13
Nov

Thursday – Oil Inventory Preview

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Sentiment Watch: Ugly. No one sees a light at the end of the tunnel or any reason to rally anything. That's usually when things turn up for an unexpected reason but I'm not expecting a rally at this point. Oil inventories later this morning. Bank of America energy conference all day. The natural gas storage report will be released on Friday due to Veteran's Day.

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Oil Inventory Preview
  4. Stuff We Care About Today
  5. Odds & Ends

Holdings Watch: The Wiki Holdings tab is updated; the $10KP is valued at $10,904 with 50% cash.

  

  • FSLR - $10KP Trade: Bought (2) FSLR November $135 Calls (QHBKG) for $5.
  • FSLR - Regular account - added FLSR November $140 calls (QHBKH) for $3.80.  Added to the FSLR $140 calls for $3 with the stock off $13 so average cost on those now $3.40.
  • DO -  Regular account - Added DO December $80 Calls (DOLP) with the stock at $73.75 for $5.50.
  • DO - $10KP Trade - Added (2) DO December 80 calls (DOLP) for $5.40.

Commodity Watch

Crude oil fell $3.17 to close at $56.16 yesterday. The monthly oil chart looks to be in the middle of if not going through 2005/06 support levels now. This morning crude is trading up slightly but that's meaningless pre oil numbers.

  • IEA Cuts 2008/2009 Global Oil Demand:
    • 2008 now seen at 86.2 mm bopd, up 120,000 from 2007 but down 330,000 bopd from last forecast
    • 2009 now seen at 86.5 mm bopd, up 350,000 over 2008, but the forecast is down 670,000 barrels per day from last month's read.
  • Pickens Plan Initiatives To Be Greenlighted In Obama's First 100 Days. Ok, at least that's what T. Boone thinks.  I'm not so sure as the economy will take center stage and the new administration has already talked about issuing an executive order to cease drilling for natural gas in a "sensitive part" of Utah, not exactly gas friendly. Pickens said he sees oil at $100 in a year and $300 in 10 if the U.S. does not adopt an energy policy. Amen.

Natural gas fell $0.30 to close at $6.40 yesterday. That's a 12% in the last 2 days for those of you who are keeping score and it leaves gas back at near term support. The move coincides with and exceeds this week's decline in oil prices. This morning gas is trading slightly lower.

Oil Inventory Preview:

ZComment: The only thing we have to fear, is fear itself. Sounds good, not quite true though. Hedge funds in crude are still selling on Fear. More stories come out daily now with Fear in the headlines than at any time in memory. Fear of deepening economic troubles, fear of demand destruction, fear of a new unfriendly to old school energy administration. The problem with fear is that it often does not come with a lot of numbers attached. But if you look at the link to the oil chart in the crude oil bullet above you can see the fear.  So what, if anything in today's report from the EIA can arrest fear?

  • For crude, it comes down to imports which have been holding near 10 mm bopd and seasonally should be closer to 9 mm bopd. What better proof to the market that OPEC is cutting than falling imports into the U.S. If the crude number comes in as expected in the preceding table there will be little help for crude today.  Increased product demand would be the other shoe we need to see drop. And not just on the heating oil side which would be seasonally normal but also on gasoline.
  • Gasoline - For gasoline to rally (beyond a move inspired by crude) we need to see an uptick in demand brought about by lower prices. U.S. retail prices now average $2.20 per gallon, down a whopping 29% from year ago levels (the third week it has been down from last year ). Demand is stuck a little over the 9 mm barrels per day mark and is off 3 to 4% depending on the week and source you are looking at. Normally, demand inches up into the holiday season but with the economy on the rocks and employment at 6.5% and headed higher that may be too much to ask. However, stocks are middle of the road so any headway on price will likely only come after several weeks of up demand. Pretty tough to imagine right now.
  • Distillates - time to see some primary demand as cold in the northeast sets in.

 


 

Stuff We Care About Today

Bank of America Energy Conference

...When the fundamentals don't matter, study them anyway. Presentations I plan to listen to today: (all times EST)

  • CLR & HK speak at 8:40am; I'll probably will listen to HK as Floyd is speaking and he sometimes goes off the planned remarks.
  • EOG: 9:20am
  • BHI:10am - although CXO speaks at the same time and that is a pretty interesting story.
  • PDC: 10:40am. Time to hear what the drillers think about all the 200 to as much as down 800 rig count chatter. SD speaks at the same time but there's unlikely to be anything new there.
  • WLL: 11:20am - Bakken development timeline
  • ESV: 12:30pm - check up on the shallow water business
  • BEXP: 1:10pm - Bakken development timeline, probably little new
  • GMET: 1:50p m- coalbed methane producer I'm not familiar with
  • BBG: 2:30pm - Rockies gas producer; NFX speaks at same time but I doubt they offer up anything different than the 3Q call.
  • LNG: 3:10pm - time to get the perspective of an LNG company on sending gas out of the U.S.
  • FTI: 3:50pm - subsea markets
  • STO: 4:30pm - perhaps a talk about the deal with CHK.

Highlights & Thoughts From Today's HK Presentation:

  • Total reserve "potential" of 21.6 Tcfe, that goes up against the 1.1 Tcfe at ye2007. They put their new Eagle Ford shale at 3.7 Tcfe. I can guarantee you there is nothing in the stock for that play.
  • They had no reserves booked in the Haynesville, the Eagle Ford, the James Lime or the WRHLU as of 2007. Their reserve growth this year should be good sized, and next year should be massive.
  • 5 Haynesville wells now on production with 55 MMcfepd gross (all put on at 15 to 20 so you can see those declines at work)
  • Growth rates reiterated:
    • 4Q seen up 14% to 355 to 365 MMcfepd from 315 this past quarter
    • 2009 still seen at 25 to 35% growth over 2008
  • Capex still at $1 billion, reiterating they could grow 20% next year on spending of $600 mm (if prices warrant further cuts). Half of the current budget will target the Haynesville (that's probably 75 wells taking into account drilling efficiencies, 3x this year's number)

 

  • Their Haynesville wells have IP'd at better rates consistently: (16.8, 15.4, 15.7, 20.1, and 17.0 MMcfepd or a broad area- DeSoto, Caddo, and Bossier Parishes)
  • Eagle Ford:
    • Budget: 82 mm,
    • 1 Rig 2009 (wells costing $5 to $7mm)
    • 150,000 acres, 90% working interest, operate.
    • First well: IP of 9.1 MMcfepd.

Odds & Ends

Analyst Watch: Citi cuts (TOT) from Buy to Hold, FBR cuts (SOLR) to marekt perform, otherwise very quiet on the analyst front.

Housekeeping Watch:  Haynesville Shale Expo.  November 21.

218 Responses to “Thursday – Oil Inventory Preview”

  1. 1
    Sambone Says:

    By Nick Heath
    Of DOW JONES NEWSWIRES

    LONDON (Dow Jones)–Crude oil futures pull backed from fresh multi-month lows
    to hover near unchanged Thursday as market participants, subject to a barrage
    of fundamental and macroeconomic developments, waited for weekly U.S. inventory
    data due later in the day.
    Traders juggled predictions of shrinking demand from the International Energy
    Agency with reports the Organization of Petroleum Exporting Countries would
    meet at the end of this month to discuss action to staunch crude’s sharp fall.
    The IEA predicted world oil demand growth this year is on the cusp of falling
    into negative territory for the first time in 25 years as global economic
    problems erode energy consumption.
    “Obviously the big picture is: economic downturn equals less demand for oil.
    Demand is weak across the board,” said Robert Montefusco, senior commodity
    broker at Sucden in London. “Nevertheless, if (OPEC) keep cutting back there’s
    a chance for a jolt to the market.”
    With ICE Brent having fallen to a near three-and-a-half year low of $50.60 a
    barrel in Asian trade, and Nymex crude trading below $55 a barrel for the first
    time since January 2007, prices pared their losses as participants retreated
    from the market. Attention turned to weekly U.S. Department of Energy data,
    traders said, widely anticipated to reveal builds in U.S. crude oil stocks.
    At 1211 GMT, the front-month December Brent contract on London’s ICE futures
    exchange was up 43 cents at $52.80 a barrel. The contract expires later
    Thursday.
    The front-month December light, sweet, crude contract on the New York
    Mercantile Exchange was trading 64 cents higher at $56.80 a barrel.
    The ICE’s gasoil contract for December delivery was down $4.25 at $582.50 a
    metric ton, while Nymex gasoline for December delivery was up 85 points at
    125.66 cents a gallon.
    The IEA said Thursday that world oil demand is expected to grow just 0.1% in
    2008 compared with a previous growth projection of 0.5% and far below the 1.1%
    growth in 2007. The agency also made its first substantial downward revision to
    oil demand in China and other emerging markets – 2009 demand in these nations
    was cut by 260,000 barrels a day, with most of that coming from China.
    Weaker-than-expected Chinese October industrial output figures and
    confirmation that Germany had fallen into a recession in the third quarter
    added to the darkening outlook for global economic prospects.
    “This sharp (IEA) downward revision is no surprise – it reflects a clear
    assessment that the economy is not looking as rosy as previously thought,” said
    Lawrence Poole, energy analyst at Global Insight in London.
    With its previous 1.5 million barrel a day production cut seemingly impotent
    in halting crude’s decline, OPEC is likely to have an emergency meeting Nov. 29
    in Cairo to seek to stem the falls, an OPEC delegate said Thursday. The OPEC
    Daily Basket fell below $50 a barrel Wednesday, OPEC reported Thursday, the
    first time it had dropped to that level in three years.
    “We believe that by not cutting production aggressively enough when it had the
    chance last month, OPEC is now dangerously behind the curve and is consequently
    scrambling to get back in control,” said Edward Meir, analyst at MF Global in
    New York. “The cartel is also faced with the additional difficulty of
    single-handedly trying to stem a price decline amid a global recession.”
    U.S. weekly inventory data are due out 1600 GMT Thursday, delayed a day due to
    Tuesday’s U.S. Veterans’ Day holiday. According to a Dow Jones Newswires survey
    of 14 analysts, all bar two expect crude stocks rose last week, by 1.3 million
    barrels on average.
    Gasoline stocks are seen growing by 300,000 barrels on average, while
    distillates are expected to have risen by 500,000 barrels. Refinery use is seen
    rising by 0.1 percentage point to 85.4% of capacity.

