Equity trading closes at 1 pm est today.
Holdings Watch:
CALLS:
- (IOC) Bought July $22.50s for $2.15. Last bid $3.50.
- (HAL) Bought July $35s for $0.75. Last bid $0.70. The OIH looks like it plans to test 180 again very shortly and as I've said before, I like being long one of the lower multiple core components of the index if I think it's going to punch through to new highs. While I'm a little nervous about natural gas prices due to the increasing level of imports (see below) I'm content to build a position here or trade it quickly again if I get another good swing.
- (EOG) No action other than once again the stock opened poorly with oil and then recovered with oil before closing at the HOD. Cost here is $1.45. Last bid $1.50.
PUTS: No action except to watch the refiners hold firm with falling oil and rally with it later in the day despite under-performance from gasoline. Distillates continue to be stronger than one would expect as heating oil inventories remain a concern.
STOCKS: No action. Waiting on natural gas to get cracked before going long more of my favorite names.
Oil. After a brief dip in the morning the August contract rallied to close up $0.41 at $71.09. This action is looking a little tired and very technical.
Nigeria Watch: Eni (E) restarted ~50,000 bopd of production from two fields.
Tanker Watch: Rates for VLCCs back down to January lows. Stocks don't really seem to mind. Tanker watchers attribute the slump to OPEC cuts, high U.S. inventories and a glut of capacity.
Crack Spreads Resume Slump. Once again not stating this stuff for filler or my health, well maybe for my heath, as gasoline once again was out distanced by oil and closed up $0.059 just short of $2.25. According to a Reuters survey, at least a half dozen refineries wre in the process of restarting in late June and into early July representing 3% of U.S. refining capacity. Simply stated, that should keep oil aloft while driving gasoline lower.
Early Read on Thursday's Oil Inventories (from Reuters):
- Crude - expected DOWN 700,000 barrels.
- Gasoline - expected UP 300,000 barrels. Utilization is expected to be up another 0.9% to 90.3%. Late last week the bull camp was saying utilization was going to hit the mid 90s this week! But alas that was so last week when we really needed an excuse to top $70. Now perma bulls like Flynn and Addison Armstrong (who may get his own watch if he repeats himself any more on CNBC) are once again banging the holiday driving demand drum. Never mind this week's report doesn't actually include the holiday and that the week containing Memorial day, the biggest driving day of the year, was a complete bust just a few weeks ago. Who needs logic when you've got the media on your side!?
- Distillates - expected UP 200,000 barrels.
Natural Gas: Temps up but imports rose as well.
- Cooling Degree Days: 68, in line with prior expectations of 68 and up from 59 last week. Essentially in line with year ago levels and about 10% warmer than normal. This jives with Edison Electric Institute data which showed generation was up 3.9% relative to the prior week. This week's CDDs are expected to climb slightly to 71.
- Imports Rally To Third Highest Level Of 2007. Both LNG and pipeline imports from Canada were up. LNG notched its third highest level of the year last week with 3.16 Bcfgpd while imports from Canada makred a modest (but almost certainly short lived) recover reaching 9.3 Bcfgpd.
The combination of higher imports this week and milder weather next does not bode particularly well for natural gas prices this week as I'll be looking for a return to triple digit injections. Of course storms are a possibility and we are tracking a minor wave slowly turning its way across the Atlantic. Here's another report showing a the same wave and another forming off Mexico. No development is expected at this time but clearly it's time to start watching more carefully.
One Offset To Inventory Weakness: I think MMarkkk pointed this out a few days ago when citing a Natural Gas Week article but all the rain in Texas and Oklahoma has gone from being a minor headache to a major problem for gas producers in the region. I haven't seen a PR so far but the rain does seem to be slowing down drilling and field work and more rain is forecast. Look for some "get out of jail free pass" PRs prior to earnings.
Odds & Ends
Analyst Watch: nada.
Gastar Announces Two Well Completions. Late yesterday (GST) announced two more Bossier single zone completions that will add a combined 8,000 Mcfgpd net to the company; fairly significant when compared to total company 1Q07 production of 14,100 Mcfepd. These wells are both restricted by temporary high pipeline pressures downstream from GST's sales point. Completion operations on a third well (which had not previously been deemed a success) are said to be in "finalized" but encountered delays due to the previously mentioned inclement weather. I still like this one at these levels and remain long.
(BBG) Added to the S&P 400 Midcap Index. This may provide a nice entry for puts going into earnings but there's still plenty of time until and I'm behind on my research so no action just yet.
