Wednesday – Oil Inventory Preview

207 thoughts on “Wednesday – Oil Inventory Preview”

1. Union workers to hear PBR proposal at 1 EST.

2. XCO Exco Resources Explores Possible Joint Venture Opportunities in Its East Texas/North Louisiana and Appalachia Operating Areas

3. 7:16 am EST

   Crude Slips $2 As Traders Sell Before DOE Data

   By Angela Henshall
   Of DOW JONES NEWSWIRES

   LONDON — Crude oil futures fell over $2 in London Wednesday, after lacking direction for much of the session, with traders uncertain where to allocate positions ahead of this week’s U.S. oil inventories data.

   “The problem with this market is it’s looking tired,” said Glen Ward broker at ODL Securities, “we break above resistance levels but never follow through, just fall back again. The market needs to flush out a lot of longs and get fresh short positions in before it will have the energy for a major rally again.”

   At 1104 GMT, the front-month August Brent contract on London’s ICE futures exchange was down $1.78 at $136.97 a barrel, after dropping to $136.28 a barrel earlier.

   The front-month August contract on the New York Mercantile Exchange was trading $1.49 lower at $137.25 a barrel, after falling to $136.40 a barrel earlier.

   The ICE’s gasoil contract for August delivery was up $7.50 at $126.100 a metric ton, while Nymex gasoline for August delivery was down 327 points at 335.21 cents a gallon.

   —By Angela Henshall, Dow Jones Newswires

4. I’m curious how/if anyone of the more informed readers interprets the other major world indexes in terms of energy and/or the DOW/S&P. For instance, I see this morning that most are slightly down. Does that mean anything to us?

5. Z-
   Thanks for the quick read on coal plays…holding ICO Jul 15 calls…hoping for any kind of sympathetic pop today. Mostly bot them as a play on their met coal (steel prices)

6. See it Bleemus, 2 prs in 2 days. Bumps XCO’s H.S. acreage to 115 from 107,000.

   Kaman – looks like that group will have a nice day today. One thing that is always hard with a deal like this where you have a hefty premium is judging how long the others will bask in the glow of it. Sometimes its only a day, sometimes several. Here I would think more than one as it was from a non-pure play (coal and steel company) and as such vertical integration which boosts the number of potential acquiring entities.

   Need to add ICO to my list, cheap on 2010 eps of $1.65. Bid up about $0.90 at present, not a bad option trader in terms of volumes either, good luck there.

7. Kaman – Table in post updated to include ICO. Thanks.

   Arodeen. It does matter to the energy names as the broader markets influence the action in the group. How much depends on what the commodities are doing that day and the news out in the group. In yesterday’s comments, Tater had an interesting article on the VIX as it relates to the energy stocks and their relationship to the broad market and the commodities. I have not done on a study on it but we alternate back and forth between being more or less influenced on a daily or weekly basis and the read on the VIX may help explain which is more influencing at a given point in time.

8. Oil inventories update: Since late last night estimates for EIA inventories have changed pretty dramatically.

   Platts is now looking for a drawdown on crude of 3 mm barrels

   and a drawdown, not a build in gasoline stocks of 1.1 mm barrels

   still expecting a build in distillate of 1.8 mm barrels.

   If imports rally which I’d give even odds you are likely to see a build, not a pull from stocks and I would guess this would cause more selling. Hope I’m wrong as the group is keying off oil prices at present.

9. What is your take on CRK? They seem to be concentrated on HS shale and are only 12% hedged. Of course, if NG drops, will hurt its bottomline

10. By Rebecca Bundhun
    Of DOW JONES NEWSWIRES

    LONDON (Dow Jones)–Fresh dollar weakness has renewed speculation over the
    potential revaluation of Gulf currencies, which in turn is adding to the risks
    surrounding the dollar Wednesday.
    The euro’s rise to a record high of $1.6040 Tuesday sparked the debate over
    whether Gulf countries might revalue or even depeg their currencies from the
    enfeebled dollar.
    “Changes to the pegs might be seen as a vote of no confidence in the U.S.
    currency,” said Julian Jessop, chief international economist at Capital
    Economics.
    Stoking the speculation, a member of Saudi Arabia’s Shura legislative council
    announced Tuesday that he had requested a revaluation of the Saudi riyal, which
    could be discussed as early as next week.
    Walid Arab Hashem proposed a 20% appreciation of the riyal, arguing that its
    peg to the weakening dollar is exacerbating already soaring inflation by
    driving up the cost of imports.
    Because soaring inflation in Gulf states, such as Saudi Arabia and the United
    Arab Emirates, is coupled with vigorous oil-fueled economic growth, the
    dollar’s slide has triggered much debate over the benefits of the currency
    pegs.
    Inflation in Saudi Arabia reached 10.6% in May, while annual inflation data
    for 2007 show U.A.E. inflation at 11.7%.
    “The dollar remains under depreciation pressure and if it were to lose further
    ground from current levels, the probability of a currency move would increase
    significantly,” said Ahmet Akarli, a currency strategist at Goldman Sachs Group
    Inc. in London.
    Jessop said he is “skeptical that any changes are imminent,” but warned that
    “the markets would initially interpret any such moves as negative for the U.S.
    currency.”
    Markets assume that if Gulf states abandon their dollar pegs, this would lead
    to reduced dollar flows and diversification of foreign-exchange reserves, which
    would hurt the U.S. currency.
    Saudi Arabia, the U.A.E, Oman, Bahrain and Qatar are tied to tracking U.S.
    monetary policy as a result of their dollar pegs. Given the divergence of the
    economies of these countries from the United States, mimicking U.S. rate moves
    hasn’t really made sense.
    So far Kuwait is the only Gulf Corporation Council member state to have
    abandoned the dollar peg.
    With fresh concerns over the U.S. financial sector and dovish rhetoric from
    the Federal Reserve, near-term U.S. interest rate hikes seem to be off the
    cards
    Such a rate-setting outlook isn’t in the interest of Gulf states and could put
    further pressure on the dollar – factors which add to the case for GCC
    countries to revalue or depeg.
    If the Saudi authorities did allow the riyal to appreciate, this could trigger
    similar moves from other Gulf states.
    “It is very likely that the other GCC economies, which had to cope with
    serious inflation problems over the past few years, namely the U.A.E and Qatar,
    would follow suit to realign their currencies,” Akarli said, adding that he
    wouldn’t be surprised to see GCC foreign-exchange forwards starting to price in
    a higher probability of revaluation over the coming days.
    At 1320 GMT, the euro was trading at $1.5890 from $1.5899 late in New York
    Tuesday.

