28
Sep
Friday – Wow Oil
Housekeeping Item: Welcome new subscribers! If you have any questions please feel free to join the active comment session at the bottom of the daily post.
Commodities Watch:
- Crude Oil: After rallying $2.58 to $82.88 yesterday in what can only be described as a hedge fund induced bout of "I'm long a lot of oil and if I buy more now I can get them new Benz on Saturday" end of quarter pumping, crude is trading +/- $0.20 on several occasions topping $83 on: 1) more of the same, 2) Nigerian trouble, and 3) storm mania. Anyone who says 4Q tightness in a news article today who didn't say it 3 days ago when oil was falling will make the flip flopper hall of shame.
- Nigeria Watch: one worker killed, two missing after rebels attacked an ENI facility in the Niger delta.
- Karen threatening to head more westerly and Lorenzo strengthened to a Cat 1 before coming ashore this morning.
- Natural Gas: After trading off two dimes to a quarter all day yesterday, the November contract, managed a late session rally to close yesterday down just under $0.13 to 6.911. This morning gas is flat to up a nickel at $6.98.
RBOB and Heating Oil: Heady times. Despite the crude rally, heat and RBOB cracks actually improved yesterday as products showed large gains. HO looks ready to put the pinch on consumer spending in the northeast this winter. As to gasoline, you might have noticed pump prices edging back towards $3 and yet it doesn't feel like summer. Contrary to the beliefs of the "spoon feed me my knowledge in sound effects laden 5 second snippets" of the Cramerica school of investing cracks are very healthy for this time of year.
Refiner Analyst Watch: From a note yesterday ~ according to analyst Mark Flannery of Credit Suisse "U.S. refining margins in the third quarter fell from 30% to 55% from the previous quarter, the result of burgeoning gasoline supplies in June and energy traders' subsequent focus on sluggish demand during the peak summer driving months. Margins came under futher pressure as crude-oil prices rose and gasoline prices languished, blowing out the crack spread in the process. We have updated our U.S. refining earnings to reflect acutal commodity prices. Our [3Q07] for U.S. refiners fell by 19% on average."
Z Comments: Sheesh, where to begin?!
1) Have you ever heard of a thing called seasonality? 3Q margins have fallen from 2Q levels 66% of the time this decade. In 2006 the 2Q to 3Q decline rang in from 20 to 35%. It fell more this year but you fail to point out that 2Q07 was the highest average crack spread quarter on record. A thinking person might expect the magnitude of the seasonal pull back to increase especially as they sat at their desk watching the powers that be (OPEC, hedgies, etc) keep oil aloft.
2) "Sluggish demand during the peak summer driving months"? Which months would those be? Check out the blue line ...looks pretty strong to me pal.
....how about on an annual basis...nope, still strong!
3) "our estimates fell 19%" So whose fault is that? You got ahead of yourselves whipped up by the frenzy of those dizzyingly high cracks during the second quarter and now you're reigning in your 3Q levels. Sounds like a personal problem.
4) stop investing by looking at the quarter that just past, or do you drive in reverse using your rearview mirror as a guide? That gas demand you decried remains strong and inventories are off or don't you read my Thursday wrap ups?
5) To be fair, this fellow is not alone. There is a lot of group think about right now and no one can afford to be the loan wolf saying, 3Q is history, how about the long term? Ah group think: one of the many reasons I left the Street.
6) The fact that the Street couldn't get enough of these stocks this summer when valuations were stretched and cracks were obviously not sustainable and, now two whole months later, the fact that they are shunning them says a lot about what's wrong with the Street. I may be early on VLO but when the CROWD comes back (I think in October or November) it'll be with its usual "I gotta get in now" grace.
Gas Storage Summary: Week Ended September 21, 2007: 74 Bcf Injection. My number was 70.
- Storage as of September 21, 2007: 3,206 Bcf (updated September 27, 2007).
- Max storage for this week in history: 3,243 Bcf (2006).
- We are now 37 Bcf below (1.1%) year ago levels.
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We are now 238 Bcf (8.0%) above the 5 year average which includes 2006's record levels (see third chart below). We were 28% above the five year average back in April and I know we're producing more gas now so you've got to ask yourself if we've seen a little industrial demand creation, either attributable to low prices or increased consumption from ethanol producers.
Looking Ahead:Still On Track For Record Storage. There are roughly 2 months left in the traditional injection season. The Street is still for the most part modeling peak storage at a record smashing 3.6 Tcf. I think that's a stretch but we're in the shoulder season (that period where both cooling and heat related demand are slack). If go back and look at previous posts you'll note that the projected end of October numbers have been inching lower over the last several weeks. I think we'll land in the 3.4 to 3.5 Tcf range.
Tropics Watch:
- Karen - like bad language, you just can't get rid of her. Strong shear expected to weaken the storm over the next 2 to 3 days but models have her becoming a hurricane (if she survives the shear) in five days.
Tracks are increasingly looking like a toss up between Bermuda and Florida.
- Lorenzo came ashore as a Cat 1. It's a compact storm and so far I have seen no reports of Pemex offshore facility evacuations or production shutins although activities at several ports was suspended last Thursday.
Stocks We Care About
- Chinese Oils: add (CHOLF5) to the list of CEO SNP and PTR, also known as the stocks the world can't get enough of. The latest entry, mentioned in yesterday's post is the Chinese Oilfield Services company and it jumped 160% on opening day.
- (NFX). (UPL) flew out of the gate yesterday on it's Bohai Asset sale. NFX should get similar treatment in coming months. I'll bite bullet today and take some November or December calls there as the timing of the sale could be any time in the fourth quarter. I think expectations for its Bohai sale are too low plus I want to be in for earnings later in October when I think Newfield will once again have some nice news to share about the Woodford, the Rockies, progress on an 08 deepwater GOM field and the ramp in Malaysia production. They have been pretty tight lipped since late July except for the announcement of several nice oil and gas hedges.
