Monday Briefing

If you missed last week's wrap view it here. All kinds of good stuff is in there from the performance of the energy sectors to the resurgent natural gas short position.

Cyclone/Hurricane Watch: Coast looks pretty clear.

Oil - Rebound Day? Oil is up a smidgeon today as the Iranian OPEC minister says they have no plans to increase output prior to the next schedule cartel meeting in September. Comment: 1) they've already said this, 2) they continue to increase production, and 3) that's exactly what you'd tell people if you sold that much of anything, "quantities are limited folks so don't wait to call..."

Gasoline looks like this:


Natural Gas Softens. Continues to weaken after last week's "as expected" 110 Bcf injection. Mild weather and the lack of storms are at this point combining with the recent large injections to spook traders into selling gas off a bit.  Given the technically weak looking chart I wouldn't be surprised to see gas briefly test $7.25 this week.

Odds & Ends

Analyst Watch: nada

END Watch: Well I thought I had pretty much nailed the downside call as the stock spent most of Friday hanging out at $1.80 but then a large block, nearly 10 million shares, changed hands late in the day and it must have been their biggest holder.

(GST) announced another nice Bossier well with (CHK).

34 Responses to “Monday Briefing”

  1. 1
    ramana Says:

    GST – Hi Zman, this one has some news..and …


  2. 2
    zman Says:

    Thanks Ramana, saw that. Nothing monumental, just keeping on keeping!

  3. 3
    T-Tupp Says:

    z- cracks are gona really start ailing when crude rebounds back up to the 67-68 range eh, and esp if rbob goes sub 2$ this week…..

  4. 4
    zman Says:

    I don’t know what Nicky would say but I think $2 RBOB will be around for a while. Still, cracks are getting whacked even now. I plan on adding the VLO look at spreads to the TSO one today.

  5. 5
    T-Tupp Says:

    so you think it will hover in the 1.9-2.1 range for a while?

  6. 6
    zman Says:

    T- yeah, I think we’ve got a $2 test coming soon and then you probably get a bounce, hopefully not crossing back through the 2.11 level.

  7. 7
    zman Says:

    TSO continuing to work to the downside as does FTO while VLO remains flat. 🙂

  8. 8
    zman Says:

    Morning N!

    RBOB and Oil are way off that level but

    nat gas is almost there. Given the weather I’d expect another 100+ Bcf injection this week which will again hit the YoY deficit and probably build the 5 yr surplus as well. Gas could get knocked for a pretty good loop. It looks like the next support below your level is $7.25. Obviously I hold off on a gas estimate until a little later in the week when I’ve seen the imports numbers for last week tonight.

  9. 9
    zman Says:

    very slow trading in the equities…yawn…

  10. 10
    zman Says:

    N – hear ya dust. I saw some sat photos set for dust last year and it was mammoth.

  11. 11
    zman Says:

    Here’s a story talking about the dust late last season and it mentions that the dust was intense despite a pretty wet season which obviously runs counter to logic


    stocks have strengthened a bit…especially my shorts.

  12. 12
    zman Says:

    Current dust image…nothing to write home about.


  13. 13
    zman Says:

    Karm – if you like APA here don’t forget the CLR, still flirting with $15 and I expect crude to be strong relative to products.

    END is just getting pummeled. I won’t add unless it gets completely knocked down but if I were only a 1x position at this point I’d strongly consider a DD.

  14. 14
    scoop006 Says:

    Z- why the strength in NE & NOV

  15. 15
    zman Says:

    Scoop I was just looking at that. OIH strong across the board too. I have no news though.

    RBOB bounce looks like a head fake.

  16. 16
    Stephen Says:

    Yeah, OIH is strong across the board, I’m thinking of exiting from GSF, their rig data has not been very good for March and April, but they all just keep going up.

    The jackup companies have run up at the same pace as the semisub companies, even though I’m much more bullish on semisub day rates than jackup day rates.

  17. 17
    zman Says:

    Stephen – agreed on the semi sub rate vs jackup rate issue. Shelf looks weaker in terms of activity every time I check that data.

  18. 18
    zman Says:

    N – agreed.

    Has anyone had trouble connecting to my site today? I have but I can’t tell if its Vista being the POS (piece of software) that it is or if it’s my host being the POS that it is!

    The E&Ps look adrift, OIH is strong but I’m not really sure why unless it’s a similar bounce of hard selling last week like gaso and oil.

    Probably liquidate the rest of my options today through Wednesday.

  19. 19
    scoop006 Says:

    could not log on @1:05PM EST.

  20. 20
    Denver Says:

    Z I had trouble once about 2 hrs ago, but since then no prob.

  21. 21
    rol lew Says:

    Can someone briefly explain what RBOB is.
    Z-Man – Stumbed on to your site last week. Great stuff!

  22. 22
    zman Says:

    thanks….aaaarrrrgtggghhhh!!! I can’t yell at them any louder than I already have.

    The host is anhosting.com

    you can check their status here (no www) to see if there is a problem at my site.


    I would not recommend them to you unless your name is T Boone or Flynn.

    Nicky, have you seen Flynn’s latest. I appear to be blocked from the page that shows his trades and opinion now.

  23. 23
    zman Says:

    row lew – glad you like the site.

    Here’s a good primer on RBOB


  24. 24
    zman Says:

    Row lew – it’s essentially just gasoline in the post MTBE world, ie ethanol blended into gasoline.

    btw, if you really like the site you can vote for it at the upper right. Quick and painless, not tom mention guilt free viewing thereafter.

  25. 25
    scoop006 Says:

    Z- Best guesstimate; Refiners + or – by Friday?

  26. 26
    zman Says:

    Sccop: RBOB and refiners down barring a storm. Utilization should tick back up on Wednesday but I’d again point out that with such a large build last week you will very likely see a smaller one this week. EIA has a way of doing that but the trend is still back towards a smaller YoY deficit.

  27. 27
    scoop006 Says:

    Z- Thanks for your reply. Will hold my MRO 120P and go down with the ship unless it goes south.

  28. 28
    zman Says:

    MRO is highly unlikely to make it there.

  29. 29
    zman Says:

    Guy on PSW pointed out NGS: I wouldn’t chase right now but we should be watching this one. This is what I had to say regarding today’s nearly 5% move:

    NGS up with the group. Compression is a big ticket /must have item in Texas right now (Wyoming too but not to the same extent). When you rapidly grow gas production in an area, like has been happening in the Barnett Shale, you have to find a way to get the gas out of the field. You take the old gathering system and add compressors to it to get more Mcf’s in the same sized pipe. A lot cheaper than building a new pipe.

    Anyway HC, the benchmark in the industry is merging with it’s biggest competitor and Universal Compression Holdings so people might be thinking it’s the next takeout although the call volume doesn’t show that today. Also JP Morgan upgraded HC last Thursday which helped extended the run here after Morgan Keegan upgraded NGS on June 6th.

    Hope that helps, Z

  30. 30
    T-Tupp Says:

    nicky do you ever lok at rsi and macd for equities? tso is showing a bearish divergence in those two indicators compared to the two previous highs…. whatcha think ?

  31. 31
    zman Says:

    Tupp – I’ll have the VLO crack data out in the morning post. Man the distillate cracks on the coasts have been holding up better than anyone would have thought!

  32. 32
    T-Tupp Says:

    yea there has been a dichotomy in rbob and distillates latessss

  33. 33
    bill fraser Says:

    VSE is subject of takeover rumors as reported on cnbc.

    Play at your own risk

  34. 34
    tredinertok Says:


    Very interesting information! Thanks!


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