TGIF – Jobs In Line, Nabors Warns, and Shipping Looking Up

Land rig operator Nabor's (NBR) warned over 3Q profits this morning due to weaker than expected rig activity. Shouldn't be much of a surprise but should also set a weak tone in service, including the list of onshore drillers from yesterday's post and names like (BHI) and even and shallow water operators like (ESV). Nabor's blamed the lower expectations on " our U.S. Offshore, U.S. Well Servicing, and International units followed by our U.S. Lower 48 Land Drilling entity." In that order. I may actually chase (NBR) as the outlook does not look very heartening at present. Here is the press release. I may also look at (PTEN) and (BHI) on the put side depending on how they open.

That table of land drillers from yesterday's post is worth repeating with updated prices for last night:


Commodity Watch: Pulling back a bit this morning after strong performance yesterday.

  • Crude Oil: Rally Mode. November crude jumped $1.50 to $81.44 partly due to a weaker dollar and mostly because traders wanted it to. The same talking heads and media gadflies that explained why it was going lower have once again enjoyed a bought of amnesia and done an about face on their thoughts replacing the 7 in $75 with an 8. Crude is off 40 cents in early trading.
  • Nigeria Watch: British oil service worker held for 2 months is freed by crack Nigerian troops. Also in Nigeria, officials expect a 500,000 bopd increase in production by June 2008 as shuttered facilities return to service and new platforms (further offshore) come online. Comment: Good luck with that guys.
  • OPEC Watch: According to tanker tracker sources, OPEC supply increased by 270,000 bopd in September relative to August
  • Cracks spreads appear to be rebounding off recent lows as the product draws from Wednesday's inventory report continue to resonate with trades. While heating oil may be getting all of the attention due to the approaching heating season, gasoline's larger inventory deficit is generating a sharper rebound in gasoline crack spreads. I'll post these charts in the weekly wrap.
  • TEPPCO just completed an additional 900,000 barrels of storage capacity at Cushing, OK I only mention this because I can see some clever analyst trying to show storage vs capacity on an apples to oranges basis in the near future. The fact that they were willing to build this storage and an additional 250,000 barrels under construction for 2008 service should tell you something about expected deliveries from Canadian oil sands in the near future: they're going up.
  • Natural Gas: Also in rally mode. November gas traded higher as well yesterday and although it will be affected by near term swings in tropical thoughts it did get a bit of moderately bullish news in the form of the EIA storage report yesterday. Weaker imports and late season cooling load combined to yield a smaller than expected number. Gas looks like it's trying to mount a seasonal move and has broken well off its recent,  pre Curtailment Era (CE) lows. This morning gas is trading off a dime as tropical action in the Gulf is not very...well...tropical.

Gas Storage Review:

  • 57 Bcf Injection. My number was 60 Bcf. Street was at 70-75 Bcf.
  • Storage as of September 28, 2007: 3,263 Bcf.
  • Max storage for this week in history: 3,317 Bcf (2006).
  • We are now 54 Bcf below (1.6%) year ago levels and 227 Bcf (7.5%) above the 5 year average 

Injection Season Drawing To A Close; I Think We'll End Up Between 3.45 and 3.5 Tcf. In the following graph I've plotted the high, mean and low cases from the last five years of data. The high case is almost out of the question as that magnitude of injections is only seen in years where storage is considerably lower in the Fall shoulder season. Given the current trends and my expectation that imports will continue to be light for LNG and a bit weaker from Canada I think we come in just short of the mean case, which is lower than Street estimate 50 to 150 Bcf.

injection-remainder-100507.jpgclick to expand.

Stocks We Care About Today:

  • (DRYS): Buys Capesize newbuild for $147.5 million with expected delivery in 2Q08. It's probably this one from Golden Ocean which itself is up 450% over the last 12 months. Similar sized vessels were being acquired for under $100 million earlier this year. The rapid increase in price is being by demand from China and Inida first and foremost. Some oil tnerks are even being converted to bulk status which may help the ailing tanker market eventually which is sufferring from recent over production. Comment: more good news for ship builders and hello inflation. As for DRYS it remains the big kid on the block but a nat in terms of global capacity. Consolidation in this industry is likely. I'll have expanded dry bulk valuation tables out over the weekend. Cantor took their price target up from $108 to $114. 

QMAR Seems Discounted At This Point On A Replacement Cost Basis. One other thing, this kind of price for a Capesize is a record, and this price and recent prices for Panamax vessel sale in the upper $60 millions point out a replacement value discrepancy to the market for (QMAR) which owns 18 Capasize and 11 Panamax vessels. Using very back of the envelope math QMAR's TEV is $2.1 billion but their replacement value would be over $3.4 billion. True, you can't just assume all their ships old ships could be sold for new prices but the discrepancy on replacement value is largest for this stock.  Really starting to warm up to this name. 

  • (BTU) / (RAIL): Union Pacific says car loadings of Powder River Basin coal hit record for September. BTU is the largest provider of coal from the PRB and Freightcar America builds coal cars. RAIL's stock has fallen about 30% in the last two months and down by nearly half from Spring 2006 levels. The railcar business is cyclical and they've been going through some rough times as orders have fallen off. Bears watching 3Q results later this month but most analysts don't expect a turn around here until sometime next year.
  • (EEE) - explosion and fire at a K-fuel test facility. Doesn't some like damage was done but I'll do a little more checking.  