    -By Rebecca Bundhun, Dow Jones Newswires Dow Jones Newswires
    07-16-08 0936ET- – 09 36 AM EDT 07-16-08

11. I like CRK as they transition to more of a resource play. I owned them much lower many months back and missed the big move higher and am now on the fence. In this environment I don’t see a real need to rush in but they are the radar as their exposure relative to the Haynesville relative to their booked reserves is high.

    Sam – Thanks. You won’t see Saudi trying to rein in oil prices with talk much longer if we get another leg down in the dollar.

    Sudden greening of the group in an early day bottom fish. I’m longer than I like in July and well on my way to good earnings season positions and will not act pre EIA #s today.

12. Wow, unreal three minute reversal on the group. Across the board, on lowish volume but very fast. Looks like a sell program.

13. xco JV- Goldman hired to bring big boy on 50/50 basis. Devon and marathon charging… number floated as high as 2B for a 50% wi.

14. Reef – are you saying for XCO’s 122,000 acres in the H.S.

    Notice DVN has been awfully quiet about what they are doing there.

15. Tired of sending all your US dollars overseas? Well, just invest in “GULF” and get it back.

    http://www.wisdomtree.com/etfs/fund-details.asp?etfid=69

16. Yes, big sudden drop. but seems to have slowed now.
    Broad market declining now.
    When are EIS#s expected?

17. meant 115,000 acres on XCO

    10:35 EST.

18. 14- yes, in the hy only

19. 9:29 am EST

    Nymex Crude Down Ahead Of Inventory Data

    By Brian Baskin
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures traded slightly lower Wednesday, with the market taking a breather before the release of U.S. oil and product inventory data.

    Light, sweet crude for August delivery traded 66 cents lower, or 0.5%, at $138.08 a barrel on the New York Mercantile Exchange. August Brent crude, which expires Wednesday on the ICE futures exchange, traded 95 cents lower at $137.80 a barrel.

    Futures plunged $6.44 on Tuesday, the biggest single-day loss in dollar terms since 1991. The market has calmed since then, awaiting inventory data for the week ending July 11. Analysts polled by Dow Jones Newswires gave an average forecast of a 1.6 million-barrel draw on oil inventories, a 200,000 barrel decline in gasoline stocks and a 1.5 million-barrel increase in distillate inventories. The data will be eyed for clues to the health of U.S. demand, which has been down slightly from a year earlier.

    “Crude is trying to make its way back higher, but the sentiment is still lower, and I think we’re going to see considerable draws to get this market back to $140,” said Tony Rosado, a broker with GA Global Markets in New York.

    The market is heading lower over worries about the U.S. economy, which Federal Reserve Chairman Ben Bernanke told Congress is likely to see slow growth through the end of the year.

    A U.S. economic slowdown is nothing new, but the market is on the lookout for signs that a slump in oil demand is quickening. For now, strong growth in Asia is seen countering declines in the U.S. and Europe, but the balance could tip if economic problems worsen. Bernanke will testify before Congress again Wednesday.

    “We suspect that as the pace of demand destruction accelerates, it will be harder to ignore,” wrote Edward Meir, with MF Global. “We could see more frequent bouts of selling, and perhaps the start of a long-overdue trading range.”

    Consumer prices rose by 1.1% in June, the biggest monthly increase since 1982, according to Labor Department statistics released Wednesday. Energy was a major factor in the rise, with prices for that category growing by 6.6% in June. High inflation is seen increasing the likelihood that the Fed will hike interest rates, which would strengthen the dollar. Some investors use oil as a hedge against the dollar, so a rising dollar could cause oil prices to drop. A rate hike is far from guaranteed, however, as the Fed may prove reluctant to cause more difficulties for the troubled financial sector.

    Oil prices showed little reaction to the inflation data.

    Front-month August reformulated gasoline blendstock, or RBOB, recently traded down 1.48 cents, or 0.4%, at $3.3700 a gallon. August heating oil traded 1 cent lower, or 0.3%, at $3.9090 a gallon.

    —By Brian Baskin, Dow Jones Newswires

20. Reef – $17K+ for a deal of that size would be pretty impressive.

    Broad market getting a boost here which I don’t get right now. Why is inflation being so readily forgiven Sam or anyone watching the explanations on CNBC?

    Refiners getting a second day of green. Not trusting that move w/o seeing the data.

21. CHK has had quite the haircut in the last couple of weeks. This seems more than profit taking.

22. Z – This market is in “Lala land”. The only thing I can come up with is “Mr. market”. Once again it reminds me of Animal house. “All is well” as he gets run over. Banks are up because now the big bad bear can’t naked short their pals at JPM, GS, MS, etc. WFC reported better numbers than the street expected, SO, All is well! No more problems. I’m short, staying short and moving $ off shore into other currencies.

23. Ram – there is the fear that Aubrey has been too aggressive with the balance sheet. There also concerns that they won’t be able to drill up and keep all their H.S. acreage and that doing so will lead to extreme service cost inflation. Reuters ran an article after the close summing all this up citing analysts from Fitch and from GimmeCredit worrying about the debt load. These cats and Moody’s and S&P have in the past done a poor job of reserve accounting and therefore have repeatedly taken an overly cautious tone on the debt carrying capacity. I have concerns about men and materials availability but CHK will be one of the ones able to get the rigs and most likely the pipe they need. Still, it is a concern. But at present, its move appears in line with the pull back in the group to me and while it stinks for my July’s I am not as concerned for the medium term and especially for the stock.

24. Hear ya la-la land Sam

25. zman – great summary of the CHK pullback and reservations. thank you.

26. Z new to the site, learning a great deal. thanks. u think CHK is finding technical support from the june 13th low and could bounce here?

27. breakhound – welcome to the show. I will defer anything but the most simpleton support and resistance TA work to the more knowledgeable subscribers here as they are much better at that than I. I would say we look to be in a support range now at 58 and add that stocks fill gaps and there is one all the way down to 56. We are nearly the secondary price and a lot of times you will see deal participants come back into the open market to fill up allocations or add to positions they just acquired if the price retreats to that of the deal.

28. For those new to the site this is where get the EIA release, usually a few seconds before CNBC runs through the main numbers.

    http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/txt/wpsr.txt

29. Welcome Break!

30. XCO, # 13 and 20: Is the $2 billion rumor for the 50% being peddled or the implied total value? If the former, it would be around $34k per acre. a little over what CHK got.

31. xco-true 34k net and this is being peddled

32. Hey bird, long time no chat. Anything to add to yesterday’s Bakken/TFS thoughts?

    Elwo – thanks for the correction, overlooked it was for a 50% WI. Insert whistle here.

