Wednesday – Chesapeake Curtails Gas Production

As many of my long term readers will know I've been saying the natural gas production curtailment press releases have been on the drawing board for some time and were pennies away (in terms of natural gas prices) from being sent to the newswires. Yesterday at one minute after the close Chesapeake did not disappoint:

  • Production Curtailment:  6% of production or about 125 mm/d net (200mm/d gross). THIS will boost gas prices. Even better its from the Barnett Shale. Note that they went on to reaffirm both 2007 and 2008 production guidance and established a double digit growth number for 2009. I've been saying it for a while now and just this last weekend I wrote:
"I'm beating a dead horse but since it's dead I'll hit it again. $5 gas means a much lower number at the wellhead in many places including the Rockies. Press releases will be crafted and released regarding shut ins" Comment: And there you have it! This is where the storage surplus has come from. If (CHK) is feeling the pinch that means many other players there are in a worse position with regards to land costs and few have the same leverage with the service companies.

Regarding the Fayetteville Shale I wrote:

$5 gas is marginal and will not work for the non legacy asset players involved here. If prices do fall below $5 watch the drilling permits in these plays slow down and the rig counts come off these peaks pretty quickly. Comment: Not far away if prices don't recover soon.

Recall (CHK) fired the opening salvo of production cuts last year as Henry Hub fell to $4.75 in late September at that time also curtailing 6% of production. Many companies followed in (CHK)'s footsteps in the weeks that followed albeit in a less public way.  You can’t justify this level of drilling at these prices!

  • Master Limited Partnership Formation As Expected. They plan to raise in excess of $1 billion.
  • Asset Sales: 1 Now, 4 More To Come. These in combination with the MLP should go a long way towars alleviating the fear of near term equity offerings. Yesterday I called BMO's downgrade of (CHK) bogus but little did I (or apparently the analyst) get just how lame a call it was. Nice bit of humble pie for him there.

    • Deal #1. Non Operated Selling 145 Bcfe of non operated assets in Kentucky and WV (1.5% of total proved reserves and production) for $550 million. That’s a nice price for those assets (roughly $3.80 /Mcfe). No doubt the premium pricing to Hub in the Appalachian region is behind part of the premium as are an undisclosed quantity of proven undeveloped and probable/possible reserves but no two ways about it, (CHK) got a great deal as most acquisitions have been pricing around $2.50/Mcfe in the recent past which was in a better gas price environment. Kudos to Jefco's Randall & Dewey team which contains some serious E&P analytical talent for pulling off that sale.

    • Deals 2,3,4 & 5. To cap a perfect press release Chesapeake added that they'll be conducting four more sales of similar size and expected price, one approximately ever 6 months through 2009.
  • So In Aggregate, That's $3.5 Billion Raised Over The 24 Months (~ Half of It This Year). Equity deal schmequity deal.  These deals combined with CHK's strong hedge positions should ensure their desired level of capex without tapping the equity markets for quite some time. Remember, they're converting acquired assets to producing reserves right now, not acquiring more. 

Let's see how many Wall Street converts this garners this morning and work up additional positions after the market opens. I think I'll be adding to September to January 35s as this one may have a pop at the open, then a delayed reaction advance over the rest of the day/week. This will have positive ramifications for the gassy stocks in general but especially for big liquid names like (APC), (COP), (EOG), (XTO) and a little later with gassy mid caps (NFX), (SWN), (KWK), (CRK) all the way down to minnows (PQ) and (HK). 

Natural Gas. Rebounded from a dismal opening yesterday as the hurricane gurus at Colorado state point to Felix and Dean and said, "see, we told you it was going to be a bad one, two cat 5's making landfall in the same year...unheard of. They then went on to say that the season will continue to be a busy one." Gas closed up $0.16 to $5.63 as it continues its nearly two week long stint of range bound trading in the mid $5s.

