsofpreyRcool Says:

    just spoke to the trading desk… HFs are in panic mode re: nat gas storage. they want to see CHK announce curtailments. but, CHK still has plenty of storage available to them and the ability to sell nat gas at over $8/m out the curve. so, they are standing pat, for now.

    all the HF darlin’s are being pushed out of the airplane. pretty much in free-fall.

  30. 30
    zman Says:

    ZTRADE: Added HK $25 September calls for $0.90 with the stock falling like a stone down 14% for no apparent reason on than group abandonment. This is a high risk trade and will be quick and goes against one of my tenants “Don’t trade angry” but enough is enough and this is ridiculous.

  31. 31
    zman Says:

    Bird – listening to the Williston stuff your comment on reserve conservatism rings pretty true. They talked about 3 wells that had better IPs than the region has seen, a 473,000 net acreage position position and break even economics down to $45 per barrel. And then they lop it off at 10% prospective (for kicks I assume) and say this could be worth 30 mm barrels to them….way not to sell it!

  32. 32
    BirdsofpreyRcool Says:

    NFX is a lovely company. they are wonderful managers and great at exploration. but, they are the anti-Aubrey. i wouldn’t tell them to change, but it does cause their stock to (chronically) underperform.

  33. 33
    Sambone Says:

    Spoke to BGR folks yesterday.

    Here are some highlights that they see.

    Crowd is and has exited because of “Too much leverage, Margin calls, forced liquidation”. They expect the bloodletting to be done by the end of the month, because “Fund of funds” report year end. Nobody wants the energy patch on their books at that time. This started July 1 and now they say it’s way overdone. Fundies don’t matter anymore. One guy who has been with State Street and now Blackrock over 30 years has never seen a market like this that doesn’t look at fundies. They don’t understand why the US$ is up, head scratcher. This Energy patch reminds them of December 2006. “The crowd” exited. Wall street valuing companies at 60-65 a barrel. Supply/demand picture still intact. Favorite areas/stocks are Coal (double from here), Oil (50% upside), and NGAS (25%). They like Coal because the contract is at 125 a ton and the street is pricing it at 50 a ton.

  34. 34
    zman Says:

    Bird – I hear ya, conservative balance sheet and strong production growth and a transition to higher R/P plays with repeatable success and they have met their promises and still no one cares. We seem to be in the serious “bargain creation” zone.

    Sam Re 33 = me too.

  35. 35
    Sambone Says:

    By Siobhan Hughes
    Of DOW JONES NEWSWIRES

    WASHINGTON (Dow Jones)–U.S. Energy Secretary Samuel Bodman said Tuesday that
    “we’re starting to see some improvement” in oil inventories, but he declined to
    comment on whether OPEC should try to keep oil prices at at least $100 a
    barrel.
    “All I have asked is that not only the members of OPEC but all suppliers to
    the world markets keep the markets well-supplied,” he told reporters after a
    press conference. “I’m not going to comment on anybody’s policy.”
    Bodman also said that he expects to loan more oil from the U.S. Strategic
    Petroleum Reserve as hurricanes disrupt supplies. “We have conversations that
    are going on right now with two companies,” he said. Bodman declined to name
    the companies.
    As for a new energy law that authorized the government to grant loans to
    automakers to retool their fleets, Bodman said that Energy Department rules
    that would govern the loans probably won’t be completed this year. He cited
    talks within the Bush administration over “both the type and the terms of the
    loan program,” and said that it would take time to write proposed rules and
    then to finalize those rules.
    “We’re going to move as rapidly as we can,” he said. But “it takes a long time
    to complete the rules.” He said that” we have to not only propose rules, we
    also have to staff them.”

    -By Siobhan Hughes, Dow Jones Newswires

    Dow Jones Newswires
    09-09-08 1050ET

  36. 36
    BirdsofpreyRcool Says:

    Smabone – thanks for the comments! particularly like the coal observation. hearing that ANR, in particular, is way oversold.

  37. 37
    zman Says:

    Bird – in coal was looking at WLT too. Huge drop, very cheap, going to a pure play from once a homebuilder. Although, building houses would likely lift their stock in this market.

  38. 38
    BirdsofpreyRcool Says:

    Lehman… won’t comment on share price move. bad sign.

  39. 39
    zman Says:

    Bird – is that from Tom Driscoll? Lehman has been a big bear in hear vs Goldman’s bull stance. At some point, that flips. Maybe just a calendar issue.

