Wednesday – Oil Inventory Preview + Oil Service Dance List

139 thoughts on “Wednesday – Oil Inventory Preview + Oil Service Dance List”

1. By Angela Henshall
   Of DOW JONES NEWSWIRES

   LONDON (Dow Jones)–Crude oil futures traded higher in London Wednesday in
   anticipation of a draw in gasoline stocks, but market activity was largely
   muted as traders awaited U.S. weekly inventory data due at 1435 GMT.
   The recent market selloff has reinforced bearish sentiment but the potential
   for production cuts by some members of the Organization of Petroleum Exporting
   Countries could put a floor under losses, said Commerzbank analyst Eugen
   Weinberg in Frankfurt.
   At 1155 GMT, the front-month October Brent contract on London’s ICE futures
   exchange was up 95 cents at $114.20 a barrel.
   The front-month October contract on the New York Mercantile Exchange was
   trading 89 cents higher at $115.42 a barrel.
   The ICE’s gasoil contract for September delivery was up $14.00 at $102.400 a
   metric ton, while Nymex gasoline for September delivery was up 133 points at
   287.72 cents a gallon.
   A Dow Jones Newswires survey of analysts forecast the U.S. Energy Information
   Administration would report a build of 800,000 barrels a day for crude oil
   stocks, while gasoline inventories are seen falling 2.4 million barrels a day.
   Distillate inventories, which include heating oil and diesel fuel, are expected
   to rise by 500,000 barrels a day.
   Reaction to the data could be mixed as the market enters the autumn “shoulder”
   period, when demand drops off between the peak seasons, said Olivier Jakob,
   managing director of Swiss consultancy Petromatrix.
   “Storm activity and the movement on the dollar might dominate as a direction
   input while oil trades in a range rather than in a trend,” Jakob added.
   The peak of the hurricane season is September, so tropical storm activity will
   remain a key focus for the market over the next three weeks.
   Participants were also eyeing news that BP will restart its Baku-Tblisi-Ceyhan
   pipeline this weekend. The pipeline, which transports Azeri crude from
   Azerbaijan to Ceyhan in Turkey, was operating at around 850,000 barrels a day
   before it was shut down two weeks ago due to a fire.
   “If (the inventory data are) bearish then the return of the pipeline will add
   to downward pressure,” said Harry Tchilinguirian, an analyst at BNP Paribas in
   London.
   After several sessions of range bound trading, the short-term technical trend
   for crude oil futures remains sideways, said Glen Ward, a broker at ODL
   Securities in London.
   “Every day that prices remain in this trend will provide more power for the
   move when it breaks (out of the range),” Ward said.
   -By Angela Henshall, Dow Jones Newswires (Lananh Nguyen and Spencer Swartz in London contributed to this report.)

   Dow Jones Newswires
   08-20-08 0800ET

2. TROPICAL STORM FAY HAS TURNED SLOWLY NORTHWARD AFTER FINALLY
   REACHING THE EAST-CENTRAL FLORIDA COAST EARLY THIS MORNING.
   HOWEVER…THE CENTER REMAINS JUST INLAND ALONG THE COAST NORTH OF
   MELBOURNE FLORIDA AND MAY NOT EMERGE OVER THE ATLANTIC OCEAN UNTIL
   THIS AFTERNOON WHEN FAY IS EXPECTED TO MOVE NORTH OF THE CAPE
   CANAVERAL AREA. MOST OF THE GLOBAL MODELS ARE NOW INDICATING A
   TIGHTER TURN TO THE NORTHWEST AND THEN A SHARPER WESTWARD JOG
   ACROSS NORTH FLORIDA AFTER 36 HOURS AND INTO THE NORTHEASTERN GULF
   OF MEXICO BY 72 HOURS. THE GFDL AND HWRF MODELS ARE EXCEPTIONS TO
   THIS SCENARIO AND KEEP FAY MOVING NORTHWESTWARD ACROSS GEORGIA AND
   ALABAMA…BUT EVEN THOSE MODELS ARE NO LONGER TAKING FAY EAST OF
   80W LONGITUDE. THE OFFICIAL FORECAST TRACK IS A LITTLE TO THE
   SOUTH…OR LEFT…OF THE PREVIOUS FORECAST TRACK AND IS SIMILAR TO
   BUT SLOWER THAN THE MODEL CONSENSUS.

3. Energy-Stock Bull Is Primed To Resume Run

   By DAVID J. REYNOLDS
   Of THE WALL STREET JOURNAL

   Oil and gas insiders are betting big that the historic run-up in energy stocks isn’t over.

   Since energy stocks crested and retreated in early July, an unusually large number of directors, officers and large stakeholders have pumped money back into their own companies — a sign, analysts say, that the boom is primed to resume.

   New York Mercantile Exchange crude oil has sunk more than 20% since peaking above $147 a barrel in early July. A sector fund that tracks energy stocks in the S&P 500, State Street’s Energy Select Sector SPDR, is off 17% after enjoying a three-year run that doubled its price.

   Kelcy Warren, the chairman and chief executive of natural-gas pipeline operator Energy Transfer Partners LP, said he thinks the recent dip in energy stocks is overdone.

   “I’ve been amazed that the whole sector has been turned upside down,” he said. “Investors have thrown the baby out with the bath water.”

   In July, Mr. Warren bought $42.2 million in shares of Energy Transfer Equity LP, which owns the general partner of Energy Transfer Partners.

   Mr. Warren isn’t alone. Insiders at more energy companies are buying more stock since energy prices fell, according to data compiled by Form4Oracle, a Somerville, Mass., financial-research firm specializing in insider-trading data. Executives, directors and large stakeholders bought $10 million more stock than they sold over the last month, the data show.

   “This is the most buying we’ve seen in a long time,” says Form4Oracle analyst Alex Romayev. “As part of their compensation, directors and officers get stock and stock options. It’s only normal for them to diversify and sell their holdings. When insiders are buying more than they’re selling, it’s a very bullish sign.”