    -By Nick Heath, Dow Jones Newswires (Spencer Swartz and Angela Henshall in London contributed to this item)

    Dow Jones Newswires
    11-13-08 0737ET

  2. 2
    Sambone Says:

    Crude Reality Catches Up With Oil

    By DAVID COTTLE
    A DOW JONES NEWSWIRES COLUMN

    LONDON — Was it really only last summer that the prospect of some poor soul being the first to stump up $200 for a barrel of oil seemed realistic?

    Well yes. Four short months ago the record high above $147 was hit. But since then prices have tumbled all the way back to the $55 area for West Texas Intermediate, the U.S. benchmark crude. In London, meanwhile, a barrel of Brent blend for December delivery will set you back less than $53. That means prices have returned to lows we haven’t seen for nearly two years. They’re also within shouting distance of $100 below the record peak.

    The reasons behind this sudden crashing reversal aren’t hard to find. Indeed, why on Earth would you buy? Demand prospects looked shot to pieces even before the U.S. Energy Information Administration slashed its outlook. The industrialized economies are either in recession or heading that way. Germany is the latest to join the unhappy band; data released early Thursday show its economy contracted for a second baleful quarter.

    And those who thought oil’s lofty peaks were fundamentally justified by ever-rising demand from China, India and the other usual emerging suspects were fooled. They’d been taken in, just like all the other fans of “decoupling.” As was always clear, and is now unarguable, that which hurts the exporter’s major Western markets surely hurts the exporter too. Just give it time.

    The one-way bet on commodities, that wasn’t limited to oil by any means, of course turned out to be nothing of the kind.

    Moreover, we can’t know exactly what speculative premium was built into the oil price as it rose. From anecdotal evidence, it was substantial. This column fretted at the time about non-specialists treating crude exactly like every other financial asset, with some justification it now seems.

    But whatever the premium was, it’s been very swiftly liquidated as the credit crunch sends investors stampeding for cash.

    Global oil demand contractions have happened before of course, notably during the recessions of 1981 and 1974/75. The big game for the oil market now is to evaluate whether recent falls are a leading indicator of global downturn or whether there are yet more big falls to come before it is sufficiently “priced in.” This calculation won’t be far from the minds of the Organization of the Petroleum Exporting Countries. Clearly, production cuts would be the standard response to falls of this magnitude. It’s widely believed the cartel will hold an emergency meeting on November 29 in an attempt to chart the way ahead.

    If prices continue to fall, perhaps the best hope for OPEC, and embattled oil’s composure, will be a weather-generated rise in fuel demand over the Northern Hemisphere’s winter. A chorus of “Let It Snow” sung by a choir of OPEC ministers would be an unlikely seasonal hit indeed.

    (David Cottle has been a financial news reporter since 2000. Before joining the Taking Stock column as special writer he reported on corporate credit, the U.K. economy and sovereign debt markets for Dow Jones Newswires. He has also edited, and written for, the company’s Market Talk product in London and Singapore.

  3. 3
    Sambone Says:

    In Nod To Econ Woes, EIA Takes Ax To Official US Oil Outlook

    By GREGORY MEYER
    Of DOW JONES NEWSWIRES

    NEW YORK — The U.S. government’s foremost energy forecasting agency, for months an unlikely oil bull, has changed its tune in a big way.

    After sticking with one of the most aggressive forecasts for oil demand and prices, the federal Energy Information Administration Wednesday acquiesced to the stark new economic landscape and slashed both.

    The EIA, the analysis and statistics wing of the U.S. Energy Department, now sees benchmark light, sweet crude oil prices averaging $63.50 a barrel next year. Last month it saw $112 oil in 2009.

    The agency also now sees world demand growing sluggishly, by 80,000 barrels a day this year and 40,000 barrels a day next year. Last month it saw demand growth of 330,000 barrels a day in 2008 and 780,000 barrels a day in 2009.

    The EIA also dropped its projection that demand for crude produced by member countries of the Organization of Petroleum Exporting Countries would outstrip supplies well into next year.

    The drastic revisions come after a month in which economists have dumped earlier economic forecasts and begun to take seriously prospects for global recession. Between Oct. 7, when its last outlook was released, and Wednesday, the EIA said the economic growth outlook it uses had fallen a full percentage point for 2009, to 1.8% from 2.8%.

    “The recent dramatic deterioration in the outlook for economic growth in the United States and the rest of the world has led to a significant reduction in this Outlook’s assumptions for world economic growth and projections of energy demand and prices,” the agency said.

    As recently as September, the EIA projected crude would average $126.50 a barrel next year, a forecast higher than that of many Wall Street firms. Its latest turnabout — which comes on the heels of a relentless slide in crude prices — makes it one of the lowest. Goldman Sachs sees crude at more than $72 early next year and Merrill Lynch at $91, for example.

    The EIA now predicts crude will hover between $60 and $65 for the duration of 2009, warning that the financial crisis could drive it lower.

    Steadier prices would be helped by a larger cushion of surplus capacity inside OPEC, which the EIA said it expects will rise above 3 million barrels a day for the first time since 2003. The agency revised downward its estimate of OPEC’s oil output in 2009, saying the sharp decline in oil prices would lead to “compliance that is above historical levels” among the OPEC members subject to quotas.

    It estimates OPEC output, at 32.3 million barrels a day in October, will drop to 31.8 million barrels a day in the first quarter of 2009 and stay near there for the full year. OPEC’s Oct. 24 decision to cut its output ceiling by 1.5 million barrels a day will yield a real cut of about 1 million barrels a day, a compliance rate of about 70%.

    (David Bird and Anna Raff in New York contributed to this article.)

  4. 4
    zman Says:

    HK – added a section in the post on their presentation at B of A. Getting on that call now.

  5. 5
    zman Says:

    Favorite Quote from the B of A conference so far.

    “We have 21.7 Tcfe of potential reserves are growing double digits…whether anyone gives a shit remains to be seen” (crowd laughs) ~ Floyd Wilson, CEO HK.

  6. 6
    zman Says:

    Other HK comment:

    Laterals in the Haynesville now are 4,000′, see going to 5,000′ with more frac stages.

    See completing 10 more wells in the H.S. this year.

    So far, the wells are spread over a 30 mile span, very consistent.

  7. 7
    zman Says:

    HK – Eagle Ford

    second well drilled, looks a little higher quality than the first.

    have 150,000 acres, picking up another 50,000 acres. Acres cost in the hundreds, not thousands.

    said the cores look “Haynesvillish”

    sees well costs falling below $5 mm eventually.

  8. 8
    zman Says:

    So Floyd talked for 20 minutes, and B of A allotted 10 minutes for Q&A. 1 question asked. Is there any leasing activity going on in the Haynesville? Yes, but less than before at lower prices obviously. That’s it. Come on! They announced a new shale play in the last 2 weeks and no one has a question about it. That is just pitiful.

  9. 9
    BirdsofpreyRcool Says:

    z – your enthusiasm is bottomless…. and wonderful to have around during these tough times. If you were there, I know you would pepper Floyd with a few good questions!

  10. 10
    zman Says:

    I just think people should ask more questions when stocks are down than when they are up. It’s not the end of the world as we know it and I’m pretty sure people are still going to use natural gas. The press does a great job of taking a ball, falling or bouncing, and running with it.

  11. 11
    VTZ Says:

    JR (regarding last night’s question) –

    Lots of the wells are ~1000m, some are more shallow at 500m depths, some are even less shallow than that but there are also some >1000m.

    Regarding your question about the CS huff and puff, it depends on the operator but lots of people use the same injector and producer. Others use dedicated injection and producers. It depends on the company and when the wells/production facilities were built.

  12. 12
    rlogan1301 Says:

    Let’s hope they use alot of it prior to the expiration of my dec UNG calls!..hehe…Floyd’s comment is priceless…

  13. 13
    BirdsofpreyRcool Says:

    Summary thoughts on Paulson’s speech yesterday

    Given Paulson’s flip-flopping on the “bailout”… credit investors now have little faith in anything the govt is trying to do. Perhaps it had to come to this… as the TARP morphed from a potential buyer of illiquid assets into a funding vehicle for companies rushing to offload debt. We can debate whether the Paulson Plan (as it originally stood) would have helped (I think it would have), but we now know that we can not depend on the US Govt to bail us out of the fine mess we find ourselves in.

