31
Oct
Wicked Wednesday – Will The Fed Trick or Treat? + A Word On RIG and The Dry Bulk Hubub
That's got to be my least original post title ever. (EOG) was the one bright spot (up 4% on the common) in an otherwise blood red day yesterday. Oil and the energy sectors came crashing down on a Goldman slam job and the drybulks got crushed by the "Crowd".
Commodity Watch:
- Crude: Oil fell $3.45 to $90.08 yesterday. Did world peace breakout? Certainly not. Did Saudi Arabia find a new oil field? Not to my knowledge. No, the bloodletting began when Goldman Sachs advocated "taking profits" and alluded to "already" weakening fundamentals in the 1Q08 supply / demand picture. I doubt there has been time, since their last reiteration that oil was going to $95 just a few weeks ago, for them to gather evidence that 1Q08 is going to be looser than they thought. But by saying as much, they were able to exacerbate the move causing oil to tumble. Can you say pump and dump? Fear that the Fed might not make the much desired quarter point rate cut took a back seat to the Goldman "news".
- Early Morning Recovery. After trading as low as $88.92 late last night, oil has staged a strong recovery this morning and is presently up $0.75 on high volume at $91.10
- Graph of $/ Euro vs Oil. This excuse was getting a little flimsy as you can see that oil 's run was a bit excessive to the Euro's climb (thouse are percents on the right hand scale).
- OPEC Watch: Saudi Arabia weighs in on the production hike question. In a nutshell: it won't help. "I don't think additional oil will help," Alireza told reporters when asked if Saudi Arabia should agree to pump more oil to lower crude prices when Opec meets in early December. "It's not a supply problem. I think most of us (Opec members) have really gone up to the (output) level that we can"~ Reuters.
- EIA Inventory Expectations (from the Bloomberg Survey)
Comment: Very Split Decision This Week. Numbers are all over the map this time around. Different surveys like Platt's sees a million barrel build in crude as well as builds in both products. This time of year products generally see declining stocks; gasoline due to lower production and imports and distillate due to higher demand. I'm betting both products see declines this week as well. As far as crude goes, I'd say it's a coin toss as to whether you get a bigger build given the sizable, import driven draw on stocks last week, this week could be a "make-up" with imports and stocks ramping.
- Natural Gas - closed up a nickel to $8.02 on those weak import numbers I mentioned in yesterday's post and also the possibility that Tropical Storm Noel near Cuba could drift into the GOMex (which appears pretty unlikely). Combined gross imports are now at their second lowest level of 2007 which in the case of Canada speaks to the glut of gas in the U.S. The LNG numbers continue to dwindle due to increased competition from abroad.
Earnings Watch:
(RIG) Reports Solid Top and Bottom Line Beats. Not a lot of meat in the release (a little less than usual aside from the financials). Big day rate increase but also slightly off on utilization.
- Reported EPS of $2.12 (after backing out some one time items) vs $2.06 expected.
- Sales were $1.538 B vs $1.511 B expected. That's a 7% increase over the prior quarter and a 50% increase from 3Q06.
- CFPS from operations was $2.99 vs expectations of $2.53. This was a very strong cash flow quarter but the spread on estimates here was very wide (different analysts will use different definitions of CFPS most likely the problem) so I'm not sure this info will get much credence. Still $900 million in cash flow generation during the quarter is up a whopping ~ 50% sequentially!
- Net operating margins advanced again. They reached 48%, up a percent from the prior quarter and up strongly from the 33% margins seen in 3Q06.
- Avg fleet day rate: $219.7 Kpd (000 per day) vs $202 Kpd in 2Q07 and $147 in 3Q06. This is a record and driven by increases across all rig categories. While deepwater capable rigs led the way here it should be noted that the company's jack-ups also saw a slight bump.
- Utilization: 89% vs 91% 2Q07 and 87% in 3Q06. This dip is probably what's holding the stock back from a bigger run in the pre-market. How they handle it on the conference call will be key. If it's just planned shipyard or mobilization time then it'll be no big deal.
- Yesterday's Rig Status showed one of the new drillships, the Deepwater Expedition, with a 2009 starting rate of $600kpd. Everyone was very pleased last month when the newbuild rates were seen garnering a little north of $500kpd. $600 is the holy grail.
- Conference call at 10 EST.
Stocks We Care About Today Watch:
Dry Bulk Sector Got Slammed Yesterday. Why? A) the first pull back in day rates in a few months, B) a well timed but absurd and sour grapes article from the Motley Fool which proved once again that it's name is apt.
A) Bulk Shipping Sector Day Rates: The blue line below is the Cape Index. These are the really big ships that chiefly transport grain, iron ore, and coal. It has been on a roll but fell 6% yesterday. The orange line shows Panamax and the yellow line is Handymax.
This modest pullback in rates sent many of the drybulk stocks down double digit percents yesterday and left industry leader (DRYS) and up and comer (EXM) down 18 and 20% respectively at the close. True, these are the most leveraged of the group to day rates and they are up quite a bit this year but the rate of earnings growth has outpaced these gain and the rates by which they make a living have paced these gains (the BCI is up ~ 40% since the beginning of September and over 150% since the beginning of this year while the BPI has advance smartly as well. Also, EXM's treatment was particularly unfair as it's fleet is comprised of Panamax and Handymax vessels which did not see the same small dip in rates.
B) Motley Foolishness. Here's the full article which I have retitled Spotlight on Idiocy. I'll break this absurd article down in pieces. Motley's comments are in italics:
In what sane universe do capital-intensive companies like these deserve multiples to book value approaching those of asset-lite profit leaders like Google and Microsoft?
Answer: This One. Why go after price to book and why compare these guys to software giants? It's like comparing apples to zebras. And lets see, how do you grow book value, oh yes via earnings and just using DRYS as an example, their earnings are set to go from $2.38 in 2006 to over $15 in 2008....that might shrink that multiple a bit. Jefferies, one of the best in the commodities and shipping businesses has a $160 target here ....gee, I wonder if they looked at book value, ooh, ooh better get them on the phone. Try earnings or cash flow multiples pal which are much more appropriate when you are trying to size up an earnings growth story. On that basis the stocks remain exceedingly cheap
I fail to see why a single player within this industry -- DryShips -- should enjoy a valuation more than 50% higher than its nearest rival, and more than twice that of some of the ships giving more distant chase.
First off you are using book value again. Taken on a forward PE basis, DRYS is cheaper than all of its peers on an 08 multiple as you can see from the following table.
Sure, it gets the best margins of the bunch, but that just raises more flags. Reviewing DryShips' results, we see that much of its profit over the past year was derived from gains on the sale of assets.Meanwhile, the firm's cash flow statements don't show this supposedly wildly profitable firm generating any cash profits since its IPO. On the contrary, over the last year, the firm has burned through nearly $500 million in free cash flow, as its long-term debt ballooned from $418 million to $728 million. Somewhere, this corporate ship has sprung a leak.
Best margins raise flags???!!! I see $117 million cash flow from ops in the second quarter when rates were far lower. I'd also note that costs are not rising as fast as revenues so the 36% margins Fool is complaining will I guess be raising even more of their flags.
Anyway, when I see a guy who obviously doesn't get it I like to point it out. We've added a revised valuation table for the dry bulks on the drybulk tab as well as some of Bill's very useful links. Thanks Bill for all your hard work.