New York Natural Gas Production Flattening. Short article from Forbes about the high growth in New York state gas production over the last few years with a quick piece on the growth brought about by the Trenton Black River wells and how that's now leveling off. Comment: Though it's a small piece of production New York's story is not unlike a lot of states that are not tradionally know as oil or gas states but that have recently undergone a surge in production chasing elevated gas prices. After the initial easy stuff is drilled up and the wells have declined by 50% in the first six months you've got to say, "ok, what else do you have?"
Exxon Downplays Vz Pullout. After the close (XOM) indicated that its failure to work out a satisfactory deal with Venezuela would not have a material impact on the company's finances nor operations. Both (XOM) and (COP) are continuing compensatory talks with the government.
Chavez Downplay XOM and COP Pullouts. This is the one thing the two sides have in common. Chavez called the two firms vampires and said he'll replace them with a laundry list of state-owned oil firms including, Brazil, Belarus, China, Iran and Russia. This is easier said than done given the capital and heavy oil technical expertise that is leaving. Moreover, these countries stand to get burned by Chavez' daily shifting winds. The Chinese are still stinging from the cancellation of a deal to produce 100,000 bopd of Orimulsion, a cheap fuel produced from Orinoco heavy oil, for China's power plants. Chavez may hate the U.S. but he loves its money selling over half his daily production to the U.S. Without U.S. expertise that percentage is very likely to rise as Venezuela's production continues to fall.
Have a Great adn Safe 4th of July!
GST to be strong this morning. They’ve just announced two wells that boost production more than 50%. This is CHK’s
partner in Tx. They’ve got a third well which is in the process of completion but it’s delayed by all the rain.
In other news a tropical wave mid way across the Atlantic has gotten a lot better organized overnight,
http://www.intellicast.com/Storm/Hurricane/AtlanticSatellite.aspx?animate=true
When you combined this action with the subsidence of Atlantic wind shear a month ahead of schedule you could be looking at a rally in natural gas and gassy stocks. I’ll keep you posted. This could also send the OIH back to 180 and beyond by Thursday.
Z- Is it time to short WNR?
Zman – I like this loop better.
http://www.ssd.noaa.gov/goes/east/catl/loop-vis.html
Scoop I’d wait given the holiday ramp that’s on.
Sambone… Got one that’s not Java. I can’t get it to load on my machine. ;-(. It looks much better organized today though don’t you think. Probably the strength behind some of the gassy names like SWN up a buck here.
GST off a nickel is an opportunity.
Sambone – downloaded Java on my XP box. My main box, Vista, refused to do it. Talk about not ready from prime time.
Anyway you get the prize for earliest call on a spinner in the Atlantic this year. That thing has good rotation and a core.
FTO: Control and another VP at FTO have exercised options and then sold 47,000 shares in last few days. Not exactly a ringing endorsement of company prospects when you just pass through your options.
Atlantic wave – when you zoom in on the loop you can see an eye forming but then dissolving overnight.
Z,
FYI, Jeff Saut lowered his ’07 forcast on NG price assumption from 7.70 to 7.08. But big increase in ’08. You can read his comments at http://www.raymondjames.com Go to Personal Investing then Market Commentary.
Thanks Art. EOG acting well in here again as is OIH.
Watching OIH closely as it’s nudging closer to the 180 level.
I’d bet that wave gets upped to a tropical storm over the holiday.
Taking a small position in OII Calls if I can pick off the July 55s.
of course terrorist attacks are far worse for demand than supply but whatever works for you CNBC.
Nicky – I too am thinking the gasoline build could surprise to the upside. Consensus is only a 300 build. Mid week holiday and wet weather in much of the country will suppress driving demand.
Nat gas. It was hotter but there were much higher imports. I think 71 is very low.
UNG sharp rally. Anybody see any comments about that storm yet?
Tropical perspective from someone who lives on a sailboat (RedJack) in the Virgin Islands. I subscribe and follow many weather sources…the current disturbance in the Atlantic bears watching, but it is currently forecast to pass the Virgin Islands on Sunday night/Monday morning as strong tropical wave. Also storms that do from in this part of the Atlantic basin in early July tend to recurve to the North. I wouldn’t be concerned that it would effect the markets unless it threatens the Gulf of Mexico, which is unlikely and certainly not this week. However, saying that, some forecasters are more concerned about the favorable conditions that exist in the western Caribbean over the next two-three weeks. If anything forms there, it would be perceived as imminent threat to GOMEX.