    Paulson’s shift to focus on consumer-related debt (student, auto, credit card loans) is amazing. That problem has been there from the start… why “focus” on that now? Why not include it in the original Plan? Did they only notice it now?? That, in itself is scary, if true. Or (and this is even scarier, if possible), is the Treasury bowing to Congressional sentiment… if so, this will only make the situation worse.

    Junk bond spreads hit a new wide yesterday, in response to the Treasury’s plan to stop purchasing assets. But the credit indices do not even begin to show the real situation. Some short maturity bonds (not in the indices) are trading at levels only seen before in bankrupt companies… and these are the bonds that are trading! There are many others that just can’t trade… at any price.

    So, sadly, ignore any article you see or anything you hear about the Thawing of the Credit Markets. Paulson’s flip-flopping has resulted in a new, ugly, illiquid low.

    That said, maybe the stock market will rally anyway, on the back of any “good” headlines about credit. AT&T and MO both sold corporate bonds yesterday… albeit at much wider spreads than they had hoped for.

    The credit market is still unwinding. this means that any stock market rally is not sustainable.

  14. 14
    Jay Reynolds Says:

    VTZ-

    Would a variable volume, inexpensive (one moving part, no steel tubulars)totally corrosion proof, no workover rig required, one piece, one moving part production system good to 250 deg F be of any potential use in these applications?

  15. 15
    zman Says:

    If you can believe it I’m listening to the Atmos Energy Call – gas storage and transmission. Sometimes its good to step outside one’s box, plus the EOG guy was putting me to sleep.

    Wow, green open. Take a picture of your screen, then go to the beach.

  16. 16
    tater Says:

    VTZ –
    Thanks for the info yesterday. You have $40 as a break even number. Others say $70. Not disputing you or them, I’m not qualified. Just wondering what you would give for a reason that there is a $30 difference in the numbers?

  17. 17
    BirdsofpreyRcool Says:

    The floodgates have been opened… there is not enough money in the WORLD to “bailout” the City of Detroit.

    City Council: Detroit needs $10-billion bailout

    BY NAOMI R. PATTON
    FREE PRESS STAFF WRITER

    The Detroit City Council passed a resolution today calling for a $10-billion bailout for the city of Detroit.

    Council President Pro Tem JoAnn Watson sponsored the resolution to use the money for public service employment, to fund mass transit plans and to place a moratorium on home foreclosures for two years.

    The resolution specifically requests the council meet with Mayor Ken Cockrel Jr., Gov. Jennifer Granholm, the state’s congressional delegation, U.S. House Speaker Nancy Pelosi and officials from President George W. Bush’s office and President-Elect Barack Obama’s transition team.

    Watson said she fully supports mayors from Warren, Sterling Heights, Livonia and Dearborn meeting with representatives from Granholm’s office, the state’s congressional delegation, the Michigan Economic Development Corp., the Southeastern Michigan Council of Governments and the Michigan Municipal League, seeking federal redevelopment funding for communities facing huge losses in property tax revenue affected by looming plant closures.

    But, she said, “The city of Detroit has got to be leading the way on this.”
    The city recently received $47 million from the U.S. Department of Housing and Urban Development to help stabilize neighborhoods hit hard by the nationwide foreclosure crisis. Officials with the city’s Planning and Development have prepared a plan the city council is expected to vote on in a week.

  18. 18
    rlogan1301 Says:

    R#13 – it pisses me off that they are now focusing on student loans, auto, credit card…i have all three, my student loan for damn near 10yrs, and never missed a payment..even in dire straits…people and companies that can’t afford these things need to go bankrupt..it needs to happen at some point…take the good (i.e. education, car, taco bell late night after drinking and no cash) with the bad.

  19. 19
    kiaora Says:

    Sam–With the election out of the way…Do you still feel healthcare & pharma are a good short?

  20. 20
    zman Says:

    RL – Floyd’s comment speaks volumes right now about how in the dog house the industry is. The potential reserve uptick here is impressive. Basically you have 1 Tcfe booked and 20x that in potential. Never in the history of E&P have you seen those kinds of multiples. But it takes money to get those reserves into the proved category. If you looked at next year for just the Haynesville, if they spend $500 million drilling 75 wells that nets out to under 300 Bcfe (0.3 Tcfe) of reserve adds. Had prices stayed above $8 you probably would have seen them drill something like 150 wells.

    Along with the wells comes production of course and of course, its lower than it would have been for the 2x rig count. So when people talk about a gas bubble in 2009, you gotta say look at the decline rates and the lower well count on these plays. You don’t hook up 5 wells with an aggregate IP of 85 MMcfepd and within a couple of months have those same wells producing 55 MMcfepd without a significant first year decline rate (about 80%).

  21. 21
    Sambone Says:

    Yep, The Dems will eventually do in the pharmas earning potential. I don’t know about everybody else but my health insurance has gone way up for the coming year. I wouldn’t buy the area. My question is, will the feds bailout GM or let them go bankrupt. If they bail them out without going bankrupt, now is a gret time to buy their bonds.

  22. 22
    rlogan1301 Says:

    my health insurance is expected to increase by 29% next year…unreal.

  23. 23
    zman Says:

    Knew I should have taken that picture of my screen when it was all green. Fear and loathing persists…as do light volumes. Maybe we just need to get the Hedge Fund sell date 11/17 under our belts.

  24. 24
    bill Says:

    >gas bubble in 2009

    re need to explore this further

    a bunch of production is offline, industrial demand is lower, we dont export the stuff, and we producing more and more

  25. 25
    tomdavis12 Says:

    Z: When do you think the lower cap ex and rig count will be reflected in the weekly nat gas numbers so that the fear of oversupply will be hard to hold on to?

  26. 26
    ram Says:

    Why don’t we export?

  27. 27
    BirdsofpreyRcool Says:

    IG 200… which way it goes from here is key (for short-term trading). Wider than 200 = fear trumps all. Tighter = willing to at least think about the investment process.

    Will keep you informed as to what I am seeing. Volumes low, tho.

  28. 28
    antrimshale74 Says:

    Pretty sharp turns on the intra-day charts for everything. Up, down, up, then what?

  29. 29
    zman Says:

    Bill – Its not that simple an issue. A lot of the commentary that goes along with the gas bubble assumes no flattening of the Barnett and a quick start to the Haynesville. That’s not going to be the case. Texas has been a big driver of growth and that is set to slow. Industrial was off with higher prices, not as much a function of GDP as I showed in a chart the other day. LNG remains a wild card. Canada is likely to decline. The Marcellus is 3 years out from really making a difference. The Haynesville is unlike to add volumes as fast as some analysts think due to pipeline constraints.

    Tom – probably won’t be able to see it until next Spring and in the monthly numbers. The weekly storage numbers are going to be clouded by demand which is a function of weather.

    Ram – because the U.S. has always been in supply deficit. The U.S. is still in supply deficit. 8 to 10 Bcfgpd are imported from Canada via about a dozen pipelines, and anywhere from 1 to 3 Bcfgpd in the form of LNG coming into 4 (5 if you count Sabine) facilities. The U.S. Want more oil? Get Canada to keep their gas and use it to cook oil sands. Gas could be exported by converting or augmenting the regas import facilities to liquefaction facilities. Going to listen to the LNG call in a bit to see if they are exploring that.

  30. 30
    zman Says:

    Bird and Antrim – my vote is up.

    Concho call …very interesting, half listening, half typing 29. This is a oily, organic growth focused play, rich gas as well so they have strong margins as that wet gas is stripped of higher margin liquids. Nobody will care today but this is one I’ve like for awhile and I may add some stock, at some point.

  31. 31
    bill Says:

    rally time

    and even hk (cant get no respect) is up 30 cents on great news

  32. 32
    zman Says:

    Energy suddenly outperforming the markets 3 to 1. Oil up $1.50. So the sky is not falling for at least the next 15 minutes.

  33. 33
    bill Says:

    ty z

    i agree looing forward to the lng presentation

  34. 34
    zman Says:

    Bill – re HK, other than the fact that I already own it I’m tempted to say, fine, let it fall. The reserves aren’t going away and they don’t need to do a stock deal anytime soon as they are out of acreage acquisition mode.

    Holy cow, sun even shining on FSLR.

    Back to the time when names like XOM are outperforming.

    Volumes do indeed look light.

  35. 35
    VTZ Says:

    JR – I don’t think the temperature would be high enough although I can check that out for you.

    tatet – I say 40 because I know it’s 30-40 depending on gas price for an integrated mining/upgrading operation and that is the highest cost structure in the oil sands 🙂

    The well based production has an even lower breakeven

    The people who say 70 have no clue what they are talking about.

    In order to make new projects economic, because of capital costs the breakeven with a 10% return is probably 95ish.

    99.9% of people who write articles about oil sands: a) have never seen them b) find information 2nd hand and/or c) provide dated information

  36. 36
    BossmanG Says:

    Z, when you are comparing volumes to judge that they are light, anything in particular you are looking at? what kind of time frame? average?

  37. 37
    zman Says:

    EIA Oil Report. Not only delay a day but also to account for them sleeping in. Comes out at 11 EST, not 10:35 today.