33. Energy stocks sure are jittery before this EIA release.

34. re #20: Was listening to FastMoney yesterday driving home and struck by the same thought…any bounce in refiners right here is probably an opportunity to short or take puts.

35. XCO followup, the press release talks about Marcellus nd Haynesville. Is the $2 billion rumor for half of everything? If so, that’s not much of a markup on the current total $4 billion market cap.

36. Crude increased by 3 mm barrels
    Gasoline up 2.4
    Distillate up 3.2

    unfortunately I was right about today’s call

37. oil down 5$

38. Oil down $5

    the big build in oil was predicated by a surge in imports.

39. Gasoline demand continues to hover between 9.3 and 9.4 mm bpd.

40. Sam–re. #22-would you consider adding to puts on COF & C on a day like this?

41. oil headed further down

42. Peak shaving going on in gasoline demand.

43. 135 was obvious support for crude, once it fell through that it only had a chance to make a stand at round number support, next hitch could be $132.

    Last week they beat oil over the head on a bigger a large draw down in stocks saying it was an import problem and a west coast problem and today we get the opposite, an import increase, which is not sustainable at a whopping 10.8 mm barrels so they may say “oh hey, its the imports stupid, and try to rally it some” at least that’s my wishful way of looking at it. We are definitely still suffer from baby and bathwater action on the group as everything is getting punted without regard to hedges or oil/gas mix. Service getting hit worst of makes the least since, at least in the onshore arena as those names are only getting busier.

44. Hey Breakhound –

    Z indulges me by allowing me to present some chart analysis every once in a while. Added CHK at the bottom of the list. No predictions, just my version of what I see happening. Good luck

    USO CLR RIG SLB NBR CHK

    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2933882

45. Sane – any API confirmation yet?

46. z-so oil off some 10% in days…when do big bull hedge funds get a cash call?

47. z – good call maybe platts should consult you. prob is i was too stupid to act on it.

48. zman:

    energy stocks are tanking with the drop in oil, I thought HK, CHK etc are not that correlated with oil.
    Am I wrong ?

49. Kyle – me too.

    Reef- no idea, usually takes awhile (months of slow grinding the wrong way). In this case you gotta think a few will get nipped.

    Uop – they are correlated with oil when it moves like this.

50. XLE at 3 month low. It seems to me that we should be due for some earnings beats over the next few weeks. Perhaps that will be a catalyst for the group?

51. CHK early June gap now filled

52. K – My question back to you is, “Is the worst over”? Have the banks, IB’s, card companies, Mortgage companies taken all their writeoffs? If not (Which I say), yes to add. Don’t bet the house, but be there.

53. Antrim – beats, upward volume guidance, and play specific news is my game plan.

    SLB kicks off with bmo results on Friday, widely expected to have nothing but good things to say about the near and long term outlook, better than last quarter when the stock actually missed, said good things and we rocketed and the stock is below where it was then despite an upward move in estimates.

54. Airlines up 20-30% across the board. UAUA and NWA each up over 25%. At least somebody’s excited and profiting from today’s oil action.

55. Thanks D – I see it. Awful lot of group dumping going on. Seeing some try to head back up but those rallies have so been pretty quick sold.

    HK trying one now.

56. Analysts surveyed by Platts expect that U.S. crude stockpiles decreased by 3 million barrels last week. They also expect a decline of 1.1 million barrels in gasoline inventories and a buildup of 1.7 million barrels in distillates.

57. Tater great chart work. much appreciated. Looks like PBR is ready to plung here. This sell off is good sets the stage for rallies in Aug/sep.

58. 10:40 am EST

    Nymex Crude Down Ahead Of Inventory Data

    By Brian Baskin
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures traded slightly lower Wednesday, with the market taking a breather before the release of U.S. oil and product inventory data.

    Light, sweet crude for August delivery traded 66 cents lower, or 0.5%, at $138.08 a barrel on the New York Mercantile Exchange. August Brent crude, which expires Wednesday on the ICE futures exchange, traded 95 cents lower at $137.80 a barrel.

    Futures plunged $6.44 on Tuesday, the biggest single-day loss in dollar terms since 1991. The market has calmed since then, awaiting inventory data for the week ending July 11. Analysts polled by Dow Jones Newswires gave an average forecast of a 1.6 million-barrel draw on oil inventories, a 200,000 barrel decline in gasoline stocks and a 1.5 million-barrel increase in distillate inventories. The data will be eyed for clues to the health of U.S. demand, which has been down slightly from a year earlier.

    “Crude is trying to make its way back higher, but the sentiment is still lower, and I think we’re going to see considerable draws to get this market back to $140,” said Tony Rosado, a broker with GA Global Markets in New York.

    The market is heading lower over worries about the U.S. economy, which Federal Reserve Chairman Ben Bernanke told Congress is likely to see slow growth through the end of the year.

    A U.S. economic slowdown is nothing new, but the market is on the lookout for signs that a slump in oil demand is quickening. For now, strong growth in Asia is seen countering declines in the U.S. and Europe, but the balance could tip if economic problems worsen. Bernanke will testify before Congress again Wednesday.

    “We suspect that as the pace of demand destruction accelerates, it will be harder to ignore,” wrote Edward Meir, with MF Global. “We could see more frequent bouts of selling, and perhaps the start of a long-overdue trading range.”

    Consumer prices rose by 1.1% in June, the biggest monthly increase since 1982, according to Labor Department statistics released Wednesday. Energy was a major factor in the rise, with prices for that category growing by 6.6% in June. High inflation is seen increasing the likelihood that the Fed will hike interest rates, which would strengthen the dollar. Some investors use oil as a hedge against the dollar, so a rising dollar could cause oil prices to drop. A rate hike is far from guaranteed, however, as the Fed may prove reluctant to cause more difficulties for the troubled financial sector.

    Oil prices showed little reaction to the inflation data.

    Front-month August reformulated gasoline blendstock, or RBOB, recently traded down 1.48 cents, or 0.4%, at $3.3700 a gallon. August heating oil traded 1 cent lower, or 0.3%, at $3.9090 a gallon.