Side note: the saharan dust has been so bad the last few days that St. Thomas has looked like L.A.
1) Nicky that’s why I don’t watch the “Talking Heads” at CNBC. Waste of my time.
2) Zman – No prize, just watching. Prediction = If a TD/Hurricane hits the GOMEX, Oil = $80.00. That’s how skittish this market is.
3) Leaving at 1PM since the market will be closed, NYMEX open til 2:30 I believe.
4) Have a good 4th, and I’ll see ya on Thursday.
Z,
Tropical update in 3
Here’s a discussion from Impact Weather:
Tropical Disturbance 19
Updated: Tuesday, July 3rd 2007 10:39am CDT
Thunderstorms associated with Tropical Disturbance 19 midway between the eastern Caribbean Sea and the coast of Africa near 9.8N/39W increased overnight, but latest satellite imagery indicates a decrease in thunderstorms over the past few hours. There is evidence that the disturbance has developed a weal low-level circulation center, an initial step in possibly becoming a tropical depression. Movement is a little to the north of due west at 10-12 mph. We think that there may be a 30 percent chance that this disturbance could become a tropical depression over the next 24-36 hours. However, beyond that time, conditions aloft are forecast to become less favorable for development, le ading to gradual weakening.
The disturbance is forecast to track to the west-northwest over the next 5-7 days, reaching the islands of the northeast Caribbean by Sunday. By then, the disturbance will most likely be just an area of disorganized thunderstorms that will produce some gusty wind and brief heavy rainfall as it passes through the islands.
Thanks for the weather reports guys. Looks like a non-event but you never know. Have a great 4th everyone! See you Thursday.
Now that it looks like the weather folks don’t expect things to develop, you know what that means!!!!
When one of these pops, there will be a nano second worth of time to make a good trade. Then it will get overblown in the media and on the Street, then there will be a second chance for a good trade going the other way. Just keep an eye out!
Most of the oil ‘bidness’ is closed Thursday too so I’ll see you on Friday! Nice one-day work week!!!
Here’s what the EIA website says:
Note: Because of the forthcoming Independence Day holiday, the Weekly Natural Gas Storage Report for the week ending June 29 will be released on Friday, July 6, between 10:30 a.m. and 10:40 a.m. (Eastern Time). The official release schedule is accessible by use of the link titled “Schedule” located on the menu bar at the top of this web page.
Rumors floating around London of a BP-Shell merger. Wow. Sounds great – just because it will make Chucky Schumer and all of his little buddies seeth with anger and angst. I love anything that makes a Dem squeal.
MMarkkk Are you referring to Senator SCHMUCKY CHUCKY SCHUMER?
L96 will be dead by tonight. Nothing else much to report in regards to the tropics.
No post today. Been down with a Central American bug.
Nigeria’s got oil and gasoline pumping hard.
Yes Nicky, post here.
The comments seem euphorically bullish yet like you said, there has been no fundy change here.
OIH hit 180 again but is treading water with everything else before numbers.
Still holding my IOC but my dump my calls just before the number.
We’ll see in about 1 minute
Futures still in the green after report, but not as much.
Build Build Build Build
354.0 Mbls is a lot of oil in storage
Sane
is it just me or do most of the refiners rally in the opposite direction preceding the actual report at 1030??!! lol ive notice that lately. weird. the broader market seems to do that on rate day decisions too when the probability of direction is priced into the swaps… odd.. but maybe tradeable…
is api a worls thnig and eia a usa thing??
The American Petroleum Institute reported a climb of 1.2 million barrels in crude supplies for the week ended June 22. The Energy Department had reported a rise of 3.1 million barrels for the latest week. Motor gasoline supplies were up 48,000 barrels, the API said. The government reported that supplies were up 1.8 million barrels. Distillate supplies climbed 1.7 million barrels, the API said. The government posted a 1.2 million-barrel rise
Nicky, do you think Phil F will care or even remember those numbers? He’ll just act like this a quirky number or some such and will say, “wait until next week when the numbers with the actual holiday in then will show big demand”
gaso demand was up only 1.2%, that’s below the 1.4% of the last several weeks which has fallen from up 2% earlier this spring.
Out of IOC trade for $4.70. Cost $2.15
Added TSO 57.50 puts for $1.80.
that climb in distillates is going to knock out one of the last legs the refiners have to stand on.
Tupp – I noticed that too.
USO getting creamed now.