Today Gas Is Rebounding As You Would Expect. Gas is up $0.15 to $5.78 in early market trading this morning and I'd expect more short covering to show up in the CFTC numbers on Friday. I'm still a little leery of the upcoming headline "3 Tcf in storage reached at earliest point in the history of gas storage" which could happen this week but certainly by next week. When this happened last year the news was met with a sharp decline in prices (fell from $6 at the beginning of September to as low as $4.20 by the third week of the month). However, I'd also point that last year's curtailments, led by (CHK) put the floor in on gas. When that floor appears to be set I'll be looking at more E&Ps and (UNG) as longs. I'd also note that many of the major brokerage firms have adopted a neutral tone on the gassy E&Ps over the last two months giving them room to upgrade opinions as gas prices begin to firm into winter.  

Other Curtailments Likely Around The Corner. Rockies prices fell well below $1 / Mcf last week but reclaimed $2 late in the week. If that kind of activity doesn't inspire further curtailments I don't know what will. 

Natural Gas Imports Retreated For A Second Week.

  • LNG - fell to 1.91 Bcfgpd from 2.44 Bcfgpd last week and an all time record of 3.8 Bcfpgd just two weeks ago. Part of the drop may be simply logistical (timing of offloadings) but I suspect it is also due to multiple consecutive weeks with gas below $6.  I expect LNG imports to come off pretty substantially in September relative to August.
  • Pipes - Imports from Canada came off slightly to 9.9 Bcfgpd but remain unexpectedly high. At some point this number should drop precipitously. We'll be watching Canadian production for signs of sequential weakening. 


Tropics Watch: TS Gabrielle? Forecasters think this will form off the east coast of Florida over the next few days. Direction not yet predicted but I'd guess it'll be a non-event drifting out towards the middle of the Atlantic Ocean. Tropical Storm Edouard formed in similar territory back in September 2002, headed due west and jumped Florida for the Gulf but it is very much the exception to the norm.

Oil Closed Up A Buck Yesterday, Breaching $75 for the first time since early August. I'd say we're in for a test of the recent highs and maybe a run on $80 as OPEC appears set to sit idly by until December. 

Early Read On Oil Inventories: (from the Dow Jones survey). The EIA's report comes out Thursday this week. 


  • Crude Oil: Down 2.1 million barrels. Last night this number stood at 1.1 million. 2.1 seems more like it as Mexico was still not back to full strength last week.
  • Gasoline down 1.2 million barrels. 
  • Distillate up 0.1 million barrels. That's pretty weak for this time of year. I'd be somewhat surprised if it's that low. 
  • Refiner Utilization flattish to up 0.2% - won't last as we're entering maintenance season. 


Crack Spreads Continue To Turn The Corner. 3Q Not Looking So Dire Now.


Stocks We Care About Watch:

  • (VLO) and (TSO) are both perking up with the recent strength in product prices. I doubled up and doubled down on these two names respectively. Valero webcast from Lehman conference: 1:25 CST Wednesday.

Holdings Watch: 


  • (RIG) retired half my position for an average cost of $4.60 for a 156% gain since 8/22. I think it goes higher but I took the opportunity provided by a Cramer pump fest to play with house money. Next time service takes a dip I'll re-up with Octobers. 
  • (HAL) added September $35s for $0.90. Last bid $0.70.


PUTS: No action.

Odds & Ends

Analyst Watch: (BP) upped to outperform at Bernstein, Goldman reiterated its neutral rating on (CHK) while saying it sees 20% upside from a $39 discounted cash flow driven price (that's a Buy in my book but oh well).

Nigeria Watch: President Yar 'Adua seeks "emergency powers" to deal with increasing level of sabotage. I'd love to hear the plan there, "hey you, yeah you guy with the RPG...put that down, no don't point it this way..."  You mean to tell me the president of a nation that has 600,000 bopd of production shut in by roving bands of thugs for well over a year now out of a possible 3 million bopd of capacity is only now requesting emergency powers. I mean I know he's only be in office for a few months now but come on, at least try to look like you on top of this.