Holdings Watch: No Changes Yesterday.

Odds & Ends

Analyst Watch : (CAM) from buy to hold at Sterne Agee, increased price targets for RRC and APA from Calyon, and for DRYS from $108 to $114 at Cantor, and over in la-la land, FBR has (ESV) rated as outperform with a price target reduction from $80 to $74.

Tanker Watch: Will add in the weekly wrap over the weekend.

Can't Keep A Good Vlad Down Watch: People are speculating that Putin will leave the presidency, as proscribed by the Russian constitutional term limit, and potentially take over the role of prime minister. Following this he could run for president again. Or he could just change the constitution and remain president but he has vowed not to do this. I propose a third option. Have your wife run and stay right where you are.

One Small Set Back For Nuclear Plant Construction: The NRC is thinking maybe new reactors should be plane crash proof and is seeking public comment on the matter. Gee, I wonder if the public, that already loves nuclear energy so much will want reactors to be able to shrug off a commercial plane strike. I say just put a battery of SAM's around each facility and start building. I've seen critics of my saying that you can't just shoot down a commercial airliner on final approach to a nuke but what do they think is going to happen if it hits the facility? Will it simply bounce off? Sheesh.

Housekeeping Watch: Please add zmanalpha@gmail.com to your e-mail program's address book to ensure receipt of Blasts and other communications. Thanks.

166 Responses to “TGIF – Jobs In Line, Nabors Warns, and Shipping Looking Up”

  1. 1
    Nicky Says:

    Good morning.

    This morning’s non farm data report now takes the energy bull’s weak dollar arguement away. What’s next?

  2. 2
    Sambone Says:

    8:42 am EST

    Nymex Crude Lower As Dollar Rallies On Jobs



    [Dow Jones] Nymex crude is lower after better-than-expected US jobs data boosts the dollar. Nov crude -42c at $81.02/bbl. Traders focussing more on currency implications than positive news for US economy, with lessened chance of further US rate cuts lifting the dollar.

    Reported earlier:
    LONDON — Crude oil futures were slightly lower in London Friday morning as investors booked profits, but a tight fundamental outlook continues to underpin prices.

    Traders said the market is consolidating following the previous session’s impressive rally and, in the absence of fresh fundamental news, will likely take its cue from movements in the dollar and Gulf of Mexico weather.

    “We’ve proved there’s good support down below $79 a barrel, and with the products markets looking strong there’s a case for further gains this afternoon,” a trader in London said. “But it’ll be the same old dollar/weather drivers if the news front stays quiet.”

    At 1133 GMT, the front-month November Brent contract on London’s ICE futures exchange was down 25 cents at $78.72 a barrel.

    The front-month November contract on the New York Mercantile Exchange was trading $0.21 lower at $81.23 a barrel.

    ICE’s gasoil contract for November delivery was up $16.00 at $695 a metric ton, while Nymex gasoline futures for November delivery were down 30 points at 204.92 cents a gallon.

    Wednesday’s unexpected slide in U.S. distillate inventories continues to support sentiment, as the approach of winter turns attention to heating oil supplies amid suggestions by some that the coming winter could see average temperatures. This compares to the last two years where temperatures have been warmer than average.

    “Market participants put more weight to tighter heating fuel supplies, as we approach winter months,” said Michael Davies, analyst at Sucden in London.

    Heating oil futures have rallied accordingly, and this, combined with gains for gasoline, has offered support to crude along with a strengthening technical picture.

    This stems from the fact that WTI November didn’t fall through key support between $78.25 and $78.87 a barrel, but even this doesn’t guarantee a test of the all-time highs.

    Analysts point out any attempts to test the highs have been quickly rebuffed by heavy selling pressure and, as a result, they expect prices to hold in a tight range short term.

    Offering some direction is the dollar, according to Davies.

    Renewed weakness for the dollar, a move which makes dollar-denominated oil more attractive to non-U.S. buyers, was blamed for much of crude’s gains late Thursday and a steady performance by both Friday morning bears some witness to this.

    Although not thought to provide an overwhelming influence on oil prices, traders said the oil market is eager for directional indicators amid quiet newsflow, especially as the dollar is close to all-time lows. For this reason attention will turn to U.S. September payrolls, due 1230 GMT, for any dollar reaction.

    And concerns over the vulnerability of U.S. and Mexican oil production during the Atlantic hurricane season hasn’t gone away.

    Attention is still focused on a low-pressure system in the northwestern Gulf of Mexico which, while of little danger at present, has potential for development, according to the National Hurricane Center.

    “Development, if any, of this system will be slow to occur,” it said. “However, interests in Texas and Louisiana should continue to monitor the progress of this system.”

    —By David Elliott; Dow Jones Newswires

  3. 3
    zman Says:

    Nicky – the next argument….um…cold winter = out of heating oil or

    warmer winter and we burn more gas driving to the beach…although with the global warming thing it could be argued that the beach is at least closer.

  4. 4
    Nicky Says:

    No tropical activity in the Gulf.

    But they did find something bullish to say about BP refinery – phew thank goodness for that as I was worried for a moment that the bulls were clutching at straws.

  5. 5
    Nicky Says:

    Broader market futures have now halved their gains. I predict a pop and drop. The uncertainty remains and the market hates that.