Holdings Watch:
CALLS:
- (RIG) - bought a second batch of the November $120s ahead of earnings for $2.55. This brings my average cost in the $120s to $3.03; last bid $1.90. The released an 8K mid day that rescued the stock from its lows with multiple new high dayrate contracts including one drillship starting in mid 2009 at $600,000 a day which to my knowledge is an industry record and again, speaks volumes to demand for their ultra deepwater capable fleet.
Odds & Ends
Analyst Watch: (LNG) started at outperform at RBC with a $50 pt, FBR raises target on (FTI) slightly to $80 and maintains outperform,
(CHK)'s DFW Airport Wells Doing Well. They've drilled 33 shale wells on the grounds of the Dallas airport since May and so far the 11 hooked up are producing an average of 2.7 Mmcfgpd, besting the average Tarrant County well which average 2.0. They plan to drill 300 to 325 wells here by 2011 with a five rig program.
nice moves up in products today, both gasoline and heating oil nearly doubling the move seen in crude. once again good for cracks. hopefully we are starting to see some convergence here as low inventoried products on the way up in price meet high inventoried oil (on the way sideways)
October 31st, 2007 at 8:11 amDD on EXM today?
October 31st, 2007 at 8:20 amjust tell what the fed is going to do. Maybe those (which are pretty far out of the money at this point )and maybe it will likely be a little close to the money.
I’d like to see them open for awhile.
October 31st, 2007 at 8:23 am8:31 am EST
Crude Futures Higher Ahead Of Stock, Rate Data
By Nick Heath
Of DOW JONES NEWSWIRES
LONDON — Crude oil futures recovered some of Tuesday’s losses in London trade Wednesday as profit taking gave way to dip buying; but markets were relatively quiet as traders awaited U.S. Department of Energy inventory data and an announcement on U.S. interest rates.
Front month Nymex light, sweet crude fell to $88.92 a barrel in overnight trade to extend the steep sell off that preceded the New York close Tuesday.
But skepticism that the move represented the end to the current episode of high prices tempted some buyers Wednesday, pushing crude back above the previous day’s settlement prices.
“The trends are all still higher in this complex, and it is not going to require very much to bring buying back into this market,” said Peter Beutel of trading advisory firm Cameron Hanover.
“That is especially true on any further dips we may see.”
At 1211 GMT, the front-month December Brent contract on London’s ICE futures exchange was up $0.69 at $88.13 a barrel.
The front-month December crude contract on the New York Mercantile Exchange was trading $0.58 higher at $90.96 a barrel.
The ICE’s gasoil contract for November delivery was up $1 at $770.25 a metric ton, while the Nymex gasoline contract for November delivery was up 229 points at 228 cents a gallon ahead of its expiry Wednesday.
“It’s been a bit of a wait-and-see market this morning, everyone is just holding station,” a trader said.
“Not only are there the DOE stats, we’ve got this Fed(eral Reserve) rate cut — or not — which everybody seems to be waiting for to see whether it has a significant influence on the dollar and therefore how funds view commodity markets.”
Crude markets are expecting a build in inventories after last week’s data revealed a surprise counter-seasonal drop in U.S. oil stock levels. The announcement ignited the recent rally in crude that added more than $8 to Nymex light, sweet crude futures before Tuesday’s sell off brought the run to a halt.
With the market already riven by concerns of fourth quarter demand-supply imbalances, any data hinting that crude and product stocks are looking vulnerable ahead of the northern hemisphere winter would likely add fresh upwards impetus to crude prices.
A reminder of the current U.S. stock situation came from the U.S. Department of Energy Wednesday.
“As we go into winter, we’re faced with a very tight market,” Guy Caruso, administrator of the DOE’s Energy Information Administration, told an energy conference in London Tuesday.
“We think we’re in a very tight situation,” he added.
Caruso said that crude and products stocks were “average to low” for the fourth quarter of this year and that there wasn’t enough spare oil production capacity.
“There’s no cushion to deal with either real or perceived” supply disruptions, he said.
A reaction to Wednesday’s DOE data could be delayed by the scheduled 1815 GMT interest rate announcement from the U.S. Federal Open Markets Comittee.
The crude and other financial markets are widely expecting a quarter of a percentage point cut in the Fed funds rate Wednesday, confirmation of which would help consolidate weakness in the U.S. dollar, a significant driver of recent crude price rises.
But a surprise decision by the Fed could have alternative implications for commodity prices in general.
“The question is will it be 25 basis points, 50 basis points or nothing,” said Eugen Weinberg at Commerzbank.
He added “25 basis points is priced in already, and if we get it we’ll see a positive reaction for crude and commodities. If nothing happens, it will probably be negative for commodities and if we see 50 basis points cut it will push prices higher.”
The dollar traded at fresh record lows against the euro Wednesday after U.S. consumer confidence figures out Tuesday shored up expectations of a Fed cut.
Traders suggested that Tuesday’s retreat was overdue given the pace and extent of recent price gains, but few were prepared to predict that the current bull trend has run its course.
The publication of a Goldman Sachs report suggesting investors should take profits fuelled Tuesday’s descent, while the steep decline towards the end of the day triggered a wave of technical selling.
“Before bears start to celebrate, a few things could make their job going forward somewhat difficult,” said Ed Meir of MF Global, with technical indicators suggesting the uptrend is still intact and a shortage of bearish fundamental news to argue against it.
“Pure technicians would argue that the bull market is still alive and well and only experiencing a modest, but much-needed correction. We have to side with the technicians on this one,” he said.
While continuing to provide support for crude prices, Middle East geopolitical developments had retreated briefly to the background Wednesday after a recent period of increased rhetoric, with data releases firmly occupying market attention.
Meanwhile, Petroleos Mexicanos, or Pemex, said it has resumed oil exports at one loading port on Tuesday, and planned to begin shipping from another terminal early Wednesday.
In a statement, Pemex said it will be able to resume oil production in Campeche Sound after exports are restarted. Earlier Tuesday, a Pemex spokesman said it would take around 24 hours to fully resume production after the ports open.
Crude oil prices rallied at the start of the week after Pemex announced it had shut-in 600,000 barrels a day of oil production as a result of bad weather.
The company must now ship oil out of the terminals to free up inventory space to begin restarting production.
—By Nick Heath; Dow Jones Newswires
October 31st, 2007 at 8:29 amWow EOG – holding.
RIG positive- see post above but probably stuck in a holding pattern of up $2 to $4 until the call in 30 minutes.
TSO – big up early …hmmm. holding
Dry bulks running…I’m holding off for a bit on adding. NM had great earnings yesterday and got pounded…probably a good add here. And EXM as per post…wish is were not fed day.
October 31st, 2007 at 8:35 amdo you see CHK breaking out with gas firm and winter coming?
October 31st, 2007 at 8:36 amdooch: yes.
October 31st, 2007 at 8:37 amI’m impressed with CHK making this nice base in the $38s…Good call on the LEAPS awhile back Z…
October 31st, 2007 at 8:43 amThanks B. Hope the interviews are going well. Can you put skull & bones on your resume or do you just use the handshake.
October 31st, 2007 at 8:44 amJust the handshake, don’t want to make it too obvious… 🙂
October 31st, 2007 at 8:46 amThe interview went really well, I was able to regale them with my pitch of CHK, so they were pretty shocked that a non-energy guy could talk about energy like that…Hoping to get final rounded…
Now if Uncle Ben can gimmie 50 today and help me instead of screw me, I’d be FANTASTIC!!!