   Typically, Mr. Romayev said, insider sales greatly outnumber buys, so the trend is especially conspicuous. “It was a great example of insiders reacting to the valuations of energy stocks,” says Mr. Romayev, who owns shares of Chesapeake Energy Corp., an Oklahoma City-based natural-gas producer.

   Analyst Ben Silverman says the insider purchases are a sign energy prices could soon rebound. “What they’re trying to do is call a bottom,” says Mr. Silverman, research director at InsiderScore, which tracks and rates insider buying and selling. “Over the years, energy insiders have accurately made short-term calls.”

   At least four times in recent years insiders have timed a short-term bottom in energy stocks, Mr. Silverman says. “When prices come down, insiders buy aggressively.”

   Mr. Silverman says he has a long position in Southwestern Energy Co. , a holding company with units engaged in oil and gas exploration and production.

   Insiders at a number of energy-related companies have bought shares. At oilfield services provider Hercules Offshore Inc., four insiders, including Chief Executive John Rynd, bought $1.75 million in stock this month. Company stock is off nearly 50% since July highs. None of the insiders could be reached for comment.

   Robert Day, a director of deepwater driller McMoRan Exploration Co., spent $9.4 million three weeks ago to buy shares. Mr. Day couldn’t be reached for comment.

   Mr. Warren said that energy prices are bound to rise because the government has made poor choices in energy policy.

   In the meantime, he says, oil and natural gas will remain in high demand and many energy stocks are, at current levels, a good buy.

   “I don’t see what everyone’s missing in the energy sector,” Mr. Warren says. “There are some great bargains out there.”

4. Morning Sam, you’re fast with the stories this am. Any thoughts re the left hook they seem to be expecting for Fay?

5. Satellite on Fay shows it completely stalled on the east coast of central Florida on the last five hour graphic.

   http://tropics.hamweather.net/2008/atlantic/fay/clir/latest.html

6. Z – This puppy will either stall right where it is, or jig left and then back north behind the front over NC.

7. Check out 95L looks like at the end of the loop. Click “FWD” tab on right.

   http://moe.met.fsu.edu/cgi-bin/cmctc2.cgi?time=2008082000&field=Sea+Level+Pressure&hour=Animation

8. Thanks Sam, 95L looks like an east coast threat on fsu’s animation. To me the oil market is getting pretty excited over a pretty small possibility this morning, and bucking the dollar and in front of inventories which are pretty important this week.

9. My bad wrong number, it’s 94L. Yea, East coast. The sad thing is that the east coast hasn’t really been hit since Hugo which was almost twenty years ago. If a Cat 3 hits anywhere on the East coast, major, major damage will result. These beach houses have really been built up, stacked is a better word.

10. I live about three miles from where Hugo came ashore in SC. Pictures of the damage are quite amazing.

11. Gartman goes positive on Energy this AM

12. Isle – good to hear, he’s a smart one.

13. No more Twinkies? Tell me it aint so!

    Union: Lenders delay Twinkie-maker’s reorg
    By DAVID TWIDDY 08.19.08, 4:33 PM ET

    KANSAS CITY, Mo. – The International Brotherhood of Teamsters says lenders are holding up a potential plan for helping Interstate Bakeries Corp. exit almost four years of bankruptcy protection, endangering thousands of jobs.

    In a news release, the Teamsters, who represent more than 9,500 Interstate Bakeries workers, singled out JPMorgan Chase (nyse: JPM – news – people ) Bank and hedge fund Monarch Alternative Capital for blocking the plan the union said it has negotiated with investor Ripplewood Holdings from moving forward.

    Interstate Bakeries’ current financing package is due to expire on Sept. 30, which could force the maker of Hostess Twinkies and Wonder Bread to liquidate itself.

    “Without a reorganization plan in place soon, the company could face severe consequences, and these same institutions will likely recover far less than under the Ripplewood proposal,” said Richard Volpe, director of the Teamster’s bakery conference.

    “We are holding out little hope that this proposal will be approved,” Volpe added. “These banks and hedge funds are once again going to disappoint all of the 23,000 employees of Interstate, just like they have disappointed the nation with the mortgage debacle.”

    JPMorgan spokesman Brian Marchiony and Monarch spokeswoman Lin-hua Wu declined to comment on the union’s claims.

    Maya Pogoda, a spokeswoman for the Kansas City-based company, said Interstate Bakeries was not involved in the negotiations between Ripplewood and the secured lenders.

    “We’re hopeful that the parties will reach agreement on concessions that would allow IBC to emerge from Chapter 11 (bankruptcy protection) as a stand-alone company,” Pogoda said.

    Interstate Bakeries filed for protection from creditors in September 2004. It developed a reorganization plan late last year but had to abandon it in March when the company was unable to gain workplace and welfare concessions from the Teamsters.

    During a bankruptcy court hearing on the plan, a Teamsters attorney said the union would prefer to see the company liquidated to accepting the concessions.

    Instead, Interstate Bakeries began negotiating with New York-based Ripplewood, which the Teamsters said had proposed a reorganization plan that included concessions it could accept.

    In April, Interstate Bakeries also negotiated a new financing package worth $250 million with JPMorgan, Monarch and three other lenders, due to expire Sept. 30.

    The company also said it would begin developing a plan to sell itself whole or in pieces if it ultimately couldn’t get a reorganization plan approved.

    Since then, the company has provided no update on negotiations and has continued to struggle with rising costs, losing a total of $81.2 million so far this year.