- (RIG) - Nice puff piece from market watch about why the Baron Fifth Avenue Growth Fund likes (RIG) (the manager is probably a friend of JC's - that loud red-faced guy on CNBC). The PM basically says its a good buy for the next five years until capacity comes into the deepwater rig market and swamps it which is what will happen although the stocks will lead the capacity by two years or so.
Holdings Watch
CALLS: semi busy day
- (TLM) - entered April 2008 $20s for $1.90. Last bid $1.85.
- (CHK) - Oct $35s for $0.90. I still hold the $32.50s and the January 08 37.50s. Last bid $1.10. I won't get attached to this position and will likely be out today with a little luck.
- (DRYS) - Out on half of my Oct $85s for $10; a nice 3 day gain of 72% from my Monday purchase at $5.80. I am not greedy and though:
- 1) the fundamentals for the dry bulks (especially for the major bulks of coal, iron ore, grains of which (DRYS) is well positioned to take advantage of) appear to be exceedingly stout in the near and medium term and
- 2) (DRYS) is the cheap big kid on the block the industry is a little outside of my normal stomping grounds and as such I'll be covetous of quickly gotten gains. The stocks in this group are also exceedingly volatile so until I get comfortable trading the area, if ever, I'll be in and out from time to time.
PUTS: No Action
Odds & Ends
Analyst Watch: (GNK) price target raised from $70 to $81 at Cantor. This is a day after Genco executed a 3.6 million share secondary + 0.8 for a selling shareholder and was the worst performer for it in the shipping group yesterday.
(ECA) says to cut $1 Billion from 2008 Alberta investments if the proposed taxes are enacted. This equates to 30 to 40% of the currently proposed spending levels.
8:05 am EST (Part 1)
Crude Down, Profits Booked After Brent Hits High
By David Elliott
Of DOW JONES NEWSWIRES
LONDON — Crude oil futures were slightly lower Friday morning in London as investors booked profits after an early fund-led rally pushed Brent to a fresh all-time high.
But weakness in the dollar and attacks against oil workers in Nigeria are all helping to encourage fresh investment in the market and a further push higher can’t be ruled out ahead of the weekend, traders said.
“The bulls are taking all these factors into consideration and putting forward a pretty good case to keep buying,” said a trader in London.
At 1140 GMT, the front-month November Brent contract on London’s ICE futures exchange was down 17 cents at $79.86 a barrel having earlier climbed to a fresh all-time high of $80.49 a barrel. Brent settled at an all-time high at $80.03 a barrel Thursday.
The front-month November contract on the New York Mercantile Exchange was trading $0.32 lower at $82.56 a barrel.
ICE’s gasoil contract for October delivery was unchanged at $705.50 a metric ton, while Nymex gasoline futures for October delivery were down 212 points at 207.27 cents a gallon.
Consensus opinion points a finger at speculative funds as the main backers of the latest rally for both Brent and WTI, with a fall in the value of the dollar helping to make oil attractive to investors outside the U.S. The euro climbed to an all-time high of EUR1.4198 against the dollar Friday.
“The ever-weakening dollar is probably the key driver of this (oil price rally), with non-commercial long interest being fueled by the view that the U.S. will sacrifice its currency to prop up growth,” said analyst James Neale at Citigroup in London.
Suggestions have also been made that the approach of the end of the third quarter — marked by the end of September — may be helping to trigger some of these fund investments but most traders agree the bullish short-term technical picture is one of the main reasons proffering buy signals.
While these technical factors are accounting for the latest price action, traders point out a bullish fundamental picture is the main foundation of the market’s strength.
September 28th, 2007 at 7:25 amZ – having problems posting the rest of the news.
September 28th, 2007 at 7:41 amtest test test…what’s the trouble posting S?
September 28th, 2007 at 7:50 amWell, I try to put the second part up, and for some reason it won’t take. Oh well, I’ll just wait til the next update from Dow Jones.
September 28th, 2007 at 7:52 amoil is up $0.52 to 83.40…hopefully Nicky’s connection is down b/c this is going to ruin her day!
HO is over 2.255
September 28th, 2007 at 7:57 am8:45 am EST
Crude Rises Above $83 As Dollar Weakens
DOW JONES NEWSWIRES
September 28th, 2007 at 7:58 amFrom MARKET TALK:
[Dow Jones] Nymex crude hovers around $83 after, after dipping lower in overnight trade, then bouncing back as the dollar continues to weaken. The dollar hits an all-time low against the euro, which reaches $1.4198 in morning trade. The weak dollar makes “oil much more attractive to non-US players,” says Addison Armstrong of TFS Energy Futures. Although crude is higher, there isn’t a lot of momentum to break the record of $89.30 a barrel right now, he says. Nov crude +34c at $83.22/bbl. (elizabeth.landau@dowjones.com)
The gas price differentials between Henry Hub and Opal, WY have increased from ~$2/mcf in mid August to anywhere from $4-6 lately. Pipelines must be making a killing on what gas from the rockies they can carry. I suspect that the long heralded opening of the “Rockies Express” pipeline in early 2008? will help soften the differential. If you are a rockies gas producer that isn’t hedged-ouch!
September 28th, 2007 at 8:06 amWeather – Nothing of interest at this time.
September 28th, 2007 at 8:07 amjy – true. I tried to short BBG on that a couple of months ago but it refused to falter.
Sambone – don’t care about the Karen westerly tracks?
September 28th, 2007 at 8:08 amDRYS bid up strong on open
September 28th, 2007 at 8:10 amZ – The only thing about Karen is that the East coast needs to keep an eye out. At this time I don’t see it affecting the GOMEX.
September 28th, 2007 at 8:13 amNot sure how much of rockies production is hedged by each public company. I suspect a large percentage, but have no hard numbers. Prices will be lamented often during 3Q conference calls.
September 28th, 2007 at 8:13 amjy – true and the hedging varies a lot as usual, mid and big caps more hedged as a % of expected volumes than the minnows for the most part.
hear ya re 3Q calls. This is why EOG shut in 50 mm/d and I know some others have more quietly shut in all the way down to N Mex.