Z How do you feel about Nov NFX 55 calls?
October 31st, 2007 at 8:48 amHear ya re Uncle Ben. Never can tell with him
HAL and SLB biding time flat to down a dime.
EXM up $2.30 vs $4.50
NFX Nov $55. Pretty gutsy with 12.5 days left. If fed is kind it’s worth a trade but I’m happier with Dec or the Jan’s I’m in. Those gas imports should help this and CHK. In NFX’s case, the stuff I’ve read from Simmons and others post call reflects a sort of “hey, look over here, this is new” kind of mentality regarding the shift in the company’s focus and assets. I’ve been saying it since Spring but whatever. Short answer is, I’d be more comfortable with a longer date there.
October 31st, 2007 at 8:52 amthat should have said EXM up 2.5 vs $4.50 just minutes ago. These are all over the place and will likely be that way until fed time.
RIG call in 7 minutes.
Hey cattle, maybe the NFX Nov $50s for a move back near the recent high.
October 31st, 2007 at 8:55 amMay add a little more CHK novemeber call exposure after the Fed or Th or Fri. Earnings Nov 6.
October 31st, 2007 at 8:58 ammorning ya’ll. Z i see the new vacuum tubes on the commodore 64 are holding up…
October 31st, 2007 at 8:59 amRIG dropped a buck and they have not said anything besides the legal boiler plate on the call so far
October 31st, 2007 at 9:04 ambtu may complete the pull-back letting us in once agin , what do you think Z?
October 31st, 2007 at 9:09 amRIG
floater market demand continues to surprise, lots of demand out through 2010.
Jack Ups – pleasantly surprised by strength here (added $400 million to backlog on JUs during the quarter)
October 31st, 2007 at 9:10 amBTU – I’m pretty cautious pre fed.
October 31st, 2007 at 9:11 ami know. im not touching anything
October 31st, 2007 at 9:11 amCramer Says Buy Dry Bulk Shippers On Weakness (DRYS, DSX, QMAR, TOPT)
http://www.streetinsider.com/Analyst+Comments/Cramer+Says+Buy+Dry+Bulk+Shippers+On+Weakness+(DRYS,+DSX,+QMAR,+TOPT)/3072384.html
—————-
Yeah baby! Grabbed the DSX Nov 40 calls yesterday at the bottom. They don’t report until Nov 14 so I guess I’ll sell today or tomorrow unless Z thinks that is unwise. Z?
October 31st, 2007 at 9:17 ammore rig CC:
marketing outlook:
contract backlog at $22.9B, up 1.4 since last quarter.
high specification unit demand seen still rising.
stock waiting on Q&A
October 31st, 2007 at 9:18 amyou bought $40 calls?
October 31st, 2007 at 9:22 am40 strike i mea aitrader?
October 31st, 2007 at 9:22 amYes – Nov 40’s that expire on the 17th.
October 31st, 2007 at 9:23 amThe all knowing Phil.
http://www.321energy.com/reports/flynn/current.html
October 31st, 2007 at 9:23 amis in 40’s 30$ in the money? lol
October 31st, 2007 at 9:29 amRIG Q&A
recurring them…third party performance is constrained in the shipyards as far as both new build and mob work/maintenance.
$600K – is it the new day rate? would not extend to the whole high spec fleet. may see some others this high later but would be cautious extrapolating this as the new rate threshhold.
how many rigs in fleet have the high spec rate: very limited now, 5 or 6 under construction now and expect that to be absorbed by demand.
October 31st, 2007 at 9:30 amNo, DSX is at 42.50 or so. Got the 40 calls when it was 39 someting.
Oil going ballistic.
October 31st, 2007 at 9:31 amAnother big build.
October 31st, 2007 at 9:31 aminventories:
crude off another 3.9 mm bls
big down on refinery util
gaso up by 1.3
dist up by 0.8
odd numbers
October 31st, 2007 at 9:31 amOff to the races
October 31st, 2007 at 9:32 amh sorry br. i get dsx and exm mixed up im not to sharp…. i was gona say thats a bonehead move… jk
October 31st, 2007 at 9:32 amMake that draw LOL, sorry.
October 31st, 2007 at 9:32 amZTRADE: HAL 40 November CALLs for $1.00
October 31st, 2007 at 9:33 amive come to the conclusion that refiners dont trade with cracks, but instead with crack
October 31st, 2007 at 9:36 amT – tis true short term , they trade with oil and not product…right now cracks are about even on the day as gasoline and ho are running up on these numbers, following oil higher and not the numbers. This is one week and they (products) are still low relative to last year.
EOG and COP shot out of a catapult. Come on Fed…
October 31st, 2007 at 9:38 amNo need to visit Six Flags ever again, just sit in the comfort of your office and trade the energy markets!
October 31st, 2007 at 9:40 amGasoline build is pretty strange since production fell and demand rose…imports saw a big resurgence which may or may not be sustainable.
The drop in refinery utilization to 86.2% is the low for this season.
OW – LOL. That’s why days like yesterday don’t get me down, haha!
October 31st, 2007 at 9:41 amStill on RIG call….they’re just outlining good global long term demand growth.
Analysts seem pretty happy but not completely wowed.
October 31st, 2007 at 9:42 am10:35 am EST
Crude Rises On Strong US GDP, UK Refinery Fire
By GREGORY MEYER
Of DOW JONES NEWSWIRES
NEW YORK — Crude oil futures rose early Wednesday after the U.S. reported surprisingly strong U.S. economic growth for the third quarter and a major blaze at a refinery east of London.
Ahead of U.S. weekly inventory data from the Department of Energy, prices were also lifted by an attack on a vessel protecting a Nigerian oilfield.
Light, sweet crude for December delivery on the New York Mercantile Exchange was recently up 69 cents at $91.07 barrel after rising as high as $91.62. December Brent crude on the ICE futures exchange rose 81 cents at $88.25 a barrel.
Analysts surveyed by Dow Jones Newswires expect a 100,000-barrel increase in crude-oil inventories, a 400,000-barrel drop in gasoline stocks and a 1 million-barrel drop in distillates, including heating oil and diesel. Expectations also point to a 0.5 percentage-point rise in refinery use, to 87.6% of capacity. The U.S. Energy Information Administration releases inventory data for the week ended Oct. 26 at 10:30 EDT.
Peter Beutel, president of energy risk management firm Cameron Hanover, noted that the inventory report for this week has historically revealed increased supply.
“If we see the opposite of the five-year tendency, if crude stocks and (refinery) utilization were both to decline today, that could have a very bullish effect on prices,” he wrote in a note to clients.
Details of the fire at the Coryton refinery owned by Petroplus Refining and Marketing Ltd. were scarce but market participants said it is thought that the isomerization unit, which makes a major component for gasoline blending, has been damaged during an explosion. The refinery has the capacity to process 172,000 barrels a day.
The oil market is set to focus its attention later in the day on an interest rate decision from the Federal Reserve’s Open Market Committee, at which the central bank is generally expected to cut its key overnight federal funds rate by 25 basis points to 4.50%. Oil prices soared in September after the Fed delivered a half percentage point cut in interest rates in a bid to stop a crunch in the credit markets from spilling over into the rest of the economy.
“The real story today is the inventory report and the FOMC decision,” said Addison Armstrong, an analyst at TFS Energy Futures, in Stamford, Conn.