What are these guys smoking watch? Oppenheimer cut 20 energy stocks to hold yesterday citing high crude inventories and a collapse in refining margins in the last three weeks. We've been high on inventories for a while and they are starting to correct. As to the crashing refining margins over the last weeks all I can say is: Ummmm, nope. They go on to so that investors "who have doubt about the group in particular and the market in general, may be better off liquidating their positions and staying out until the picture is clearer." Clear picture = higher prices, just watch.

77 Responses to “Wednesday – Chesapeake Curtails Gas Production”

  1. 1
    scoop006 Says:

    Z With the CHK news does this mean you will NOT have to eat your hat?

  2. 2
    zman Says:

    Jury’s still out but I think they’re warming up to an acquittal. We could still get a big leg down with mild weather and 3 Tcf plus headline. If (STR) or some of the others who curtailed last year wait longer gas could fall while we wait. I think the bottom is nearly in though.

  3. 3
    zman Says:

    Wachovia calling CHK curtailment positive for CHK, positive for E&P

    Goldman Sachs says same.

  4. 4
    zman Says:

    the CHK news may be perceived as a slight negative for HAL and a bigger negative for NBR, BHI, PTEN, PKD

  5. 5
    zman Says:

    Dow off 90 putting a little bit of a negative spin on energy

  6. 6
    Sambone Says:

    Nymex Crude Holds Steady Above $75

    From Market Talk:
    Nymex crude holds steady above $75/bbl, buoyed by hurricane concerns, refinery snags in Texas, and expectations of declines in crude oil and gasoline inventories in Thu’s DOE data. Oct Nymex crude +17c at $75.25/bbl. Oct reformulated gasoline blendstock +39 pts at $1.9949/gal. Oct ICE Brent +30c at $74.22/bbl (roshanak.taghavi@dowjones.com)

    Reported Earlier:Crude Up On Hurricanes, Refineries, Inventories
    By David Elliott


    LONDON — Crude oil futures were trading just below one-month highs Wednesday morning in London, bolstered by Atlantic Hurricane forecasts, U.S. refinery outages and U.S. inventory forecasts.

    At 1113 GMT, the front-month October Brent contract on London’s ICE futures exchange was up 24 cents at $74.16 a barrel.

    The front-month September contract on the New York Mercantile Exchange was trading $0.06 higher at $75.14 a barrel.

    ICE’s gasoil contract for September delivery was up $4.00 at $652.25 a metric ton, while Nymex RBOB gasoline for October delivery was down 25 points at 198.85 cents a gallon.

    Traders said the main support for crude over the last 24 hours has been the latest forecast from Colorado State University which said above-average hurricane activity in the Atlantic is expected for the remaining three months of the hurricane season. It predicts five named storms, four of which will become hurricanes, before November.

    “The focus at present is wind-related,” said Rob Laughlin, senior broker at MF Global in London. “I cannot remember meteorologists coming out so late on in the season with this rhetoric before.”

    The forecast came just before Hurricane Felix was downgraded to a tropical depression after making landfall in Central America, well south of the concentration of oil facilities in the Gulf of Mexico. Last month, Hurricane Dean failed to interrupt oil production in the region significantly.

    “Both Dean and Felix have failed to take the right path to the Gulf, but both have developed into major Hurricanes faster than predicted by the models, and this is bringing an additional premium to be priced on any developing storms,” said Olivier Jakob, head of Petromatrix in Switzerland.

    Adding further support for the oil complex as a whole is continued outages at refineries in the U.S.

    Valero said Tuesday its Port Arthur, Texas, refinery continues to run at lower rates following problems in the coke handling and shipping system. A gasoline production unit at Motiva Enterprises’ Port Arthur refinery is down again after a third failed restart attempt, according to a person familiar with the plant’s operations.

    Also, a report filed with state environmental regulators showed a hydrocracker at ExxonMobil Corp.’s giant Baytown, Texas, refinery, shut unexpectedly Monday due to an equipment malfunction.