  6. 6
    zman Says:

    pop and drop. sound like a convenience store in a bad part of town.

  7. 7
    sane Says:

    Dumb fed, now Kohn is saying that they could adjust up the rate if the cut was too much. They are now worried about inflation again. Umm yeah you should have thought about that before you cut rates.

  8. 8
    Nicky Says:

    Unreal Sane. And these guys are running the country – God help us!

  9. 9
    Sambone Says:

    Inflation, what inflation? Fed doesn’t look at food or energy, so what inflation. Mad magazine Alfred E. Newman – “What me worry”?

  10. 10
    sane Says:

    Yeah he was quoted as saying “It is better to do too much too fast than too little too late” I guess that means rates will be 4.75 this month 5.0 next month 6.25 the next 5.25 next etc……….

  11. 11
    Nicky Says:

    Art Cashin just said it better than it can be said, the jobs report is completely useless and the only thing more usless than the jobs report is the initial reaction to the report.

  12. 12
    zman Says:

    Art is smart

    DRYS = wow

    go TSO

    Chinese oils bopping

  13. 13
    calvino Says:

    all canadian producers up on huge new discoveries offshore newfoundland and the athabasca plain -NOT. just the yankee peso getting crushed, 1.5% the sort of moves one just does not see in currencies in normal circumstances.

  14. 14
    zman Says:

    TRADE: NBR OCT 30 PUTs for $0.90.

  15. 15
    calvino Says:

    hit them on the report, huh

  16. 16
    zman Says:

    TRADE: (DRYS) Out of the $100 strike October Calls for $3.90. 23% in 2 days and a riskier than I like to be. Still hold the half position of the October 85s.

  17. 17
    Sambone Says:

    The great PF


  18. 18
    zman Says:

    Cal – the tail end of the press release for NBR sounded like they were downright depressed.

  19. 19
    rseidman Says:

    Z: Not to rain on this parade,
    but what about our VLO Oct calls?

    Are you still expecting a rally before expiration?


  20. 20
    calvino Says:

    Maybe if they started pricing in euros.. they’d do great. wti should be getting quoted right next to the dollar/euro rate now, for full disclosure.

  21. 21
    zman Says:

    RS – VLO – can’t catch a break there. It’s just very sluggish despite improving cracks and all the other good stuff about them I constantly prattle about. Nobody cares but me and Cramer which is kind of scary. I haven’t bought more because as you know I’ll double down once or twice but that’s it. I have not bought the 67.50s either which should also be telling. I’m considering selling them now or waiting for next Wednesday, at which point they will be cut in half if the stock does not move higher. I will likely just sell them soon, wait for a bad day in oil and then buy the Novembers close to the money.

  22. 22
    calvino Says:

    Shrub alert – turn down your bloomberg, the cheerleader cowboy is on the prowl. Guess we are going to hear about the revised august employment – wohooo.

  23. 23
    Sambone Says:

    9:28 am EST

    Nymex Crude Down A Bit As Dlr Gains On Jobs Data

    By Matt Chambers

    NEW YORK — Crude oil futures were down slightly early Friday, slipping after the dollar was boosted by U.S. jobs data seen lessening the chances of further interest rate cuts.

    September non-farm payrolls came in slightly above expectations at 110,000, while August payrolls were revised sharply higher, to 89,000 from a previous estimate of a 4,000 decline. While the data bodes well for the economy, oil traders have been focussing on dollar movements in recent weeks, as a slump in the currency has been factor in helping push prices to their record of $83.90 a barrel Sept. 20.

    “Crude is undoubtedly lower on the jobs numbers; there was some buying of crude yesterday on whispers that they would disappoint,” said Addison Armstrong, an analyst at TFS Energy Futures in Stamford, Conn. “In the vacuum of other significant news for crude, we’re trading on the dollar.”

    The front-month November light, sweet crude contract on the New York Mercantile Exchange was recently up down 41 cents, or 0.5%, at $81.03 a barrel. Brent crude on the ICE futures exchange fell 38 cents to $78.59 a barrel.

    The euro was recently at $1.4074, down from $1.4135 late Thursday.

    Traders are also eyeing a narrowing of the front-month Nymex futures contract’s premium over the second month, which has fallen to around 70 cents a barrel. The difference widened to $2 a barrel last month and traders had been saying it would be a sign of crude price weakness if it dipped below 80 cents. A bigger difference is seen as indicative of tight supplies.

    Gasoline futures continue to show strength relative to crude as traders focus on low inventories reported this week and low refining margins. The crack spread, or difference between the price of a barrel of gasoline and a barrel of crude, was recently at $5.33 a barrel, up from around $3 earlier in the week, but well off the highs above $30 a barrel it scaled in May.

    Front-month November reformulated gasoline blendstock, or RBOB, rose 53 points, or 0.3%, to $2.0575 a gallon. November heating oil fell 17 points, or 0.1%, to $2.2296 a gallon.

    –By Matt Chambers, Dow Jones Newswires

  24. 24
    zman Says:

    By the way, earlier I took profits on those DRYS 100s because they were still out of the money, Cantor can only raise its price target so often and the Baltec Index could tip over just briefly and whack them. It could easily go to $100 and the bid on those options is now better than I did but the 23% gainer in 2 days is not too shabby and I’ve still got the 85s for a move over 100 which I’d bet on next week given a fair seas.