Oil prices have been on a rampage since September, rising as high as $93.80 on Monday on continued expectations of strong demand and tight global supply. The rally has revived expectations of prices climbing as high as $100 a barrel.
The strong GDP data has further reinforced the notion of strong demand. Gross domestic product rose at a seasonally adjusted 3.9% annual rate July through September, the Commerce Department said in the first estimate of third-quarter GDP.
“Clearly the strong performance this morning has been the result of the surprising GDP (data),” said Mike Fitzpatrick, vice president of energy risk management at MF Global, in New York.
Meanwhile, a naval officer was killed and four other naval personnel were injured in an overnight attack on a vessel protecting a Royal Dutch Shell PLC (RDSB) oilfield off southern Nigeria. The attack highlights the precarious nature of the Nigerian oil supply, Armstrong said.
Front-month reformulated gasoline blendstock, or RBOB, rose 3.94 cents, or 1.75%, to $2.22965 a gallon. Heating oil rose 4.91 cents, or 2.03%, to $2.4737 a gallon. Contracts for both expire at the end of trading Wednesday.
—By Gregory Meyer, Dow Jones Newswires
October 31st, 2007 at 9:42 amtook the HAL’s Z. think vlo’s new floor is a nice round 70$?
October 31st, 2007 at 9:43 amgo EXM! well at least my investors are going to get back a few cents on the dollar 😉
October 31st, 2007 at 9:44 amWhat a difference a day makes!!
October 31st, 2007 at 9:45 amWatch GS reiterated their “take profitss” stance since this is messing over their short on day 2, lol
T – yes I do. I think GC and Mid Cont cracks are about as low as they are going to get. Plus the Tricenda valuation for TSO is going to highlight VLO’s low multiple.
go CHK, OII, EOG yada yada
RIG comment on Q&A: subsea tree demand is beyond cap to deliver through 2010 from what they can tell. More affirmation for OII, FTI, CAM
October 31st, 2007 at 9:46 amSane : have you seen API?
October 31st, 2007 at 9:46 amNot yet
October 31st, 2007 at 9:46 amis fed at 230 as usual?
October 31st, 2007 at 9:49 amAPI
Crude DRAW 3.3M
Distillate BUILD 3.1M
Gasoline DRAW 800K
Z, Notice the big Cushing draw.
October 31st, 2007 at 9:49 amHAL DDT?
October 31st, 2007 at 9:50 amTtup: 2:15
October 31st, 2007 at 9:50 amSomethin’ kicked RIG in the butt…Must be gettin’ good!!
October 31st, 2007 at 9:51 amSane: mostly just wanted to see if you were paying attention, lol. Thanks for the data. I did not see Cushing, thanks, that’ll be the headline within an hour.
missed my NFX $50 trade.
T – yup, people don’t go there first but it was hit hard yesterday and is cheap, cheap, cheap.
Brian: RIG call still gooooooinnnnnggggg onnnn. people seem happy, can’t poke any holes.
October 31st, 2007 at 9:51 amZ, are you lightening up on anything pre-fed? this could be a huge bearish move on crude if he leaves rates put…
October 31st, 2007 at 9:52 amuuber cheap. $100 to control $4000
October 31st, 2007 at 9:52 amthe 42 1/2’s are going bonkers
October 31st, 2007 at 9:53 amOW – Here’s a little conspiracy theory for you. Does Ben have a quote screen up right now. If he see’s crude today, after GS tried to sabotage oil yesterday (treasury secretary Paulson’s old firm) so that he could be more comfortable cutting rates, does it enter into his thinking today know ing that they failed and that he will be responsible for sending oil to $100 if he cuts. hmmmm…
Am I lightening up….always thinking about it on days like today. I’m sure you’ll get the blast.
October 31st, 2007 at 9:56 amWell, that theory does sound a little far-fetched.. ‘proly means it’s true .. haha.. I get your drift, Z ! 😉
October 31st, 2007 at 10:00 amNo add to SPR, Cushing fell off a cliff from 18.2 mm bls to 15.1 mm bls. That’s an all time low and I have not seen it yet in a story. That could be “reason” for a push to $95 muey pronto when it is widely disseminated.
October 31st, 2007 at 10:01 amTLM looks like a nice cup and handle, an uber cheap, higher performance Can E&P
October 31st, 2007 at 10:11 amooops i forgot to short USO Karen Finnerman
October 31st, 2007 at 10:11 amZ you have the ability to trade canadian options? they trade in that back portion of the beer store in Montreal..
no but for serious, some of these Canadian companies trade better over there
October 31st, 2007 at 10:13 amZ – Helicopter Ben doesn’t know how to use a quote screen, let alone how to look at the US dollar or oil, IMO.
October 31st, 2007 at 10:14 amRig – so far so good, looks like analysts are squaking nice things.
Dry bulks look to me like they will explode if Ben cuts at all. They’d rebound a lot more just based on the spiel I put forth in today’s post were it not for Ben’s possible treachery.
T – I don’t know. For the TLM its an ADS and the option just trades normal for me.
October 31st, 2007 at 10:14 amSambone – he cuts 25 bips and oil is $95. 50 bips and oil is 100…and a gallon of milk will average $6 by Christmas. But who cares, that’s not part of the core.
October 31st, 2007 at 10:16 amZ If he doesn’t cut oil is ?
October 31st, 2007 at 10:19 am50: Oil = $100 or $1,000 possibly, I start to use my George Washington’s as toilet paper, and I get a lot more crap from the Canadians in my class…
October 31st, 2007 at 10:21 amZman – what’s your feeling about HK these days? Worth adding at this level?
October 31st, 2007 at 10:22 amScoop: probably over 90. The chart in today’s post was supposed to convey my thoughts that the relationship has gotten a little stretched…another excuse for high oil to throw in a 1000x revised news story along with the words rebel, explosion, mishap, shut in, storm etc…
AITrade – very much like, already own, waiting on earnings when I think they should hit 20 if the market is friendly like today.
October 31st, 2007 at 10:25 amThx Z – doubled up on HK.
October 31st, 2007 at 10:30 amSU upgrade 10 $124 C today… any thoughts?
October 31st, 2007 at 10:30 amP – yes, I think they are overvalued but will keep going up with oil (which also overvalued). Probably should have bailed on my put position yesterday. Still, it is a Dec and I’m sure I’ll get another chance soon.
October 31st, 2007 at 10:34 amGo RIG Go…making a run on $120. wooo-hooo.
If I take profits pre Ben the most likely candidate right now is COP. Despite the fact that I think it is too cheap it is also exceedingly volatile and I have good gains on the 80s, flat on the 85s…mulling.
Also, EOG may get cut to house money status as I think it goes higher in November.
Wow just saw nat gas trading up $0.21 to 8.24.
On a Ben cut things that look interesting and are down now: BTU. Also VLO (not down but definitely cheap)
October 31st, 2007 at 10:40 amalso on a Ben cut, as I mentioned before EXM, DRYS & Co should really pop.
Bill – are you around. What did you thing of that motley FOOL?
October 31st, 2007 at 10:42 amHey Z question for you…
I bought and sold the RIG $115s and then rebought the $115s yesterday and just sold them…But I also have the RIG $120s as well…Would you have sold the $120s and let the $115s run or would you have done what I did?
But thanks anyway for the RIG trades!
October 31st, 2007 at 10:43 amTLM through 21. has the buy me sign hung out with that multiple and these commodity prices. ditto NFX as it gets back above $53 and potentially resumes the breakout.