    “An elevated number of refinery outages have continued to plague the market and with demand staying solid, inventories have fallen to critically low levels,” said analysts at Barclays Capital. “We expect gasoline prices to remain firm in the coming weeks, with some upside risk if inventory levels continue to move lower.”

    This latter factor will come into focus Thursday when the Department of Energy releases its weekly U.S. inventory report, a day late as a result of the U.S. Labor Day holiday.

    Further falls for crude and gasoline stocks are providing further support for the oil complex.

    Analysts surveyed by Dow Jones Newswires expect both crude and gasoline inventories to fall by 1.1 million barrels while distillates are seen rising by 0.1 million barrels and refinery utilization by 0.2 percentage points.

    —By David Elliott, Dow Jones Newswires

  7. 7
    zman Says:

    Looking at the CHK Oct $32.50s for $2.05. Tiny premium.

  8. 8
    zman Says:

    TRADE: CHK Oct $32.50s for average $2.05

  9. 9
    zman Says:

    Fortis raises CHK to buy and target to $40 from $38

  10. 10
    zman Says:

    JP Morgan applauds CHK’s move to rebalance the gas market. Calls it a positive for both CHK and gas prices.

    If the Dow weren’t so schizo these days this stock would be $35 now.

  11. 11
    Sambone Says:

    Nymex Crude Steady Around $75;Storm Fears, Stocks

    By Roshanak Taghavi

    NEW YORK — Crude oil futures held steady near a one-month closing high Wednesday on continued concerns about a refinery outage in Texas, the possibility of a new hurricane in the Atlantic ocean and expectations of draws in U.S. crude oil and gasoline inventories.

    The front-month October light, sweet crude contract on the New York Mercantile Exchange fell 28 cents, or 0.1%, to $74.80 a barrel. On Tuesday, prices rose to their highest settlement since Aug. 3. Brent crude on the ICE futures exchange was down 3 cents to $73.89 a barrel.

    A 90,000-barrel-a-day fluid catalytic cracker at Motiva Enterprises’ Port Arthur, Texas, refinery went down again after weeks of shutdowns and failed restarts. The unit was taken down Sunday on its third restart attempt in about a month. There have been problems with the blower and with steam and the restarts have been unsuccessful.

    Continued concerns about the possibility of a hurricane forming in the Atlantic Ocean have also been weighing on traders’ minds.

    “With two category five hurricanes having made landfall (a record), traders are keen not to be left on the wrong side of a storm that finds its way into the northern U.S. Gulf,” said Peter Beutel, president of trading advisory Cameron Hanover in New Canaan, Conn., in a research note.

    Anxiety remains high about a potential hurricane’s impact on crude oil markets because of the damage it could inflict on the production of oil, natural gas and refined products along the Texas and Louisiana coasts.

    Even though Hurricane Felix is generally no longer being considered a threat to U.S. Gulf oil facilities and Hurricane Dean didn’t notably affect U.S. oil production, traders remained concerned about possible damage to facilities after Colorado State University released forecasts Tuesday for four additional hurricanes throughout the month of Sept.

    The university said it expects two of the four hurricanes to be major hurricanes with wind speeds over 111 miles per hour.

    Front-month October reformulated gasoline blendstock, or RBOB, fell 2 points, or 0.01%, to $1.9908 a gallon. October heating oil rose 79 points, or 0.4%, to $2.0874 a gallon.

    Focus is also shifting towards U.S. government data on petroleum inventories being released by the EIA, the Department of Energy’s statistical arm, on Thursday.

    “As we get into trading this afternoon, the conversation will turn increasingly towards the outlook for supplies as we move through a month renowned for turnarounds,” said Beutel.

    The report, which will cover the week ended Aug. 31, is scheduled for release at 10:30 a.m. EDT. Its release, which is normally on Wednesday, has been delayed by one day due to Monday’s U.S. Labor Day holiday.