  40. 40
    ram Says:

    With HK busting through its 200DMA, is the uptrend now history?

  41. 41
    Sambone Says:

    CALGARY, Alberta, Sept 9 (Reuters) – Devon Energy Corp’s
    DVN properties in the burgeoning Horn River shale gas
    region of northeastern British Columbia could hold as much as 8
    trillion cubic feet of natural gas, the head of the company’s
    Canadian division said on Tuesday.
    Chris Seasons, vice-president and general manager of
    Devon’s Canadian division, told a Toronto investment conference
    that its 153,000 acres of land in the region north of Fort
    Nelson, B.C., could eventually produce 700 million cubic feet
    of gas a day.
    (Reporting by Scott Haggett; Editing by Peter Galloway)

    Tue Sep 9 15:02:34 2008 -GMT

  42. 42
    BirdsofpreyRcool Says:

    wish i was launching an energy-only fund today. this is totally bargain basement stuff. WLT is one of the coals i want to circle back to. at this point, buy quality and what you already know.

    strong dollar policy could be targetting russia… lower oil prices would take some teeth out of their recent bear-moves.

  43. 43
    BirdsofpreyRcool Says:

    #38. sorry. meant the LEH share price. it’s leading the financials down and throwing fuel on the fire.

  44. 44
    zman Says:

    Bird – oh well, in that case…ha, ha, ha. That’s what they get for hosting an oil and gas conference where everyone on the podium had to say “…and though we disagree with you guys on price forecasts…”

    I would bet the serious pre 4Q bottom fishing in the energy names (especially E&P) begins before the end of September. The move has outstripped the commodities by a long shot

    Re DVN – I saw that but did not see a timeline for development, will look. An extra 0.75 Bcfgpd is a bit but I bet that’s a 5 or 6 year time line at best. NFX says they will get 1.5 Bcfgpd out of the Woodford eventually, in 10 years, up from 250 MMcfgpd net now. It’s important for any E&Ps reading out there to make sure you put timelines on things so that traders can do the math, otherwise they just assume we are awash with gas and that decline rates are a thing of the past and that gas should be $2.

    Ram – That would be my read yes, but we still can get one whale of a bounce.

  45. 45
    BirdsofpreyRcool Says:

    #44 – yep. already spoke with one fund who sold energy a coupla weeks ago. sticking their toe back in the water today.

  46. 46
    zman Says:

    Thanks Bird re 45, canceling traders anonymous meeting.

    Latest Ike track may have inched a hair back to the east for landfall.

    BP, Shell, APC on the tape saying they are shutting in production due to Ike.

    Still no word from OPEC.

  47. 47
    zman Says:

    Ya know, when you look at Ike, it is not a compact storm like Gustav. Looks to cover the Gomex, not with hurricane force winds but with the threat of them. Also, accuweather is saying it will be a slow mover. In my experience, it can be worse to have a Cat 3 storm trudge across your platforms and rigs at 5 mph vs a Cat 4 zipping across them at 12 to 15 mph.

  48. 48
    zman Says:

    Guess people gave up on the COG takeout rumor, down 7.5% which is about in line with its peers.

  49. 49
    md Says:

    Is Opec announcement at Wed 1.30 AM .
    Now is almost 6 PM Vienna time.

  50. 50
    zman Says:

    MD – they were set to begin meeting Tuesday night Vienna time. Should hear some statements out of them a little later, don’t know if they will have a pr on Wednesday or in a few hours but generally some stuff will leak out.

  51. 51
    zman Says:

    When the link becomes available for the OPEC webcast it will be here:

    http://www.opec.org/home/Multimedia/liveStreaming.aspx

  52. 52
    zman Says:

    The meeting itself does not being until 8:30 local time, so about 2.5 hours from now.

  53. 53
    Sambone Says:

    12:31 (Dow Jones) T. Boone Pickens says he’s taken losses this summer at his
    BP Capital hedge-fund firm. “We’ve had losses, it’s not been a good year for
    us,” said Pickens, who gives away his share of fund profits to charity. “I
    won’t be giving any money away this year.” Appearing at a forum in NYC today,
    he refused to say if he’s long oil, but he expects the price to be higher by
    year end. Oil recently fell $2.30 to $104.04/bbl. Still, the wildcatter turned
    hedge-fund manager opposes the idea that there’s a speculative bubble bursting
    in the commodities space, and insists oil prices could spiral higher. “We
    cannot drill our way out of this problem,” he says. (RCC BJB)