CHK just touched an all time high.
B – no, I get you and I think that’s what I would do, protecting what I assume at $115 is the bigger $ position and letting the spec $120s hang out there.
October 31st, 2007 at 10:46 am11:25 am EST
Nymex Crude Surges On Surprise US Inventory Draw
By MATT CHAMBERS
Of DOW JONES NEWSWIRES
NEW YORK — Crude oil futures rose above $93 a barrel Wednesday after U.S. Department of Energy data showed a surprise fall in crude stockpiles.
It was the second straight week that the data, put out by the DOE’s Energy Information Administration, showed an unexpected draw, and the second straight week it sent prices rocketing higher. A big draw at the Cushing, Okla., delivery point also pushed prices higher.
The front-month December light, sweet crude contract on the New York Mercantile Exchange was recently up $2.52, or 2.8%, at $92.90 a barrel after rising as high as $93.67. The contract was trading near $91.40 before the data.
“You had a substantial draw in Cushing, and combined with the big overall draw, it’s pushing prices higher,” said Anthony Rosado of IAG Energy Brokers in Fort Lauderdale, Fla. “I don’t see why we shouldn’t hit new records; the fundamentals seem to be in the marketplace” for crude to rise past $95.
The EIA said U.S. commercial crude oil stockpiles fell by 3.9 million barrels last week to 312.7 million barrels, compared with analysts’ expectations of a 100,000-barrel build in an earlier Dow Jones Newswires survey. Cushing stockpiles fell by 3.1 million barrels to 15.1 million barrels.
Gasoline stockpiles rose 1.3 million barrels to 195.1 million barrels, compared with forecasts for a 400,000-barrel fall, and distillates, which include heating oil and diesel fuel, rose 800,000 barrels to 135.3 million barrels, compared with estimates of a 1 million-barrel draw. Refinery use fell to 0.9 percentage point to 86.2% of capacity.
Front-month November reformulated gasoline blendstock, or RBOB, rose 5.99 cents, or 2.7%, to $2.317 a gallon. November heating oil rose 5.12 cents, or 2.1%, to $2.4758 a gallon.
—By Matt Chambers, Dow Jones Newswires
October 31st, 2007 at 10:48 amThanks Z, just wanted to get a little less involved pre-Ben…Don’t want to give the gains up…And yeah the $115s were a little bit bigger position…
If Uncle Ben effs up my good mood I’m gonna be pissed!!!
October 31st, 2007 at 10:48 amDRYS just issued a PR locking in rates on 4 ships for part of 2008.
The rates look kinda low.
70’s & 80’s k / day.
Like I said yesterday, I don’t know the biz well, but this seems much lower than the $150k rated being bandied about.
October 31st, 2007 at 10:48 amB – me too, this is one of my favorite days of the year and I’d hat to have Ben pee in my candy bag.
October 31st, 2007 at 10:50 amP – odd for them to lock anything in at all, market may see that as them signaling a rate top. No doubt they will try to spin that otherwise but the Chinese rumors out there you do have to be concerned. Will look at and get back. Thanks for the headsup
October 31st, 2007 at 10:51 amP – those are Panamax. See orange line in today’s chart so the rates are pretty good.
October 31st, 2007 at 10:53 amit’s also only 5% of their Panamax fleet which means its 2-3% of their total fleet, if we see a string of these it might be a reflection of their thought that the Pana rates are up too much but it also may make investors very happy. At the Jefco conference these guys said they would remain committed to the spot market and it literally sucked the air out of the room. This more conservative approach, “wait and then lock in higher than your peers” may pay off in a reduced risk profile that fund managers appreciate.
October 31st, 2007 at 10:56 amCrude up $3 to $93.40. Products not quite keeping pace which is not surprising and tells you the speculators are thanking GS for the buying opportunity by rushing back into their favorite trading vehicle, the good old barrel of WTI.
October 31st, 2007 at 11:00 amHey Z.
Does a Fed cut mean a drop in dollar value mean oil must rise in price to maintain the same relative world value?
aka Fed Fund Rate Cut = Higher Oil Price?
October 31st, 2007 at 11:03 amT – Si senor. Brushing up on languages with low value currency.
October 31st, 2007 at 11:04 amSambone – I see the Cushing draw hit the news stories and is now pushing oil higher.
That guy in the story above is a PF wannabe
“fundamentals in place”…ha.
October 31st, 2007 at 11:08 amZ= RIG CC FINISHED? IF SO YOUR THOUGHTS
October 31st, 2007 at 11:09 amPF = All talking heads, don’t ya know!
October 31st, 2007 at 11:10 amScoop – yes finished. Generally positive, analysts were happy but not ecstatic, they couldn’t poke any holes in the go forward demand thoughts on both the high specification/ultra deepwater and on the mid water depth rig demand which remains strong. JU did well and look to be on track to continue to do well so the one point of weakness you expect (the shallow water GOMex) did not hurt them and they are pretty happy with demand there. Soooo, it was pretty positive. It was pretty touch and go during the call if this would stay positive on the day but they handled themselves well and of course oil rocking didn’t hurt. Still, there have been a couple of waves of buying that were obviously analyst induced so I’d expect to see some nice things said tomorrow.
October 31st, 2007 at 11:14 amok, who’s nibbling at the Jan 55 NFX’s
Sambone = truth
Option Monster: does anyone use that system? Their “heat seeker” was targeting DRYS long yesterday. Just want to know if all it is is a put/call ratio screening program or if there is something more to it.
October 31st, 2007 at 11:17 amNo kidding on the NFXs…No volume until now and BAM 200 contracts…
October 31st, 2007 at 11:19 amIt’s probably Tupp
October 31st, 2007 at 11:20 amthats narjarians thing.. does he own it?
October 31st, 2007 at 11:21 amTupp! ive never owned the stock or the options!
Brian, where are the Canadians in your class from?
October 31st, 2007 at 11:22 amre: #95, kidding to the first paragraph. i have to site when im using my dry Canadian sarcasm
October 31st, 2007 at 11:23 amthe day i follow trades from a dude with a pony tail ill eat a hat too
October 31st, 2007 at 11:24 am*cite
October 31st, 2007 at 11:25 amMost recently they both lived in the Toronto area…I’ve had to hear about the Canadian dollar every step of the way…The Canadian Club wanted to throw a “Parity Party” when you guys finally pulled even with the USD…A little late for that now!! AND IT KEEPS GETTING WORSE!!!
October 31st, 2007 at 11:25 amT – you talking about DRYS…saw him tout it on CNBC yesterday morning with the stock at $131. just curious how it works…guess I could always go read about it.
T – I though you guys were all funny “ha, ha” not funny “ha, huh”.
October 31st, 2007 at 11:26 amZTRADE: Out half EOG November $85 Calls for $4. 122% two day gain and will likely hold the rest through Ben.
October 31st, 2007 at 11:29 am“Ha, huh” Funny guy
October 31st, 2007 at 11:32 amB- 105 now lol– I live in Windsor, a border city. my day and weekend trips have become a lot cheaper since it used to cost me $1.55 to by a yankee buck in like 2002. i wonder what the change in the peso cross rate is now? that could be nice too!
it will be at 110 by year end if you guys keep cutting and we don’t… Yale right? are you doing a concentration on Finance? tell your Torontonian classmates they should have went to Schulich.. kidding– ivy league will always dominate– although we did beat you in a number of business contests on the Economist television show 😉
Z- you read? unheard of. HAL, the calm before the storm.. any trades in the cache for after the announcement?