Oil on fire up 80 to 83.65…bet they use those westerly Karen tracks as part of the reasoning along with rebels the dollar and that time of the quarter
September 28th, 2007 at 8:16 amMorning all – all losses in the complex early this morning now reversed and then some!
First flip flop of the morning – John Kilduff on CNBC this morning saying oil is overdone and he expects us to move back sharply over the next quarter.
September 28th, 2007 at 8:16 amN – lol, now I know it tops/taps 85 pronto
September 28th, 2007 at 8:17 amIt should test 84.10 but could top out any time now. By my count the move of this morning’s low is v and we are probably completing iii of v so have iv and v of v to come.
September 28th, 2007 at 8:24 amGmorn. Brilliant watch -Jimmiie Baboons Street dot com says only direction for amd is now up. Because all bad news is already finished. I was reading from intel devpr’s conference that the only directin for amd is morgue.
September 28th, 2007 at 8:28 amTrading below today’s 82.46 would be the first sign the top is in.
September 28th, 2007 at 8:31 amNat gas really would have looked better with a move above 7.374 but it is starting to look less likely that we will get it. We may already have started the move down.
September 28th, 2007 at 8:33 amBy my reckoning wti is now up 4.5 bucks in just over two sessions.
September 28th, 2007 at 8:43 amdistillates looking toppy. spike up and down.
September 28th, 2007 at 8:44 amGo VLO!
September 28th, 2007 at 8:45 amWould this be a nice time for a momentum play on the VLO 67.5s with tight stops, Z.?
September 28th, 2007 at 8:46 amQ – Same conditions apply today but refiners couldn’t get around the misguided wishes of that bean counter I pointed out in today’s post. That’s not a bad play
RIG – just broke out and could make a run on 120 soon.
OII is closing on a break out
September 28th, 2007 at 8:49 amGNK now flavor of the day, DRYS could go heavily into profit taking mode if it breaks into red here.
September 28th, 2007 at 8:50 amdistillates needs to break 22272 for confirmation of a top.
rbob needs to break 20642.
September 28th, 2007 at 8:54 amWTI has support at 83.30 and 83.00
September 28th, 2007 at 8:57 amOUT DRYS.
September 28th, 2007 at 9:00 amTaking the wife away for the weekend.
Thanks to all. I could’nt have done it without you.
apbd
apbd,
Awesome. That’s what it’s all about.
September 28th, 2007 at 9:03 amTRADE: Out APA October $80 calls for $11.30. 3 weeks, 335%. Enough for me.
September 28th, 2007 at 9:12 amTSO getting whacked (down another 2%). gasoline weaker, ho still holding up. pressuring cracks today.
September 28th, 2007 at 9:16 am9:41 am EST
Nymex Crude Rises Above $83, Brent Hits Record $81.05
By ELIZABETH LANDAU
Of DOW JONES NEWSWIRES
NEW YORK — Crude oil futures in New York bounced past $83 Friday as the dollar weakened against the euro and as Brent crude hit an all-time high of $81.05.
In addition to the falling dollar, violence against oil workers in Nigeria contributed to the rise in prices.
The front-month November light, sweet crude contract on the New York Mercantile Exchange was recently up 68 cents, or 0.8%, at $83.56 a barrel. Brent crude on the ICE futures exchange hit an all-time high of $81.05 barrel after settling at an all-time high of $80.03 on Thursday.
“The weakening dollar is one of the main driving forces,” said Addison Armstrong of TFS Futures, “making oil much more attractive to non-U.S. players.”
The euro reached an all-time high against the dollar of $1.4198 Friday morning.
A weaker dollar also reduces the purchasing power of oil producers, Armstrong noted. This makes it less likely that the Organization of Petroleum Exporting Countries will increase production.
“I don’t see any quick rescue of OPEC to do anything about $80 a barrel,” Armstrong said.
Nymex front-month October reformulated gasoline blendstock, or RBOB, was down 36 points at $2.0903 a gallon. October heating oil was up 1.04 cents at $2.2625 a gallon. Both contracts expire Friday.
Analysts expressed mixed opinions on the likelihood of crude maintaining its $83 edge. Tom Bentz, director and senior analyst at BNP Paribas Commodity Futures, said crude could surpass its all-time high of $83.90 in the coming days, “if not today.”
Others do not see much momentum to break that record. “We could easily go down and test the $80 mark again,” Armstrong said.
One worker was killed and two are missing at oil services company Saipem SpA (SPM.MI) following an armed attack at a site in southern Nigeria on Thursday, the Italian company Eni SpA (E) told Dow Jones Newswires. Eni, Italy’s biggest oil and natural gas company by revenue, controls Saipem with a 43% stake.
“Traders were worried that this could mark the beginning of a new campaign of attacks by MEND on oil facilities in Nigeria,” said a report from energy risk management firm Cameron Hanover. MEND, the Movement for the Emancipation of the Niger Delta, began targeting Nigeria’s oil industry in late 2005.
Weather concerns may also be a factor in the gains in crude futures, analysts noted. Hurricane Lorenzo weakened into a tropical storm after making landfall and weakening inland over eastern Mexico, the National Hurricane Center in Miami said early Friday. Tropical Storm Karen is moving toward the west-northwest, and is about 755 miles east of the Windward Islands.
—By Elizabeth Landau, Dow Jones Newswires
September 28th, 2007 at 9:23 ambroad market people…any thoughts, you’re starting to rain on my parade.
September 28th, 2007 at 9:33 amZMAN, After #30 HOW can anyone rain on your parade?
September 28th, 2007 at 9:37 amScoop – wellllll…I’m not complaining…just don’t want to get sideswiped by some stupid sub prime type issue.
I had RIG finally popping technically (it’s been popping fundamentally) and that $2 gain today vanished.