    —By Brian Baskin, Dow Jones Newswires

59. By Brian Baskin
    Of DOW JONES NEWSWIRES

    NEW YORK (Dow Jones)–Crude oil futures hit a three-week low on a surprise
    increase in U.S. oil and product inventories.
    Light, sweet crude for August delivery traded $5.09, or 3.7%, lower at $133.65
    a barrel on the New York Mercantile Exchange, after falling as low as $132 a
    barrel after the data release. Brent crude on the ICE futures exchange traded
    $4.63 lower at $134.12 a barrel.
    Oil stocks rose by 3 million barrels in the week ending July 11, according to
    the U.S. Energy Information Administration. The analysts consensus forecast was
    for a 1.6 million-barrel drop. Gasoline inventories also surprised, rising by
    2.4 million barrels, where analysts had expected a 200,000 barrel drop.
    Distillate inventories rose by 3.2 million barrels, about double expectations.
    “The numbers look bearish across the board,” said Jim Ritterbusch, president
    of Ritterbusch & Associates in Galena, Ill.
    The inventory data gave the market a reason to extend Tuesday’s losses, which
    were the biggest in dollar terms since 1991. Rising oil and product inventories
    are an indicator of falling demand in the U.S., the world’s largest oil
    consumer. Gasoline demand is off about 2% from last year, the EIA said.
    “It’s a clear indication that the demand is just not there, typically what
    happens is that the number reflecting the July 4 weekend typically shows an
    increase in demand by around a million barrels,” said Nauman Barakat, senior
    vice president at Macquarie Futures USA in New York. “It doesn’t look like
    that’s showing up in these numbers at all.”
    Federal Reserve Chairman Ben Bernanke said Tuesday that a recovery isn’t
    imminent, with slow economic growth likely to persist through the end of the
    year. Inflation data out Wednesday also showed energy prices weighing on the
    economy, with June’s 1.1% increase in consumer prices the largest since 2005.
    Bernanke’s comments and the EIA data appeared to finally break a wall the
    market had built around negative U.S. economic indicators. Futures have risen
    over the last year in spite of increasingly grim signals, as investors assumed
    that strong growth in Asia would compensate for declining oil consumption in
    the U.S.
    With futures having fallen by $12 in two days, market participants now wonder
    how low oil can go.
    “It’s the whole gravity effect, things seem to fall faster than they rise,”
    said Mike Zarembski, senior commodity analyst at brokerage optionsXpress Inc.
    in Chicago.
    Price support is now forming around $131.75 a barrel, he said, with a move
    below that level likely to prompt another round of rapid selling.
    Front-month August reformulated gasoline blendstock, or RBOB, recently traded
    down 13.60 cents, or 4%, at $3.2488 a gallon. August heating oil traded 11.80
    cents, or 3%, lower at $3.8010 a gallon.

    -By Brian Baskin, Dow Jones Newswires (Tatyana Shumsky in New York contributed to this article)

60. def con 3

61. Scud count for July looks like 5 with another 2 with steep losses. Ug.

    Oil, NG and the Group seeing no sign of recovery yet.

    Refiners losing their shine already.

    At least I was distracted long enough to not go in on the WLT yet, colas mostly down hard with energy.

62. HOUSTON, Jul 16, 2008 (BUSINESS WIRE) — Rowan Companies, Inc. (RDC, Trade ) announced today that its wholly owned manufacturing subsidiary, LeTourneau Technologies, Inc. (LTI), has entered into a contract to provide major components for nine new 1500 horsepower land drilling rigs. The contract is with Nomac Drilling, Inc., a wholly owned subsidiary of Chesapeake Energy Corporation, and is valued at approximately $90 million.

    Each of the rigs will feature AC drive technology and incorporate key LTI drilling equipment, including the mud pumps and drawworks. Delivery of the components is expected to begin in the fourth quarter of 2008 and be completed by mid 2009.

    Rowan Companies, Inc. is a major provider of international and domestic offshore contract drilling services. The Company’s manufacturing division, LTI, produces equipment for the drilling, mining and timber industries. The Company’s stock is traded on the New York Stock Exchange. Common Stock trading symbol: RDC.

63. Thanks Bill saw that earlier and that and other orders are why I say CHK will get the rigs they need to go to a 60 rig program.

64. bill – The sky is falling, nobody cares about that! Demand for oil is going to zero! If you do a straight line from last year’s july long demand to this years demand and extend forward it means nobody will be driving on july long weekend in 10 years! sell sell sell. It doesn’t matter that CHK is a gas company. sell sell sell.

65. V – you type like I feel.

66. #32… z – missed the Bakken/TFS comments. what/where are you referring to? i recently met with KOG CEO… finally understand the geology there.

67. ATW: Last analyst upgrade to buy in June had split adjusted target of $92.25 (90% above current) Stock has fallen 25% in 2 weeks. Maybe finding support near April low here? Time for technical bounce?

68. these are the days you buy calls

    i uncovered my hk calls and now long just the stock

69. V – Bwhahahaha, you sound like me. LOL

70. Bird – wondering if you had any comment about the ubiquity of the Three Forks Sanish in the core area and outside the Neeson. Did KOG have any thoughts there?

    Bob – unreal thrashing there, problem is unreal thrashing everywhere. RIG coming out with good data point after good data point to no avail.

    Bill – agreed re calls but was a bit early and would average down a little higher than here as I’ve been buying weakness for a week now.

71. Tell me it not so; Benny B52 Bernanke “Repeats that manipulation not cause in oil rise”! LOL

72. Slightly off subject:
    My in-laws in Portland, Maine, just filled their heating oil tank for over $1000. at $4.30/gal. They said many people couldn’t afford oil last year and this year is much worse.
    They got a cord of wood, but now all the wood dealers are sold out and not taking any more orders.
    And this is still July, isn’t it???

73. Skyking, – when you factor in the utility hike requests I’ve been seeing the end of summer cooling and the winter heating bills are going to crush the consumer into buying more blankets and mukaluks. What’s the ticker for LL Bean?

74. While the July’s Don’t look good. The Augs and out will be just fine. This is to be expected given the significant drop in oil in just a short amount of time. Most all of these names will bounce back shortly. I am looking at this as a quick buying opportunity. Hopefully, I am right.

75. z – no. sorry. nothing to add, yet. we covered just some pretty basic stuff about the play. he made some comments about the canadian side of the bakken that caught my interest, tho. sounds like the producing zone is bordered by a facies change to the east. would like to figure out what happens to the north. anyone familiar with the geology there? is it an old sabkha sequence??

76. Bird – if interested in the north Bakken you might go snooping around HTE (Sask player with Bakken mention)

77. Say what you want about Bernanke, but it must take a lot for him to not want to jump across the table and pop some of these congressmen with their silly questions and grandstanding.

78. the comment was made that the canadian stuff wasn’t anywhere near as good… but, as i said, i’m pretty new to undertanding the g&g here. thanks!