14. Sam – Oh no, there goes my deep fried twinke’s.

15. By Gregory Meyer
    Of DOW JONES NEWSWIRES

    NEW YORK (Dow Jones)–Crude oil futures tracked higher Wednesday ahead of the
    release of data expected to show mixed trends in U.S. oil inventories.
    Light, sweet crude for September delivery was recently up $1.55, or 1.4%, at
    $116.08 a barrel on the New York Mercantile Exchange. The September contract
    expires Wednesday. More active October Nymex crude rose $1.58 to $116.12 a
    barrel.
    October Brent crude on the ICE Futures exchange was up $1.59 to $114.84 a
    barrel.
    An expected drawdown in U.S. gasoline stockpiles was breathing some life into
    the market. Weekly U.S. oil inventory data due at 10:35 a.m. EDT are expected
    to show gasoline inventories fell by 2.4 million barrels last week, according
    to analysts surveyed by Dow Jones Newswires. That would mark the fourth
    straight weekly drawdown for gasoline stocks.
    “A gasoline stockdraw, though seasonally appropriate, would push the inventory
    level below the five-year average,” said Brad Samples, an analyst at Summit
    Energy in Louisville, Ky. “Given how soft demand is in this market, the market
    thinks that inventories ought to be performing better.”
    Analysts expect the data will show crude stockpiles rose by 800,000 barrels,
    and stocks of distillates, which include heating oil and diesel, climbed by
    500,000 barrels. Refinery use was expected to have climbed by 0.4 percentage
    point to 86.3% of capacity.
    The path of Tropical Storm Fay drew attention as the National Hurricane Center
    and other forecasters projected it could turn west to the Gulf of Mexico after
    blowing through Florida. In a morning alert, the center said most models show
    the storm will turn northwest and into the Gulf three days from now. It said
    the Fay’s chance of forming into a hurricane is “becoming smaller.” The Gulf
    region is home to a quarter of U.S. crude production and half its refining
    capacity.
    The market showed little reaction to news that the Baku-Tbilisi-Ceyhan crude
    pipeline, a key conduit for Caspian crude to global markets, is set to restart
    by this weekend after a fire knocked it out of service two weeks ago. The
    pipeline, which partly runs through the former Soviet republic of Georgia, was
    operating at around 850,000 barrels a day before the incident, a volume equal
    to about 1% of the world’s daily oil demand.
    Adding some buying sentiment to the market, investment bank and major energy
    trader Goldman Sachs said it sees benchmark West Texas Intermediate crude at
    $149 a barrel by year-end.
    Front-month September reformulated gasoline blendstock, or RBOB, rose 3.80
    cents, or 1.3% to $2.9019 a gallon. September heating oil climbed 4.74 cents,
    or 1.5%, to $3.1711 a gallon.

    -By Gregory Meyer, Dow Jones Newswires

    Dow Jones Newswires
    08-20-08 0943ET

16. Z – There’s your GS quote.

17. Sam – I guess when you are that big you can just say, “as I said before, the price is 149” and have no extra explanation. Like Valentine setting the price of pork bellies.

18. If we do get bullish product numbers today, I’d look for a pretty good sized surge in crude and even more so in the stocks….perhaps offsetting coming weakness when any Gulf side reentry potential for Fay fades away.

19. z – good call on HK got out this morn but have plenty left

20. Wow, 2 days of bright green.

    Wow recovery in CLR, EOG, WLL … all the Bakken names. NFX should move as well. Waiting for oil numbers at this point. May take a little HK back of the table if #s prove not so bullish.

21. Z – a good test for this nascent rally would be if the numbers are mixed or worse. Then we’ll see what it’s made of.

    I’m reminded again of why I couldn’t be an analyst for Goldman. It’s not good enough to say that oil will be around $150. Nope, it’s $149. Like to know what their error-bars are on that one. Oh right, they don’t do errors…

22. Morning all. GS are long so we know it was only a question of time before they made this call yet again. They will get a rally to sell into – still not sure if it is already underway or will be soon.

23. Really impressed with the Bakken list, if the numbers are bad (bearish) for oil these probably get cut in half on the days gains…just a thought for a day trade. CLR up about 20% in 2 days, WLL, EOG, BEPOX all seeing nice rallys. Nothing fundamental wrong, just know they will trade off sharp if oil resumes downward trajectory.

    There goes NFX, well at least I own the common.

24. Morning Nicky – Got a count on gasoline and distillates?

25. Nicky – are you saying GS didn’t take any profits on their energy longs when they were upgrading oil service at the very top a month ago? What I’m asking, I guess, is how do we know they are long? Do they disclose this stuff?

26. The numbers would have to be really bullish to pop the stocks after this morning rush. They’ve spent it already, surely (??)

27. Number in 5 minutes.

    Dman – after the fall we’ve had? In a light volume market?

    No, the move off the bottom, if you can really call it a bottom is very tentative. If the numbers are bullish and I care as per the post a lot more about products than oil itself we could see a rest of week move similar to today’s 5+% in the names per day.

28. Along those lines, while HAL is up, its not keeping pace well with the OIH or SLB. Expect that to change somewhat if oil goes on up but I would have to say that nat gas prices and the likelihood of big draws are hurting the stock, rightly or wrongly. They said over the weekend that business is not being hurt but people associate them with ng more than they do SLB.

29. If the numbers look cruddy I will punt the HK and revisit it on the bounce.

30. Huge build crude: 9.4 mm barrels, it was imports at a record 11 mm bopd.

    Large draw gasoline: down 6.2 mm barrels

31. Gasoline demand hovering at 9.4 mm bpd

    Crude got cut more than in half by the headline number but it was imports and we know imports are coming down. Going to take oil a little while to wade through the numbers. Once it picks a direction expect it to move sharply either way.

    I’m sitting on my trades for a bit.

32. Z – refiners going green!

33. Good numbers for refiners by the way, VLO trying to poke through $35 again.

34. gas went to 7.97 from 8.10 then came right back on the data

    fun to watch the volitility

35. hk 32.70 to 31.10

    chk 49 to 47.50

    took advantage of the dip to buy more chk and pq

36. API

    Crude UP 12.4M
    Gasoline DOWN 2M
    Distillates UP 313K

37. bill, yep, that headline scared people on crude. but when you dive in you see gasoline production was actually rose last week and you still got a big drawdown and also the distillate build was smaller than expected.

    on crude, imports up 1.3 mm bopd account for most of the build vs last week adding 9.1 mm barrels on the week.