CHK is flat to down now
DRYS is off a couple…
September 28th, 2007 at 9:42 amZ-the technician I follow says her oscillator is overbought-H Meisler
September 28th, 2007 at 9:44 amwere due for a pullback-also lots of commentary by “smart” money about overfrothyness in China markets-another
wave technician I subscribe to went short China index yesterday.
Denise – thanks for that. I agree re China. It’s internet bubble city in their markets right now driven purely by loads of readily investable cash. Their oils have gotten out of sync with growth rates and valuations. That being said, I’d rather step on the third rail than be the first guying saying short them as my money flow compared to theirs is something like 1 to a google x.
September 28th, 2007 at 9:47 amZ – upside doesn’t quite look done to me but I agree with Denise. Top is getting closer.
September 28th, 2007 at 9:50 amGO CHK – don’t call it a comeback!
NG – if it hits $8 before $4 Nicky should have to eat a hat.
September 28th, 2007 at 9:55 amBought DBA Calls 04/08 $30 @2.25
Hey Guys & Gals its time to expand your horizions. IHO The time spent on
September 28th, 2007 at 9:56 amGOM weather is looney considering that you don’t seem you be able to trade off the information. We are running out of
1-Food (DBA) 2-Water 3-All Metals
4-Energy is not the only area to invest.
2007 has been my worst year because I am to overweight chk & other NG co’s.
Najerian Is on CNBC now with CHK DVN> He is really sharp.
I’m bearish, but I have been. Ready to put my hedges back on in a moments notice. I believe a “Black swan” will happen or the Crowd will finally wake up to what’s going in the economy and the world.
September 28th, 2007 at 9:56 amDrdavis –
September 28th, 2007 at 9:59 amhttp://www.moneycontrol.com/india/news/fii-view/fed-cut-wasserious-mistake-jim-rogers/11/34/304689
Z – a little late to change the hat eating bet now! Especially as we are currently much closer to 8 than 4!
September 28th, 2007 at 10:02 amSambone: I am short with leaps. The MKT will crash “WHEN”???? Tomorrow?-January? Who knows.
September 28th, 2007 at 10:06 amDr D – with all due respect, talking about the weather is a long standing past time around here and if you think I don’t make $ off of the hurricane trade you can have my OII calls.
I have very few rules for the site: no flaming, foul language, sharing of what goes on inside the site and lastly and perhaps most importantly promoting the restriction of idea sharing.
Please refrain from telling people what not to chat about. Someone I’m sure finds it of use. I certainly do as I get a lot out of Sambone’s, Redjack’s and others weather expertise and would never want them to feel like their input is a nuisance. This winter we’ll be talking about the movement of arctic air masses so be prepared to see a lot of that kind of banter as well.
Finally, we do get outside the energy box (dry bulks for example) but this is an Energy site (hence the name) and that’s going to be the primary focus. There’s other stuff to trade and to talk about but energy rules here. I own GOOG in the IRA and I’m listening to my IPOD now but I’m not about to talk about them here. If someone else wants to that’s fine. But energy is a pretty broad topic and it rules this roost.
September 28th, 2007 at 10:08 amAnyone have an opinion on these two names
September 28th, 2007 at 10:08 amRIO and NAT Thanks
As of this am I’m now all cash. It took all week but I sold my last holding, a local tiny biomed for a four bagger. The time just seemed right to lock in profits.
September 28th, 2007 at 10:10 amQ for Z:
number crunch on RIG vs GSF: is there any value in GSF over RIG, assuming the deal goes thru?
September 28th, 2007 at 10:15 amScoop – RIO = momentum
September 28th, 2007 at 10:18 amZ – My wife saids I’m a “PAIN”!!! lol
September 28th, 2007 at 10:20 amDollar getting spanked again.
September 28th, 2007 at 10:21 amPlease accept my humble apology. I was clearly “out of line”.
Phil
September 28th, 2007 at 10:24 amre RIG & GSF…the tax consequences of owning RIG when the merger consumates is something to consider. They both trade in lockstep.
September 28th, 2007 at 10:28 amGSF is trading at a small discount to the done deal but I like the bigger share value of RIG for trading options (that makes no mathematical sense I know but the swings are bigger and the option spacing is the same and it works kind of like the reaction to stock splits…weird but true). The deal will go through in the 4Q. No feds to hold it up now and the shareholders like it.
Dr D – don’t apologize, it’s not necessary, I just want to promote the free share of ideas, never inhibit it. One man’s garbage is another man’s gold.
September 28th, 2007 at 10:31 amRJ – can you elaborate, is it the higher cash component going to the RIG shareholders you’re thinking of?
September 28th, 2007 at 10:31 amOII – now that’s more like it. All time high.
September 28th, 2007 at 10:33 amDow Jones is reporting that France is saying any agreement on a third round of sanctions against Iran will be delayed until November.
Interesting that US is backing down the pressure a touch.
September 28th, 2007 at 10:33 amFCEL getting cheaper, I got stopped out last fri.
September 28th, 2007 at 10:36 amNicky – my spin, and that’s all it is, is that if the US backs off Iran at the diplomacy table it means Israel has already made its decision.
Need to do some work on the alt energy ETFs. If oil does back off soon that thing will get clocked. Anybody remember the tickers of those?
September 28th, 2007 at 10:38 amMaybe the US doesn’t want oil at higher levels at this moment in time.
September 28th, 2007 at 10:43 amZ..I wish i could find the article that discussed the possible tax however it pointed out that the GSF shareholders have to treat the transaction as a sell whereas the RIG shareholders may not have to treat it that way.
September 28th, 2007 at 10:43 amBut may give us the impetus for the next leg up in a month or so….
September 28th, 2007 at 10:44 amUnless WTI and HO break down soon then this consolidation means higher levels to come yet.
September 28th, 2007 at 10:45 amZ: since you mention the options on RIG/GSF…
I have a LEAP spread in GSF: long 60s short 70s. Haven’t figured out what becomes of it when the deal closes. Do the cash bits just cancel out & I end up with a LEAP spread in RIG?