  54. 54
    Sambone Says:

    NEW YORK (Dow Jones)–OPEC will lower crude-oil output over the next few
    quarters to “prevent a sharp decline in prices,” according to an official U.S.
    forecast released Tuesday.
    “The future price path will be influenced by the pace of world gross domestic
    product growth and OPEC behavior,” the federal Energy Information
    Administration said in a monthly energy outlook.
    Oil futures have plunged 28% from their all-time highs hit in early July.
    Light, sweet crude for October delivery recently hit a fresh five-month low of
    $103.46 a barrel on the New York Mercantile Exchange.
    Members of the Organization of Petroleum Exporting Countries, gathering
    Tuesday night in Vienna, are expected to hold output steady. But the oil
    producers’ group, which controls more than a third of global crude oil output,
    may informally pare back volumes, enforcing greater adherence to production
    targets.
    The EIA, the statistics and analysis wing of the U.S. Energy Department, says
    OPEC output will average 32.9 million barrels a day in the third quarter, up
    from 32.3 million in the second quarter. The group’s production is seen
    dropping back to 32.8 million barrels a day in the fourth quarter of 2008
    before declining to average 32.1 million barrels a day in 2009, keeping
    industrialized countries’ “inventories near five-year average levels measured
    in days of forward consumption.”

    -By Anna Raff, Dow Jones Newswires

    Dow Jones Newswires
    09-09-08 1238ET

  55. 55
    Sambone Says:

    Old news

    GS –
    http://www.reuters.com/article/GCA-Oil/idUSL868040820080908

  56. 56
    Sambone Says:

    12 15 PM EDT 09-09-08
    NEW YORK (Dow Jones)–U.S. government energy analysts Tuesday raised their
    crude-oil price forecast for next year despite recent price declines, saying
    oil will average well above $100 as world petroleum demand keeps rising.
    The Energy Information Administration’s latest monthly energy outlook,
    released Tuesday, forecasts benchmark West Texas Intermediate spot crude oil
    will average $126.50 a barrel in 2009, more than $10 higher than its forecast
    price for this year. The forecast was 2.4% higher than the agency’s prior
    outlook.
    “Projected stronger growth in world petroleum demand is expected to increase
    the annual average WTI price to $126 per barrel in 2009,” said the agency, the
    independent statistics and analytical wing of the U.S. Department of Energy.
    The EIA’s revised down its average crude price forecast for 2008 for the
    second month in a row, responding to the steep drop in oil prices since
    mid-July. The agency’s analysts now believe crude will average $115.81 a barrel
    this year, 2.8% lower than their $119.09 forecast made last month.
    In the fourth quarter of 2008, the EIA expects crude to cost $119.67 a barrel,
    more than $8 below its prior forecast. In the final quarter of 2009, the agency
    sees crude averaging $124 a barrel.
    Regular gasoline will on average retail for $3.88 a gallon next year, the EIA
    said, a 7.4% rise over a projected 2008 price of $3.61 a gallon and reflecting
    higher prices for crude oil.
    “This forecast projects continuing weak gasoline margins because of the
    decline in gasoline consumption and growth in ethanol use,” the EIA said.
    The retail price of diesel fuel will rise to $4.26 a gallon next year from
    $4.09 per gallon in 2008, the agency said.
    “Diesel prices reflect continuing strength in demand, particularly in emerging
    global markets, which has significantly increased the margins between diesel
    prices and crude oil costs from their 2007 level,” the agency said.
    The EIA anticipates heating oil will retail for $4.12 a gallon next year, up
    from at average $3.78 in 2008.
    In fourth quarter of 2008 and the first quarter of 2009, encompassing the
    northern hemisphere’s winter, the EIA sees heating oil averaging $4.12 a
    gallon, which is 26% higher than the $3.28-a-gallon average price last winter.
    -By Gregory Meyer, Dow Jones Newswires

    Dow Jones Newswires
    09-09-08 1247ET

  57. 57
    zman Says:

    Thanks Sam, had not seen the STEO was out yet.

  58. 58
    zman Says:

    HK recovering with rest of group, still blood red out there. You could take those ZTRADE HK calls off the table for a 70% gain right now …if only I were into day trading these huge dips provide good ops.

  59. 59
    BirdsofpreyRcool Says:

    re: HK $25 calls. No guts, no glory. Nice trade.

  60. 60
    zman Says:

    re 59, give it an hour and you may be able to say, “too much guts, no money”. Very tough market.