October 31st, 2007 at 11:36 amT see 73 & 74
October 31st, 2007 at 11:37 amSambone – do I make you laugh, do I amuse you? funny how?!
October 31st, 2007 at 11:38 amhttp://www.fool.com/investing/value/2007/10/30/worlds-scariest-stock-research-in-motion.aspx is this the same douche-bag who wrote the drys article!!??
October 31st, 2007 at 11:39 amsam you a canuck?
October 31st, 2007 at 11:40 amUh, Uh ……… Get outta here
October 31st, 2007 at 11:40 amT yeah Yale…Been a good time so far…$1.10, if we in the US are lucky…Those trips to Montreal are becomin’ HELLA expensive for us Americans!!!
October 31st, 2007 at 11:41 amT – Southern baby! Tha south’s gonna do it again!
October 31st, 2007 at 11:41 amre: 73, you know VLO is a darling of mine…..
October 31st, 2007 at 11:42 amCanuck’s like cold, I don’t
October 31st, 2007 at 11:42 amdo you guys have a commerce society? montereal– beautiful city, visit the option exchange- it is ran from the vacant portion of a dual-use beer store…
October 31st, 2007 at 11:43 am12:37 pm EST
Nymex Crude Touches $94 After US Inventories Fall
By MATT CHAMBERS
Of DOW JONES NEWSWIRES
NEW YORK — Crude oil futures touched a record $94 a barrel Wednesday after U.S. Department of Energy data showed a surprise fall in crude stockpiles.
It was the second straight week that the data, put out by the DOE’s Energy Information Administration, showed an unexpected draw, and the second straight week it sent prices rocketing higher. A big draw in stockpiles at the Cushing, Okla., delivery point for New York Mercantile Exchange crude futures, which fell to a two-year low, also pushed prices higher.
The front-month December light, sweet crude contract on the New York Mercantile Exchange was recently up $2.77, or 3.1%, at $93.15 a barrel after rising as high as $94.00, the highest price for a front-month contract. The contract was trading near $91.40 before the data. Brent crude on the ICE Futures Exchange rose to a new intraday record $90.74 a barrel and was recently trading at $89.84, up $2.40.
“You had a substantial draw in Cushing, and combined with the big overall draw, it’s pushing prices higher,” said Anthony Rosado of IAG Energy Brokers in Fort Lauderdale, Fla. The tightening U.S. inventories, in addition to speculation and supply risk factors already priced in, could be a catalyst for crude to rise past $95, he said.
The EIA said U.S. commercial crude oil stockpiles fell by 3.9 million barrels last week to 312.7 million barrels, compared with analysts’ expectations of a 100,000-barrel build in an earlier Dow Jones Newswires survey. Cushing stockpiles fell by 3.1 million barrels to 15.1 million barrels. Both total U.S. stocks and those at Cushing are at their lowest since October 2005.
Gasoline stockpiles rose 1.3 million barrels to 195.1 million barrels, compared with forecasts for a 400,000-barrel fall, and distillates, which include heating oil and diesel fuel, rose 800,000 barrels to 135.3 million barrels, compared with estimates of a 1 million-barrel draw. Refinery use fell to 0.9 percentage point to 86.2% of capacity.
Nymex crude prices have surged 14% in the past month on a confluence of factors, including sliding U.S. stocks, a weaker dollar and concerns tensions between Turkey and Kurdish militants could spill over into northern Iraq and effect crude oil pipelines.
As well as digesting the EIA’s weekly report, traders are now waiting for the Federal Reserve’s decision on U.S. interest rates, due at 2:15 p.m. EDT. Most traders are expecting the Fed to cut rates by a quarter percentage point. A bigger-than-expected cut is likely to boost prices because it will be seen as positive for crude demand.
Before the DOE data, prices were buoyed by stronger-than-expected third quarter U.S. economic growth.
Front-month November reformulated gasoline blendstock, or RBOB, rose 6.46 cents, or 2.9%, to $2.322 a gallon. November heating oil rose 6.95 cents, or 2.9%, to $2.4941 a gallon after earlier hitting a new intraday record $2.4973.
—By Matt Chambers, Dow Jones Newswires
October 31st, 2007 at 11:44 ami live half my life n Vancouver- they have palm trees and no snow… you can be on the beach 80 Fahrenheit, and go snowboarding an hour away to Whistler, the best ski hill in the world! a Utopian city!
the south is much warmer i bet tho 😉 , when i get chilly i go to Vegas.
October 31st, 2007 at 11:46 amSeeing a bit of a pullback in the sector despite still lofty commodities. Expected equity dip into the Fed release. 25 bips seems to be consensus, correct?
October 31st, 2007 at 11:49 amBond markets indiciate 92% prob of 25 bp and 8% of no cut. Markets not betting at all on 50 bp.
October 31st, 2007 at 11:50 amThat’s what I’m reading…
October 31st, 2007 at 11:50 amWallstreet is 100% on 25
October 31st, 2007 at 11:52 amThanks fellas. Sambone, think they sell the news?
October 31st, 2007 at 11:57 amZ – Not this market. These lemmings, grrrr, don’t get me started.
October 31st, 2007 at 11:59 ammy thought too. good, I’m 95% long.
October 31st, 2007 at 11:59 amYou know everything is Goldilocks when WMT starts it’s Black Friday sales on this coming Friday. I wonder why?
October 31st, 2007 at 12:02 pmDRYS at HOD
October 31st, 2007 at 12:08 pmmomentum seems to be shifting to the dry bulks now.
October 31st, 2007 at 12:14 pmRe drys
http://money.cnn.com/news/newsfeeds/articles/marketwire/0322401.htm
This is exactly what I have been saying
old rate 30 k new rate 81 k
old rate 51 new rate 81.8
old rate 49.5 new rate 78.6
old rate 28 new rate 77
Thats another 58 m of pure profit to the bottom line. And that for just 4 ships.
they still have more that will reset.
This deal, will show up in q 1 pl
And even though drys and other in the sector recovered, drys is trading with the rest of the pack and no premium for this great newsas i write this drys is up the same as the other dry shippers
October 31st, 2007 at 12:18 pmThanks Bill. Can’t believe how bad of a slasher piece that Motley Fool article was. Guy is truly a moron.
October 31st, 2007 at 12:26 pmyou know your tempted to write an editorial Z. ps does oii repot b4 or after the bell demain
October 31st, 2007 at 12:29 pmOII after the bell Thursday
October 31st, 2007 at 12:31 pmXOM reports before the open tomorrow.
October 31st, 2007 at 12:36 pmCrude up $4 to $94.35: CUSHING. Goldman Who?
October 31st, 2007 at 12:36 pmi have a feeling XOM will disapoint
October 31st, 2007 at 12:41 pmso does Narjarian. buy sum DUG!!!!!!!
October 31st, 2007 at 12:42 pmT – I was just about to buy some calls, lol. Why do you think so? They did not warn like their peers. Also, they disappointed last quarter…two in a row. I think $94+ my override a small miss anyway. Not saying you are wrong, just curious why you think they miss.
October 31st, 2007 at 12:45 pmZ – Don’t count GS out yet. Those pikeys know how to work this market.
October 31st, 2007 at 12:47 pmyeah, they’re the smartest guys in the room.