  38. 38
    zman Says:

    Bossman – what are you referring to?

  39. 39
    zman Says:

    Oh, I got it, just looking at shares traded for this time of day. Very light. Take a name like CHK with 5 mm traded, often it is 15 by this time of day.

  40. 40
    BossmanG Says:

    Thanks, just thought maybe you were using some other indicators to judge

  41. 41
    BirdsofpreyRcool Says:

    #30 – z, you got my vote yesterday. My 50 year old MBA textbook says you get a green day, following 3 straight red ones.

    Overall, it’s pretty fugly out there… doesn’t mean we don’t get green, tho! (at least for a day or two). I think this is more “techinical trading” here… like if the SPX holds the intra-day low from Oct 10th, then rally it. Don’t think it’s anything more than that.

  42. 42
    BirdsofpreyRcool Says:

    IG 199… but not putting much faith in the direction, yet.

  43. 43
    zman Says:

    FSLR trying to find a bottom Tater?

  44. 44
    VTZ Says:

    JR – it also depends on what a “production system” includes. You would need to manage sour production.

  45. 45
    reefguy Says:

    z- I have been travelling alot lately so I have not been on the board. My travels are revealing IMHO that(and a general feeling is) oil is down at a place that buys are smart. Assets can be had for multiples of current price. It is becoming widely expected that oil prices will rise dramiticly by YE 09. Buyers are strongly favoring the purchase of oil assets over gas.

  46. 46
    zman Says:

    JR – put the link to your website up.

  47. 47
    BirdsofpreyRcool Says:

    IG back to 200… standing on the sharp edge of the knife… wondering which way to fall.

  48. 48
    VTZ Says:

    tater – the 70 dollar number is probably a breakeven based on an older capital cost (1-2 years ago before capex doubled).

  49. 49
    zman Says:

    Thanks for the color Reef. I was noticing the contango in oil prices is pretty steep too.

  50. 50
    BirdsofpreyRcool Says:

    IG 201

  51. 51
    zman Says:

    V – Re 35. That’s why I leave it to you, lol.

  52. 52
    VTZ Says:

    Haha, ok.

  53. 53
    VTZ Says:

    Re 35 again – When I say 95, tater, I mean for an integrated mining/upgrading like Suncor, Syncrude, Fort Hills or Albian.

  54. 54
    zman Says:

    Crude: unchanged (a little low)
    Gasoline: up 2.0 mm (high to est.)
    Distillate: up 0.6 mm (high)

    Imports at 9.5 mm barrels

    Gasoline demand at 9 mm bpd. That’s down 2% from the comp week in 2007. Last week we were down 3%. This has been falling from a deficit of 5.4% 6 weeks ago.

  55. 55
    arodeen Says:

    Z – know where I could look up NG price history at the well head besides the EIA site? Is EIA the most accurate?

  56. 56
    zman Says:

    Arodeen – its the only free source of well head prices where you can easily download that I know of. Reef might have another source.

  57. 57
    Sambone Says:

    10:01 (Dow Jones) Citigroup cuts 2009 oil forecast to $65/bbl from $90 and
    lowers long-term oil forecast to $85 from $100, saying OPEC’s spare capacity is
    growing due to continuing demand slowdown in Asia Pacific region, lag in the
    effect from OPEC’s supply cuts and stronger US dollar. Firm is bearish on oil
    over next 12 months, but says prospects for economic growth past 2010 make oil
    companies good long-term investments. Keeps buy rating on Petrobras (PBR), but
    downgrades Ecopetrol (EC) to hold and Petrobras Energia (PZE) to sell on
    concerns over production growth. (EBW)

  58. 58
    arodeen Says:

    Thanks Z.

  59. 59
    zman Says:

    By the way, this is the fourth week in a row crude stocks have hovered at the 311-312 range. So if OPEC is not cutting production why are U.S. stocks not running up.

    Note that last 4 weeks imports look like this:
    10,400
    10,337
    9,972
    9,500

    Must be going to Asia, oops, they’re not supposed to be taking more. Europe? Nope recession. Hmmm, could it be OPEC IS actually cutting production.

  60. 60
    Sambone Says:

    latest from “Uncle Phil”

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

  61. 61
    sane Says:

    API,

    Crude Up 899K
    Gasoline Up 3.6M
    Distillates UP 1.5M

  62. 62
    Jay Reynolds Says:

    VTZ –

    As far as “production system”, I am speaking only from bottom of well to the discharge side of the wellhead. Everything in this system is stainless steel or thermoplastic, no corrosion potential at all. Well servicing is a one man, one hour max operation.

    We are currently running to 330 M depth, is engineered for about 800 M currently.

    http://www.strippersolutions.com

    Thanks VTZ and Z

  63. 63
    Sambone Says:

    arodeen, try this one;

    http://www.upstreamonline.com/market_data/?id=markets_gas

  64. 64
    zman Says:

    Thanks Sane…not very bullish that.

  65. 65
    Sambone Says:

    Arodeen, looks like it’s 30 minute delayed

  66. 66
    zman Says:

    Looking more like OPEC to call Nov 28 emergency meeting:

    http://biz.yahoo.com/rb/081113/business_us_markets_oil.html

  67. 67
    VTZ Says:

    Jay – I’ll take a peak later in the day or in the evening.

  68. 68
    zman Says:

    PDC said nothing enlightening with regard to the expected plummet in rig count in N. America other than they would work with their customers.

    I’m going to, yes I know go ahead and shoot me, look at adding some longer dated calls on HK.

  69. 69
    BirdsofpreyRcool Says:

    z – right here, right now… at current prices: what are your top 3 e&p buys?

  70. 70
    BirdsofpreyRcool Says:

    (not to put you on the spot, or anything… )

  71. 71
    BirdsofpreyRcool Says:

    IG 202… credit not going along with the green theme…

  72. 72
    zman Says:

    BOP – EOG, HK, SWN (right here, right now)

  73. 73
    BirdsofpreyRcool Says:

    z – cool. thanks!!

  74. 74
    BirdsofpreyRcool Says:

    great line up… no arguments from me. oily, gassy, gassy. good geographic, play, and balance sheet diversification.

  75. 75
    Pete Says:

    Z, What keeps CLR off the list?

  76. 76
    zman Says:

    Ok, just to keep my blood pressure up and because none of the 11:20 slot B of A presenters are webcasting, I rolled back the DVR to catch Epperson’s read on the oil numbers. First off, learn to talk. Second, when you talk get the numbers right. Maybe notice oil inventors have not risen sharply for the last 4 weeks before you say they have. Finally, when you interview a guy, ask if he’s short before asking a question like, “do you care if OPEC cuts production” and he says “no, because Venezuela is in a catch 22 below $70 so they won’t cut” and if he answers that way, you might come back with “Saudi is a lot bigger than Venezuela, and has a lot lower cost structure, what about that, Bub? How can I get Comcast to switch my CNBC channel to Bloomberg? Ugh.

  77. 77
    BossmanG Says:

    lol z, I think you need to go on CNBC to straighten things out

  78. 78
    zman Says:

    Pete: Re CLR

    1) BOP only gave me three slots
    2) Newer names tend to get less credence during these times
    3) BOP did not state long term time frame
    4) They’re oily and 100% unhedged on oil which if you have not heard is headed to $12.

    Ok, really just 1,2,and 3

  79. 79
    1520sbroad Says:

    Z-
    Couldn’t agree more on the Epperson oil pit reporting. Painful to watch. The woman that does oil on bloomberg is not much better. I don’t know where CNBC finds the guys they interview from the nymex pit. I knew 2 guys that were crude options traders and they couldn’t go more than about 3 words without some sort of four letter word.

  80. 80
    Pete Says:

    Z, what is your long and short term time frame? short one to two months? long ?

  81. 81
    BirdsofpreyRcool Says:

    z – to be fair, my question was “right here, right now” with a very near-term outlook. (which is how you answered the question, I believe.)

  82. 82
    zman Says:

    Pete – short term is now out to 6 months. Long term would be 12 to 24 months or longer. Its difficult to go long term with some of the smaller, interesting stories unless you know or have loads of faith in management. When I say “longer dated options” that’s different though, then I’m generally referring to 3 to 12 months out. I was looking at out month premiums yesterday and they really are not that bad. The spreads are not great but given the flatness of the prices for next month options vs options 6 months out it starts to make one think about doing a couple of fire and forget type plays.

  83. 83
    BirdsofpreyRcool Says:

    “near-term” is defined as “next market move up”

  84. 84
    Pete Says:

    BOP true

    thanks z

  85. 85
    antrimshale74 Says:

    Is anybody else here a bit worried that Bush is speaking at 2pm? Zman, don’t things usually go awry when Bush speaks during market hours? Why couldn’t he wait until 4:30 or 5pm?

  86. 86
    Dman Says:

    Z – the following quote is from Cramer on Nov. 7:

    “It is time to recognize that the solar industry is in a real jam. When the most forward looking eastern utility–Duke–says it is too expensive to be used that makes it so despite Obama when they rally, which they are doing, they need to be sold., That was what sunopower said, too”

    Leaving aside the dubious source (not easy to put aside, but let’s try)… does it make any sense?