  61. 61
    BirdsofpreyRcool Says:

    book gains when you can get them.

  62. 62
    zman Says:

    What a load of horse pucky

    HARTFORD, Conn. – Connecticut Sen. Christopher Dodd is urging NASA to get it right as it reviews bids for the next generation space suit.

    Connecticut-based aerospace manufacturer Hamilton Sundstrand is one of the bidders as a partner of joint venture Exploration Systems & Technology. Dodd praised the company for its work making early space suits.

    NASA selected Houston-based Oceaneering International Inc. in June, but terminated the contract last month. NASA says it had to re-examine the cost proposals of the two bidders and asked that protests by Exploration Systems & Technology be dismissed.

    Dodd told NASA Administrator Michael Griffin in a letter that he will be watching to make sure the process for picking a contractor is unbiased.

    ZComment: Unbiased means pick a Connecticut space suit maker.

  63. 63
    BirdsofpreyRcool Says:

    credit spreads back out to the wide of the day… mrkt going down further.

  64. 64
    zman Says:

    Nat gas by the way down less than a penny from a 38 cent down open.

  65. 65
    zman Says:

    DOE reports only 1 refinery still down due to Gustav. Other ramping.

  66. 66
    BossmanG Says:

    BirdsofpreyRcool, could you comment on what you have on your stock screens or where/how to get credit spreads info?

  67. 67
    BirdsofpreyRcool Says:

    This feels a lot like last January… when managers got back from the holidays and realized that mrkts were not going to rally. That selloff culminated with the BearStearns sale.

    The global-macro bear community is returning to that play book. Leaning on the financial sector and blowing out credit spreads. This time, they are going after Lehman (after having taken out Bear). But, Lehman is no BearStearns as it sounds like they have a few more options than Bear did. Let’s hope they can do something fast to shore up confidence in the credit markets. The stock market can not rally if the bond market is sick. Plain and simple.

  68. 68
    Popeye Says:

    China has opted for two different suits on their upcoming spacewalk. One homegrown and one Russian.

  69. 69
    BirdsofpreyRcool Says:

    BossmanG: the thing about the credit markets is that there is no real index or quotes you can pull up. That is what makes credit so opaque to equity investors. Bond markets are still pretty much non-exchange-traded transactions. I get info/running quotes directly from the fixed income trading desks at the major banks. I will try to pass along what is helpful, if people care.

  70. 70
    BirdsofpreyRcool Says:

    that is also part of the reason why the global-macro guys love leaning on the credit markets… it can scare the dickens out of the equity market due to it’s opacity.

  71. 71
    BirdsofpreyRcool Says:

    watch LEH. if LEH can pull the rabbit out of the hat, shorts will have to get covered in the credit market. That would set off an equity market rally.

    The huge risk here is if LEH does approach a collapse. The Fed has probably used up all it’s bullets. That is why the global-macro bears are pushing… after the Fannie/Freddie bailout, they figure the gov’t/Fed can’t afford to do any thing more.

  72. 72
    Sambone Says:

    Bird – LEH, Bazooka Paulson will not let them fail. Someone else will merge with them. See Bear Stearns.

  73. 73
    zman Says:

    Natural gas UP 9 cents and climbing. Latest track on Ike shows it becoming a 3 again a little sooner than before. Some of the tracks still show Tx/La border, and not just Corpus to Brownsville.

    http://tropics.hamweather.com/2008/atlantic/ike/modelsmap_zoom1.html

  74. 74
    BirdsofpreyRcool Says:

    Sambone, agreed. Lehman is no BearStearns. But, that is the fear right now.

  75. 75
    BirdsofpreyRcool Says:

    fwiw, the credit selling has stalled here. so, as stocks have been following credit all day, we might have a bounce.

    just passing along comments from the fixed income desks.

  76. 76
    zman Says:

    Wow, stepped out for 10 minutes and oil decides to plummet. Market or did someone say something from the meeting?

  77. 77
    BirdsofpreyRcool Says:

    Brent crude fell below $100… think that set off a psychological trigger.

  78. 78
    zman Says:

    BOP – re 75 & 76, thanks.

    Looks like WTI will see double digits in next 24 hours too. The OPEC basket is in double digits now.