  25. 25
    calvino Says:

    thanks sam, interesting with the backwardation premium reduction

  26. 26
    zman Says:

    ESV chart could gap lower by $1.50 to 2 in a weak market. My 55s are just back in black but the 50s look like a very long shot for a minor salvage job.

    missed my BHI trade.

  27. 27
    Nicky Says:

    Perhaps someone should tell Bush about the birth/death model which adds 150k of fake jobs to the report each month.
    So no we haven’t actually created any new jobs but we haven’t lost as many as previously thought either!

  28. 28
    zman Says:

    Nicky – take solace in the fact that all the professional blogger jobs aren’t likely to get counted.

  29. 29
    zman Says:

    NBR will roll over and die if this market gives back a few more points. How does the NBR chart not fall another 2 points in coming days. Ditto ESV which already warned and will likely warn for 4q as well over rig mob downtime and weaker than expected utilization in the GOMex

  30. 30
    Nicky Says:

    Distillates has big support at the 22200 level.

    WTI has support at 80.75 and 80.40.

  31. 31
    Nicky Says:

    RBOB has support at 20520 and then 20400.

  32. 32
    calvino Says:

    bidu just tacked on another $10 to its meager 195 price /earnings. really, this time.

  33. 33
    Nicky Says:

    and 20460.

  34. 34
    calvino Says:

    $12.50 – I stand corrected

  35. 35
    Nicky Says:

    I see PF said that if the data was better than expected then oil would rally first and then break. Well neither has happened.

  36. 36
    Sambone Says:

    Nicky – When are you going to open an account with Phil?

  37. 37
    zman Says:

    Fraser – thanks for the emails. Do you know much about rail cars? That business has been stinking but may be approaching a bottom.

    NFX … nice

    CHK … getting there

    Thanks for the levels Nicky. Cracks had a great day yesterday and a close right now would be another big pop. Funny how the refiners trade with oil price and then cracks and not the other way around.

    NBR gettng a little dead cat bounce

    Sambone – any weather you see next week in GOMex?

  38. 38
    Nicky Says:

    Tempting eh Sam – we could get his daily recommendations then.

  39. 39
    Sambone Says:

    Z – Nothing on my scope at this time that has me interested.

  40. 40
    zman Says:

    RAM – did you see I came out of the OOTM 100 OCT DRYS Calls?

  41. 41
    Nicky Says:

    As WTI is looking so bullish I guess I better give some resistance numbers –

    8190 and then 8240.

    Sorry to stand on the fence but this could still resolve either way obviously not based on fundamentals!

  42. 42
    fraser921 Says:

    All i know about the rails is Warren Buffet likes them.

    But big picture, you have to move coal and grain to the ports.

    Also, you need to ship all the stuff we are buying from china and s korea and japan that comes in.

    here is how im playing drys

    core position long stock and short calls, i buy the calls on weakness and sell on strenght

    I also have a long term core position in leaps that i gradually build on dips.

    Im going all in 1 week before earnings regardless of price.

    I also sold some 95’s and 100’s today and i will buy them back on dips.

    for those interested in the secotr

    there is a weekly market letter at this site.


  43. 43
    zman Says:

    Fraser – re rails. Backlog for building new cars has come way off. Car loads near record highs, setting monthly records out of PRB. At some point, the rail companies start buying more cars. RAIL is down on lower profits. Turn expected soon. Me like turn.

    DRYS – hear ya, buy low, sell high. It may break 100 next week but I won’t chase on up days.

    Thanks for the BDI link.

    QMAR on replacement cost basis and if BDI can hold anywhere near these levels.

    EGLE is about to get some big upside from chart expirations. Roughly one third of their vessels about to be recharted at much higher rates (88% higher in case of one of them)

  44. 44
    calvino Says:

    sell bidu 326, a short my heart can really get into

  45. 45
    BigJim Says:

    Zman – Any thoughts on Do or Rig later next week before earnings will be announced at the end of October.

  46. 46
    calvino Says:

    sell a bit more at 325

  47. 47
    zman Says:

    Man they are all over the map trading wise. My OCT rigs went from star to dog in the last two days. I like them longer term for a move well beyond these levels. Have not worked up the specific play or timing to get me exposure to it yet. I’ll be in the Nov near the money (whereever that is) before earnings.

    HK > 18 aaaggguuuudhdfgh

  48. 48
    zman Says:

    and NFX about to top 50

  49. 49
    zman Says:

    CHK now $1 short of breaking out of a base that is 24 months old.

  50. 50
    drdavis124 Says:

    Fraser: Rails: CNI CP are 2 best long term. Canada rails we benefite from crashing US$.

    I have CEO CNOOC But have not done DD on it. Any comments on CEO????

  51. 51
    zman Says:

    CEO = pricey and very volatile; could get pricier given current HK market.

  52. 52
    zman Says:

    Here’s a fun chart for those of you who have been around awhile šŸ˜‰


  53. 53
    Denise Says:

    Z-on the rails-one I have owned in the past-GBX spiked up in early July on a short squeeze (Cramer induced) if you are wondering what the heck happened.