October 31st, 2007 at 12:48 pmI don’t trust pikeys, especially when it comes to caravans.
October 31st, 2007 at 12:55 pmbecause they didnt warn… and they refine quite a bit, second in throughput to cop right?
October 31st, 2007 at 12:55 pmi have my tinger on the trigger for rimm and BTU
October 31st, 2007 at 12:58 pmZMAN – Should OII run into earnings?
October 31st, 2007 at 1:01 pma last minute move on COP?
October 31st, 2007 at 1:01 pm13 minutes
October 31st, 2007 at 1:02 pmCOP set a stop at $5 on the COP 80s (now $5.45)
setting at 1.80 on the $85s
OII – I’d guess it moves with energy, they need a beat and good news to maintain this level. A meet will not do. Still holding.
October 31st, 2007 at 1:04 pmTurkish “For ever action, there is a reaction. And a Pikey reaction… is quite a fucking thing”.
October 31st, 2007 at 1:05 pmThat has got to be my favorite movie of all time.
October 31st, 2007 at 1:08 pmoil going for $95 today.
October 31st, 2007 at 1:09 pmWow, up $4.25 now to 94.63
October 31st, 2007 at 1:09 pmbought more CHK calls I’M addicted.
Bought Put XOM ODUMJ Jan 09 @$50 75cents
XOM is dead long term. The above is a long term trade. Researves in hostle counties are worthless but are on the books as full value. Don Coxe Rule the “value goes down by the square of the price increase” in those contries.
Phil
October 31st, 2007 at 1:10 pmXOM Does anyone know the percentage of oil res. XOM have in Chavez type countries??????
October 31st, 2007 at 1:14 pm.25
October 31st, 2007 at 1:15 pm25 bp FF cut, 25 bp for discount rate.
October 31st, 2007 at 1:16 pmCOP went right through my stop limits, pulling them off.
October 31st, 2007 at 1:16 pmmy COPKQ were sold
October 31st, 2007 at 1:16 pmFed comments dragging down the market
October 31st, 2007 at 1:18 pmwhat did they say? how bad economy talk? even oil is selling off.
October 31st, 2007 at 1:19 pmDow seemed to firm before going red…Enjoy the roller coaster ride…
October 31st, 2007 at 1:20 pmWasn’t a unanimous vote – one dissenter. Fed left the door open for a further adjustment depending on the market outlook. Sounded a bit “doom and gloom” rather than upbeat.
October 31st, 2007 at 1:21 pmThey are now saying the housing market is going to be a significant drag on the economy in coming months
October 31st, 2007 at 1:21 pmThey are saying housing is going to get worse.
October 31st, 2007 at 1:23 pmFutures now have 52% odds of rate cut in December, which is down from where it was.
October 31st, 2007 at 1:23 pmjeez, they couldn’t see that before but they can now?! somebody needs to kick some peep holes in the ivory tower. Market should not panic over that kind of talk as it means more rate cuts are more likely than not going to occur.
October 31st, 2007 at 1:23 pmOil breaking above 94.
October 31st, 2007 at 1:24 pmUS$ falling against the euro
October 31st, 2007 at 1:24 pmThey can start calling him $100 Ben
October 31st, 2007 at 1:25 pmZ – See “Goldilocks”, “What, me worry”, etc. on this market.
October 31st, 2007 at 1:26 pmCOP?
October 31st, 2007 at 1:26 pmBB reporting 2 year low in stocks at Cushing. I can’t see oil avoiding the $100 mark in the next week.
October 31st, 2007 at 1:27 pmCOP: I’m going to hold, not seeing a big panic in the energy sector although some hurt worse than others.
October 31st, 2007 at 1:27 pmThey are not going to avoid a recession, so they need to take their pick: A credit market recession, or an inflationary recession. Guess they chose the latter…
October 31st, 2007 at 1:29 pmnxy, pcz, and su uppped at FBR. they a good research house Z?
October 31st, 2007 at 1:30 pmFBR – yes
October 31st, 2007 at 1:32 pmxom b4 or after bell tomorrow?
October 31st, 2007 at 1:33 pmwas a little early on my first half sale of EOG it seems. oh well, its a problem to have.
October 31st, 2007 at 1:33 pmxom before
October 31st, 2007 at 1:34 pmRIG can feel free to make a move on $120 now.
BTU down is odd here.
wow TLM
October 31st, 2007 at 1:40 pmSane – See #65, “$6.00 gallon of milk”. What, me worry? It’s not part of the CPI, ya know!
October 31st, 2007 at 1:40 pmyou always use limit stops, Z ?
October 31st, 2007 at 1:40 pmWould you think of adding to COP prior to XOM and with the prospects of higher oil?
October 31st, 2007 at 1:41 pmmostly, otherwise they have a license to steal.
October 31st, 2007 at 1:41 pmRam – no I would not but I might after I see the numbers.
What happened to oil up = mkt down and vice-versa?
Drybulks look likely to run again.
October 31st, 2007 at 1:43 pmI used a market stop.. took me out 5 cents below market.. ha.. managed to get a 1/3 back at a price even lower than that, at least… now it rrrruns away! go markets
October 31st, 2007 at 1:43 pmOW – way to go! I’m not that nimble and I am a poor day trader anyway.
October 31st, 2007 at 1:46 pmCHK HOD…GOOOOOOOO AUBREY!!
October 31st, 2007 at 1:46 pmEOG = wow up another $3
October 31st, 2007 at 1:47 pmThat’s what I was getting to ZMAN. I got exec on COP – took a loss – and was trying to get back in. It seems to run now.
October 31st, 2007 at 1:47 pmthe face that the fed is going inflation neutral is sure good to energy bulls.. not so sure about the general economy, though
October 31st, 2007 at 1:48 pmface=fact
October 31st, 2007 at 1:49 pma $100 oil looks even more in the cards now due to the wording..
October 31st, 2007 at 1:50 pmRAM – I was saying I would not add before XOM’s numbers tomorrow.
October 31st, 2007 at 1:50 pmZMAN – Thanks.
October 31st, 2007 at 1:52 pmfocusing on DSX a la Cramer style on CNBC right now
October 31st, 2007 at 1:52 pmguess BTU down was odd…
but I still may sell the COP $80s prior to the close.
ya know a quick guy like OW could have been in and out of RIG at least 5 times today with big profits.
CHK soaring
October 31st, 2007 at 1:56 pmDSX – let’s see if it breaks its 45.15 52 wk high. Certainly seems to be enough momentum here to do so.
October 31st, 2007 at 1:56 pmwow..making 50% on my newly bought COP calls in 20 minutes is not too shabby
October 31st, 2007 at 1:56 pmZ – You’re right, but I’ve found out that long term.. the more you try to guess to near term tops and bottoms , in the end you just mess it up , churn through commissions and , and forget about the initial big move you were after from the start.. so I like your style a lot better, thanks, though 🙂
October 31st, 2007 at 1:58 pmNice O.W.
October 31st, 2007 at 2:00 pmXOM up $0.85
October 31st, 2007 at 2:03 pmi think we’re getting some sun whisper numbers
October 31st, 2007 at 2:05 pmZTRADE: out CHK Nov $37.50s for average $2.40, up 60%. Still hold the longer dated calls.
October 31st, 2007 at 2:14 pmThanks for the headsup on RIG scoop. Cramer likey conference call.
back in 30
October 31st, 2007 at 2:15 pmwhat is up with HAL? no move with crude or fed
October 31st, 2007 at 2:21 pmCHK will be over $40 11/16
Phil
October 31st, 2007 at 2:22 pmwhat was the date of the last fed cut?