  87. 87
    zman Says:

    BOP, that is how I answered your question then (more like over the next couple of weeks).

    CHK would be on the list but they still have debt, people hate debt right now, even though none of it is due for 5 years. And when good news is met with yawns it begs the question, “what do you people want?” and the answer isn’t really “another deal done before year end” as much as it is “oh, nothing. we just aren’t really paying attention to you E&P types right now”

  88. 88
    Fiveanddimer Says:

    I’d often heard about Charley Maxwell, but never seen him in a video format. Here’s a very recent Bloomberg TV link to the second half of an interview with Marc Faber, where he is joined by Maxwell. If I understood Maxwell correctly, he thinks it will be 16 to 24 months before the crude price bottoms.
    http://www.youtube.com/watch?v=V2JfJCJsnB4&feature=related

  89. 89
    zman Says:

    Antrim – or maybe 1:03 am on Saturday? I personally believe the phenomenon was started very deliberately by George Soros.

    Dman – No. Solar is primarily a European revenue source. Europe may be in recession but the subsidizing of the solar industry provides thousands of jobs there. FSLR confirmed no cuts to those problems. As to Duke, a U.S. player that may be a valid statement. Pickens said as much yesterday when he delayed his wind project since competitive sources of generation have recently become cheaper (hello natural gas and therefore higher natural gas demand). No worry as Cramer will change his mind in an hour or two if not sooner.

    Don’t mean to be flip with that last but he gets his ideas from charts and then reinforces them with half (or less) of the story.

    I’m more concerned that pre-campaign designs are being altered post election. I don’t think there is much in the group for the $150 billion Obama plan but I’m sure that if it gets tabled for a while due to the economy that the stocks will get shelled.

  90. 90
    Sambone Says:

    By Benoit Faucon
    OF DOW JONES NEWSWIRES

    LONDON (Dow Jones)–OPEC will hotly debate the size and speed of possible cuts
    to oil output in the coming weeks, as members are split between those who want
    a steep, rapid additional supply cut and those calling to wait for the effect
    of the October decision.
    A Nov. 29 meeting initially restricted to Arab members of the Organization of
    Petroleum Exporting Countries, or OPEC, is now set to be extended to other
    countries as the group considers responses to a steep drop in oil demand and
    prices.
    The early gathering comes as oil prices have fallen to $55 a barrel – down 60%
    in three months – despite a reduction of 1.5 million barrels a day decided last
    month.
    But members are divided on how much oil – if any – should be taken out of the
    market: some are pressing for no more than 500,000 barrels a day and others
    pushing for a new 1.5 million reduction.
    Considering the uncertainties of the global economy and of the oil market in
    particular, “I am sure there will be scope for disagreements” between OPEC
    members, said Humphrey Harrison, managing director of U.K.-based consultancy
    Horizon Strategies.
    An OPEC delegate, who declined to be named, said when the organization decided
    to cut 1.5 million barrels per day in October, there was already three million
    barrels per day “too much in the market.” He said OPEC should remove the
    remaining 1.5 million barrels in oversupply from the market by the end of the
    year.
    Another delegate said Thursday “if there is too much oil on the market, why
    not cut 1.5 million” more.
    Iran and Venezuela have officially called for another reduction of at least
    one million barrels day at a previously scheduled meeting on Dec. 17 or
    earlier.
    But a third delegate who also preferred to remain anonymous said a cut of
    “500,000 would be fine. But at one million, there will be some resistance.”
    Some countries won’t follow because they can’t afford to lose too much
    production, he added.
    Some OPEC members, including OPEC president and Algeria oil minister Chakib
    Khelil, wants the organization to wait and see if the current reduction
    decision is effectively implemented.
    “If OPEC decides another reduction before the current one is effective, the
    market won’t believe” the decision will have an impact, a person close to
    Khelil said Wednesday.
    The person added the implementation of the cut won’t be complete before late
    this month or early December.
    “Some producers believe we should wait, that we should not be in a hurry,”
    OPEC Iran governor Mohammad Ali Khatibi said Tuesday.
    Last week, consultancy PFC Energy said members are reasonably compliant with
    the October decision but there is evidence the latter is hitting deliveries
    only slowly.
    For instance, Angola’s 99,000 barrels a day will be fully in force only at the
    end of December, a person familiar with the matter said.
    And U.K.-based tanker tracker Oil Movements said Thursday Shipments from 11 of
    the OPEC members are forecast to fall by only 60,000 barrels a day in the four
    weeks to Nov. 29 compared with the previous four-week period.
    Oil Movements head Roy Mason said that “suggests there is some effect” from
    the cut decision but “not at a rapid rate.”
    Mason said by the end of next month, it will be clearer if the cuts are
    implemented as “all the outside commitments made in October (before the cut)
    will be gone.”

    -By Benoit Faucon, Dow Jones Newswires

    Dow Jones Newswires
    11-13-08 1208ET

  91. 91
    Sambone Says:

    Ah come on Z, you know you follow “Tha Cramer”! Tell us how you really feel!

    “No worry as Cramer will change his mind in an hour or two if not sooner.

    Don’t mean to be flip with that last but he gets his ideas from charts and then reinforces them with half (or less) of the story.”

  92. 92
    zman Says:

    Charly Maxwell = smart guy. At least from what I have read of his. Listening to that piece now.

  93. 93
    teomax Says:

    does anyone follow canadian Petrobank?
    it looks like that growth and potentional invention (they are trying to develop THAI process for oilsands) is great thing for a punishment.

    CALGARY — Petrobank Energy and Resources Ltd. (TSX:PBG) says increased oil production propelled the company to record third-quarter earnings of $123.2 million, up 487 per cent from the $21 million posted in the same quarter of 2007.

    Net earnings per diluted share amounted to $1.35 compared to 25 cents per share during the same period last year.

    Revenue jumped to $307 million from $62 million the year before.

    The Calgary-based company says oil production more than trippled during the quarter.

    Quarterly production stood at 30,850 barrels of oil equivalent per day, whereas the company produced 9,935 barrels during the third quarter of 2007.

    Petrobank says production has continued to soar and currently stands at more than 40,000 barrels.

  94. 94
    Sambone Says:

    By Brian Baskin
    Of DOW JONES NEWSWIRES

    NEW YORK (Dow Jones)–Crude oil futures shed gains Thursday after a report
    showing a surprisingly large build in U.S. gasoline inventories.
    Light, sweet crude for December delivery traded 35 cents, or 0.6%, lower at
    $55.81 a barrel on the New York Mercantile Exchange, down from $57.40 a barrel
    before the inventory data release. December Brent crude on the ICE futures
    exchange, which expires Thursday, traded $1.28 lower at $51.09 a barrel.
    Gasoline inventories increased by 2 million barrels in the week ended Nov. 7,
    exceeding the average analyst forecast of a 300,000-barrel build, according to
    the U.S. Energy Information Administration. Stocks are approaching average
    levels for this time of year, just a few weeks after plunging to a multi-year
    low. Rising inventories are being interpreted as a sign that demand remains
    weak.
    “None of us were looking for a build anywhere near that much,” said Addison
    Armstrong, an analyst with Tradition Energy in Stamford, Conn. “The demand
    story still remains a negative one.”
    Front-month December reformulated gasoline blendstock, or RBOB, recently
    traded down 2.42 cents, or 1.9%, at $1.2239 a gallon.. December heating oil
    traded 1.49 cents, or 0.8%, lower at $1.8205 a gallon.
    Oil inventories were unchanged for the second week in a row, where analysts
    surveyed by Dow Jones had given an average forecast of a 1.3-million-barrel
    build. Distillate stocks, including heating oil and diesel, rose 500,000
    barrels, in line with an average forecast of a 500,000-barrel gain.
    Stable crude stocks may have tempered what otherwise would have been a strong
    negative reaction to the gasoline data, said Jim Ritterbusch, president of the
    trading advisory firm Ritterbusch & Assoc. in Galena, Ill.
    “The primary impact will likely fall on the gas cracks,” an approximation of
    the margins that refiners see from converting oil to gasoline, Ritterbusch
    said. That should continue to push down refinery runs, which will ultimately
    support energy prices by reducing supplies, analysts said.
    Refinery utilization fell to 84.6%, from 85.3% the week before, according to
    the EIA. Utilization is at the lowest level for November since 2005.

    -By Brian Baskin, Dow Jones Newswires

    Dow Jones Newswires
    11-13-08 1134ET

  95. 95
    Sambone Says:

    12:11 (Dow Jones) The year-on-year drop in US gasoline demand — averaging
    9.1M/bbl a day over the past four weeks — is narrowing. Demand (as implied by
    EIA data) is 1.9% lower than a year ago. With prices at the pump off
    substantially from summer highs, the data continue to support the notion that
    demand has hit an inflection point and is rising. Still, unemployment will
    continue to weigh on near-term demand. (ANR)

  96. 96
    BirdsofpreyRcool Says:

    IG 205… uh-oh

  97. 97
    zman Says:

    Ok, listened to that piece with Maxwell. He’s saying 2 years to find a bottom for crude. His reasoning is that although Capex may come down relatively quickly, the production being placed on stream today was drilled many months ago and was discovered 6 to 8 years ago. I’m not going to quibble with his numbers as he’s been watching oil market for 50 years and I don’t see the value in that. He did say that he has never seen oil fall this far this fast. I obviously have not either. But compression of moves in the global markets have become increasingly tight over the last 10 years. So drops that would have taken month or years to evolved into a cycle (it is a cyclical business) have been compressed into days and weeks. So I think he’ll be pleasantly surprised with a sooner rather than later bottoming.