79. z: 67,70. Agree RIG better company, but RIG off only 8% from high versus 25% for ATW. Coul not resist buying some common today at $48.00 while contemplating August options

80. API

    Crude UP 5.1M
    Distillates UP 5.4M
    Gasoline UP 1.6M

81. Bird, Z – be careful with Harvest as they have significant refining as well. They do have a nice yield though.

82. To ammend my response, I would not touch Harvest. The yield could be cut as well.

83. Bob – agreed on the slamming of ATW. I was out of the country when it when ballistic from $100 to $120 + when I got back. I guess easy come easy go. Kind of like the H.S. players are seeing now too. ATW seems to be doing well, the longer term metrics are strong and I thought I saw them add another rig the other day (on order for 2012?), before that they were not as leveraged as RIG, don’t know about now. RIG is now rumored to be about to put forth a good sized dividend which will then make investing in them available to a wider list of funds (growth and income ones)

    I may own either of them by their call, added a little SLB in the personal account for Friday.

84. Wow Sane, wonder what is happening to export diesel demand, must not be as good now as earlier this spring with those big builds. Not good stuff for guys like VLO who were touting diesel as the last great hope for the refiners.

85. VTZ – thanks for your comments. i’m wary of trusts, anyway… but, might be able to cruise their reports to see if i can pick up some info on the northern limits of the bakken. i know i’m late to the party here, but it really is a cool play from a geologic perspective.

86. V – thanks, I’m not there and won’t be. Just thought Bird might want to sift a presentation there for the Bakken angle.

87. Bird – since I’m basically lazy by nature please let me know if you find another way to play the north Bakken.

88. Oil down a little under $4 now, group staging a decent rally (still down 2 to 4% on most names).

89. z – will do. but, not sure the northern bakken is in the same league as the south-of-the-border stuff. will let you know! (you’re hardly “lazy”… LOL)

90. Z, Bird – I ran into a company the other day with what looked to be canadian Bakken assets, but they didn’t refer to it as a Bakken play. It was the same area though. I’ll see if I can pull it up.

91. re 84

    I wonder if China is winding up their stock building for the olympics comming up.

92. Sane – wasn’t their game plan to shut down imports prior to but then where are they going to get electricity if they can’t burn diesel or coal during the events?

    V & B – thanks.

    HAL trying to go green. SLB losses cut by more than half, still want to see a day where we turn in the middle and close green, that seems to be how people make their investment decisions this summer.

93. Z, Bird, V: Petrobank has leases in Bakken area

    http://finance.yahoo.com/q?s=PBG.TO

    Trades on pink slip. Let us know what you feel

94. In case this is of interest: Canadian trust Enerplus (ERF) has a Bakken oil play, but it’s in Montana:

    http://www.enerplus.com/operations/bakken.shtml

95. The few DUGS that I have have tripled in value. Do you all continue to see oil going down. Be nice to unload them, see oil go up, and then buy them back at a much lower level. To me, everthing portends a descent into the 120s.

    If there is anything positive, Bush’s portfolio is probably hurting, although knowing him and Chaney they probably shorted the oils before his jawboning yesterday.

    Jazz

96. Z,

    They are going to put half a billion Chinee on stationary bikes connected to generators for electricity.

97. Took a shot at AUG CHK 60’s. Tater or Z, at the bottom of the charts, the CHK chart is saying that the majority of the time it opens strong and closes weak. Does that have any technical meaning?

98. i mention FREE yesterday

    its up .22 cents to 6.00

    worth a look

99. rv9 – i know a HF guy who has a pretty large (long) position in petrobank. he’s keen on the in situ stuff, but looks at the bakken as upside to the core bitumen sand stuff. fwiw.

100. Weather – Wow, Bertha won’t die. Die Bertha, Die Bertha! LOL
     Still watching 94L. Cane Hunters on the way. Should be a TD this afternoon. Wave off Africa will amount to nothing. Nothing else at this time of interest.

     http://www.ssd.noaa.gov/goes/east/tatl/loop-rb.html

101. Thanks Bill – has the threat of China slowing shipments of coal been fully discounted in the BDI and in the shares in your way of thinking. Looking at the charts of the BDI’s I would guess so.

     Jazz – I think it would be healthy for oil to pull back into the mid $120s as it would alleviate some economic concerns or at least give it a little bit of a break. I think DUG is 25% Exxon and down oil there is not necessarily a bad thing for them as the refining and chemicals sides will benefit while their E&P side sees lower revenue. I still think USO or the double ETF there on oil is a better play if you like oil down.

102. rv9 – petrobank is a great company and I would certainly take a look at them.

103. Thanks for the weather report Sam. Have you seen the tracks for 94L. I saw them mentioned but have not seen a site that maps tracks on lows, just TD’s, TS’s, and Cains.

104. WILDZTRADE (risky): Added WFT July $40 calls for $0.60 as another play on SLB’s Friday earnings.

105. Arb is closed from far east for diesel and jet, Europe diesel still at 2003 inventory stock levels and market is in contango for next few months. I would expect diesel to remain strong in the near term and not crater after Olympics. Also, middle distillate demand driving much of front month crude, so if diesel comes off, crude likely to follow.

106. Z, looking at E&P Hedged in the link:

     http://zmansenergybrain.com/subscriber-data/e-p/

     The data for CRK is slightly off from company’s recent presentation. Where do you compile this data from

     Thanks

107. rv9 – it is dated from April, those are done by hand when I get time or from Street research when I get it.

108. #103 – I still use “Stormtrackr”

     http://www.thestormtrack.com/tropical/aal942008/2008AL94_0716_00z_op_full.png

109. Thanks Sam, it is added to the Weather tab.

110. rv9 – I generally update the hedges if I see a big change or after the quarter which is when most companies release their hedge numbers. That last is from the closing time of the last quarter.

111. Is 10Q your source or you get it from bloomberg etc? Thanks

112. rv9 – usually from press release at the time of quarter, sometimes from ops update pieces, and sometimes someone is kind enough to send me a bit of Street research (data dump) with the hedges in a table.

113. Z – I guess the oil patch will continue to go down sinec Uncle Phil is bullish!

     http://www.321energy.com/reports/flynn/current.html

114. Thanks for 113 Sam, there’s 1 minute of my life I will never get back, lol. Now his trades are “just a guide”. I’d be more chipper like him but I have money on the table the trades aren’t just a guide.

     I do agree completely with Cadillac’s sentiments in 74.

115. zman:
     what would be a hedge against crude ?

     and NG ?

     and oil exploration ?

     and coal ?

     and solar ?

116. Z – You still thinking about WLT?

117. Uop – Probably puts on USO for Oil,

     for natural gas I have not been satisfied with puts on the XNG but gas has been doing what oil has been doing 3 out of 5 days a week so again, the USO there.