    Crude oil inventories are expected to decline by an average 1.1 million barrels. Gasoline stocks are also expected to fall by 1.1 million barrels, and distillates are predicted to rise by 100,000 barrels. Refinery use is seen rising by a modest 0.2 percentage point.

    –By Roshanak Taghavi, Dow Jones Newswires

  12. 12
    zman Says:


    When they say the possibility of a new hurricane they must be just talking in general. That system way off Florida is moving the wrong way.


  13. 13
    Sambone Says:

    99L has no impact on the GOMEX at this time. More like NC and SC.

    Wave action off Africa is ripe for a cane, so watching that area the next couple of days

  14. 14
    zman Says:


    What about that collection of clouds south of Cuba that’s about to get hit by a wave from the West?

  15. 15
    zman Says:

    Investors really liking what OII had to say at the Lehman energy conference a few minutes ago.

  16. 16
    Sambone Says:

    Shear is high in that area. It will go the way of 98L, which is get ripped apart. No models on this patch at all.


  17. 17
    BigJim Says:


    VLO is holding up nicely in a bad market. I see people are still buying VLO Sept. 75 calls. So someone is looking for a pop Thursday and Friday. Any thoughts?

  18. 18
    zman Says:

    OII saying deepwater O&G production to rise 50% between 2007 and 2010.

    They see:

    global subsea completions at ~ 3,500 this decade, which is 3x the 90’s. In the 2010s they expect completions to grow to >7,000.

    Subsea tree orders rising faster than historic rates…

    more in a bit…

  19. 19
    zman Says:


    They speak at the Lehman conference this afternoon. Products both RBOB and HO are holding up nicely and traders are looking for further draws in gasoline stocks tomorrow.

  20. 20
    BigJim Says:


    Would you be a buyer ahead of this afternoon speaking on VLO?

  21. 21
    zman Says:

    I’m already in lower (twice) but I if I weren’t I would except for market is a pretty crappy. They should have pretty positive stuff to say this afternoon and hopefully will shed a little light on gulf coast region maintenance. Midwest utilization is already taking a hit (leading to much better cracks – see the green line with triangles in this morning’s post) and if Gulf Coast is going to be weak as well, which I suspect, then it’ll be good times for their 4Q numbers.

  22. 22
    zman Says:

    meant to say, market is a pretty crappy one. Anybody, Sambone, Nicky if you’re back got some broad market thoughts for us. Everything was just peachy yesterday, right?

  23. 23
    BigJim Says:

    It is tempting because this happened last week also. It was 280 down day, then report came out next day and we have taken off ever since. Would like to see the old 3:00pm to close sell off for good pricing. So I will keep and eye on it. Thanks

  24. 24
    BigJim Says:

    The only thing that worries me at this point on the 75 calls, is plenty of bids are lined up to sell at .60. I do know 10,000 calls were bought one day, I believe before Labor Day. So maybe this person is looking to unwind position. If that is the case, could put damper on price action momentum. Trade might be to crowded. Any thoughts?

  25. 25
    zman Says:

    To sum up OII:

    90% of revenue and 95% of op income comes from oilfield work. Of that 95% is seeing very favorable trends.

    ROVS (40% of business and largest fleet in world) are seeing both increased utilization and day rates.

    Subsea products (trees, umbilicals, etc) are expected to see strong growth as well

  26. 26
    zman Says:

    Are those Oct 75s you speak of? That far out of the money I’d be quick to take profits and more likely to take the $72.50s or $70s (same $ value, less contracts). That way, I get paid on virtually any move up even if it’s delayed til next week.

    There’s 50K out on those 75s which at least should make for a pretty liquid market. I guess those guys agree with my thesis that it got too cheap, eh?

    I’ll be looking to add some longer dated calls soon here on weakness so my Sept $65s will be out the door soon.

  27. 27
    BigJim Says:

    Looking at September 75’s

  28. 28
    zman Says:

    BigJim – thought so, typed wrong month b/c I was thinking if I were going that high I’d want more time. The 50K was referring to the Sept’s

  29. 29
    JMiller Says:

    Is SWN speaking today at Lehman conference today? Is so, do you know when?