  98. 98
    antrimshale74 Says:

    Market is in wholesale tanking mode.

  99. 99
    zman Says:

    RE 95. HOLY CRAP, SOMEONE NOTICED.

  100. 100
    zman Says:

    ESV call about to start…change of pace.

  101. 101
    Dman Says:

    Z #89 paragraph 1: seriously? Soros has strong views, but he’s very much in favour of making money. Or are you saying he made money as well?

    paragraph 3: Yep. Often he correctly identifies some short-term psychology but then talks about it as though it is a long-term fundamental, thus losing lots of his followers a lot of money. Not sure how many are left though.

  102. 102
    tomdavis12 Says:

    Z: Hear any M&A questions to CEO’s? Like why is no one making offers? Why aren’t you? Maybe if someone does, it would signal a return to normalcy. What are your 3 most vulnerable E&P’s.

  103. 103
    Dman Says:

    Z – #97 I think that compression you mention is a symptom of the overall tightening of the supply-demand situation, resulting in much greater sensitivity to any given shift in either supply or demand.

  104. 104
    BirdsofpreyRcool Says:

    IG 208… very little resistance in the move wider.

  105. 105
    zman Says:

    Tom – re M&A, frozen credit markets stated repeatedly as reason for no deals plus unsteady economic backdrop.

    XTO, SD (though would not take puts but in an irrational market it could go lower), APC (but only due to debt levels and only if gas stays down here for quite some time).

  106. 106
    zman Says:

    Re 101: I was joking that he made money betting into Bush’s speaking times. Somebody mark the market prices when Bush starts talking, maybe he’ll surprise the market. Anything would be better than Paulson’s act yesterday.

  107. 107
    zman Says:

    Anybody see news or a downgrade on PVA? Big move down there today.

  108. 108
    VTZ Says:

    Does anybody other than me think that the US has reduced their gasoline consumption to the lowest tolerable level already. People always have a basic requirement and I believe we were already there and with gas at these prices, it should stay flat in North America and continue to grow elsewhere.

  109. 109
    Bleemus Says:

    BOP – where do you get the IG bond index data from? I can’t seem to find it on my platform.

    Thanks in advance.

  110. 110
    tomdavis12 Says:

    Z: Barclay’s cut PVA this morning before the open. That’s not your answer.

  111. 111
    zman Says:

    V – yes, we are within a few percent of the absolute low in my opinion. When you look at the envelope charts I have for demand its not like volumes are falling off a cliff. Quite the contrary, we are down 2% YoY and in the normal range for this time of year, just under the five year average.

  112. 112
    zman Says:

    Tom – thanks.

  113. 113
    zman Says:

    Wow GE.

  114. 114
    BirdsofpreyRcool Says:

    IG 209 1/2… continues to move wider on light volume.

    Bleemus – I get the trades and quotes directly from the JPMorgan credit default swap trading desk via bloomberg emails. It gives me a snapshot of what is going on in the private, institutional bond market. It’s not a publicly-quoted index, that is why I frequently update the level on days like this. I hope it helps.

  115. 115
    BirdsofpreyRcool Says:

    IG 210… there is little support to keep it from going wider.

    Everything is moving pretty fast in the bond market right now… still not a lot of volume, but prices are moving down faster now.

  116. 116
    BirdsofpreyRcool Says:

    IG 213… a 3 bps gap out… not good.

  117. 117
    BirdsofpreyRcool Says:

    what happened? anyone? was GE the most recent catalyst?

  118. 118
    tater Says:

    VTZ –
    In and out today. Thanks again for all the info. Figure the sands will be good to own this winter when Putin challenges Europe to a wrestling match. Don’t think he liked it when the Georgia march got questioned. Man seems to understand the concept of holding a grudge.

    FSLR – Staying with my assessment on the last chart of the last page at the link. If I am wrong, be very careful should price get back to 130 (yesterday’s opening gap). Technical trade is to sell the first entrance to the gap area. Volume is slowing intraday today on the selling so a bounce may be near, RSI is confirming that thought as well. Daytrade on that idea only.
    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=1573973,20&cmd=show%5Bs154551201%5D&disp=G

  119. 119
    BirdsofpreyRcool Says:

    now I see it… the move on the SPX below 840 triggered technical selling. We needed to hold the intra-day lows from Oct 10th around 840.

  120. 120
    antrimshale74 Says:

    I believe that the market is technically challenged right now. S&P 500 and the Nasdaq are at new yearly lows. The Dow is about to follow suit. My recollection is that there is support on the Dow at 7300 and at 6300 once it breaks our lows from last month. Ugh.

  121. 121
    zman Says:

    Thanks T.

    Man, the Bush pre game show is no fun.

  122. 122
    BirdsofpreyRcool Says:

    IG 214

  123. 123
    zman Says:

    Volumes still very light in the oil patch.

  124. 124
    BirdsofpreyRcool Says:

    IG 217… moving from the “oh-sh*t” level (200+) toward the “we’re f-d” level (which is about 225, by my quesstimates)

  125. 125
    BirdsofpreyRcool Says:

    IG 214…. backing away from the edge, for now

  126. 126
    BirdsofpreyRcool Says:

    sorry to populate the board with all these posts… but, credit is moving quite rapidly today. Just trying to pass some of that along. Everything is spiralling wider.

  127. 127
    rlogan1301 Says:

    BOP – that is hilarious…at what level is the “my money would be nice wallpaper in the living room”

  128. 128
    zman Says:

    Anyone see news on BEXP today? Speaking now.

  129. 129
    zman Says:

    ZTRADE: $10KP TRADE

    BEXP: Bought (10) BEXP December $5 calls (QBJLA) for $0.60 with the stock down about $0.75 at $4.25. They are presenting at the B of A conference today and there is no change to the story.

  130. 130
    BirdsofpreyRcool Says:

    wow… this is “light speed” in credit…

    IG back to 213, then, 212, now 211.

    whiplash time.

  131. 131
    Dman Says:

    BOP – keep populatin’ the board & don’t be sorry about it. Very valuable window into the credit quadrant of the space-time-money continuum…

  132. 132
    zman Says:

    Oil going green, how odd.

  133. 133
    BirdsofpreyRcool Says:

    RL – your money is KING right now… it’s your stock and bond certs that are headed toward wallpaper land.

  134. 134
    zman Says:

    Yeah BOP, populate away. Its either that or I start posting porn.

  135. 135
    BirdsofpreyRcool Says:

    LOL!!!

    (just might call your bluff and shut up. ha!)

  136. 136
    BirdsofpreyRcool Says:

    turning south again… IG 212

  137. 137
    BirdsofpreyRcool Says:

    shorts are pushing this now… guess they sense that there is little interest from longs to defend the mrkt here.

  138. 138
    BirdsofpreyRcool Says:

    RL – to follow up on your comment. What we are seeing is tremendous, on-going, no-end-in-sight asset DEflation. It’s a function of deleveraging and lower asset prices. In this environment, your CASH is your most valuable asset. You will be able to use it to buy cheaper hard assets in the future.

    All the worry about INflation seems like ancient history. Govt policy can deal with INflation. Ain’t nothing but time that can take care of DEflation.

  139. 139
    bill Says:

    85 i get more worried with obama talks

  140. 140
    BirdsofpreyRcool Says:

    IG 210… phew

  141. 141
    antrimshale74 Says:

    Thinking about buying a stack of puts now that the gap has been filled. I just don’t see how we’re not heading to an inflection point (either down or up) at DOW 7774.

  142. 142
    Sambone Says:

    #113, look at BAC, heading to 10

  143. 143
    zman Says:

    German guy on CNBC right now making a lot of sense. Talking about inability to get credit to ship things anywhere will lead to supply disruptions in the U.S., he mentioned fertilizer and crops. Dieter also mentioned oil being down as a function of the non-working credit market, something the other talking heads have failed to mention. They keep trying to pin down oil on down oil demand without paying heed to all the other down commodities.

    If you get a chance the BEXP presentation which is very long for a short amount of time is an excellent presentation on the Williston Basin and not just for BEXP but also talks about EOG, WLL, and CLR in the Bakken and TFS.

  144. 144
    BirdsofpreyRcool Says:

    antrim – this mrkt is as skittish as a polecat on a hot griddle… no telling how HF unwinding might affect the near-term as shorts will have to be unwound at the same time longs are sold. Not saying buying puts is wrong… just saying this mrkt will move in the direction to hurt the most people in the short run. It’s just so darn negative out there now.

  145. 145
    zman Says:

    By the way, Epperson just listed why crude was off today as the number behind here head continued to rise. Hmmm. Crude up a $1+ now.

  146. 146
    antrimshale74 Says:

    My put trades are extremely short term in nature… i.e. 20-30 minutes to as long as three days. Since my portfolio is heavily weighted to the long side, I can buy downside protection relatively cheaply that will explode in value fairly quickly, thus mitigating the loss on the long side. That is the theory at least.