38. Thanks Sane, confirms it was a record week for imports.

39. Blending components took a large draw 3.6M barrels per EIA

40. Most Americans think that the worst of the fuel price spike is over. No, this is not a repeat from 2003, 2004, 2005, 2006, or 2007. Sambone, 2008

    Americans think worst of 2008 oil spike over: poll
    Wed Aug 20, 2008 8:31am EDT
    By Emily Kaiser

    WASHINGTON (Reuters) – Most Americans think that the worst of the fuel price spike that pushed gasoline above $4 per gallon has passed, but they have little hope that the housing market will stage a swift recovery, according to a Reuters/Zogby poll released on Wednesday.

    The economy has jumped to the top of voters’ concerns this election year, eclipsing the Iraq War, and that has put the housing bust and rising inflation squarely in the spotlight.

    The poll of 1,089 likely voters found that just under 13 percent thought gasoline prices would rise a lot between now and the end of the year. About one quarter thought prices would rise a little, while one in three thought they would drop a little and 18 percent said they would stay about the same.

    The survey was conducted August 14-16, when oil prices had come down some $30 from a July 11 peak above $147 per barrel, and the national average price for a gallon of gasoline fell back below the psychologically significant $4 mark.

    Pollster John Zogby said the swift rise in fuel prices earlier this year had fundamentally changed U.S. consumer behavior, and a pullback below $115 per barrel was not sufficient to alter that.

    “The lines are not forming to buy Hummers,” he said, referring to the big luxury trucks that are notorious for their poor fuel mileage.

    Mounting costs for necessities like food and gasoline have strained household budgets, leaving less money for spending on discretionary items. That has put a dent in the U.S. economy, which was already struggling to overcome the housing slump and financial market turmoil.

    Reuters

41. Ztrade: Sold the HK added yesterday for $3.10, up 38%, somewhat mixed numbers out of the EIA, will add it back if it falls but in this market it pays to be cautious.

42. Those were the HK $30 Sept calls taken yesterday for $2.25.

43. I see stories citing down truck sales that imply that people won’t buy SUV’s again (give me a break) and that by not adding at the same clip (but adding even 1 truck is adding) that gasoline demand will somehow fall. I find that just funny.

44. Dman re #25 – personally I don’t know if they are long or not but it just seems pretty obvious when they were calling 149 on an almost weekly basis and for a long time it went their way. Then the market turned and they continued to tout the same number only to an audience that was no longer listening! They have been very quiet now on the oil price for about a month but we were only commenting on here about a week ago that they would be out with this call again any day and here they are. I can’t see any reason why they would not be following their own calls and as they have never said anything but up then I am presuming they are still long and doubling or tripling up.

45. I’m just saying unless you drive your Hummer to the Prius dealer who hands you the keys to your green machine while putting your H2 in a crusher like some kind of guns for cash exchange program like you see in some cities, the net fleet of gas hogging vehicles does not go down.

    I agree with Nicky, they follow their own calls as the analysts are going to be using that number in their models from which they recommend buying the stocks.

    Oil still undecided on what to do about those numbers…at least not tanking…the stocks however remain green and this gives me a little more confidence that sentiment is turning my bullish way.

46. oil down 50 cents, gasoline and HO off too.

47. Oil down a buck, group start to show spots of red, big gains getting wiped out.

48. Well, looking on the bright side, at least the stocks can now move in both directions. Been a while since that was true.

    Z- what is the meaning of the huge build/import number? Did the refineries all hit the buy button several weeks ago and that crude has now arrived en masse?

49. Energy Groups just appear to be looking for reasons to rally…good resilience in the face of down $1.50 crude.

50. Dman – Re imports, its more a function of delays two weeks ago due to Edouard and the system playing catch up.

51. CLR gave back all of today’s 10% early gain. Day traders dream market.

52. Oil – it appears to me that v down is now underway which is what we wanted to see! So we need to undercut the previous low. Again support is likely to come in around 110.

53. Sounds like the NHC is giving up on the Fay into the Gulf concept: From the 11 am est update.

    FAY HAS BEEN OVER LAND LONGER THAN ANTICIPATED AND IT HAS CONTINUED
    TO WEAKEN. THE SATELLITE PRESENTATION HAS DETERIORATED SIGNIFICANTLY
    SINCE YESTERDAY. HOWEVER…THERE ARE NUMEROUS RAINBANDS PRIMARILY
    OVER WATER AND THE OUTFLOW IS WELL DEFINED. THE INITIAL INTENSITY
    HAS BEEN SET TO 45 KNOTS BASED ON RECONNAISSANCE DATA AND THE SFMR.
    SOME HIGHER WIND GUSTS ARE PROBABLY OCCURRING OVER WATER ASSOCIATED
    WITH SOME RAINBANDS. ENVIRONMENTAL CONDITIONS ARE FAVORABLE FOR
    SOME STRENGTHENING IF THE CENTER MOVES OVER WATER AS EXPECTED. THE
    OFFICIAL FORECAST NO LONGER FORECASTS FAY TO BECOME A HURRICANE DUE
    TO THE CYCLONE’S INTERACTION WITH THE FLORIDA PENINSULA BUT ALLOWS
    SOME STRENGTHENING. ONLY THE HWRF INSISTS ON INTENSIFICATION BEFORE
    LANDFALL. A LITTLE DEVIATION OF THE TRACK TO THE LEFT WOULD KEEP
    THE CENTER OVER LAND AND INTENSIFICATION WILL NOT OCCUR.