September 28th, 2007 at 10:47 amRJ — ohhhh, that’s a good point. I thought you were looking at it from a negative standpoint for RIG, but you are saying GSF neg tax view. I will look for that. I thought was merger of equals as there are 2 distinct payouts.
September 28th, 2007 at 10:47 amDr Davis – Zman takes no prisoners. lol
September 28th, 2007 at 10:51 amDman – it gets complicated.
Check out this site:
http://www.888options.com/help/faq/splits.jsp
Sambone, in the immortal words of Bono, “Did I bug ya? I didn’t mean ta bug ya”
September 28th, 2007 at 10:54 amNah, I’m just messin around. It’s Friday.
September 28th, 2007 at 10:59 amZMAN – What’s flaming?
September 28th, 2007 at 11:02 amPopeye, saw the FCEL slide, started nibbling and averaged in at 9.54
September 28th, 2007 at 11:03 amflaming = verbal abuse on the internet.
Sam – I know, I just wanted to get a Bono quote in sense he got the Liberty Medal for his work in Africa.
Beer thirty swiftly approaching
September 28th, 2007 at 11:05 amJimmie Jimbo the Magic Talking Baboon watch – just as the street said there was no place at all for amd to travel downwards, Barron’s sends us this today:
American Technology Research analyst Doug Freedman this morning cut his estimates on Advanced Micro Devices (AMD) for the third quarter and for 2007 and 2008. In particular, he has concerns about Barcelona, the company’s much discussed new server processor.
Z – it’s your and Nicky’s faults for starting me on the magic talking monkey, but I will stop if you instruct me.
September 28th, 2007 at 11:06 amCal – no I rather enjoy it. The magic talking monkey deserves to be somewhat flamed.
September 28th, 2007 at 11:07 amZMAN – Thanks. Are you still keeping an eye on TLM? It snuck upo close to $20 this week.
September 28th, 2007 at 11:07 amcrude negative
September 28th, 2007 at 11:07 amRam – took some leaps their yesterday as BigJim kept reminding me. April ’08 $20 CALLS
September 28th, 2007 at 11:08 amCrude = unwinding the trade
September 28th, 2007 at 11:11 amFinally…..
September 28th, 2007 at 11:12 amTRADE: Out OII Oct $75 CALLs at $3.50, up 108% in 11 days.
September 28th, 2007 at 11:13 amCal – Since I don’t watch talking heads, who is Jimmie Jimbo the Magic Talking Baboon?
September 28th, 2007 at 11:13 amWTI – support at 81.75, 81.00 and 80.50
September 28th, 2007 at 11:14 amWhat I find funny is the WSJ had a huge write up on grain today, and DBA is down. Oh silly me, it’s the market, that’s right!
September 28th, 2007 at 11:18 amDistillates now sitting on support.
September 28th, 2007 at 11:18 amYou can watch his leaping antics on CNBC everyday, he goes by the human name of Jimmie Cramer, when they let him out of the cage and put on a suit.
September 28th, 2007 at 11:19 amSamborne lol! Crop report was out today wasn’t it. I believe corn was a shocker with way more than needed. Wheat the opposite although now of course everyone will rush out and plant it and so prices should work lower over the next year.
September 28th, 2007 at 11:19 amAlt energy GEX Other Interesting ETF’s SLX NRL GDX
DBA looks good.
September 28th, 2007 at 11:20 amPowerShares DB Agriculture Fund Commodity Index – Optimum Yield Agriculture index is composed of futures contracts on some of the most liquid and widely traded agricultural commodities – corn, wheat, soy beans and sugar. The index is intended to reflect the performance of the agricultural sector.
Z…were you aware that as an option holder of RIG or GSF that one would receive the cash and your option contract is adjusted for the percentages of ownership?
September 28th, 2007 at 11:20 amNext support level for distillates is 22080.
September 28th, 2007 at 11:21 amFuel Cell – could all the people shorting them be thinking it’s a hydrogen car engine, as opposed to a stationary, NG, utility scale power plant?
September 28th, 2007 at 11:22 amAhh yes corn – the collusion trade of the year – long corn, short ethanol producers. The open volume on the CBOT maxed out at 250,000 contracts, at one point.
September 28th, 2007 at 11:24 am#14 just formed over the Cape Verdes Islands, but it will be another fish storm.
September 28th, 2007 at 11:25 amhttp://www.ssd.noaa.gov/met8/eatl/loop-rb.html
Nothing else of interest
Cal – I thought I was the only one that takes him for entertainment value only.
September 28th, 2007 at 11:30 amRJ – yes, if the options are out of the money after the adjustment they become worhtless…but you have the cash you received from the deal.
September 28th, 2007 at 11:31 amNicky: The World Grain storage carry-over was the “lowest in history” last spring, Do you have info on what crop situation is in other parts of the world? We have 4.5 Billion people in Asia & the FSU that eating better.
Phil
September 28th, 2007 at 11:31 amThe price of corn will not drop much here. It will be exported to asia.
Phil
September 28th, 2007 at 11:39 amDr D – everything I am reading says wheat should top out anytime now and then move much much lower.
September 28th, 2007 at 11:57 amAll I heard this morning was that we are now awash with corn. It will be the same with wheat next year – its easy to grow and at this price there is huge incentive for them to rush out and plant it everywhere – its extremely easy to cultivate.
Barry Ritholtz on inflation
http://zmansenergybrain.com/?p=825#comment-15803
September 28th, 2007 at 11:58 amNow that crude’s fallen off a cliff…in a kind of falling upward sort of way… 😉
There’s a chart of US driving miles here:
http://www.theoildrum.com/node/3014
(scroll down or search for “Expect more of this in the future”)
showing that in July 2006, for the first time in 27 years Americans were driving less than the previous year.
Anyone know where a more recent chart might live?
