Wrap – Week Ended 11/16/07


Natural Gas Near Term Thoughts:

Weather Flip Flopping: Warmer than prior week last week and the week ahead. The numbers will be released in the morning but we are probably going back to a small injection in next Thursday's gas report. After that the midwest is expected to cool down in the 6-10 day forecast which will gradually spread east into the 11 to 15 day period.

No "Peak and Plunge" Top... October was the 6th warmest on record in the U.S. and while November has cooled off it has not asserted itself as a cold month instead waffling back and forth.  


...And Speculators Are Making Bets Against Gas At Least In The Near Term. Short interest jumped --%. While I generally think of these large spikes in shorts as fuel for a rally at a later date this one is an old accumulation of shorts with fresh volume added and the momentum may be in the shorts favor for the near term as a return to injections will give bulls little reason to warm up to gas now. I think however that the dip will be pretty short lives as I expect gas to rebound with the first real weather in the trading communities, (Chicago, Boston, NY) around Dec 1. This may give us a nice buying opportunity in some gassy stocks in the next couple of weeks. 


Natural Gas Imports Are Low Which Is Helping To Support Prices



Crude Oil:

Oil Remains Near Record High As Global Stocks Have Taken A Dip.


This is an EIA chart showed the Days of Supply for the OECD country stocks. Since days of supply take into account both supply and demand you can be rest assured that the historic portion of the chart is a little to low near the present and that the 2008 figure is nearly pure speculation. But you get the drift. Without an increase in supply or a global recession that drags down demand, the trend towards tightness will continue.  




12 Responses to “Wrap – Week Ended 11/16/07”

  1. 1
    zman Says:

    test comment

  2. 2
    zman Says:

    test comment 2

  3. 3
    kaman Says:

    Saudi gas pipeline blast…purely maintenance-related, but still “perceived by the crowd” as the kind of disruptive event that typically wags the dog? Advantageous Monday play?

  4. 4
    zman Says:


    Don’t think its a big deal as it was a natural gas line. Might give a small pop as you never know if it was terrorism or not. They say not but there’s the truth and then there’s the truth. Unless something new comes out I would not expect any lasting impact.

  5. 5
    aaatest Says:

    test from aaatest

  6. 6
    TTupp Says:

    z you here?

  7. 7
    zman Says:

    si senor

  8. 8
    TTupp Says:

    did btu lose a lot of market cap in the spin off? like what size of a company was spun off? less than $1b right

  9. 9
    zman Says:

    T – I think PCX was priced to be worth 5% of total.

  10. 10
    TTupp Says:

    i know ive asked a million questions regarding this, but btu options root is the new company exclusive of patriot, correct?

    just to be clear, btu would net me ownership of the newer, smaller company, which has only been trading for a few wees now, hence the lower open interest, higher volume.

    doesn’t the chart look interesting? quite the coil pattern suggesting a big move either way. im contemplating a strangle here. i remember seeing the same thing in the ptr chart but never had the guts to buy– big mistake! lol

  11. 11
    zman Says:

    T – as far as I could tell the BTU root excluded the newco.

    chart looks very interesting. I think we may soon get a pullback in NG which might give you a little better look, especially if you can combine that with some more broad market red days but I like coal long term very much and their latest presentation (BTU’s) was very compelling.

  12. 12
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