    FAY HAS BEEN MOVING VERY SLOWLY TOWARD THE NORTH…ABOUT 3 KNOTS…
    WHILE EMBEDDED WITHIN VERY LIGHT STEERING CURRENTS. A MID-LEVEL
    RIDGE IS FORECAST TO DEVELOP NORTH OF FAY AND THIS PATTERN SHOULD
    STEER THE CYCLONE TOWARD THE WEST OR WEST-NORTHWEST. THIS OFFICIAL
    FORECAST KEEPS THE CENTER VERY NEAR THE EAST COAST OF NORTH FLORIDA
    FOR THE NEXT 24 HOURS AND THEN MOVES THE CYCLONE INLAND UNTIL IT
    BECOMES A REMNANT LOW. IN THE LONG RANGE…SOME GLOBAL MODELS TURN
    FAY WESTWARD ACROSS NORTH FLORIDA AND INTO THE NORTHEASTERN GULF OF
    MEXICO. THIS SCENARIO IS NOT LIKELY TO OCCUR BUT I WOULD NOT RULE
    OUT THE POSSIBILITY YET GIVEN THE GOOD PERFORMANCE OF THE GLOBAL
    MODELS.

54. CHK now supported by the 5 and 20 sma, as is the XLE

55. Group back to all green with strip off a little over $1. NG flat. I know I’m typing these little inane comments in often but 1) its slow around here and 2) and more importantly, I’m looking for a change in sentiment (stocks not necessary going down with commodity would be rare these days) so these are really notes to me for later.

56. ddaley – thanks was watching CHK underperf the group today post numbers, think it may be a bit squished (that’s a technical term) between the 20 sma for support and the 200 sma for resistance.

57. ZTRADE: Added Oct $140 RIG calls (RIGJH) for $3.00 (bought on the mid with the stock up about 60 cents on the day. See post for reasoning but I basically talked myself into it last night and think they will be one of the ones to really run (very cheap, earnings keep going up, largely immune to short term commodity price flux) when the sentiment turns more positive on the group.

58. BB? MMR and EXXI up

59. Could be. I’m not watch the lease sale but I guess it could be bidding on an adjacent block, just a thought.

60. Z,
    For CHK, not to make too fine a point, but my chart suggests the 200 is JUST under its current 47.3?

61. DD – I’m roaming and I didn’t zoom in so maybe I saw it wrong. My 200 EMA shows 51 for CHK. No matter, TA still more important than fundies here or it would be much higher. Hope you are correct.

62. Z- Your take on DO?

63. Z,
    200 SMA!!

64. 200 DMA for CHK is around 51.4.

65. Occam – DO and NE are cheap as well right now. I took RIG because I think they are little better positioned in the deepwater and will get a bigger bounce and I’m playing options. If I were looking at the stock, I might take a harder look at DO due to the dayrate sensitive dividend. Nice to get paid while you wait and nicer still to participate in the upside these guys are all seeing and will very likely continue to see in near, medium, and long term.

66. Oh, SMA. Is this what tech traders or computer trades use?

67. It looks to me like the CHK 200 SMA at 47.30 to 47.40, which would put it right above current level. So a resounding close above here, say 48 would I guess make this moot.

68. Z: Any thoughts about US$ fundamentally or technically. I see reports from Lehman and CSFB that are now US$ bullish. The gist is that even if our economy is weak Britain, Eur and Japan will be even weaker. A strong US$ has gotten in the way for our special sectors. R U concerned?

69. Ram – simple people like me use SMA, lol. I don’t know if I can stand an all green day with oil down slightly. How long has it been since we’ve seen 2 green days in a row on the groups?

70. GMXR UP $5 . Anything new

71. If Gasoline, and Crude move down by the same % does the crack spread stay the same?

72. Tom – always concerned but I think the dollar rally is more than represented in the dip in oil of late. I know some will argue that’s not the case but I respectfully disagree and don’t think over time, the dollar is the key determinant of pricing. Do I see a huge rally in the dollar from here? Not really. At least not soon. If the Fed tightens, which would strengthen the dollar, you get a crushed economy. Does Bernanke do that and hand the election to the democrats? Don’t know but I kind of doubt it. Inflation is everywhere but it has been for some time. Now seeing in PPI more outside of food and energy but a lot of that is just filter down of energy flowing in. Saw a comment yesterday that this PPI increase permanent. I’d say that’s reaching and but that it has further impetus to the upside before lower prices for transportation filter down to reduce it. This type of inflation is simply not fightable via Fed tightening and I think the Fed knows that. So they are not really in a rock and a hard place but a rock and black hole, meaning, tighten now, crush the economy and still not control inflation. Not with 1 or 2 or 3 hundred basis points . It will take multiple rounds of tightening to get a grip on inflation and the next admin will be in office before it has an impact on prices but the impact to the economy, at least in terms of perception will be ugly in November. At least that’s my quick read…I could be wrong.

73. Z – Good article on RIG if you missed it:

    http://seekingalpha.com/article/91793-transocean-drilling-deep-for-profits

74. MD – No, people are just looking to get long the names again and its one of the cheap, nearly pure plays on a hot shale play. Came close to buying it earlier on the dip but my RIG trade fired first and I am being a little careful in believing all the green I am seeing. Oil could still slam lower into the close although it does not feel like it.

    Gaamblor – the gas crack would, the 3-2-1 crack spread would move in accordance with the price of crude, gasoline and heating oil. Right now gas cracks would be up with gasoline off half the move in crude and distillates (heating oil) almost flat.

    Fred – thanks much will have a read.

75. Calyon upgraded several oil service names, took NBR from Add to Buy

76. For the TA inclined, please have a look at the OIH and XNG…starting to look alive.

77. Z – i have been away from the computer during the day the past couple days but i did want to get back to you about that “write calls on friday of expiration one month forward and then buy it back on a swoon on monday idea”

    After some thought and looking back over notes i think what you are seeing is a combination of things. 1. Friday of expiration has an inherent bullish tilt to it in terms of folks rolling out options, (selling the about to expire and buying a new option one month forward.) A built in “net buy” for one month forward options. 2. The first monday of a new month has a slightly bearish tilt to it as there is not a “net buy” anymore. There can even be a net sell from options writers that were waiting for their options to expire worthless and then re-write them on monday. 3. Some institutions even have trouble writing new calls at all on the monday after expiration because they have to wait for the expiration transactions to post. 4. Options desks will seize the opportunity to square up on this monday too depending on where they stand after expiration.