     XLE for the E&P companies

     KOL for Coal but I don’t like puts there, maybe you can borrow it if the SEC will let you. Can you short an ETF? I honestly don’t know.

     For Solar that probably ties well with coal but you could look at something like the MOO ETF.

     Ram – I probably should be but no, going to let it sit until next week. Lack of follow through with the rest of the group makes me think down energy is over riding and that the deal hype will be short lived. I like it but have decided not to chase.

118. zman:
     what does HK and CHK have in terms of NG and oil ?

119. CHK is 92% natural gas and hedged north of 70% for this year’s expected production,
     HK is 91% natural gas and less hedged.

120. Added some OII exposure here

121. ram re #97

     Please don’t take this like a smart ass comment because I’m taking your question on it’s face. It seems like you are actually making a statement, kind of “forest for the trees” kind of thing. Your eyes are telling you something (there has been obvious selling in CHK) and you don’t want to believe what your eyes see.
     TA is just a pictorial description of the day’s action.

     Z – wondering if you could take a sec and force yourself to make an argument for SLB to somehow report bad news. I can’t come up with anything, but you know one heck of a lot more than I do. Would be of a great help in preparing for downside risk.

122. NG coming close to green.

     Dman – I’m contemplating some too.

123. Thanks tater for the response. Just wondering when the sticks are red, meaning they close down for the day even though they were up, even higher than the previous day, does that mean something.

124. zman: hk and chk high in NG, the rest is condensate ??

125. What is your take on adding August SLB’s now?

126. Tater Re SLB – If they brick it will likely be offshore. Remember they missed last quarter and that was largely a function of Western Geco (offshore seismic) and other timing and weather related issues that lead to lumpy revenues. The stock was more than forgiven during the call for the feeling imparted by management that things in the onhsore N. American environment were looking like they would improve in 2H08 and especially 2009. People expect them to elaborate on this now that we are three more months closer to promised land. Also, a second sequential decline in the middle east would be unwelcome, not saying it happens but impossible to know for sure. On the quarter they could miss but that would not be the end of the world unless it were a large one. The stock is relative cheap for it at 16x next year’s numbers with strong growth expected this year through 2010.

127. Uop – a mix of oil and NGL’s

     Cargo – I’m not very concerned about them right now. See 126 for things that might change that but I’m holding them through the call on Friday.

128. ram –
     Sticks are actually clear or filled.
     Clear stick (red outline or black outline) means the day’s close was above the day’s opening price.
     Filled stick (red or black) means the day’s close was below the day’s opening price.
     Clear red stick means days closing price was above day’s opening price but still below yesterday’s closing.
     Black filled in stick means down day but close still above yesterday’s close.
     The tails on the sticks (shadows) are the day’s trading range. The think body (real body) borders the day’s open and close.

     Sorry, I misread your question.

     Thanks Z, appreciate it.

129. At $95, SLB is right back where it was before the last conf call. Unlike in the E&P and refining realms where analysts periodically mark their estimates to the market prices of commodities, oil service estimates remain relatively unchanged after a quarter is released once the adjustment s to the models are made. There are minor tweaks but generally only a big contract announcement can move the needle. SLB’s have not moved since early May. So unless they were too high after the 1Q call and have not yet cut the company should be about ok on the numbers. One other thing to add is that they get their business largely from the Majors, state oil companies and E&Ps. Those almost monthly increases in Capital budges on the part of E&Ps and companies like PBR should be finding their way into SLB’s pockets.

130. #117 z – you can short an ETF… but the borrow can be a bit tough. there hasn’t been borrow (or at least I can’t get it) on USO for about 2 months now, fwiw.

131. Broader market: Reminder 2PM ET Fed minutes from last meeting. Could move market lower or higher. Over the past year it has cut the daily gains more often than added to them.

132. XCO – It seems hard to believe that XCO won’t be able to pull off a deal that implies a value to it a lot higher than its current market cap. I’ve increased my position today in the Sept 40s. I want plenty of time for earnings cc an/or JV announcement. Of course, it also seems hard to believe that oil reaching a one month (or so ) low could send natural gas stocks down 5%, so what do I know.

133. Brazil: union willing to talk with PBR but they want all workers removed from offshore platforms first.

     Thanks Bird and Bob.

134. Sorry if I missed you saying it earlier or not, you mentioned WFT as a play on SLB positive call. Do you like NBR (other than for it’s own reasons) with SLB as the trade catalyst?

135. Tater – I think HAL is the most obvious runner up on good news at SLB. WFT is sometimes called a “little SLB” and it generally moves if SLB has a good day, liked the low premium there and am already long the name further out. NBR should move too but it may be a bit slower for the July’s so I took the WFT.

136. That’s probably bad phrasing. Could you see SLB’s call influencing other service names, specifically land drillers?

137. Sorry. It’s hard not to forget to phrase those questions properly.

138. Tater – yes, they could mention the higher Canadian rig counts, the higher U.S. counts, the higher Mexico count and all of these could help NBR. The US count could help the other names in U.S. land as well including UNT which I hold and the smaller names like GW which I don’t and won’t.

139. Tater – no worries and I did not notice anything about phrasing that was a problem for me. I’d let ya know it if you said something like “should I buy SLB $100 June calls or not Z, come on tell me what you think!” but you didn’t do that.

140. Just added some more COSWF at $47.60 US.

141. some fed officials wanted rate hikes “very soon”

142. Z-
     Near term catalysts for EOG, earnings on the 29th? And am I correct that EOG is more sensitive to crude, as it is a Bakken oil play in the Williston Basin?
     Thanks

143. DD – EOG is a strange trader as it is a gassy but becoming more oily large cap E&P. It has always traded closer to oil than NG and should be one of the better CFPS numbers as it stopped hedging during the 1Q and has more exposure to both oil and gas than many of its peers. Been drilling the biggest Bakken wells in its Austin/Parshal area and they should have more results out on the call. Also, they should have more news out on their Canadian shale play and their other oil shale plays announced with a little more detail than CHK did earlier this Spring. Very curious to see progress in the Barnett oil play.

     Planning to do a WIOWIO for EOG and SLB for tomorrow’s post.