October 31st, 2007 at 2:26 pmT I believe it was the 18th of September…
October 31st, 2007 at 2:29 pm9/18 50 bp cut
October 31st, 2007 at 2:30 pmi mean whisper numbers on SUN
October 31st, 2007 at 2:33 pmYeah it definitely a Tuesday which was the 18th, because I was sitting in the hall watching CNBC and almost yelled a string of explitives because I was short the Dow through PUTS and that 50 bps cut totally screwed me…
October 31st, 2007 at 2:34 pmwe saw a bigger than normal draw in crude last week to right guys?
October 31st, 2007 at 2:44 pmHell yeah!
I think there was an expected build and we got a 5.3MM DRAW!!!
October 31st, 2007 at 2:46 pmDr D. – I agree and that’s why I have longer dated calls but the I’m tired of round tripping profits in my near month ones on CHK….I’ll probably buy them back next big red day.
SUN – should be able to say their east coast cracks are materially improved on the call.
HAL – I have patience with them always
T – a lot bigger, 5.8
OII chargingm
never got my PQ dammit
SWN post close should be good #s but I’m not chasing and they need a beat.
October 31st, 2007 at 2:46 pmSorry about that T…I knew it was either 5.3 or 5.8MM build…
October 31st, 2007 at 2:48 pmnevertheless same deal, i say we rall the rest of the week like last week. picked up some NXY calls mid-day
October 31st, 2007 at 2:48 pmZman
October 31st, 2007 at 2:48 pmAll is really good except for WNR. Any thoughts?
Thanks.
ZMAN – Any other trade thoughts before earnings tom?
October 31st, 2007 at 2:48 pmoh it might be 5.3, I was going on memory
October 31st, 2007 at 2:49 pmIrish: I’m holding WNR into earnings. Cracks are improving and if TSO approves the Tricenda, which I think they will, then you will get a better spot to duck out than here.
October 31st, 2007 at 2:50 pmT, I’m wondering if we just head straight to $100 and don’t bounce off of $95 first…These inventory numbers have been hugely bullish (at least to my noobish eyes) and with Uncle Ben’s fight to make the USD like toilet paper, I can’t see where the bears can have their case for cheaper oil…
October 31st, 2007 at 2:51 pmGracias. Excellent day!!
October 31st, 2007 at 2:52 pmRam – Nahhh. Things are pretty green and pretty reluctant to chase or think at this late hour.
October 31st, 2007 at 2:52 pmUnfortunately I am not as green as you, so I was looking for other opp’s. Hopefully tomorrow is better.
October 31st, 2007 at 2:54 pmGreen has nothing to do with what you or I are in …I’m talking about how much the stocks are up now.
October 31st, 2007 at 2:56 pmanother slip in all three sized drybulk day-rates
October 31st, 2007 at 2:57 pmEXM and NM up 10% today
October 31st, 2007 at 2:58 pmO.K. I get what you mean now.
October 31st, 2007 at 2:58 pmz what happens t tso’s price is they announce the board accepts kirkorian’s bid? straight back to 65$?
October 31st, 2007 at 2:59 pmZ What stock price would surprise you re RIG
October 31st, 2007 at 3:05 pmSeems like VLO is lagging the refiners group. Time to double up on a down day perhaps..
What’s your “best guess” on their earnings Z – meet, miss, or beat?
October 31st, 2007 at 3:10 pmT: $65 +/- a buck
Scoop: depends on how far out you’re talking: this year ($105 and $135)
12 months out anything short of $140.
VLO: I don’t make guess on earnings but since they’ve already warned I’d say its a meet to a near miss and that the go forward talk regarding uptime will be more important that this quarter’s numbers. The near term outlook is known to be weak so that should surprise either. I think their talk about ongoing capital improvements combined with the good old capacity tightness st0or will sell pretty well investors this go around.
October 31st, 2007 at 3:15 pmT – fwiw I’m straddled on TSO with Nov 60 puts and Nov 62.50 calls. It’s a bit risky, but the idea is the market punished them on earnings tomorrow and Friday and then they take Mr. K’s offer and move to $65.
The break-even was $4 for both when I jumped in a couple of days ago.
Thx again Zman!
October 31st, 2007 at 3:19 pmZ I was thinking short term ;like 3 weeks
October 31st, 2007 at 3:19 pmScoop: < $110 and > $135 would surprise me
October 31st, 2007 at 3:21 pmI expect to see $126 by 11-17.
October 31st, 2007 at 3:26 pmai, re #229, thats a strangle
October 31st, 2007 at 3:39 pmCheck out call volume for RIG January 08
October 31st, 2007 at 4:02 pm$120 $130 $140.
Crude trading 95.15 in the after market
October 31st, 2007 at 4:02 pmre: 234, thats some serious conviction!
scoop, ive never really understood this, but since there is 20,000 contracts of volume, wouldn’t the open interest have to be at least equal to this? or will this show up tomorrow?
October 31st, 2007 at 4:05 pmOn my two quote systems it shows up tomorrow…don’t know if that way everywhere.
October 31st, 2007 at 4:06 pmT- thx for the definition. I knew it was one of those “fancy option terms” 🙂
October 31st, 2007 at 4:07 pmre: 234, that could be a iron butterfly spread….. right? 3 legs, equidistant, all calls or puts, middle leg twice the size of outers….
October 31st, 2007 at 4:07 pmEvening all. Huge move since the close – is this dollar related. I hear they can’t buy December $105 options fast enough!
October 31st, 2007 at 4:19 pmSHE LIVES!
October 31st, 2007 at 4:20 pmSUN missed Q3
October 31st, 2007 at 4:24 pmT – yep, nice brick on the bottom line there.
October 31st, 2007 at 4:39 pmhow much higher then Z?
October 31st, 2007 at 4:41 pmI am still finding the fundamentals for $95 oil hard to swallow let alone $105!
October 31st, 2007 at 4:42 pmYa know I’ve been saying a pull back to 90 and then a run. Goldman gave us the pullback. At 95 you know they go 100 and the we see a bigger pullback, probably starts out testing back to the current level fails, then drops hard to 90, fails again and lows at 85. Fundamentals? Who said anything about fundamentals, 😉
October 31st, 2007 at 4:44 pmz out of curiosity, how many members are you at?
October 31st, 2007 at 5:48 pmZMAN – Were there thoughts of going into DEC or JAN on RIG?
October 31st, 2007 at 6:12 pmActually, is DEC and JAN seasonallity (?) good for energy stocks?
October 31st, 2007 at 6:16 pmZMAN – Not naming names – but I subscribe to a newsletter with a person that influences stock prices. He has blessed a particular Dry Bulk stock with lofty projections. Hopefully this will add another boost to the sector.
October 31st, 2007 at 6:28 pmZ – looks like Tesoro missed by a mile. Reported .34 EPS compared to .85 EPS forecast.
November 1st, 2007 at 7:20 amdownload
Wicked Wednesday – Will The Fed Trick or Treat? A Word On RIG and The Dry Bulk Hubub | Zman
March 3rd, 2019 at 6:55 pmfile
Wicked Wednesday – Will The Fed Trick or Treat? A Word On RIG and The Dry Bulk Hubub | Zman
April 13th, 2019 at 3:06 am