    Your CHK trade from friday to monday will probably not be the last one of these you could pull off – particularly if we continue to see this type of volatility.

    GMXR at the money covered calls are still staggering. 7%+ for September 65s

78. Thanks much 1520! I did the CHK Friday-Monday for about 50 cents and I plan to be more disciplined about it on stocks I own each month, especially in this market as I doubt I’m in much danger of losing my stocks and if so fine. Should have done of SD and will likely do next go around.

79. Starting to get notifications of energy stocks crossing back above their 200 day sma, just got one on NBR.

80. i’ll be watching the friday monday idea too. i have never really looked that short before.

81. Z – OIH has escaped its 2 week downtrend but is still within the major downtrend from early July. However, even if it just waffles for a few days it will cut across that trend & then some technical buying could kick in. Not that it will necessarily waffle: judging by NBR it could get there soonish.

82. Z–The TA on $XNG looks much better than OIH

83. Dman and K – thanks guys. Now, I’m not ready to declare an end to the prozac days just yet let alone a sea of energy love environment but this is an improvement and as someone said earlier, it means more with red oil.

84. 1520 – i sold some NFX puts last fri near close for 3.10 and w/ the stk down a little monday morn were trsding 2.70-2.90. i noticed because of z’s CHK trade to see if there was merit in his idea. i did not do for trade but his theory worked pretty good.

85. kyleandy – interesting – i’ll be watching to see what this looks like in a more neutral to positive energy equity environment.

    like i said i don’t usually go this short or even look to go this short but i will now.

86. I spent the last few days buying UNG on dips and now selling Sep calls against it. Very comfortable position.

87. 1520 – I’m not really much of a short game (time wise) player either however this market will make one adapt.

    Nice to see RIG up on the same day I buy in. Anyone on the TA side care to comment it would be welcome. Thanks.

88. Hopefully the analysts will appear with a stable energy sector and proclaim the obvious. Although the firms that reiterate a price target that is 50 to a 100% above current price and maintains a neutral rating always puzzles me.

89. Bleemus – re UNG and gas, the last 4 storage numbers have been better than expected or at worst in line and yet we’ve gotten sell offs. Tomorrow’s should be in the range of 70 to 80 Bcf which is SIZE for this time of year. Since they already assume the worst, maybe we get a small pop. Near term, I think we are overdue one but it will likely be muted by all this cold weather. No AC on for last few days and my wife was cold last night on a picnic. That just doesn’t happen in the South in mid August.

90. Ram – agreed, GS needs to get some stones if they are going to have targets that high on discounted cash flow analysis…or use a different metric and get with the program. Either way, saying CHK is neutral while saying it should be priced 100+% higher is just about one of the most gutless and worthless acts I’ve seen from the Street of late, not to cast stones but come on!

    You are starting to see various middle tier and bulge bracket firms reigning in their price targets which is the first step in the healing process. People know the 3Q estimates for oil are too high in the models given the sudden collapse so they think the numbers need to come down. Now the Street is accommodating them and they can comfortably buy the stocks AFTER the price target reductions.

91. 1520 – these were puts wasn’t short

92. 1529 = sorry didn’t see the comment about short as in time!!!!

93. Oil Falls On Huge Stockpile Gain

    By Gregory Meyer
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures sank more than $1 Wednesday after government data showed U.S. crude stockpiles swelled by nearly 10 million barrels last week.

    Light, sweet crude for September delivery was recently down $1.29, or 1.1%, at $113.24 a barrel on the New York Mercantile Exchange. The September contract expires Wednesday. More active October Nymex crude declined $1.26 to $113.28 a barrel. September Nymex crude was trading at $116.86 before the data release.

    October Brent crude on the ICE Futures exchange was down $1.09 to $112.16 a barrel.

    The U.S. Department of Energy reported domestic crude stockpiles rose by 9.4 million barrels in the week ended Aug. 15, more than 11 times the gain expected by analysts. It was the largest rise in barrel terms since March 2001 and percentage terms since April 2003.

    The gains came after crude imports to the Gulf Coast increased by about 1.8 million barrels a day, to 7.2 million barrels a day. Tim Evans, an energy analyst at Citi Futures Perspective, said Gulf imports bounced back after Tropical Storm Edouard had curbed imports in the prior week.

    The oil market found some support in a 6.2 million barrel decline in gasoline inventories, which was larger than the 2.4 million barrel draw analysts had expected. A 500,000-barrel gain in distillates stocks was on par with expectations.

    “There’s nothing supportive in that crude figure,” said Mike Zarembski, senior commodity analyst at brokerage OptionsXpress Inc. in Chicago. “The only figure that was really supportive was the gasoline figure.”

    The path of Tropical Storm Fay, now over Florida, remained on traders’ radar. The National Hurricane Center said a move to the Gulf of Mexico, home to a quarter of U.S. crude production and half its refining capacity, “is not likely to occur” but did not rule out the possibility. Separately, Jim Rouiller, senior energy meteorologist with the private forecasting firm Planalytics, said he doesn’t expect Fay to hit the Gulf or pose a credible threat to energy infrastructure.

    Emboldening some buyers earlier in the session, investment bank and major energy trader Goldman Sachs reiterated its view that benchmark West Texas Intermediate crude will be $149 a barrel by year-end.

    The market showed little reaction to news that the Baku-Tbilisi-Ceyhan crude pipeline, a key conduit for Caspian crude to global markets, is set to restart by this weekend after a fire knocked it out of service two weeks ago. The pipeline, which partly runs through the former Soviet republic of Georgia, was operating at around 850,000 barrels a day before the incident, a volume equal to about 1% of the world’s daily oil demand.

    Front-month September reformulated gasoline blendstock, or RBOB, fell 2.47 cents, or 0.9% to $2.8392 a gallon. September heating oil slid 2.19 cents, or 0.7%, to $3.1018 a gallon.