(not that it matters for crude, I guess, given all the new Chinese cars on the road. But interesting to see if the trend reversed this year …. )
September 28th, 2007 at 12:02 pmNicky: Thanks:
Phil
September 28th, 2007 at 12:04 pmI like SLX the Market Vectors Steel ETF.
I’ll buy that as a quasi-hedge when doing a large construction project that involves steel.
“SAFETY PAYS”
September 28th, 2007 at 12:06 pmIs drdavis124 (Phil) the PSW Phil?
September 28th, 2007 at 12:06 pmQ – no he’s not
Crude almost back to even
September 28th, 2007 at 12:08 pmAnybody have an opinion on DRYS upper resistance since it’s at highs?
September 28th, 2007 at 12:10 pmAnother huge bounce – thanks goodness for TD14!
September 28th, 2007 at 12:11 pmApparently EIA have come out with a statement saying they don’t expect price to effect demand because of China – no doubt adding a lift to prices.
September 28th, 2007 at 12:12 pmTD14 is a fish storm
September 28th, 2007 at 12:13 pmI’ll bite, what is a fish storm?
September 28th, 2007 at 12:15 pmDRYS is skating right above it’s BB’s. Does anybody feel it will push upward?
September 28th, 2007 at 12:15 pmram- you cant pick tops like bottoms… i know that dosent help.
September 28th, 2007 at 12:16 pmYou have to question the timing of such a statement by the EIA – first real sell off that looks like it could do technical damage and they step in!
September 28th, 2007 at 12:18 pmFish storm = Ocean only
September 28th, 2007 at 12:19 pmKaren tracks aren’t just east coast, they’re Cuba bound.
September 28th, 2007 at 12:20 pmram- bb?
September 28th, 2007 at 12:21 pmbb=bollinger bands
September 28th, 2007 at 12:21 pmKaren + TD 14 = OII up 3.4%.
Watch CAM and FTI fly up into the close
September 28th, 2007 at 12:22 pmThe reason why I am fishing is because I did not participate in the recent move. I was trying to get in now.
September 28th, 2007 at 12:23 pmI think they already have a few tropical storms priced into crude!
September 28th, 2007 at 12:24 pmNicky – that was OII, not Oil and yes, I agree.
Ram – tough call, these shippers are very volatile, I like buying them on weakness I think.
September 28th, 2007 at 12:25 pmThat said it looks very likely them are going to ramp it into the close again. Charts still look pretty bullish after that bounce.
September 28th, 2007 at 12:26 pmZMAN – Thanks. I will hold out for possible weakness.
September 28th, 2007 at 12:29 pmNicky is a much better TA person than I…maybe she would be so kind as to look at DRYS. Fundamentally I like. Technically, it’s a volatile beastie.
September 28th, 2007 at 12:30 pmZMAN – Is TLM unscathed by the Cnadian crackdown for more money?
September 28th, 2007 at 12:31 pmRAM – re TLM I wouldn’t say unscathed although I don’t recall them having an oil sands component (which is part of the new sev taxes) and they are fairly diversified (as I recall) across Canada although they do have quite a bit of Albertan production. They’re cheap and the international arena is seen driving the growth.
ECA gave the bird to the Albertan powers that be this am with the very really threat of hacking capex there if they go through with their royalty and severance tax suggestions. A Hugo by any other name smells just as bad.
September 28th, 2007 at 12:34 pmGroan…. Addison Armstrong now being wheeled out on CNBC having been quoted all day long. Lets close it at all time highs folks and it can stay up here forever according to him!
September 28th, 2007 at 12:51 pmOf I was the PM in Alberta, Encana would not be on the top of my list of people to piss off. One out of three jobs tied into energy, and more like two out of three if you include the multipliers.
September 28th, 2007 at 12:52 pmOops sorry now covering himself and saying we are overdue a correction and expects to see us trade down to 75 when we do. Two opposite statements – go figure or should I say Flip Flop!
September 28th, 2007 at 12:52 pmNovember rbob off 200 and October rbob off 20. They are now at the same price.
September 28th, 2007 at 12:53 pmamd watch – someone doesn’t want to get marked to book end of quarter below 13, and everyone else is running out the door on the downgrade. wonder who will win that one.
September 28th, 2007 at 12:58 pmNicky and CalV – agreed!
TRADE: Entered BTU November $50 calls at $2.25.
September 28th, 2007 at 1:05 pmBeer Thirty: T-minus 1 hour and counting.
September 28th, 2007 at 1:06 pmwhats btu all about? and the trade too
September 28th, 2007 at 1:16 pmjeez Z werent you saying drys was a day traders dream?
September 28th, 2007 at 1:18 pmBTU – peabody coal, I’ve been musing about the coals for awhile now. Decided to dip a toe as they look ready to run. Call volumes interesting as well there and ACI.
Nicky owns Armstrong! Nice call for a turn!
DRYS, yes I’d say daytrader’s dream there.
September 28th, 2007 at 1:23 pmZMAN – Coal?
September 28th, 2007 at 1:26 pmcoal = softish rock like substance, generally black, sometimes greenish, burns when thrown in a fire.
September 28th, 2007 at 1:28 pmKaren – Fish storm
http://moe.met.fsu.edu/cgi-bin/gfdltc2.cgi?time=2007092812-karen12l&field=Sea+Level+Pressure&hour=Animation
http://moe.met.fsu.edu/cgi-bin/ukmtc2.cgi?time=2007092812&field=Sea+Level+Pressure&hour=Animation
Hit forward
September 28th, 2007 at 1:29 pmO.K. Thanks. No more questions without specifics.
September 28th, 2007 at 1:29 pmZ.,
If you’re perusing the coals, Walter (WLT) took a nice dip today.
One of these days, people will realize that WLT is not (just) another sub-prime mortgage influenced home builder…
BUT a company with a fine metallurgical coal division– one that mines cash.
But not a pure coal play. Sure looks cheap: P/E 9 AH of 52 currently 27
Hmmm, may have talked myself into the Jan 25s (WLTAE) at 4.00
“SAFETY PAYS”
September 28th, 2007 at 1:30 pmZ – Coal, “Your a funny guy”!