  147. 147
    bill Says:

    chk and hk higher after 300 down wash

  148. 148
    BirdsofpreyRcool Says:

    antrim – you’ve got it covered. you got me beat!

  149. 149
    antrimshale74 Says:

    Although I admit that the market these days is nothing more than a casino. A few chips here and a few there.

  150. 150
    BirdsofpreyRcool Says:

    ok… i’ll say it… this is unreal. IG is 210 +9 and stocks are going positive. talk about your divergence!

  151. 151
    zman Says:

    Dow green.

    One last thing and I’ll get off my ornery bastard stump. CNBC talking about INTC getting hammered for gross margins slipping to 55%. 55% wow, why aren’t they evil. Pretty much have to have a computer. Maybe there should be a windfall profits tax there. Let’s see, XOM gross margins = 16%. Nope, better to tax them. Ugh.

  152. 152
    BirdsofpreyRcool Says:

    seeing headlines that there isn’t enough support in the Senate for a D-3 bailout. Wonder if that is what is making the mrkt happier?

    HK up over 6% now. thanks, z

  153. 153
    Alhambra Says:

    oh gosh, Bush’s about to speak. take your profits from this bounce now

  154. 154
    zman Says:

    Bird – I think you might find GMET interesting too. CBM player, with new shale acreage…doesn’t look like its reflected in the stock.

  155. 155
    BirdsofpreyRcool Says:

    z – GMET… are they the ones with the Texas Tar Sands too?

  156. 156
    bill Says:

    profits– who has profits

    Bush inspires confidence– compared to Comrade Osama and Barney Frank

  157. 157
    zman Says:

    Bird – I don’t think so. 4 CBM plays, all high gas saturation + plus a new shale play in Alabama.

  158. 158
    ram Says:

    Confidence-who has confidence

  159. 159
    zman Says:

    Ugh, its the Chatanooga shale, very shallow, going to be hard (impossible) to drill horizontals there.

  160. 160
    zman Says:

    GMET says 2 horizontal wells in 2009…gotta be pretty short laterals.

  161. 161
    ram Says:

    With all these energy plays popping up – are there any shortages for technical types to support?

  162. 162
    BirdsofpreyRcool Says:

    wow. Bush is finally explaining what is happening in financial markets. Guess it’s OK to speak the truth, now that the 2-year presidential campaign is over.

  163. 163
    zman Says:

    Oil up $2.

  164. 164
    ram Says:

    What’s he saying??

  165. 165
    BirdsofpreyRcool Says:

    basically, that too much money was lent to too many people to buy too many houses that were backed by too leveraged structured securities that were sold to investors with too little due diligence.

    also saying that reforms are needed and will take a while to get right.

  166. 166
    BirdsofpreyRcool Says:

    and that this will take a co-ordinated effort across the globe.

    Finally!!! He is actually DEFENDING markets! He is pointing out the Europe has much more financial regulation, and yet Europe has the same mortage/housing probs that we do.

    “should not have more govt, but smarter govt.”

    NOW he says that…

  167. 167
    rlogan1301 Says:

    does that some how imply that the gov’t won’t bail out d-3?

  168. 168
    BirdsofpreyRcool Says:

    It’s interesting that a U.S. president has to stand up in front of the nation and DEFEND the free markets, capitalist system. but, that is what he is doing.

    But it needs to be said. No one else has stood up and said this. Finally, a Bush speach worth listening to.

  169. 169
    zman Says:

    Re 168. Agreed. Job well done. Needed be said by the sitting president. Paulson yesterday made Bush look like a good speaker.

  170. 170
    BirdsofpreyRcool Says:

    seeing a little short-covering in credit.

  171. 171
    zman Says:

    I think you are seeing a little short covering in equities as well. E&P leaping and suddenly people like solar.

  172. 172
    BirdsofpreyRcool Says:

    apparently, capitalism and free trade are also good for oil prices.

  173. 173
    BossmanG Says:

    Z, just a couple days there was mention of nuclear issues…do you have any view on uranium prices in the next little while?

  174. 174
    zman Says:

    Re Nuclear. No, I don’t. I used to and I plan to but I’m not there yet. Occam is pretty savvy there and Sane for the mechanics of it all.

  175. 175
    zman Says:

    Missed my shot at longer term HK for today I think.

  176. 176
    BirdsofpreyRcool Says:

    i love it…. bloomberg headlines: “oil rises more than $2 on signs price drop was unjustified.”

    what is THAT supposed to mean?? uhhhh… “we have no idea why prices are moving but feel we have to comment anyway”?

  177. 177
    orion Says:

    Z, FSLR selling on this spike? or holding…

  178. 178
    Popeye Says:

    HK Dec 17.50’s volume up today.

  179. 179
    zman Says:

    Re FSLR, going to watch the 129 to 130 level of Tater’s. He called 180 for it to within a dime and since its not really an energy company but a little slice of hope (just kidding), well I have to defer to technicals. So if it does have trouble piercing $130 I dump the Novembers. I’d prefer that it stop at 126 and gap open $10 higher but you don’t always get what you want.

  180. 180
    BirdsofpreyRcool Says:

    IG 205… back down to the “oh-sh*t” level. what a relief!

  181. 181
    antrimshale74 Says:

    We’ve just had a 600 point rally on the DOW. Welcome to America’s largest casino, aka the New York Stock Exchange.

  182. 182
    BirdsofpreyRcool Says:

    antrim – tomorrow might be a good day to buy those puts… 3 days of down, 2 days of up. From my 50 yr old MBA textbook.

  183. 183
    antrimshale74 Says:

    They should be cheaper, with less volatility premium, too. I’m thinking a December put spread on the SP500 after a huge rally, just for protection.

  184. 184
    zman Says:

    If recent history is a guide, now is probably the time to grab DUG calls and/or USO puts. Investors in the energy sector have been nothing if not faithful in selling rallies in the group and the commodity.

  185. 185
    rlogan1301 Says:

    3pm selloff to begin!

  186. 186
    BirdsofpreyRcool Says:

    z – so…. you gonna go DUG?

  187. 187
    antrimshale74 Says:

    Still 1% below where we closed Tuesday on the XLE.

  188. 188
    orion Says:

    Z; FSLR – thanks

  189. 189
    zman Says:

    I have to step out for the LNG (the company) presentation at B of A. Will listen to the replay.

    Bird re DUG – I don’t think so. I am toying with OIH puts but would like 1) a 2x ETF there and 2) narrower spreads.

  190. 190
    zman Says:

    189 – meant smaller premiums, not spreads. Spreads are not bad there.

  191. 191
    zman Says:

    Volume doubled in CHK from late morning to now, most since Bush speech. Silly markets.

  192. 192
    apbd Says:

    BOP, comments always welcome.
    Back from lunch and the screen is green.
    Must be a mistake. lol
    apbd

  193. 193
    Sambone Says:

    By Peter Millard
    Of DOW JONES NEWSWIRES

    MEXICO CITY (Dow Jones)–The International Energy Agency expects Mexico’s
    liquid hydrocarbons production to slide 25% by 2015 as restrictions on private
    investment hinder production growth.
    The steep drop would cut Mexican crude exports by more than half. Mexico is
    currently the third-largest exporter to the U.S.
    The IEA, using an unconventional estimate of Mexican oil production that
    includes nearly 400,000 barrels a day in natural gas liquids, or NGLs, expects
    output to fall to 2.4 million barrels a day in 2015, down from 3.2 million
    during the first nine months of this year. NGLs, which include condensates such
    as propane and butane, are excluded from most oil production estimates.
    Mexico’s oil industry is dominated by state run Petroleos Mexicanos, or Pemex,
    which has a constitutional monopoly on hydrocarbon exploration, production and
    refining.
    The IEA noted that Mexico’s production woes are caused by a lack of
    exploration and field development, not a lack of oil.
    “Mexico’s proven oil reserves have fallen continuously over the past two
    decades, mainly because of under-investment in exploration,” said the IEA in
    its World Energy Outlook released Wednesday.
    The IEA didn’t give specific forecasts for Mexican NGL production. If NGL
    production remains relatively stable, Mexican crude production would fall to
    just 2 million barrels a day in 2015 from 2.8 million at present.
    This would leave Mexico with, at most, 700,000 barrels a day in exports
    because the domestic refining network consumes 1.3 million barrels a day.
    Mexico currently exports around 1.4 million barrels a day, with more than 1
    million going to the U.S. market.
    If Mexico follows through on plans for a new refinery and expansion projects
    at existing refineries, the country would process 2 million barrels a day by
    2016, leaving virtually no oil left over for exports.
    Recent history indicates that Mexico will have a hard time meeting all of its
    refinery-project deadlines. Refinery projects often run into delays on cost
    overruns, equipment shortages and financing problems. The expansion of Mexico’s
    Minatitlan refinery is years behind schedule.