Phil F, Even a broken clock is right twice a day. He say the same thing every week.
Sane
There everything red now including the futures
Just broke 71, 70.92
z- out of curiosity, that IOC trade– were you just expecting a bounce and just saw an opportunity for a quick trade?
Tupp – I had been watching it fall and looked into the reasoning. When they got their bankers to commit to a one month extension of the favorable rate on the revolved I knew it would pop. Since then it’s only going up because it’s been going up if you know what I mean. No further news yet. Right now it’s going without me but I’ll only get back in when I see the well report on their Elk2 hole. It’s pretty volatile and I’ll play it long or short depending on the results. If bad, it gets crushed back to $19.
surprising the size of the cumulative options contracts on that issue eh?– esp because of the size of the co./ or have the ops. heated up recently because of the recent happenings??
Tupp – I think it’s the latter.
Refiners holding up surprisingly well.
TSO down double VLO’s losses. I think it’s because of their relative valuations.
DDT coming to fruition??
Tupp – DDT?
Nicky – I think you make a great point about the purely technical rally that has lifted us $5 in a week with only fear for a reason. The London stuff should have sent crude down, not up. What are your technical levels now for oil, rbob, dist? tia
Zman and Nicky – Here’s your buddy!
http://www.thedesertsun.com/apps/pbcs.dll/article?AID=/20070705/COLUMNS03/707050301/1238/business
Going green now, but wait until after 3 PM today to see. Slow trading day. Wait till next week (Monday), when everybody gets back.
My thoughts on Nicky’s post of Flynn’s crap:
From Flynn: The weekly inventory reporting from the Department of Energy will be exciting again! Look for crude to be down 2.0 million, gas to be down 1.0 MB and distillates down 2.0 MB with runs up 0.5%.
Crude: try UP 3.1
Gasoline: try UP 1.8
Distillates: UP 1.2
Why does anyone listen to this perma bull pumper? Why can’t CNBC hold him accountable. He bricked. He bricked bad. Now he’s going to say, oh well, it was all imports you see. Imports were higher than expected and so it doesn’t count.” That’s BS. and that’s what’s keeping oil from dumping hard so far. Remember that we’re up $5 on the back of nothing but some terrorist action which should send crude lower, not higher as it would hurt travel. Unreal how CNBC defends this crap!!!!
delicious double top
what caused the initial drop in ioc?:
Article describing Phil Flynn as an energy Guru and CNBC’s go to guy on oil. He’s still calling for $85 oil and $4 gasoline later this year.
Here’s an excerpt “His predictions have been so uncanny that he has been approached by major publishers to write a book on the world’s worsening energy crisis.” gag.
In this wiki-based world if you say something often enough (or write it) it becomes truth.
Tupp – look at this piece for my thoughts re IOC.
http://zmansenergybrain.com/?p=416
I love the $4 gasoline in Chicago bit. Ummm… No. I am in Chicago at least once a week and I never saw it at $4.
The dude is a major wind bag.
Sane
Oh yes, DDT – how could I forget the DDT.
So imports were up a bit for gasoline, they’re still short of where they were several weeks ago. I don’t think can write of this increase in inventories based on a errant number for imports.
TSO really on the cusp of falling down now.
LOL – That’s why I posted it. All Phil is interested in is you opening an account with him, so he can get the commissions. Nicky and Zman, tell me how you really feel? LOL
anybody know what’s messing up HAL’s day today?
Sambone – blood boiling. The guy, who obviously has influence, is an enemy of the American public when he helps prop up oil when US stockpiles are at 9 (10?) year highs. When he constantly talks $4 gasoline and generally only sees bullish signs every where. I actually agree with him on ethanol and congress but the fact that he’s never held accountable but is lauded as a guru on energy and “uncannily accurate” tells me I’m doing something wrong. I guess I try to be right. That’s my problem.
I think it’s funny and I just laugh at old Phil. I’m just pickin a little. In regards to HAL, NOV getting spanked also. No news, so I would guess just profit taking on no news in the oil services patch that I can see.
Across the board insider selling at FTO today. It’s not option exercise either and some pretty good percentages of total ownership from the CFO, controller etc.
HAL – The only thing I can find is a story about improper accounting allegations
ZMAN – American media have become extremely lazy. Phil is handy and known, so they use him. To find another energy guru would be work. Why work, when Phil is always available and always gives short sound-bite quotes that don’t need editing.
Hear ya quiet/boring trading Nicky.