    —By Gregory Meyer, Dow Jones Newswires

94. Oil green.

95. RIG – $130 looking like a bit of a ceiling. Will likely add another lot if it breaks on through.

96. Huge amount of leverage on the HAL $50 calls, been watching the move from $0.20 to $0.33 today on a < $1 swing in the common. May add $50s or $47.50s to my $45 call position.

97. Rig breaking through $130 and running a bit now. Same going to happen to HAL I think.

98. NOV through its 20 day sma having just bounced off its 200 day. Will take some $80 calls here.

99. ZTRADE: Added NOV September $80 calls for $1.85 (part fill) as per comments in the post and on improving sentiment towards the group.

100. If the low is in for oil then it should absolutely take off to the upside here – no messing about! A move above 117.40 would be the first indication.
     That said I remain doubtful at this time and other possibilities are still on the table at this time. We could be still in a complex 4th wave or we could be in ii up of v down.

101. mmr-+10%, exxi +13%- BB?

102. Reef – I got no idea. Could be strong energy stocks + people thinking BB is good. I take you aren’t hearing anything?

103. I think they dlayed an announcement till after the La sale today. Anybody have access to those results?

104. Reef – you mean these?

     http://www.gomr.mms.gov/homepg/lsesale/207/sale_207.html

105. MMR only had one bid but it was the high bid, don’t see the block yet.

106. Z: Thanks for your compelling workup on GMXR. It looks like you are not the only one thinking this partner can be best in show. PQ is quite a contrast. I can only come up with execution risk because of their quarterly miss. Is GMXR a more likely takeout candidate because of a very simple balance sheet. Do you feel the same about PQ? Is it just under loved for some other reason?

107. MMR bid on G32731, don’t have lease # map handy to tell you what block that is but I bet I know where it is

108. EGY [Vaalco Energy] up 7.85% on about avg. volume.
     Bounced off 200 day SMA a few days ago and just crossed 50 day SMA today.

109. Tom – I think PQ may be taken out for different reasons. They barely mention their Haynesville potential. PQ is often slow to get up off the mat compared to its rivals. I don’t think they get knocked over one quarter so much as having had so little to say on the call or in the pr. I think they go higher, but tough to play options…although I will be writing calls against my stock on this one too.

110. Crys – nice to see small and large moving. I don’t recall how their 2Q went but I thought I remember it being positive. That’s a pretty interesting name.

111. By Brian Baskin and Dan Molinski
     Of DOW JONES NEWSWIRES

     NEW YORK (Dow Jones)–Oil’s relationship with the dollar looks stronger than
     ever, but the two may be headed for a breakup that could give new headaches to
     investors already burned by the abrupt reversal in both markets.
     Hedge funds that bet on trends in oil prices and the dollar, as well as other
     markets,reported juicy returns of about 13% during the first six months of
     2008, according to the Chicago-based Hedge Fund Research. The investment
     vehicles, known as macro funds, “had positions that were primarily short the
     U.S. dollar and positive in terms of commodities,” said Ken Heinz, president of
     Hedge Fund Research.
     But their profits quickly dried up as oil prices turned south after peaking at
     $147.27 a barrel on July 11, and as the dollar began recoveringafter the euro
     hit a record high of $1.6040 four days later. Oil settled at $114.98 a barrel
     on the New York Mercantile Exchange Wednesday, while the euro was changing
     hands at $1.4739. Macro funds’ returns were a negative 5.5% in July. Through
     mid-August, their losses extended to about 9%, Heinz said.
     Even though the price of oil and the dollar’s exchange rate against the euro
     continue to move in sync, analysts say investors should be more wary about
     trusting the old rule of thumb regarding oil and the dollar. The outlook for
     each is diverging, with oil seen not having much further to fall, while less
     consensus exists around the dollar’s future.
     The uncertainty could spell trouble for those hedge funds still attempting to
     play the two markets against each other and makes the task of finding a direct
     correlation between the future paths of the two more challenging.
     “There is more to oil than the U.S. dollar and vice versa,” said energy
     analysts at Goldman Sachs in a research note.

     A Rocky Relationship

     Oil and the dollar have had an inverse relationship for the past few years –
     with crude prices climbing and the dollar falling – that wasn’t entirely based
     on wishful thinking by macro fund traders.
     Higher oil prices caused U.S. import costs to surge, hurting the economy and
     weighing on the currency. A weaker dollar also gave oil-producing nations less
     incentive to raise production levels in order to dampen oil prices because it
     eroded their returns from dollar-denominated oil.
     At the same time, the weaker dollar made buying oil much cheaper for investors
     in other currencies, partly fueling the massive inflows into energy markets in
     recent years.
     Take for instance June 5 and June 6, when oil jumped 13% and the dollar
     responded with its sharpest fall against the euro in months, giving up more
     than 2% during those two days and setting the U.S. currency up to fall to
     another all-time low against the single currency.
     But the oil price link to the dollar’s exchange rate is only one among a host
     of influences in these markets. Though moved by many things, the oil rally this
     decade has taken its cue principally from a perception that world demand is
     growing faster than new supplies. The dollar weakened as the U.S. economy was
     battered by problems in the housing market, with high energy costs only
     recently becoming a major factor.
     “If people trade it then they trade it,” said Harry Tchilinguirian, senior oil
     analyst with BNP Paribas in London. “That doesn’t mean there is a causal
     relationship.”
     When oil and the dollar track most closely, as they did earlier this year, the
     explanation is as much psychological as economic. A significant portion of the
     investment world piled onto two deceptively easy bets, that oil prices would
     rise and the dollar would weaken. The two trades fed off each other, as
     investors often used a rise in one as an excuse to send the other lower, and
     vice versa.
     Macro funds, which make up more than 15% of all hedge funds, pumped up the
     oil-dollar trade, and saw steep losses in July and August as a result. Not all
     hedge funds lost their shirts, however.
     Heinz, with Hedge Fund Research, noted that many speculative investors had
     slowly pared their bets against the dollar in the five months leading up to the
     currency’s impressive rally in August. Between March and August, the euro
     traded in a tight range between $1.53 and $1.60.
     Even those hedge funds still long on the euro when the dollar began to rally
     were able to quickly reverse their positions, said Daniel Goldman, chief
     executive of Chicago-based hedge fund Ketch Capital Management.
     “I know a lot of guys didn’t begin to sell euros until it was down around
     $1.53 or even $1.50,” Goldman said. He added, however, that when they did begin
     to sell, they sold big, which allowed them to recover much of their losses as
     the euro continued to trek lower.