  79. 79
    zman Says:

    Interesting outside the door interviews can be watched here. It’s OPEC TV.

    http://www.opec.org/home/Multimedia/liveStreaming.aspx

  80. 80
    zman Says:

    One interviewee made the point that while oil has come off $45 dollars it has only come off 17 euros so look for no move by OPEC today. He said they don’t want to rally the market and they don’t want it to necessarily sell off further.

    Another guest saying demand destruction not showing up in the crude oil balances in the developed world or U.S. Given the stated production levels he says we should have seen big inventory builds that did not materialize.

  81. 81
    Sambone Says:

    HOUSTON (Dow Jones)–Despite the threat of Hurricane Ike, restoration of
    crude-oil from the U.S. Gulf slightly increased from Monday, but natural gas
    output was lower, the U.S. Minerals Management Service said Tuesday.
    Neither oil nor natural gas production has seen substantial increases from
    last week’s levels as companies are reversing, ahead of Ike, the ramping-up
    process they recently started after Hurricane Gustav forced them to virtually
    shut down all production.
    About 77.5% of the roughly 1.3 million barrels a day of pre-storm oil output
    remains offline, the MMS said. This is slightly less production offline than
    Monday, when the agency said 79.4% of oil output was still shut in.
    BP PLC (BP), one of the major offshore producers in the Gulf, shut in
    production Tuesday while other companies such as ConocoPhillips (COP) and
    Anadarko Petroleum Corp. (APC) said they could finish evacuating personnel and
    shutting down output by Wednesday as Ike makes its way toward the Gulf.
    Approximately 64.8% of Gulf natural-gas production remains offline, up from
    64.2% on Monday.
    The agency, which oversees hydrocarbon production in federal waters, said
    Monday that personnel had been evacuated from a total of 167 production
    platforms, or about 23.3% of the 717 total manned platforms in the Gulf.
    Personnel from 44 rigs also had been evacuated, equivalent to about 36.4% of
    the 121 rigs currently operating.

    -By Isabel Ordonez, Dow Jones Newswires

    Dow Jones Newswires
    09-09-08 1443ET

  82. 82
    zman Says:

    OPEC meeting about to officially start.

    Last guest interviewed by OPEC TV compared analyzing speculation in the oil markets with trying to dissect a burrito which has been run over by a truck. You know there is chicken and cheese in there but beyond that it is hard to tell what is what.

  83. 83
    Sambone Says:

    Wow, just bght somemore COSWF at US$38.34 which is over a 12% yield.

  84. 84
    zman Says:

    Gotta figure that a trade below $100 would trigger an avalanche of holdout selling.

  85. 85
    zman Says:

    Down 15% club. HK, GMXR, PVA, SD, CLR.

  86. 86
    md Says:

    For the ignorant COSWF??

  87. 87
    bill Says:

    MELTDOWN!!!!!

    i HAVE 15 NAMES DOWN 15 % OR MORE

  88. 88
    Sambone Says:

    Canadian Oil Sands Trust – COS-T (Toronto).

    http://www.cos-trust.com/

  89. 89
    md Says:

    Ouch. I’m so busy chasing opps in Haynesville that I ignore my own backyard.

  90. 90
    Sambone Says:

    By Gregory Meyer
    Of DOW JONES NEWSWIRES

    NEW YORK (Dow Jones)–Crude oil futures fell to a new five-month low as
    traders bet the Organization of Petroleum Exporting Countries will stand pat on
    output quotas after its meeting Tuesday.
    Light, sweet crude for October delivery settled $3.08, or 2.9%, lower at
    $103.26 a barrel on the New York Mercantile Exchange, its lowest close since
    April 1. it later fell below $103 in screen trading.
    Brent crude on the ICE futures exchange closed down $3.18 at $100.26 a barrel,
    and in late trading fell below $100 for the first time since April 2. Brent
    settlement prices weren’t immediately available.
    Nymex crude ended lower for the seventh session in eight, 29% below its July 3
    record settlement high of $145.29. Traders interpreted OPEC ministers’ comments
    ahead of a policy meeting in Vienna to indicate the producer group will
    maintain official output levels.
    Forecasts that Hurricane Ike will avoid critical energy infrastructure on the
    U.S. Gulf Coast also pressured prices.
    “The idea that OPEC is going to keep their quotas unchanged and that Ike is
    not going to turn northwest has brought the oil market back to lower levels,”
    said Gene McGillian, an energy analyst at brokerage Tradition Energy in
    Stamford, Conn. “Questions concerning the economy and demand have reasserted
    themselves as primary drivers of this market.”
    OPEC’s meeting in Vienna was scheduled to begin at 1900 GMT (1500 EDT).
    Despite oil’s decline in recent weeks, ministers appeared poised to leave
    official production levels unchanged ahead of the gathering. An increase in
    output by top OPEC exporter Saudi Arabia earlier this year has helped ease
    prices down from record levels.
    Arriving in Vienna, Saudi Oil Minister Ali Naimi called the production hikes
    “very successful.”
    “We have worked very hard since June, to bring prices to where they are now,”
    he told reporters.
    Hurricane Ike was churning past western Cuba early Tuesday afternoon and was
    on track for landfall near Corpus Christi, Texas, on Saturday, the National
    Hurricane Center reported. If it stays on track, it could miss much of the
    densely packed oil infrastructure of eastern Texas and Louisiana, analysts
    said.
    Still, Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC were evacuating
    personnel from offshore facilities in advance of the storm.
    Traders are expected to watch weekly U.S. oil data due out Wednesday. Big
    drops in major petroleum stockpiles are expected, as the data reflect shutdowns
    in Gulf energy facilities ahead of Hurricane Gustav last week.
    A Dow Jones Newswires survey of analysts sees crude-oil stockpiles falling 5
    million barrels, gasoline down 4.4 million barrels and distillates down 2.2
    million barrels. Refinery use is seen falling 6.5 percentage points to 82.2% of
    capacity. The data are for the week ended Sept. 5.
    The weekly data could continue to show short-term anomalies, as Gulf
    production remained shut in ahead of Ike. The U.S. Minerals Management Service
    said Tuesday that more than 1 million barrels a day in Gulf’s oil production is
    still offline, a sum close to fifth of domestic oil production.
    Front-month October reformulated gasoline blendstock, or RBOB, settled down
    9.77 cents, or 3.6%, to $2.6526 a gallon. October heating oil fell 8.84 cents,
    or 2.9%, to settle at $2.9247 a gallon.

    -By Gregory Meyer, Dow Jones Newswires

    Dow Jones Newswires
    09-09-08 1519ET

  91. 91
    md Says:

    Hypothetical ???
    What quick trade would you be doing for a possible bounce off GUS & Ike downtime

  92. 92
    md Says:

    Sam
    What’s assurance that next qtly. distribution won’t be cut

  93. 93
    crysball Says:

    Chinese using Commodity Meltdown & Helping it along.

    The Chinese have withheld buying activity across a broad range of commodities in the runup to & post-Olympics.

    Additionally, they understand OPEC’s game to flood supply into the Oil market in the runup to the November US Presidential election, and are using this and their own leverage as the World’s major commodity buyer of metals, coal, etc. in a carefully timed effort to drive hard bargains in both the transport of commodities (which have also sharply decined of late) and the commodity prices themselves. You won’t see announcements of these deals for some months as they will that part of the deals they cut.

    Very clever on their part.

    The recessions in the US & Europe, merely exacerbate the price swings, and increases their leverage.

    All IMHO

  94. 94
    zman Says:

    I would not be doing anything but what I’ve done over Gus/Ike right now as OPEC trumps them, especially given the not so threatening direction of Ike.

  95. 95
    kaman Says:

    Crysball – “Bowing to the dragon” as Tom Clancy put it.

  96. 96
    Sambone Says:

    Md – Priced at 90 a barrel.

  97. 97
    Nicky Says:

    Afternoon all. I realize it feels like carnage in the commodity sector but in reality we are not that much lower! I am still looking for a turn in everything (oil now down 7 days in a row) ie dollar is going to turn lower and energy and metals stage a corrective bounce to the upside.
    Broader market never took out the 1275 level so we have no confirmation of a cycle low in place. That said whilst I don’t think the lows are yet in I do think we could actually stage a decent bounce again. If I am wrong then prices should accelerate fast to the downside from here….

  98. 98
    Nicky Says:

    T Boone just on CNBC – slightly nervously now saying he doesn’t think we will go ‘too much’ below $100 – last week he said $100 would hold.
    We have a Gann support line at 101 and then another one that comes in between 92 and 96.

  99. 99
    md Says:

    Bought a few LEH C $10
    and HK SEP C 22.50 @ 1.30

  100. 100
    Sambone Says:

    Tini time and “Baby” I need it today!

  101. 101
    BirdsofpreyRcool Says:

    again, fwiw, the credit market bounced off it’s lows of the day to close oh-so-slightly higher. still, unlike the stock market, it did not close at the low.

    pretty much all eyes are on Lehman. that situation needs resolution. immediately.