September 28th, 2007 at 1:30 pmN,
I take it oil is back in technical damage zone?
September 28th, 2007 at 1:31 pmOIl, is my quote right? 81.61?
September 28th, 2007 at 1:31 pmCoal – The Other Black Gold
Which reminds me of an old W.Va. joke:
“What do you call 32 WV women in the same room?”
September 28th, 2007 at 1:32 pmDistillates tanks straight to the aforementioned level of support and through it! 22080.
September 28th, 2007 at 1:32 pmOII = 76.40
September 28th, 2007 at 1:33 pmPunch line:
… a full set of teeth!
September 28th, 2007 at 1:33 pmVery much so Magadan.
September 28th, 2007 at 1:33 pmOK,
I’m going home. May my absence help you prosper.
Have a great weekend, get out and take a hike in the woods or something.
I’m trailering my horses down for a ride in the SNP.
Cheers.
Q.
September 28th, 2007 at 1:35 pmbtu is last year;s trade, imho
September 28th, 2007 at 1:38 pmHey ZMAN – #135 – Were you flaming?
September 28th, 2007 at 1:38 pmQ – have a great weekend and that’s good advice. I’ll be in the woods this weekend as well. I’ve been remiss in doing some homework though so I’ll be taking some WLT reading with me.
TSO – tempting, down 2%+
Funny DJIA not reacting to the oil sale.
September 28th, 2007 at 1:39 pmZ,
Which way would you expect DJIA to react?
September 28th, 2007 at 1:41 pmIt was a little touch and go though Mag -that bounce looked too much. But it did what it had to and rolled over hard.
There was always going to come the day when they did the opposite to what everyone expected. ie for days they have bought it up into the close. With 30 minutes to go it looked as if they were going to do exactly the same.
September 28th, 2007 at 1:41 pmRam – no way, never, not me.
Cal – help me out on the last year’s trade comment. So coal can’t recover a bit this year? 1) it trades with NG and 2) I mainly trade options so the concept of years only applies to a very few, near and dear to my heart E&P companies and little else. Oh yes, and it applies to GOOG.
September 28th, 2007 at 1:41 pmI think TLM sold all their oil sands componets.
September 28th, 2007 at 1:41 pmThanks Popeye.
September 28th, 2007 at 1:44 pmfcel down 8% on news -guess noone heard sac and mack decide to go on a bear raid and get the margin boys hurt before the quarter is up. unless there was some news in the mongolian press about FCEL that i did not hear.
September 28th, 2007 at 1:45 pmTaking a long look at the Hang Seng Index. Up from 19000 to over 27000 in around 4 weeks. It really is a vertical move. RSI needless to say is very overbought.
September 28th, 2007 at 1:46 pmN – see PTR, SNP, CEO re overbought
September 28th, 2007 at 1:47 pmNICKY – I have been looking at the FXI puts, but there are so many mainland Chinese still pumping money into everything!
September 28th, 2007 at 1:48 pmAye Ram its going to be a question of timing but its on my radar.
September 28th, 2007 at 1:50 pmZ – you are fighting the entire environmental lobby, as well as the mood of the country, which has picked coal to be their bad guy. well me i don’t like mercury burning up chimney stacks either, but ours is a heck lot better than the stuff the lignite burning in ussr and in chicom factories. btu is a well run, they might make money off the australia deal to sell to the chicoms. but if i was thinking utilities fuel, i’m thinking nukes now – nrg is about to go up two reactors.
September 28th, 2007 at 1:51 pmFXI 160 and 145 puts have unusual high volume today.
September 28th, 2007 at 1:55 pmNOV FXI
September 28th, 2007 at 1:56 pmSoonest you could have a nuke online in the US is 7 to 10 years
I’m totally for them but you want to talk about tree-spiking enviro whack jobs coming out against coal and then talk nukes, aw come on!
NFX up at all is miracle today. NFX up almost 1% is odd.
September 28th, 2007 at 1:56 pmOk fine, but I heard Charlie Christ yester saying nukes are a clean fuel and he welcomes them to FLA, along with wind farms and solar concentrators. I know that nukes take years , however, I was talking about shareprices movements.
September 28th, 2007 at 2:00 pmCal – hear ya share price movements, point taken.
The enviros will get you on wind too though, giant bird ginsus in the sky and solar-covers up too much area that they might want to stare at as they drive by in their priusi.
September 28th, 2007 at 2:03 pmESV trying to roll over. would make my Friday.
September 28th, 2007 at 2:04 pmFCEL – down almost 10%. Still waiting on the outer Mongolian news network to tell me Brdar was cheating with his secretary’s husband and explain this. 10% even the NASDAQ office boys should be scratching their heads on this one – just not real cool.
September 28th, 2007 at 2:04 pmCal – Coal goes with Ngas. So if Ngas goes down, coal prices will also.
September 28th, 2007 at 2:06 pmCal – Nukes take years to build, NIMBY, and are expensive. Last one built in Us was 36 years ago? China has what three being built? Nukes are the cheapest energy source know to man.
September 28th, 2007 at 2:10 pmESV and RIG roling over.
September 28th, 2007 at 2:10 pmFCEL down 11% -the NADAQ doing its best to live up to the reputation of the Pink sheets.
September 28th, 2007 at 2:11 pmbtu getting raped into the close
September 28th, 2007 at 2:11 pmBTU – my bad timing with oil, will probably double up early next week.
September 28th, 2007 at 2:13 pmI finally got into something quick and now it’s bad timing. What the heck is going on?
September 28th, 2007 at 2:18 pmyea, as a momentum play, it looks to breeaing out… what correlation do you speak of with oil and btu?
September 28th, 2007 at 2:19 pmCoal price correlation is with natural gas.
September 28th, 2007 at 2:21 pmi got into something quick, and it’s getting mauled in a bear raid. you want to see un UUUOOOGLY chart – look at FCEL. so you sit and wait for it to end and take some gains to cover this one.