Thanks Cowboy and Sambone re HAL. Just not the usual trading style for it but it’s probably the type of day we’re going to have…people are scarce. Are the accounting allegations anything new? Thought I’d heard some of that talk before there.
P – valid point!
Brent crude – unreal. Anybody got a handle on OECD inventories. Media keeps saying they are low, except for the US, and that’s what keeps Brent up. Problem is that the latest data I have is from February.
Stocks are flat lining for the most part although the tankers are having a very good day.
natural gas quietly getting whacked.
Z Do you have an explanation why WNR stock price continues to soar?
The only thing I have seen was that Europe inventories were 66Mbs over the 5 year average and the US was 24Mbs over as of May preliminary data. In total OECD stocks were 32Mbs over the 5 year average.
Sane
Off subject – What is interesting is what the 10 year treas is doing.
Nickey, If you look at the eia’s report demand was flat to down. I guess they don’t read.
Sane
Interesting link – This will give delayed quotes. Look at the “Bonny”. When will the street start looking at the other quotes around the world instead of WTI?
http://www.upstreamonline.com/market_data/?id=markets_crude
Sane – can you point me to the OECD data?
Scoop – I think someone thinks they’re a takeout candidate. I’m just watching them for now.
Nicky . LOL. I knew they’d explain it away on imports. See comment 67.
Sambone – that’s why I’m trying to get at world inventories. Anybody got an excuse for prices like that Bonny quote?
Z,
Spero
The info is from OPEC so could be suspect.
Sane
Thanks Sane, that’s the exact opposite of the statement made repeatedly by CNBC anchors and their guests. They’ve been saying all spring and early summer than world inventories are low, unlike in the US.
Nicky – say you won’t increase production, tell everyone it is in fact falling and then cheat away as oil sticks to $70. OPEC has relearned how to play the game since last winter!
Nicky,
I agree absurd. Is this Shell/Nigeria? Thanks for the levels, those seem a long way off now!
I don’t see how the chicks on CNBC can talk about imports being something that discounts the value of this build in gasoline when production outstripped demand on a % growth basis.
Natural gas looks a little fearful of tomorrow’s number. Has anyone seen a recent consensus number?
Z J. Cramer calling for David Lesar of HAL to be replaced.JC is blaming DL for HAL’s poor stock performance.Thought you might like to know.
N,
Phil Flynn is buying 😛
Sane
Little L96 just won’t give it up, it’s a fighter. It will probably die tonight.
http://www.ssd.noaa.gov/goes/flt/t1/loop-vis.html
Watching east and west coast of Florida currently.
thanks scoop and Sambone.
Nicky – I’m starting to think we’re extended here and that this move is meaningless given the volume.
Zman – How ya feeling? Any better?
Sambone – Thanks for asking. It just keeps hanging around. My wife calls it the Honduran flu. I think it used to be called the plague.
I’ll have a post up tomorrow as usual. While I’ve got you guys on a boring day is there anything you want more of from this site? tia
I would add some more links, like “upstream”, etc.
What’s consensus for gas storage? I’ve heard a low of 71 and a high of 88.
here’s the ulitmate link:
http://energyfacts.blogspot.com/
SLM – I guess it’s around 80 Bcf which seems awfully low to me given the big bump in imports week to week.
Nicky – Your buddy doesn’t look like he’s taking any bricks. Imports, Imports, LOL
http://www.forbes.com/feeds/ap/2007/07/05/ap3886585.html
Incredible: Imports were “very big numbers” he says. Then he says refining utilization was low. Then he closes with “apparently the ceasefire is over” in Nigeria.
When you look at slowing demand and the chart of gasoline which is swiftly approaching the bottom end of the range, while the oil number is now at — year highs, it’s amazing that he can cherry pick the worst and the “unbiased” press offers no couterpoint to him.
On oil we’re at a nine year high. If we add another 600,000 barrels we’ll be suddenly at a 14 year high. I only point that out but it won’t matter.lol.
Z – you mentioned that WNR is a takeover candidate; any ideas on who is interested (rumors)? Comparing WNR against other refining peers, what arguments do you have against shorting / buying puts?
Thanks. Joe.
OIH poised to go higher again I think. It hit an interday ATH today before selling back with HAL weighing it down. I still own a 2x there and I’m considering adding more on this weakness.