  102. 102
    Nicky Says:

    GS confirm they are still trading with Lehman.

  103. 103
    Nicky Says:

    Why do CNBC even give Alan Greenspan airtime – just beats me. The guy accepts no responsibility for this and yet it was the years under him that created this mess.

  104. 104
    BirdsofpreyRcool Says:

    Nicky – totally agree re: Uncle Al. Wish he would just go away. And stay there.

  105. 105
    Nicky Says:

    Birds of Prey – now we have his number – he was just asked a question and preceded the answer by plugging his book which apparently comes out in paperback today!!! It has no relation to the answer at all.

  106. 106
    BirdsofpreyRcool Says:

    it’s almost pathetic, seeing how hard he is working to keep his “maestro” stature.

    no. wait. it IS pathetic. (only eclipsed in pathetic-ness by the mess he left behind.)

  107. 107
    BirdsofpreyRcool Says:

    now morgan stanley saying they are still trading with lehman.

    on the other hand, i see $5mm of lehman 17 day paper offered at 45.5%. ouch!

  108. 108
    Bleemus Says:

    I think MS misstated it and meant to say “we are trading LEH preferred on the short side”. LOL

  109. 109
    ram Says:

    I thought the FED discount window was available to LEH.

  110. 110
    BirdsofpreyRcool Says:

    I don’t think Lehman is going to “fail.” Like what BearStearns was facing. But, once the mrkt loses confidence in a bank, it’s tough to get that genie back in the bottle. As a bank, your reputation is the backbone of your business.

    it’s looking increasingly likely that LEH will be acquired. question is, when and at what price. But, don’t think they collapse.

  111. 111
    zman Says:

    Sorry to be away from the AG bashing, life got in the way.

    Tracks bending back to the north again for a mid Texas gulf coast strike.

    http://tropics.hamweather.com/2008/atlantic/ike/modelsmap_zoom1.html

  112. 112
    zman Says:

    This one is for md; Senator wants to stop Alaskan gas exports to Japan. The fella has a point I have to admit.

    http://www.forbes.com/reuters/feeds/reuters/2008/09/09/2008-09-09T210214Z_01_N09321910_RTRIDST_0_ALASKA-LNG-JAPAN.html

  113. 113
    zman Says:

    MEND getting busy again, seized oil supply vessel, took hostages.

  114. 114
    md Says:

    You remembered.

    On a sobering note PBR has not been mentioned in a while. It’s hard to keep track of all these beaten up stocks in the carnage but keep it in mind in your posts.

  115. 115
    BirdsofpreyRcool Says:

    z – there you go… Tom Ward is buying

  116. 116
    md Says:

    OPeC minutes likely at 7.30PM. Maybe AG should be their new chair.

  117. 117
    zman Says:

    Thanks Bird.

    Md – Looking forward to them. Member comments on the OPEC site sound like no change. The minister from Iran did a good run through of why his country is a great place to visit.

    Stepping out to soccer practice, back in a coupla hours.

  118. 118
    zman Says:

    OPEC “going back to the Doha decision” on quotas. Oil starting to move up. Q&A going on now.

  119. 119
    zman Says:

    This is a lowering in production by about 520,000 barrels.

  120. 120
    zman Says:

    They are going back to the September 2007 quota levels + production from Angola and Ecuador.

    July 2008 production will be cut by 520,000 barrels. This will be effective as of today with the production to fall in the next 40 days, on a pro rata basis. These guys are as evasive as the Fed in providing a straight answer.

  121. 121
    zman Says:

    OPEC Secretary General hopes that the speculative element have left the market.

    “Since the market is oversupplied, the conference agreed to abide by the September 2007 quota levels” adjusted for new members Angola and Ecuador and excluding Iraq and Indonesia whose membership is now suspended.

    The “new” level is 28.8 million bopd, down 520,000 bopd from July levels.

  122. 122
    md Says:

    Speculative element have left? They’re just about to join the party.
    Oversupply? OPEC playing the Vienese Waltz

  123. 123
    1520sbroad Says:

    OPEC’s speciality is non-straight answers with overtones and undertones provided by various ministers.

  124. 124
    zman Says:

    Oil up 88 cents since the press conference, back over 104.

  125. 125
    1520sbroad Says:

    this one looks like the OPEC put.