  30. 30
    scoop006 Says:

    Z Thoughts on.COPJP?

  31. 31
    Sambone Says:

    Z – You might want to log on for this tommorow.

  32. 32
    aaatest Says:

    SWN speaks today, Lehman 12:05 cst

  33. 33
    zman Says:

    Scoop, it saves me a little time if you use date / strike format. Thanks.

  34. 34
    scoop006 Says:

    COPJP=COP OCTOBER $80 @ $4.50

  35. 35
    zman Says:

    Thanks Sambone

    COP $80 Calls. That’s not a bad one or even the Septembers. Really getting beaten down today.

  36. 36
    zman Says:

    Scoop – of course, if CHK stands alone and we cross the 3Tcf mark this week gas could still pummel you.I’d like to see a little more sideways action of NG which is now only up $0.045 after a stronger start.

  37. 37
    rammastr Says:

    Was the fleet contract status update for RIG that came out yesterday positive?

  38. 38
    zman Says:

    fleet status was out for both RIG and DO. Both viewed as ever so slightly negative. Saw a couple of trimmed 2007 EPS numbers over more ship yard time than the analyst thought.

  39. 39
    zman Says:

    OII = wow, especially on day like today

  40. 40
    zman Says:

    Natural gas just lost headway and is off a penny. Looks like fear of the 3 Tcf storage headline is outweighing CHK’s PR so far.

  41. 41
    Nicky Says:

    Hi to all!!

  42. 42
    zman Says:

    Hey N!!! You made it! How was the vacation>

  43. 43
    rammastr Says:

    Hi Nicky!

  44. 44
    Nicky Says:

    Well ‘vacation’ was UK! So a bit of a busman’s holiday (if you get the expression!) – but I haven’t been home in nearly 3 years so I had a blast.

  45. 45
    zman Says:

    SWN – going through their presentation in advance of them speaking at Lehman in about 20 minutes. Nothing new that I see in the slides.

  46. 46
    zman Says:

    In depth reporting (LOL) from the Street.com on refiners. They like VLO too.


    I like VLO because it has a pretty ticker. Jeez. Can’t believe people pay for that tripe.

  47. 47
    zman Says:

    Scoop – Has Cramer been pumping VLO?

  48. 48
    zman Says:

    Holy Smokes = OII up $3.50 (5%) with the OIH flat to down.

  49. 49
    scoop006 Says:

    Not pumping but mentioned he liked it recently in the lighting round segment.

  50. 50
    zman Says:

    Scoop – thanks.

  51. 51
    zman Says:

    Natural gas spiking

  52. 52
    zman Says:

    OII up $4.50 (up 6.5%) still holding

  53. 53
    zman Says:

    Ok, enough is probably enough offering half OII September $60 calls at $14.

  54. 54
    Sambone Says:

    Z- Your question yesterday was “Are the traders back at their desks”? Yes is the answer, looking at todays move.

  55. 55
    zman Says:

    Nat gas going ballistic. At least no hat eating today.

    Sambone: LOL. They only wish they were still away.

  56. 56
    TTupp Says:

    tupp tupp. you got those OII’s Z?

  57. 57
    zman Says:

    Welcome Tupp

    You know it! Listening to VLO at the Lehman Energy Conf right now. As always, these guys are strong. nice projects on tap for 2008.

  58. 58
    zman Says:

    They’re seeing big downtime for the US industry this fall, doesn’t sound like just the MidWest where it’s been telegraphed for awhile. Gulf Coast too.

  59. 59
    BigJim Says:

    Looks like for today buy programs set at 70.20 for VLO. Very strong bounce at that level.