    Best reason I have read besides fuel costs to own rails-been told we have huge shortage of rig(not your kind!) drivers -so more goods being shipped via rails.
    “Pickens also looks for alternatives to oil, given that users of oil will have to look for different sources of fuel if oil prices continue on higher than $80. With that in mind, a speculative small-cap play for Pickens is Greenbrier (GBX) , a company that manufactures railcars for the transportation of everything from grain and solid waste to pressurized tank cars for transporting liquid petroleum gas, light oil and ethanol. As we become more dependent on fuel sources that cannot be transported via pipeline — ethanol for instance — Greenbrier should enjoy greater demand. “

  54. 54
    drdavis124 Says:

    CHK was recently recommended on CNBC. First time ever. Good sign. Cramer trashed it regularly

  55. 55
    rammastr Says:

    ZMAN – YES @4.30. Thanks. CHK ready to rock? JAN 40’s?

  56. 56
    zman Says:

    Thanks Denise – will take a look GBX in add to RAIL. Thanks for the email also.

    Is as out to lunch on CHK as he was on HAL.

    HAL at $34 – “stock’s a loser, never goes anywhere”…~ Jimmy Boy.

    HAL at $39+ ~ come on Jim let’s talk about Best of Breed you chimp

  57. 57
    calvino Says:

    calling out the magic talking baboon?

  58. 58


    Man, I’d be careful on BIDU puts, I’m hearing 350 and weekend long hedges for up gap trading on the FXI.

    That one’s beyond me.

    Quick story: there are less than 1000 professional stone cutters in USA. They all earn $150+ a day.

    There are now 50,000 professional stone cutters in Mainland China, they earn $15-20 a day… they used to earn $3/day.

    These people WANT to save and invest. This kind of internal demand psyche is beyond our Western timing sensibilities.

    BIDU and them are like the coasters at Six Flags or Cedar Point: a fun ride for a short period of time and you always hop on and end up at the bottom!


  59. 59

    Good Morning, Z.

    Sorry I interrupted your dinner last night.

    WLT is looking strong today. Are you waiting for the tide to go out on the market to board the boat at a lower level?

    I’m in the OCTs, but will be looking for entry into longer contracts as the opps. present themselves.


  60. 60
    zman Says:

    RAM – I think so. I’m about to drop my 32.50 October (getting to be that time of the month). My January 37.50s are still 15% in the hole right now. I think all this OOTM activity is long stock holders writing calls. Does not make me happy. I’m going to wait on a bad energy day (after I tump the 32.50s) and then go long NTM calls in November. I may also take some April 40s as for $2 that helps with a possible takeout and it’s only a buck more for three more months than the Jans. If gas goes soft or something at least you have 3 more months to get lucky.

  61. 61
    BigJim Says:

    Zman: Are refiners about to breakout. What do think about TSO and VLO?

  62. 62
    zman Says:

    Q – No, I just feel like I missed the boat entirely. Just kidding, I’ll be in but will wait on it until next week some time.

    Q – why don’t we put the stonecutters in one bulk carrier, bring them here and tell them the rate will be $50/hour. They’d be overjoyed and you’d have cut your labor by 2/3rds. Apart from the whole part about it being completely un-American I see an arbitrage waiting to happen.

  63. 63
    drdavis124 Says:

    Chk: I am Overweight 30%, mostly in 09 leaps. At 78 I am getting conservative.

  64. 64
    zman Says:

    BigJim – I like TSO better of the two but that’s probably because my positions there are up. West cost cracks have been a little more solid too which should benefit TSO more however, Gulf Coast could see a nice snap up here on gasoline which would be good for VLO.

    About to breakout? Hard to time it. I was really early shorting these and then made money on both sides over the summer. At this point I think they go higher into year end but I’ll be quicker to take profits and losses on the group.

    In VLO I’m not happy with my current position as I think I’m too far out of the money in a stock that could go either way over the next two weeks. For now I’m holding the 70s which I’m down 50% in right now (of course I was down 67% in them two days ago);. If I add, and I’m not convinced the Street won’t continue to shell people with the story about how cracks stink (see post on COP yesterday that refutes that but whatever) right now through earnings.


  65. 65
    zman Says:

    DRYS going for $100.

    Once over it I will look for an exit on my $85s, looking to re enter next week.

  66. 66
    calvino Says:

    Quarry, I hear you. I am sitting on this screen watching the ticks.

  67. 67

    Calvino- 10-4. Enjoy, don’t blink.

    Z.- Will Hillary pay for their medical insurance, too? Or will I need to ship them to Juarez and let them wade across to my bus?

  68. 68
    Sambone Says:

    Nicky’s hero

    10:49 am EST

    Nymex Crude Stays Below $81 As Mkt Seeks Direction

    [Dow Jones] Nymex crude is slightly lower as traders react to stonger-than-expected US jobs data, but the market still lacks a clear direction, says Phil Flynn, senior market analyst for Alaron Trading Corp. He sees $80 a barrel as the “magnet point” or center of the crude trading range. “We’ll trade on both sides (of $80) until we get a clearer picture of the economic outlook or a clearer picture of when winter is going to begin,” he says. Nymex Nov crude -66c at $80.78. (elizabeth.landau@dowjones.com).

  69. 69
    calvino Says:

    However when you have two fake cowboys running your country, that’s not exactly gravy either. If you are a college cheerleader, then you are and never will be a dude. And Harper, I saw his pic yester in a pink oxford and a Stetson — who the heck votes for these ..

  70. 70
    zman Says:

    Q – she’d take it out of your heavy truck tax deduction, lol.

  71. 71
    Popeye Says:

    Say Cal, FCEL recovering.