  126. 126
    zman Says:

    Here’s the end of conference press release:

    http://www.opec.org/opecna/Press%20Releases/2008/pr112008.htm

  127. 127
    md Says:

    What’s your read on GOMEX front
    Evacuation %
    Damage potential

  128. 128
    1520sbroad Says:

    i am starting to see a couple of dominos line up here for a possible stabilization in energy prices:

    OPEC press release interpreted by the media as a “cut” in production.

    EIA data tomorrow shows impact of Gustav on the supply side and “cheap” gas on the demand side.

    EIA data thursday shows impact of Gustav on ng prodution from the gulf. (i am afraid i have nothing on the demand side.)

    Ike pulls people off platforms and increases shut in time.

  129. 129
    md Says:

    The Crack spread moving up

  130. 130
    zman Says:

    md – on the shut down percentage it remains high and will like go back to 100% shut on both oil and gas in the next day or two. Damage potential does not look too high but it depends on where it goes, course has been easing to the east last couple of course corrections I saw and it is expected to slow. Both of those things increase the potential for damage3.

    1520 – there’s also maintenance on the Rockies Express pipe out of the Rockies that should be carrying 0.8 Bcfgpd out of the region, now empty, should stay empty for a month.

  131. 131
    zman Says:

    re cracks, just on the broad strokes gasoline had a worse day than oil but that is reversing some tonight. The sell down in the refiners was, I think, nothing more than “hey, that’s been up for a couple of days, and its in the OIL business…better sell it off”. 12% drop in VLO, TSO, and FTO today. Unreal. Unwarranted and unreal.

  132. 132
    Wyoming Says:

    Does that equate to adding TSO Oct 20 calls?

  133. 133
    zman Says:

    That equates to me wondering why I didn’t take the September 20s off for a quick double. Ug. But yeah, basically it does. I’d really like to see gasoline demand hold the line tomorrow at 9.4 mm bopd. That would be just long enough for me to type the worlds “RECORD GASOLINE DEMAND FOR THIS WEEK IN HISTORY” blah, blah, blah and then submit it to every third party publisher from google finance to seekingalpha that I know of. Or maybe “WHADAYAKNOW, PRICE MATTERS???!!!” I think the numbers will be wild and largely grain-of-salted tomorrow UNLESS they are bearish from a demand standpoint. Then the bears will say OPEC’s move only proves how weak demand is, and that it is not enough to prevent a massive build in inventories over the winter, and then…hello double digits.

  134. 134
    Wyoming Says:

    Yea, unreal, not supposed to make sense but this is too weird. SD @ 23.5, it started the year over 35. The $ for the proven, possible, probable has to be ultra low. Not like these are .com’s with ideas and stock options in flip flops. These are companies with assets, positive revenue streams with profits and a product that just won’t stop suddenly…

  135. 135
    zman Says:

    Wyoming – I know. The stocks are all at pre Bakken breakout, pre Haynseville hysteria levels. Normally I look for U-shaped bottoms and don’t try to catch a falling knife or if I do I try to sort of nab it with only one finger. I think the recovery, and mind you I only mean a goodly sized bounce and not a return to June stock levels, will be V-shaped as the funds flow back in mid to late September.

  136. 136
    Wyoming Says:

    It would look as the refiners should be the ones to rebound before anything. They have had way worse with a 3+ year low in. They do look like they have broken trend. If this is the case, then oil should be staying down or cracks would get slammed in up oil?

  137. 137
    zman Says:

    My thought would be flattish oil, say $90 to $110 for a bit as people start looking for numbers to support or kill price and not just, woe in the economy and “demand destruction”. If that happens for a time product prices may get a chance to outperform…winter coming, people have belt tightened as much as they are going to. Could be wrong on gasoline as the winter month production requirements are less strict but I think HO is in for a high priced winter as demand appears to have stayed strong for the export market and the kind of distillates the U.S. has on hand are not the kind you want to heat your house with.

  138. 138
    Wyoming Says:

    Thanks, nothing recently has gone as I would have thought. Time to do the George Costanza. Go the opposite. Read you tomorrow.

  139. 139
    Bleemus Says:

    As always Z and Wyoming. Thanks for the discussion. Learn a bit more every day. Sleep well for tomorrow could be a good one.

  140. 140
    zman Says:

    Hey what was the ticker of that CNG car play? Anyone?

  141. 141
    Bleemus Says:

    CLNE Clean Energy Fuels Corp.

    http://finance.yahoo.com/q?s=CLNE

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