144. Some at Fed June meeting saw rate hikes coming ‘very soon’
     Marketwatch – July 16, 2008 2:00 PM ET
     WASHINGTON (MarketWatch) — Some top Federal Reserve officials argued at the closed door meeting last month that the central bank should hike interest rates “very soon,” according to a summary of the meeting released Wednesday. Some members said the Fed had aggressively cut rates to 2% to guard against downside risks to growth and now that these risks had “diminished” that “some firming in policy would be appropriate very soon.” But other FOMC members said financial conditions were still too fragile and borrowing costs were higher for consumers than before the Fed starting cutting rates last fall. The minutes show a clear divide between one camp that favored a rate hike and others who believed the outlook was still uncertain at best. One FOMC member, Dallas Fed Bank President Richard Fisher, voted for a rate hike. In general, the minutes were a bit more hawkish that Fed chief Ben Bernanke was in his two days of testimony before Congress.

145. 5 killed in Nigerian gunman attack on naval boat.

146. 3 of them were rebels, sounds like a 2 hour gun battle after a failed attempt to take over an offshore platform.

147. zman;
     your designation:

     E&P is essentially in NG, yes ?
     HK, CHK,

     Majors: mix of things, crude, refining, NG, yes ?
     CVX, but not VLO as they have no oil.

     Oil Service is exploration and drilling: NFX, PBR

148. Is it time to buy ” energy?” I just got a tip from a shoeshine boy. lol
     apbd

149. E&P = exploration and production can be either all gas like a BBG or a mix of oil and gas like most E&Ps or all oil like BRY used to be and WRES is almost now.

     Majors do both upstream (E&P) work, as in they go find it, then process it into products at the refinery (downstream) and then market it at the pump. They also have chemicals divisions.

     Independent refiners generally don’t have the upstream side, last one I remember was TSO and I’m pretty sure they sold Bob Oliver and his crew to someone a long time ago. So they buy crude and turn it into gas and diesel.

     Oil service help the E&P side find the oil and gas.

     There is a list representing what I watch in each sector here:

     http://zmansenergybrain.com/subscriber-data/zeb-screens/

     It’s not comprehensive but it gives a good representation of each sector and some of the players in hot plays right now.

150. A – “I’ve been burned on tips before”

151. How could someone find out what refiners are paying for oil, especially the gas at market now?

152. Z-
     On the EOG, thanks. Are you inspired to buy it, or anyting else at thse “depressed” prices? I guess looking at the flatlining, that is a question for everyone.

153. I own it but I’m not buying much of anything until some reason comes back into the group right now. No knock against them but it was 120 two days ago and at 107, although it seems completely beaten and bashed I don’t feel particular compelled to add given the sour sector environment.

154. zman:

     txs for clarification,
     what I conclude is thaT it is almost impossible to find an index or ETF which can be used clearly to hedge,

     UNG is ok for NG,
     USO for crude,
     OIH for exploration,
     XLE for mixed situations,

155. Ram – I don’t have a good answer for that. Depends on the mix of crude they buy, where they are located, hedging, etc. Maybe someone has a better idea or source.

     OIH for oil service.

156. MMR, EXXI trying to be green. MMR earnings call tomorrow with BB update?

157. Thanks for the headsup Reef, bmo tomorrow call at 10 est., still holding some near worthless August calls here, would take a lot to resurrect.

158. xco on wire…Goldman to market 50% wi in JV. These guys did the Leor deal to ECA six months ago for 2B on a 50%interest

159. 158-in Dallas Business Journal

160. MMR – Next earnings release: Jul 17 before market, confirmed. First Call estimate: 1.03

161. Reef – any last minute color to add on MMR?

162. XCO, #158 – Is it a sign of weakness for XCO to go to GS instead of having to beat off interested parties or just good marketing? The press release talks about almost all their plays, any word as to whether they are in effect trying to sell half of the whole company? Any rumors on price? Sorry for all the questions, but their Sept 40s are currently a very large chunk of my portfolio. Any news, guesses appreciated.

163. Sands and shows below liner at 31,942. I estimate drill depth of 33,200′, going for 35k and depth record. look at mmr into close

164. 162- Marathon made an unsolicited, bringing capital and no skills. Devon will win at 2B

165. 164 – thanks, but is the $2 billion for half of everything (current market cap is $4 billion, so that wouldn’t be good news) or just half of Haynesville?

166. Half of East Tx assets, other than mid stream.

167. Reef, thanks. Sounds as if that should be very good for the stock. They also have over 100,000 net acres in Marcellus among other things.

168. Elwo – no way the $2 B extends to include the Marcellus. That’s would be on top of their Haynesville.

     Now that everything is perfectly fine with the broad market we are starting to see a rally in select service names.

169. Thanks everyone.

170. Elwo, if I remember correctly, Aubrey placed a 15 Billion price tag on the worth of his 1.6 mm acres in the Marcellus. So XCO’s 100,000, if they sell them, cold expect the same ratio…pretty penny, over $1 B for a 100% interest.

171. i think xco has 400k leases in marcallus

172. no run in mmr or exxi at close

173. “Senator, I can tell you what you can believe. You can believe I believe everything I say.”

     ~ Secretary Paulson, Senate Testimony, Tuesday, July 15th, 2008.

174. right Reef:

     393K net Marcellus
     another 117K net Huron

175. mmr two minutes late

176. I was trying to think what movie that was from before I saw the dateline.

177. exxi not following

178. Sambone that’s priceless.

179. Z,
     A wee bit of traction for the group into the close.

180. XCO – bring on the buyers!

181. Wee bit is right, I do like the reversal on the OIH though, well off lows late.

182. 210044 shares of exxi trade at $5.50 at close.

183. CAM has gotten all jiggy. Not clear to me why it has chosen today for it … earnings July 30th.

     #173 sounds right out of Get Smart : “would you believe …”

184. For you evening viewing! Tini Time

     http://www.cnbc.com/id/15840232?video=794008504&play=1

185. Wow, just saw WH, 12% rally and I have no news on it.

186. WSP Holdings Limited (NYSE: WH) (“WSP Holdings” or the “Company”), a leading Chinese manufacturer of API (American Petroleum Institute) and non-API seamless casing, tubing and drill pipes used in oil and natural gas exploration, drilling and extraction (“Oil Country Tubular Goods” or “OCTG”), and other pipes and connectors, today announced that its wholly-owned subsidiary, Wuxi Seamless Oil Pipes Company, Limited (“WSP China”), received purchase orders for 8,217 tonnes of API products from Ch

187. nowdrinkingdomesticbeerthirty

188. Thanks Eagle, I don’t have that story, thought they released that a couple of days back.

189. Sorry, Chopped off the end.

     WSP Holdings Limited (NYSE: WH) (“WSP Holdings” or the “Company”), a leading Chinese manufacturer of API (American Petroleum Institute) and non-API seamless casing, tubing and drill pipes used in oil and natural gas exploration, drilling and extraction (“Oil Country Tubular Goods” or “OCTG”), and other pipes and connectors, today announced that its wholly-owned subsidiary, Wuxi Seamless Oil Pipes Company, Limited (“WSP China”), received purchase orders for 8,217 tonnes of API products from Chickasaw Distributors, Inc. (“Chickasaw”) in the United States, and 2,246 tonnes of non-API products from PTTEP Siam Limited (“PTTEPS”) in Thailand.