    IEA Sees Partial Recovery By 2030

    The IEA expects Mexico to only partially restore lost production by 2030,
    citing limitations on private investment in the industry.
    By 2030 Mexico’s total production, including NGLs, will crawl back to 3
    million barrels a day. Mexican officials have a more positive outlook,
    expecting crude production, excluding NGLs, to recover to 2007 levels of 3
    million barrels a day by 2020.
    Mexico, along with major oil producers Iran, Kuwait and Saudi Arabia, lets
    foreign firms operate only as contractors to the state oil company and bars
    them from booking oil reserves.
    “Political resistance to changes in the upstream regime in Mexico that would
    give private companies a bigger role in exploration and development have
    impeded efforts to expand investment,” said the IEA.
    Mexico’s Congress approved last month an energy reform to strengthen Pemex and
    allow it to draft performance-based service contracts. Pemex hopes to attract
    larger oil firms with experience in deep water, where most of Mexico’s
    remaining oil reserves are located.
    Mexico expects to begin offering performance-based service contracts that are
    drafted according to the legal reforms in around a year.
    The country holds a lot of potential for discoveries both on land and offshore
    despite the poor climate for private investment.
    “Mexico holds 3 billion barrels of reserves in onshore fields which are yet to
    be developed,” said the IEA, which expects Mexican production to begin
    recovering after 2015 “on the assumption that exploration is stepped up.”

    -By Peter Millard,Dow Jones Newswires
    Dow Jones Newswires
    11-13-08 1309ET

  194. 194
    Sambone Says:

    By Brian Baskin
    Of DOW JONES NEWSWIRES

    NEW YORK (Dow Jones)–Crude futures rose with U.S. equities Thursday, ignoring
    a barrage of indicators pointing to weaker oil demand.
    Light, sweet crude for December delivery settled $2.08, or 3.7%, higher at
    $58.24 a barrel on the New York Mercantile Exchange. December Brent crude on
    the ICE futures exchange, which expired Thursday, settled down 38 cents, or
    0.7%, at $51.99 a barrel.
    Crude futures have often traded in concert with the Dow Jones Industrial
    Average over the last two months, with equities treated as a window into the
    health of the wider economy, and therefore oil demand. On Thursday the Dow
    Jones Industrial Average crossed below 8,000 for the first time since Oct. 10,
    only to quickly rebound to recently trade above 8,500. Oil followed a similar
    trajectory, falling below $55 a barrel only to settle above $58.
    “Once stocks started showing some life, it spilled over to commodities as
    well,” said Mike Zarembski, senior commodities analyst at optionsXpress, a
    brokerage in Chicago. “The markets definitely are correlated these days, I
    don’t think there’s any question about it.”
    Equities provided support for oil prices on a day that began with a sharp
    downward revision by the International Energy Agency to the organization’s 2008
    and 2009 demand forecasts. The IEA now sees China requiring less oil next year
    than previously thought, where the fast-growing economy was previously seen
    helping to offset consumption declines across the developed world.
    U.S. demand for refined products is down 6.6% from a year earlier in the month
    ended Nov. 7, according to data released by the Department of Energy on
    Thursday. Government data also showed a surprisingly large 2-million-barrel
    build in gasoline inventories last week, even as refiners cut both runs and
    imports.
    “This build appears to highlight an exceptionally weak pace of demand…Gulf
    Coast refiners appear to be scrambling to reduce gasoline output,” said Jim
    Ritterbusch, president of the trading advisory firm Ritterbusch & Assoc. in
    Galena, Ill.
    Declining demand and prices appears to have spurred the Arab members of the
    Organization of Petroleum Exporting Countries to open up their Nov. 29 meeting
    to the full group. OPEC has a meeting scheduled for Dec. 17 in Oran, Algeria,
    and could potentially announce a second production cut on top of the reduction
    of 1.5 million barrels a day agreed to in October.
    The November meeting is less likely to produce a cut, as Saudi Arabia, the
    world’s largest exporter, has not signaled its support, wrote Greg Priddy, with
    Eurasia Group, a consultancy.
    “(The Saudis) also may want to wait for some evidence of a firming of demand
    or cold weather to provide support before they fire the last arrow in their
    quiver with the next round,” Priddy wrote. “The most likely outcome at this
    point is that another round of cuts does materialize, but not until December.”
    Front-month December reformulated gasoline blendstock, or RBOB, settled 5.43
    cents, or 4.4%, higher at $1.3024 a gallon. December heating oil settled 3.96
    cents, or 2.2%, higher at $1.8750 a gallon.

    -By Brian Baskin, Dow Jones Newswires

    Dow Jones Newswires
    11-13-08 1509ET

  195. 195
    tater Says:

    FSLR – Have to say that the daytrade idea is done. It stopped short of closing the top of the gap. These things are well known so that very knowledge can screw up the target. But…
    It appears that it may still be heading north. Too early to say for sure, the new Fib grid I drew (dark blue) is tentative for now. If it is correct, the pullback caught support right at .38 and that is bullish. Without getting too over the top here, the thing to monitor right now is the RSI indicator just below the price chart. RSI is a much mis-understood tool. For now, a bullish range demands that this next leg up get above the 70 level (for RSI). If it does not that is bearish.
    Much more could be written, I’m trying to keep it as un-tech as I can.

  196. 196
    antrimshale74 Says:

    How about selling puts on the DUG as an alternative to puts on the OIH?

  197. 197
    antrimshale74 Says:

    12.5% trough to peak move in the XLE today.

  198. 198
    tater Says:

    FSLR – last one here, running out again.
    Looks like we are getting a triangle congestion formation just inside the lower area of the gap. Have to watch the break out of the triangle, probably will not happen until tomorrow, sorry.
    Generally this means the market is unsure and looking for a push. Also there is some school of thought that says such a formation located in that position is a pre-curser to a continuation of the move, which in this case is bullish.
    Lots of tech, lots of stuff to look at. Never a good answer, only areas to point to where you make your decisions and learn whether you are right or wrong. Good luck, hope some of that helps.

  199. 199
    zman Says:

    Ok, I’m back, wow, what a gift from the broad markets.

    Antrim – not exactly the exposure I was looking for DUG has a big component of XOM in it. I was thing oil service is more the way to go. Majors and oil service have already been dealt the real blow of lower prices which is pretty well filtered through their numbers. Oil service rates are just starting to fall and that multi hundred dip in the N. American rig count will be uglier still for the oil service names.

  200. 200
    zman Says:

    Tater – it does, holding my near term FSLR calls into tomorrow.

    BEXP coming flat on day, finally.

    DO, nice rally, in the one part of service I still like.

  201. 201
    Sambone Says:

    784 point swing on the Dow today, Wow!

  202. 202
    orion Says:

    Sold my SUN Jan 40 calls, too much of a spike not to take profits (+148% in 7 days). Will buy back on a downturn.

  203. 203
    BirdsofpreyRcool Says:

    IG back to 199…. this is huge. shorts are getting their toenails pulled out. extremely painful.

    swings this large in the credit market are NOT healthy!! but, tell me something i don’t already know.

  204. 204
    zman Says:

    what does consumer confidence come out tomorrow?

  205. 205
    zman Says:

    We get retail sales pre market and consumer sentiment after the open.

  206. 206
    BirdsofpreyRcool Says:

    IG 198… ouch, ouch, the Big Toe!!

  207. 207
    BirdsofpreyRcool Says:

    U of Mich Consumer Conf at 10am EST

  208. 208
    BirdsofpreyRcool Says:

    IG 197… not the PINKY TOE too!!

  209. 209
    zman Says:

    ZRADE: $10KP TRADE

    Out last (3) EOG November $85 Calls for $3.80, up 77%. Just taking advantage of the run in the group to exit a November out of the money position. Will reposition soon.

  210. 210
    zman Says:

    wow, up 571 on the djia, 60 on the SPX, $3.34 on oil.

    xng, xoi, oih all up 10 to 11%.

    This is what I meant by compression.

  211. 211
    zman Says:

    Imported beer thirty.

  212. 212
    bill Says:

    free just reported .44 vs .40 est beat of 4 cents

    cut its dividend from .20 to .075

    DSX got hammered when they cut their dividend but paying .80 cents a year when the stock is 1.70 is not reasonable

  213. 213
    bill Says:

    a Bush rally (can i say that) commented on the merits of a free market

    As Howard Dean would say YEAHHHH! YEAAAAAAAAHHH!

  214. 214
    kyleandy Says:

    bill – u listen to FREE comf call?

  215. 215
    TEXWS6 Says:

    re# 159:

    Chatanooga=Marcellus, very easy and CHEAP to drill!

  216. 216
    zman Says:

    Tex – but at that depth how do you drill a long lateral without the weight of a lot of pipe on it? SWN, HK others recently commenting about not being able to drill the longer laterals in 3 to 5,000 feet and this is less than half that.

  217. 217
    bill Says:

    214 , yes i did.. results slightly better than expected..they cut the dividend,1 ship not working,they have liquidity to get thru 2009

    Also listen to the lng presentation

    takeaways,
    -increase liquification in world means gas has to go someplace
    – ceo expects it to come here, means more preasure on ng prices
    – application for export is only exporte
    ing what they already brought in (non controversial).. i dont know why exporting other ng would be controversial, however.
    _hedge fund taking a 30 % stake, world class facility has value to somebody
    maube the secured debt is the way to play thyis one

    i suggest all to listen to lng call

    ceo said it will be interesting to see what happens when ep companies work off hedges

  218. 218
    bill Says:

    more on lng presentation

    last slide

    2 supply waves will hit meaning lower prices

    we need to increase ng use and implement the pickens plan or the piece of using ng in auto’s

    maybe new direction of new administration as they hate everything else plus market pushing that way

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