  72. 72
    Denise Says:

    z-think you might get some help on your refiners by a man some call the pied pumper of stocks. He mentioned crack spreads briefly this am.
    On the otherhand #56 isn’t quite acurate-I religiously read him(9yrs) to help/game my trading(and yes it works(well sometimes-not always)
    he has always bulled chk and gave up(too early) on hal. Food for thought-he has great contacts and fairly good at big money/mutual fund pyschology. Sorry guys -different opinion

  73. 73
    calvino Says:

    Pop, I averaged down through that beating to about 9.36 and sold off at break even couple of days ago. I still hold a core position in it, b/c the state wants them to have orders, and by Dec the utility comission passes down the rubber stamp.

  74. 74
    zman Says:

    Denise – he does have good contacts, I question his motives. He has been bullish on VLO for days now and RIG as well. I happen to agree with him but I’m not sure he’s not just talking someone else’s book. He definitely not dumb either but all the shows antics just drive me up a wall. It’s not a game show and not everything boils down to best of breed.

  75. 75
    Sambone Says:

    Ecuador has just done the Chavez.


  76. 76
    Nicky Says:

    Nat gas has support at 7.130 and 7.040.

  77. 77
    zman Says:

    Yes, Ecuador takes 99% of revenue over $23 per barrel. Why would any oil company stay?

    Denise: that can’t be good for BPZ.

  78. 78
    zman Says:

    which is ticker BZP – do they have some safeguard against this?

  79. 79
    zman Says:

    Nat gas: good number yesterday a distant memory. No storms today = problem.

    Gassy stocks mostly up with the broad market. I see no reason to chase them on a Friday.

  80. 80
    Nicky Says:

    Nat gas – Mondays low was 6.753 and I think if that gets taken out the upside is done for now – this could happen with a gap lower at the open Sunday.

  81. 81
    zman Says:

    …yet another reason for me not chase them gassies then…

    …any thoughts on this rocket of a broad market?

  82. 82
    Nicky Says:

    Plenty but most of them unrepeatable on here!

    No seriously….

    I said yesterday the charts pointed up (funnily enough none of my scenarios panned out psychology wise!! As apparently the market is now delighted that the Fed does not need to cut again!)

    Sideways consolidation all week was 4 and we are now in 5 which I would say targets about 1574 in the spx.

    Interestingly after the intitial reaction at 8.30 which was quite violent many of these have now reversed ie dollar is now weaker again, gold up. Is that telling us that this market is not convinced the Fed will not cut again? I am not sure what to make of it.

  83. 83
    Sambone Says:

    Z – Alfred E Newman – “What me worry”. take alook at MER, up on bad news.

  84. 84
    Denise Says:

    Z-Took your advice and sold BPZ after your comments. Why I started subscribing to your board after reading for a few months(smart money making ideas)

    Agree Cramer is extremely unlikeable-huge ego, parinoid, alienates most of his columnists after awhile, ect… and
    changes his mind like the weather.
    But on the other hand-he puts himself out there-and he has the little guy/gal
    kind of show. Who ever said the public has taste!
    Better than Suzie Orman or Lou Rukeyser for the little guy.
    For $300 bucks a year they can mimic his portfolio and maybe beat the S&P by a small amount and save the 1% or 2% mgt fee by thier broker.
    As far as motives I think it is all ego-why should he bother- he could go back to running his hedge fd or retire and not endure all the public darts.
    Sorry for the long winded reply

  85. 85
    calvino Says:

    Z – somebody’s gotta recycle the printing presses – I guess the ‘huge’ job numbers are the reason.

  86. 86
    calvino Says:

    They can mimick his portfokio for free on the motley fool

  87. 87
    Nicky Says:

    Plenty Z but not of it repeatable on here!

    Seriously…..I said yesterday the charts pointed higher (none of my psychology scearios played out!!!! apparently this market is now delighted that the Fed does not need to cut again)

    We were in a wave iv consolidation which lasted most the week, now in v up which I would say targets about 1474 on the spx.

    Interestingly some of the early reaction to the 8.30 data has now been reversed – dollar now down and gold up This is slightly odd given the data – perhaps the market still feels the Fed has another cut in it?

  88. 88
    Nicky Says:

    Z – I will just add that cycle wise the upside is extended here so there is nothing to say we will not see a correction which could come at any time before making another assault on the 1574 or higher area.

  89. 89
    zman Says:

    Thanks for the props Denise – I wish I could run a show for the little guy…

    RE BPZ: Ya know, I could be wrong the stock seems to care less about the ecuador news. That was my five minute run through. They may have some contractual protection.

    COP and XOM

  90. 90
    Denise Says:

    Regarding the rocket ship market-best quote of the day
    “”the bad news is good and good news is even better” market remains in place.”

  91. 91
    zman Says:

    N- what could possibly not be repeated here by you?

    OT: KGSR.com – hometown radio on the internet. If you ever wanted to know what I listen to instead of CNBC

    Denise – did that quote come from CNBC, if so see preceding paragraph

    IOC looking to break down after yesterdays pathetic dead cat bounce.

  92. 92
    zman Says:

    Go TSO

    ESV finally starting to get kicked in the head a bit.

    Anybody got anything they want ta see on the weekend.

  93. 93
    Sambone Says:

    Z – Weekend , W and Darth Vader resign.

