Blue Refiner Monday?

Just a quick post to summarize the past week's movements.

In todays post:

  1. Benchmark and refiner stocfk performance.
  2. Natural gas moves back to near record short position.
  3. Iraqi production comments - minor recovery after recent troubles.
  4. (TSO) catches a bulge bracket downgrade.


Barrel Weighted Index of Refining Stocks Continues Steady Advance. This home grown, capacity weighted index of independents VLO (68%), SUN (18%), TSO (12%) and HOC (2%) is closing in on all time highs reached during the dark days following Katrina.


The Equal Weighted Version (straight 4 way split) Is At All Time Highs and Climbing.


Odds & Ends:

  • Iraq Production On The Mend? 1.5 mm bopd in February, 1.6 Mar, 1.7 April expected. Claim is from Energyintel.com and they actual said it was growing. Growing from February's low maybe but still pretty lame when you consider that production averaged just over 2 mm bopd in each of the last six months of 2006.


Utilization Ballpark Watch: I keep a loose tally of refinery ups and downs. The long and short of it for this week (reported next Thursday) is that I think we step up from 88.4% to ~89% and then to a little over 90% in the following week. That's assuming nothing breaks, leaks, or spontaneously combusts next week which given the industry's recent performance is unlikely.

Opec Cut Compliance Faltering. From Upstream and tanker tracking firm Oil Movements:

  • Excluding Iraq and Angola, OPEC production expected to rise 210,000 bopd in April.
  • Oil Movements says this is the 4th consecutive week of increasing shipments
  • OM said compliance is certainly below 1 mm bopd on its way to 700,000 .

CFTC Shows Natural Gas Shorts At Second Highest Level Ever. This will provide a lot of buying power when they cover.


Analyst Watch: (TSO) cut to hold at Citigroup and Howard Weil. It's like I've been saying, business is great but it's not this great. Too far, too fast. Third major brokerage fim to cut its rating in 3 weeks. We'll see if it has more than $2 worth of impact. (VLO) also cut to hold at Citigroup. PTEN, BJS, NBR taken to overweight at Lehman. ESV, TDW, TRMA taken to hold at Lehman.

25 Responses to “Blue Refiner Monday?”

  1. 1
    El Diablo Says:

    THIS DAY IN HISTORY: On April 16, 1947, America’s worst harbor explosion occurred in Texas City, Texas, when the French ship Grandcamp, carrying ammonium nitrate fertilizer, caught fire and blew up, devastating the town. Another ship, the Highflyer, exploded the following day. The explosions and resulting fires killed more than 500 people and left 200 others missing.

    Anybody know how much oil spiked that day?!

  2. 2
    zman Says:

    Morning fellas, anybody at home today?

    XOI finally taking a header on those refining stock downgrades and a bad (down a penny) day for gasoline.

  3. 3
    zman Says:

    Story with dets on OPEC demand forecast cuts.


  4. 4
    zman Says:

    Noway oil production: steady at 2.4 mm bopd in March unchaged from Feb. This had been sliding almost monthly.

  5. 5
    zman Says:

    Thanks Sane! Can you see this now!

    I’ll post same on Thursday’s post where I know you can see it.

  6. 6
    zman Says:

    Technical difficulties. Let me know when you can see this post.

  7. 7
    zman Says:

    Add 2x position on TSOQB – May $110 TSO puts at $5 even.

  8. 8
    lawdymama Says:

    Z – when I go to the main page, still seeing last Thursday’s T-Bone post.

  9. 9
    sane Says:

    I can see now, thanks.


  10. 10
    sane Says:

    oops the post is messed up. It has todays title with the weekly wrap-up content


  11. 11
    zman Says:

    Sane – not a mistake – It was just a lazy amended post from the weekend. I was travelling til late last night. Most people don’t read it on the weekend so I figured no harm/no foul in reposting with a few more graphs. Sorry if it’s a bit of a lame duck post.

  12. 12
    zman Says:

    Liking the moves in TK and RAIL – calls doing very nicely here.

    TSO seeing a lot of dip buying. I’ll post a correlation of gaso prices and recent stock price in tomorrow’s post with broker comments along the way. You can see for your self what matters to the stock price. lol

  13. 13
    sane Says:

    Traders said Royal Dutch Shell (RDSa.L: Quote, Profile, Research) was expected to restart its Forcados crude oil stream in Nigeria’s Niger Delta after being shut a year ago. The company declined comment, but a source at the state oil firm said production may start in April.

    “Shell told us that Forcados would be back up and running by the end of May or the beginning of June,” a West Africa crude trader said.


  14. 14
    zman Says:

    This after Shell said it would be back to full production (Nigeria) after year end.

  15. 15
    zman Says:

    Half out of RAIL at $55 Calls at $2.30.

  16. 16
    sane Says:

    Yeah it was on reuters today.


  17. 17
    zman Says:

    meant the $50s

  18. 18
    sane Says:

    I think going long on the RR’s is a good idea. I know from where I work we have been seeing a nice growth in the volume of rail transport.


  19. 19
    zman Says:

    Car load count is up at the EIA. I like the rails and rail suppliers long and the coals short. Production is up, storage is up, prices are down.

  20. 20
    zman Says:

    Just took half rail off table b/c I paid a buck for it on the tenth! Felt kinda greedy there. Still think that chart goes higher but I’ll play with somebody else’s loss.

  21. 21
    dave Says:

    Man what a day.

    Zman I noticed that the OPEX now offers option trading on NYMEX light sweet
    crude. Wonder how that will affect the volatility of oil.

  22. 22
    zman Says:

    Dave – please clarify. What’s the symbol?

  23. 23
    dave Says:


    on the OPEX may is QMK7 % june is QMM7 crube futures.

  24. 24
    dave Says:

    % = &

  25. 25
    zman Says:

    Ok, I see. I wouldn’t think it would have any impact on volatility as oil is so liquid.

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