     In May and June 2008, WSP China received four purchase orders from Chickasaw for a total of 8,217 tonnes of API casing pipe. WSP China expects to complete delivery for these orders by December 2008.

     Chickasaw has extensive experience as an OCTG product distributor and is an OCTG provider to Shell Oil Company, one of America’s leading oil and natural gas companies.

     In July 2008, WSP China received a purchase order from PTTEPS for total of 2,246 tonnes of non-API casing, drill pipe and related accessories. WSP China expects to complete delivery for these orders by December 2008.

190. VLO Valero Energy to Receive Canadian Crude Oil for Its Gulf Coast Refining System (32.42 +0.20)

191. Don’t get too excited, they have been talking about getting Canadian crude to the Gulf Coast for several quarters now. Problem is no pipe. Looks like Keystone is a 2012 event. It’ll help them but that’s a ways off.

192. At some point in the future there will also be a pipe from the oil sands to the west coast to either Asia, West coast or Gulf coast. The problem is the Rockies.

     Enbridge has also proposed “Gateway”, but that won’t be until 2012+ either.

     Bottom line, don’t count on it any time soon. It’s good positioning for the future though.

193. NRG NRG Energy cancels plans for IGCC plant in western New York; decision follows NYPA ending support for clean coal project (37.25 -0.96)

     Co issues statement regarding its planned clean coal project at its Huntley Station in western New York. The New York Power Authority informed NRG of its intent to allow their strategic alliance, formed in January 2007 to pursue development of NRG’s clean coal project, to expire on July 22. This effectively ends co’s effort to develop a clean coal project at Huntley in its present form. “We are disappointed in the State’s action today, but we recognize that the necessary funding was not there. The Huntley IGCC project was, in many ways, ahead of its time.”

194. XCO trading off after hours, 8k filed.

195. SLB up fairly significantly after hours.

196. SLB got many a favorable comment on Fast Money tonight re: trading for Friday’s earning. Hence the move after hours.

197. chk with new guidance

     http://media.corporate-ir.net/media_files/irol/10/104617/716Outlook.pdf

     z have u seen this yet?

198. Per my observations, the Proved reserves of all gas shale plays will increase substantially compared to 2007, principally due to Haynesville shale. Does this observation make sense? Also, all the HK, Encana, etc seems to rush to drill the shale vigorously. If this is so, I feel there is a good chance that gas prices will come down probably in few months. Can you comment on the validity of this observation.

     Which other play is as rich as Haynesville shale. I see bakken play is pretty hot as well, and is more skewed towards oil.

     Thank you

199. Does that guidance show CHK trading between 3.8-4.2 2010 CFPS? for a company with 18% production growth per year… hrmmmm.

200. I just caught 60 seconds of Cramer mid way through the program. Recommended Western Gas, and then, “I think oil reverses tomorrow, I am buying it and selling the financials”. Fast Money was all over the XLF move today, like all the problems are solved. Actually Macke was skeptical, said it is going back down.

201. Evening all.

     FWIW despite today’s huge rally in the broader market the market is firmly entrenched in its downtrend. We would have to get through 11450 for that to change. I have to say I had begun to wonder if this rally was ever coming as I have a cycle high due 17th plus or minus a day – lost count of the times I have said that. Anyway yes we could go a touch higher. In fact it is possible we touch 1275 on spx and 11450 on dow but I feel unlikely. Somewhere between where we are now and there is likely to cap this rally which I have as a wave iv and take us to new lows in wave v which should be done sometime the end of July/beginning of August.

202. Oil – despite the plunge the bull is not dead count wise! We need to take out the 131.90 area and preferably 130 area and until then this is possibly just an ABC correction. That said I still favor the bearish count right now but even under it I expect to see the market stage a decent bounce for wave 2. Possible we go a bit lower and then bounce or it has already started. But I can see us retesting 140 anyway.

203. ZMAN – Is the recent filing for CHK an improvement over what analysts are currently gaging the company?

204. looks like they up’d 2009 and 2010

     2008 is the same

     also shows they have enough cash to meet need of 2008

     the only negative is all the damn hedges.

     they will lose over 1 billion in q 2 as they hedged at 8 and gas ran up to 13

205. XCO: I may be “looking for the pony”, but XCO’s filing after the bell about the forced conversion of its preferred stock into 105 million additional common (doubling the common, but getting rid of $2 billion of mezzanine debt)may have a silver lining. XCO’s F/S (note 4) disclose that if there had been a “change in control” the preferred could have forced a cash buyback at $2 billion. When you advertise for a 50% partner, sometimes 100% acquirors come calling. If such an acquiror wanted to use stock, it would be nice to not have to also come up with $2 billion cash. (Granted, a deal would now cost them more stock.)A short term call holder can only hope.

206. China Q2 growth 10.1%, inflation cools

     What is not apparent in these figures is the addition of more and more diesel & gas burning engines to support this kind of double digit growth……………and they still got 10.1% growth with a major earthquake.

     The National Bureau of Statistics said the economy grew at an annual rate of 10.1% in the three months to June, down from 10.6% over the previous quarter.

     If it keeps growing at a double-digit pace, then China may overtake Germany as the world’s third-largest economy.

     Beijing has been trying to curb rising food costs amid fears of social unrest.

     Consumer price inflation also cooled to an annual rate of 7.1% in June – a decline from 7.7% in May.

     But with producer prices rising to an annual rate of 8.8% in June – the fastest pace of growth since the mid-1990s – the expectation is that the government will go further to make sure that these costs are not passed on to consumers.

     “While inflation has been easing, it is still at a fairly high level,” said Li Xiaochao, the statistics bureau’s spokesman.

     “If prices stay high for a long period, it’s not good for the stable development of the economy and will affect people’s lives, especially those with low incomes.

     “So we have to continue with price controls to control inflation,” he added.

     Analysts considered that the growth figures were in line with expectations and despite signs that the economy has peaked, double-digit growth is still expected for the full year.

207. Crys – unreal isn’t it. This is what happens when you cap fuel prices and subsidize your refiners. People increase their per capita consumption of oil which given the scale of China can only lead to higher prices for everyone.

This site uses Akismet to reduce spam. Learn how your comment data is processed.