  94. 94
    zman Says:

    Yahoo story says bird flu mutating to more easily spreadable strain.

  95. 95
    cattleman Says:

    Ref #42 & 43 why not TRN? Rail cars, sell and lease plus barges and infrastructure?

  96. 96
    rammastr Says:

    ZMAN – All offshore drilling getting kicked in a positive market.

  97. 97
    zman Says:

    Cattleman – no reason, just collecting ideas at present…thankyou.

  98. 98
    Popeye Says:

    Sambone, you funny.

  99. 99
    zman Says:

    RAM – true which makes little sense. The central GOM lease sale was heavily weighted towards deepwater which should be long term even more positive for RIG gSF DO and the guys who have to go down there and hook it up or provide the subsea mechanics CAM, FTI , OII.

    Other than RDC, it looks like the shallow folks are down less again % wise.

  100. 100
    Nicky Says:

    The fall in the energy complex (aside from nat gas) has looked less than convincing so far. Bearing in mind that both the dollar and gold reversed their earlier direction I would not be surprised to see a rally into the close.
    Either that or this really needs to roll over.

  101. 101
    zman Says:


    RIG down 1.2%
    ESV down 3.2%

  102. 102
    Alhambra Says:

    RE: Rail Fundamentals –
    The industry has benefited from macroeconomic factors, such as raising energy prices, and regulatory changes, such as tighter trucking regulations since 2003. This has shifted shipping traffic to railroads away from trucking, as their fixed costs provide steadier and cheaper rates.
    One can also find that smaller, regional railroads have benefited from these economics and subsequently elevated the larger players. This also leads to greater consolidation/acquisition opportunities for the larger players.

    Risks – direct correlation to recession

    Z – request for NG pipeline companies (SE, TRP, ETP, KMP, TPP, etc.)

    or LNG Transports (with Russia and Ukraine heightening tensions over NG pipeline use, could be greater opportunity for shippers – wow, is that speculative)

  103. 103
    zman Says:

    Thanks A

    On pipes I always like KMP – they’ll do well on KMP….pipelines are a lot like utilities in my view which is pretty far from my usual stomping grounds

    re LNG – I’m looking at that over the weekend on the ship side.

  104. 104
    Sambone Says:

    Popeye – See “Your a funny guy”

  105. 105
    zman Says:

    DRYS going ballistic > 100

  106. 106
    calvino Says:

    re #94 would that be good for my bidu shorts?

  107. 107
    zman Says:

    yes, if you can see a 21st century plague as silver lining you capitalist you, lol

  108. 108
    calvino Says:

    gotta keep our eyes on the prize

  109. 109
    rammastr Says:

    Isn’t BIDU the new Google that will have a lot of loyal Chinese fans?

  110. 110
    calvino Says:

    98 pennies on the loonie

  111. 111
    calvino Says:

    google is trying to muscle in on them now

  112. 112
    Nicky Says:

    CNBC now wheeling out that idiot trader as they do every Friday who is trying to spin the job numbers as being bullish for higher oil prices – how????

  113. 113
    zman Says:

    here comes Nicky’s oil rally/pump

  114. 114
    Nicky Says:

    it is so obvious on days like this how totally gamed this market is – it has nothing to do with fundamentals at all.

  115. 115
    Sambone Says:

    #81 Loved these comments.

    “For the time being, the sense is the sky is not falling. We have a major concern about the magnitude of the slowdown in the U.S. economy, so this is clearly good news,” said Art Hogan, chief market strategist at Jefferies & Co.

    “The revision is an eye popper — most surprising is the 93,000 jobs they somehow missed,” Hogan said.

    “The caveat to all this euphoria would be two-fold — there is a large bet that the Fed cuts rates in October; that bet may now not look so advantageous. You better be careful, sometimes that light at the end of a tunnel is a train,” Hogan said.

  116. 116
    zman Says:

    Art Hogan is a great guy, very smart.

  117. 117
    zman Says:

    TRADE: OUT second half of my DRYS $85 OCT calls for $17, up 194% since entry on 9/24.

  118. 118
    Popeye Says:

    Sambone I’m sorry, don’t hit me.

  119. 119
    fraser921 Says:


    Once it cracked thru 100.. we have a bust out!!

  120. 120
    Sambone Says:

    Popeye, nah won’t happen.

  121. 121
    fraser921 Says:

    best part, they havent even released their numbers yet.

    call me crazy but i think drys could hit 150

  122. 122
    calvino Says:

    bidu out at 323.29

  123. 123
    zman Says:

    Sambone – that must be your favorite movie.

  124. 124
    zman Says:

    Fraser, yeah, I know but I was looking for it to carry $100, I’m not greedy and why mess with a fun friday but sweating til monday in a stock that could open +/-5. If it opens five higher, I don’t care and if it opens 5 lower I get to buy it all over again. heheheheheh

  125. 125
    zman Says:

    VLO and TSO rising nicely…and I’m still not adding.

    Somebody who’s technically proficient take a look at those two charts and let me know what you think. Today made a lot of difference to VLO in my opinion for a trip back to 70

    TSO could make 50 easily

  126. 126
    calvino Says:

    yea, Z, sleeping at night is very important. pwi was not conducive to that end for me this week. the weekend is a good time to have some cash.

  127. 127
    fraser921 Says:

    Congrats, great trade!!