September 28th, 2007 at 2:21 pmNICKY – It seems relativley quiet for an end of the quarter day for the general market. Quiet before the storm?
September 28th, 2007 at 2:22 pmkeep playing boys. oct 18 interbroker short delivery rules get born. gonna have to learn to pick stocks instead of gaming long funds. friggin rats.
September 28th, 2007 at 2:24 pmeyes off the minute charts guys, it’ll drive you to drink early
September 28th, 2007 at 2:24 pmCal – oct 18 interbroker short delivery rules get born?
September 28th, 2007 at 2:27 pmjust coffee for now. i’m gonna hold long. selling some dividend paying gainers – stuff i eat from – so i can hold this.
September 28th, 2007 at 2:28 pm2:11 pm EST
Nymex Crude Back Up Above $83 After Brief Dip
DOW JONES NEWSWIRES
From MARKET TALK
[Dow Jones] Nymex crude bounces back up above $83 a barrel, after a temporary downturn due to profit-taking and sluggishness on the back of weak prices for gasoline and heating oil ahead of Oct product contracts expiration. No specific news is driving the crude market either way, says Tom Bentz, director and senior analyst at BNP Paribas Commodity Futures. “It’s just the flow of the market,” he says. “All of a sudden prices start to stabilize, buyers come back in and we could potentially make another run at the highs.” Nov crude +52c at $83.40/bbl, after hitting a low of $82.10. Oct RBOB gasoline -1.39c at $2.0800/gal. Oct. heating oil +9 points at $2.253/gal. (cassandra.sweet@dowjones.com)
[Dow Jones] A sell-off by Nymex crude traders to avoid losing too much money in the current price fall is feeding into the drop-off, says Tony Rosado of IAG Energy Brokers. “A lot of people have bought, making bets we’d rally higher,” he says. Although prices rose to a high of $83.76, “people who can’t sustain a drop have to get out if they’re bullish,” he says. He says most news has been “bullish,” only “bearish” news is in a Dow Jones Newswires article that says Saudi Arabia will be primarily responsible for bringing new barrels to the market amid questions about how much spare capacity OPEC has and fears of a supply crunch. Nov crude -14c at $82.74/bbl. (cassandra.sweet@dowjones.com)
[Dow Jones] Nymex crude futures fall below $83 and venture into negative territory on indications from Saudi Arabia that it would be able to supply barrels in a tight market, says Tony Rosado of IAG Energy Brokers. Nov crude -69c at $82.19 after trading all morning above $83. (cassandra.sweet@dowjones.com)
[Dow Jones] Nymex crude holds steady above $83, but still well below the all-time high of $83.90 a barrel. Sagging gasoline prices ahead of Oct contract expiry are making it difficult for crude to gain much, says Andy Lebow senior vice president at MF Global. “I think it’s going to be tough for crude to sustain a big rally under that kind of pressure,” he says. If crude loses some of its gains, “I don’t think anyone would be shocked,” he says. Nov crude +52c at $83.40/bbl. Oct RBOB gasoline -1.86c at $2.0753. (elizabeth.landau@dowjones.com)
September 28th, 2007 at 2:28 pmyea, sam, no more passing short positions around for thirteen days at a time.
September 28th, 2007 at 2:29 pmRam – could get volatile next week with non farm payrolls.
September 28th, 2007 at 2:35 pmZ- if vlo breaks 66.75 it might mot be good..
September 28th, 2007 at 2:38 pmi hate this broad in cnbc chirping about refining exposure, re your post today
September 28th, 2007 at 2:39 pmVLO – yes, true from back on 9/12
what is she saying?
September 28th, 2007 at 2:40 pmi love when she makes reco’s on fast money , and they flash on the bottom of the screen that she isnt qualified to make reco’s hahhaha. biggest joke in the league.
September 28th, 2007 at 2:40 pmsaying someting about cop’s refining exposure… HELLO! MCFLY! ALL INTEGRATEDS HAVE A FRIGGIN REFINER OR TWO
September 28th, 2007 at 2:41 pmI love Erin on there. I grab my coffee, turn off the volume and watch the show. She really speaks volumes to me.
September 28th, 2007 at 2:43 pmanything specific about COP’s refining exposure…did she make a geographically specific comment? Europe has taken a big 2q to 3q drop some I’m wondering if she’s trying to get at that?
September 28th, 2007 at 2:44 pmthe saga continues fcel down 11.5%, while i’m still waiting for the news. i should of been buying equities in venezuela, safer markets there.
Good weekend to all!
September 28th, 2007 at 2:52 pmTini time, see ya next week.
September 28th, 2007 at 2:55 pmHave a good weekend all. I’m headed to the brewpub to celebrate my flush with cash position and that stop on FCEL.
September 28th, 2007 at 2:57 pm25% short interest on the shares, and no one wanted to mark to market the 30% walk up this quarter. could that explain it or am i just in the land of chocolate?
September 28th, 2007 at 2:58 pmsee you cats later, have a good one!
September 28th, 2007 at 2:58 pmok popeye, cheerio
September 28th, 2007 at 3:00 pmhave a good one Z!
September 28th, 2007 at 3:00 pmHave a good one Cal – better luck next week with the FCEL!
September 28th, 2007 at 3:02 pmoh yes, and to NICKY, nice crude call. Got some levels for next week for us.
I’m off for awhile, feels like a Red Stripe kind of afternoon. See ya!
September 28th, 2007 at 3:03 pmHave a great weekend everyone – see you on the flip side or should that be flop side???
September 28th, 2007 at 3:03 pmWill check levels and get back to you over the weekend Z.
September 28th, 2007 at 3:04 pmGreat weekend to all, even you COALMAN!
September 28th, 2007 at 3:06 pmeven me? but I prefer GASMAN.
September 28th, 2007 at 3:19 pmassman like cramer!
September 29th, 2007 at 11:04 am