  60. 60
    zman Says:

    good presentation for VLO: nothing earth shattering, just keeping on keeping on:

    here are more notes:

    gasoline: demand ytd up 1.3%
    distillate: demand ytd up 3.3%

    crude demand global up 1.6 mm bopd

    cool chart on asian crude runs (big growth last 3 years) – got it asian runs tagged

    lots more complex…getting almost all the sulfur out.
    permits very tough to get.
    increasing sulfur of crude.
    physical contrainsts – water, electricity

    VLO likes being in the middle of the country as it’s easier to work away from the coasts

    Capacity additions: clean products FCC and HCU (conversion capacity) not being added as fast as demand.

    under running budget 2007 by about 10%. $4.7 to 5.0B in 2008. Spending on reliability. Port Arthur – massive expansion >20% irr, St Charles: debottlenecking and adding hydrocracker, this will also balance the refinery which will increase margins by reducing import costs Quebec:

    They’ll reduce share count by 15% in 2007 while maintaining investment grade debt.

    sticking with balance of buybacks and project with strong returns

    sounded well attended.

  61. 61
    zman Says:

    So the stock was flat at the end of the presentation at 3 est, they’re moving to the break out session now which should be fairly well attended judging by the applause at the end of the chairman’s speech.

  62. 62
    zman Says:

    Accuweather says jetstream to pull the soon to form gabrielle back to the Carolinas – nice early read Sambone!


  63. 63
    zman Says:

    HAL creeping up nicely. At odds with the move in SLB and most of the more expensive service names.

  64. 64
    Sambone Says:

    Nymex Crude Front-Month Spread At 3-Year High

    [Dow Jones] The difference between the front- and second-month Nymex crude contracts has grown to as much as $1.17/bbl, its highest since Feb 2004. Oct crude now +34c at $75.42, Nov crude -1c at $74.25. The front-month contract rose above the second-month contract, a situation known as backwardation, in July for the first time in nearly two years. Backwardation encourages index fund investment by reducing the cost of maintaining a front-month contract and is seen as symptomatic of tightening near-term supplies.(matt.chambers@dowjones.com)

  65. 65
    rammastr Says:

    RIG near its’ low end. Reload? Why do you think alot more money piling into OII vs. RIG – is this short or long term?

    Nicky – have we possibly enetred the first leg down of an ugly wave 3?

  66. 66
    zman Says:

    Still holding my RIG but if I weren’t I’d take on a little at the close and a little in the morning…kinds of depends if we dive into the close or not. Yes, then wait, no then buy. I probably ought to just buy the stock and trade the options around swings in price.

    OII is in the sweet spot for rates and long term macro fundamentals – see above. RIG is as well but it’s a lot bigger company so it doesn’t move with such alacrity. I think long term they will both be higher.

    Good question for Nicky

    VLO back positive again. May take out $71

  67. 67
    Nicky Says:

    Ram are you talking the broader market?

  68. 68
    Nicky Says:

    Either way just getting myself sorted and will be back with some counts later today.

  69. 69
    rammastr Says:

    Yes please.

  70. 70
    rammastr Says:

    Thank you.

  71. 71
    TTupp Says:

    z- cftc button is a crack spread chart

    any plans for a holdings tab/?

  72. 72
    zman Says:

    CFTC tab fixed. Crack tab updated.

    Holdings are posted the perf tab.

  73. 73
    zman Says:

    You just looking for this format daily

    NFX Sept $45 C ?

  74. 74
    coco Says:

    SCB upgrading some of the refiner names for tomorrow (SUN,MRO, VLO, TSO.) Upgrading the names to market perform, however feels that cracks should weaken thru oct before bottoming in Sept- November. Firm recommends sidelines for now.

  75. 75
    zman Says:

    Thanks Coco. I’ll go see if I can read the text of that note. Appreciate the heads up.

  76. 76
    BigJim Says:

    It is going to be an intersting day. Petroleum and Gas report + Syria either shot down or shot at, one of Israel planes overnight. I believe things could just be heating up in the energy world. And then next week OPEC meets. Energy will not be dull this fall. Check with all later as the news comes out.

  77. 77
    zman Says:

    Thanks BigJim, see Thursday’s post

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