    Best of all, this one was discussed at length on the mn1 call last weds.

    Give you something else to talk about,

    i sold some calls too and i will buyback on the next pull back

  128. 128
    zman Says:

    Fraser – Thanks to your help! I thought about reversing to puts too but that is what I call “getting too cute” AND I hate shorting good companies with Tsunami fundamentals. Bad for sleep. I also got lucky on the timing of the trade.

    I’m much happier, though less dollar wise, with my TSO trade this week. I really enjoy taking a look at the Wednesday and sometimes Thursday data, seeing the CROWD going the wrong way and making a trade that says, “No Dammit, you are wrong!”. That’s more fun than making fun of Nicky’s boyfriend.

  129. 129
    scoop006 Says:

    DRYS DEC. $125 calls 1800+ contracts today

  130. 130
    zman Says:

    2 days down and look at COP now. Of course, the market might have something to do with it.

    Thanks Scoop.

    VLO / TSO on a rampage

  131. 131
    Sambone Says:

    Z – offsubject – This is one of my most favorite movies. Here is a quote;
    Turkish – “Have you ever crossed the road, and looked the wrong way? A car’s nearly on you? So what do you do? Something very silly. You freeze. Your life doesn’t flash before you, ’cause you’re too fuckin’ scared to think – you just freeze and pull a stupid face. But the pikey didn’t. Why? Because he had plans of running the car over”.

    Can you guess the movie?

  132. 132
    sane Says:

    I know the movie but ant telling

  133. 133
    zman Says:

    I remember somebody being called turkish but can’t get the movie title

  134. 134
    zman Says:

    is it British

  135. 135
    sane Says:

    A dag… a dog?…. yeah a dag…. a dog

  136. 136
    Sambone Says:

    Not tellin

  137. 137
    zman Says:

    brad pitt in it?

  138. 138
    Sambone Says:

    Mickey O’Neil: J’like dags?
    Tommy: “Dags?”
    Mickey O’Neil: What?
    Mickey O’Neil’s Mother: Yeah, dags.
    Mickey O’Neil: Dags, ya like dags?
    Tommy: Oh, dogs. Sure, I like dags. I like caravans more.

  139. 139
    zman Says:

    is it snatch?

  140. 140
    sane Says:

    Love the movie

  141. 141
    Sambone Says:

    Yep, GREAT quotes!

  142. 142
    zman Says:

    Great movie! Like Lock Stock and Two Smoking Barrels too.

    Nicky should love them both, remind her of home.

  143. 143
    sane Says:

    My favorite was Bricktop talking about how much flesh a pig can eat šŸ˜›

  144. 144
    Sambone Says:

    Z – Throwing old Nicky under da bus, eh?

    Sane – I like “Mary F#@&ing Poppins”

  145. 145
    zman Says:



    I wonder if Nicky talks like this?

  146. 146
    Sambone Says:

    Z – Is Nicky a Pikey?

  147. 147
    Sambone Says:

    1:02 to Tini time. You can tell it’s Friday.

  148. 148
    rammastr Says:

    ZMAN – Does it seem like RIG has lost momentum?

  149. 149
    zman Says:

    Beer thirty was reached the moment I pimped that ping pong tidley for 17 on the DRYS.

  150. 150
    zman Says:

    RAM – It being flat on the week I think that is a fair statement. However, I think it will return shortly.

  151. 151
    rammastr Says:

    ZMAN – Congrats!

  152. 152
    Nicky Says:

    #145 – I laughed so much that I logged out!!!

    Sorry to disappoint you but I don’t speak like that!

    I am surprised you understand them they have such strong Cockney accents.

  153. 153
    zman Says:

    N – it had subtitles!

    RAM – thanks…for what? Surely not the RIG and ESV trades….need to get my head examined on those…and that wanka VLO

  154. 154
    rammastr Says:


  155. 155
    rammastr Says:


  156. 156
    zman Says:

    Oh that. That’s more Fraser than me. Could have been in the lower double digits if I had listened to him earlier.

  157. 157
    zman Says:

    APC has been left out in the cold on the move in the gassy stocks this week.

    as has APA which moved well last before we got out.

    Both could rally nicely into earnings, things to think about for next week.

  158. 158
    zman Says:

    ” ‘too late, too late’ will be the cry when the man with the bargains has passed you by” ~ how I feel about NFX and HK and CHK and APC and RIG.

  159. 159
    zman Says:

    Holy Cow – CLR

    DRYS linked to DJIA

    CHK less than a buck away now for the 24 month base break out.

    ESV and NBR well off lows with this giant market.

  160. 160
    rammastr Says:

    ESV’s are OCT or NOV puts?

  161. 161
    zman Says:

    ESVs are Oct 50 and 55 PUTS

  162. 162
    Nicky Says:

    woa big bar down in the dow.

  163. 163
    zman Says:

    Those 50s I have given up for dead and would not add to with $ I like.

    If we have a bit of a DJIA profit taking session on Monday, I think things like NBR get punished.

    QMAR / RAIL rallying nicely without me. WLT too.

  164. 164
    Sambone Says:

    5 minutes to “Tini” time. You all have a good weekend. The LSU/FL game is gonna be a good un!

  165. 165
    zman Says:

    Go LSU!

    Have a GREAT weekend if I don’t see you guys in comments on the Wrap!

  166. 166
    texana Says:

    life is good

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