Unlike some, I don’t see that a tumble in oil is going to kill the service guys. They’re cheap and busy and will likely get even busier. Especially the deepwater drillers and on shore compression, tubulars of all kinds and drill bits and mud. I am in now way negative on them as I think it will take sustained lower oil (not likely) and gas below $6 (also not likely but possible) to put a dent in activity. If there are western (Rockies) shutins it won’t hurt service as it won’t be a curtailment of drilling. You need under $6 for a while to get players to lighten up in Tx and that’s unlikely during Hurricane season.
Joe – just the takeout would prevent (and the fact that they are completely out of whack with reality). I haven’t heard a real rumor that but that’s the way the stock is trading. TSO would make some sense as the buyer. The stock marches up a buck rain or shine and is a great short other than that. It’s in the top three most expensive of the group and it’s a tiny player, like HOC and FTO, which don’t make sense to me up here either.
The only other thing against it as a short is the option premiums which are pricey with big spreads. There is significant call and put volumes but the spreads never tighten which is annoying. I like FTO a little better from an options standpoint and the fact that it appears to be flattening out doesn’t hurt either.
guess I sold my IOC a little early.
Nice run in oil into the close.
I heard earlier that TSO could be involved with WNR somehow? Wonder if the private equity groups could be interested? Get some Airborne, it’s keepin me goin.
Thanks Fred…more of a stomach flu if you know what I mean. It’s ok, I can stand to drop a few pounds.
Nicky – I see the green also, BUT we’ll wait to the last 1/2 hour. Slow day, nobody’s about, ya know. Did some work on the Oil/Ngas patch and the shorts are coming in. If Oil continues it’s upward trend, as it has for awhile, we may have a short squeeze on these stocks until the floor falls away. I will put my stops in next week. I agree with Nicky that Oil has an upside down/Inverse head and shoulders chart. Oil may run to $75.00 before it’s over. IMHO
Sambone – I’m in that camp as well. $75 on technicals along. $70 new psych floor at this point.
Any opinions on the TSO chart. DDT?
Zman- TSO – My read (Nicky is the expert) is that it has had a good run since Jan. I would not be buying here, but putting in stops, if I owned it, which I don’t. It has been choppy since May. It’s below it’s 50 day avg. Volume is larger on down days that on up days, which is a signpost for me. Fundemetally, Morningstar, S&P, and Citi all say sell the stock. That may be a postive, ya know. I think your puts are a better buy, if and when the floor drops away on oil.
Sambone – that’s what I’m thinking too. I’ve got the $57.50 and $60 July puts.
Crude Oil(WTI) – 1st support/2nd support = 63.60/59.70, Resistance = 74, 50 day/200 day moving avg = 67.22/65.21, target 74.
You can tell it’s a slow day for me.
I’m gone, market is CLOSED! Zman hope the crud gets better! See ya!
Zmann –
Good thread over here (have said it b4).
I am shopping for suggestions ….
What do you think are the best short candidates if oil finally starts to roll over ?
Also, what not to short (I know you like service/OIH) and/or long candidates ?
And why ?
Good call on IOC earlier in the week BTW.
Full disclosure, I have minor positions on at this point in the sector, mostly short oriented from higher levels (oih, bhi, tso…)
Cap:
Activity remains and pricing very strong in nearly all OiH segments. Canadian drilling is week but that’s really it. They’ll stay strong unless oil really gets crushed. Or if natural gas falls below $6 in which case you could see some activity in the shales threatened and in several areas of the rockies. investors love the service stocks and although the rate of price increase (day rates etc) has slowed it’s still going up as is utilization. it just seems a bit too dangerous for me. If you were to short I’d steer clear of the deepwater drillers and compression companies, and bits and mud (SII) and tubular companies. They’re all going to stay very busy. Land drillers are probably the most vulnerable right now but not very
My best short right now is nothing new to you. TSO. Crack spreads are going to keep falling seasonally and they have quite a ways to go. Their numbers have long taken into account the new refiner and I think they’re putting in a heck of a double top here. I like HOC, FTO, WNR as well but am holding off on getting to involved in them as they’re thin and you can get crushed to easily in them.
If IOC messes the ELK2 well up that’s another one. It’ll gap down 3 or 4 and there will be room for more.
Among E&P on the shortside, I’m very curious about BBG, a rockies gas player that is seeing estimates slide with gas prices out there. could be a sharply lower 2q for them but for now I’m just watching as I haven’t had time to work it up. BBG just got added to the S&P400 which gave it a nice pop but it looks expensive to me given their 100% rockies gas focus. SJT could be in the same boat.
Thanks Z …
Oil higher, so our stocks are higher before the open