     Two Paths

     Little in the outlook for the energy and currency markets would encourage
     macro funds to return to the oil-dollar trade now.
     “For the last two months there has been unwinding of that position, who would
     come back in to do that same play now?” said Michael Korn, president of Skokie
     Energy, a brokerage in Princeton, N.J. “It’s been played out.”
     The dollar, meanwhile, is continuing to look up. European and Asian economies
     are only now starting to suffer, just when perceptions are gathering that the
     U.S. economy may have bottomed, providing a firm foundation for the dollar. At
     the same time, global interest rate expectations – a key factor in currency
     markets – are beginning to work in the dollar’s favor.
     Although oil has dropped 22% from its July peak on weak U.S. demand, the
     long-term supply picture continues to provide support to prices. The U.S.
     Energy Information Administration cut its outlook for 2009 world oil demand
     growth by one-third last week, but still sees consumption increasing by 1
     million barrels.
     Some U.S. demand could also return at $100 oil, about the price where declines
     began to mount earlier this year. Others point to the increasingly high price
     needed just to maintain current production levels as evidence that oil does not
     have much further to fall. Producers need oil to trade at $85 a barrel or
     higher to maintain output, according to Credit Suisse.
     “At some point prices have to reflect underlying supply and demand
     fundamentals no matter what the dollar is doing against the euro,” said Nauman
     Barakat, senior vice president of global energy futures at Macquarie Futures
     USA.

     -By Dan Molinski; Dow Jones Newswires -By Brian Baskin; Dow Jones Newswires
     Dow Jones Newswires
     08-20-08 1511ET

112. Anyone know why WH had over 480k volume with little price movement? One of those things that don’t require a wrench or hammer gets me confused …

113. EGY –

     Strong quarter…Great cash flow. Drill bit finally starting to turn.

114. Z- Western Gulf Sale is offshore Texas, no LA, no Blackbeard

115. yeah, just noticed that. That bid was Brazos a23

116. Wyoming,

     Just a quick look at the 3 yr trendline (daily chart) shows it is up against it. Looks like there are enough people willing to absorb the buying pressure with their inventory that’s ready to sell (overhead resistance).

     Some of these other oil gas names are going to run into the same problem. Rehearse your fire drill.

117. Wyoming – buyers AND sellers. supply meeting demand.

118. Sorry,
     Dec to now on the time frame for WH. Like I said, quick look

119. By Gregory Meyer
     Of DOW JONES NEWSWIRES

     NEW YORK (Dow Jones)–Crude oil futures pushed higher Wednesday for a second
     day after the U.S. gasoline stockpiles dropped and traders dismissed a huge
     build in crude stocks as a one-off event.
     Light, sweet crude for September delivery settled 45 cents, or 0.4%, higher at
     $114.98 a barrel as it expired on the New York Mercantile Exchange. October
     Nymex crude, which becomes the front-month contract Thursday, settled at
     $115.56, up $1.02.
     Brent crude on the ICE futures exchange closed $1.28 higher at $114.53 a
     barrel. Brent settlement prices weren’t immediately available.
     The market bounced back from the lows that followed a government report
     showing U.S. crude stockpiles swelled a hefty 9.4 million barrels in the week
     ended Aug. 15, the largest weekly increase in seven years. A surge in imports
     to the Gulf Coast accounted for most of the rise, reflecting shipments blocked
     by Tropical Storm Edouard the prior week, analysts said.
     Traders discounted the jump and chose to focus on a 6.2 million-barrel decline
     in gasoline inventories, which was larger than the 2.4 million barrel draw
     analysts had expected. A 500,000-barrel gain in distillates stocks was on par
     with expectations.
     “The gasoline draw balances out the crude build,” said Michael Wittner, global
     head of oil research at Societe Generale in London. “And the (crude) stocks are
     what they are: if not for that storm, it wouldn’t be such an eye-popping number
     this week.”
     Lending early support to the crude market, Goldman Sachs reiterated its view
     that crude oil will reach $149 a barrel by year-end. The investment bank and
     leading energy trader expects slowing oil supply growth and rising demand in
     emerging economies to drive prices higher.
     Wednesday’s government data from the Energy Information Administration showed
     the U.S. consumed 20.2 million barrels of oil a day in the last four weeks,
     down 3% from the same time a year ago. With China’s industrial activity
     expected to pick up after the Summer Olympics end on Aug. 24, the pace of
     demand growth in the world’s No. 2 energy consumer has captured the market’s
     attention.
     “People continue to anticipate that after the Olympics we will see increased
     demand in many commodities,” said Edmund McNamara, a director on the commodity
     trading desk at Standard Chartered in New York.
     Crude has fallen more than $30 a barrel from its July peak, in part on
     increased supply from Saudi Arabia, the top exporter in the Organization of
     Petroleum Exporting Countries. In a separate report, the Energy Information
     Administration said the kingdom “may cut back on its recent increase in
     production, which could halt the most recent price decline.”
     The agency reiterated its view that crude prices may settle in a range of $120
     to $130 a barrel for the rest of the year, barring any new supply disruptions.
     Front-month September reformulated gasoline blendstock, or RBOB, settled up
     4.64 cents, or 1.6%, to $2.9103 a gallon. September heating oil settled up 3.98
     cents, or 1.3%, to $3.1635 a gallon.

     -By Gregory Meyer, Dow Jones Newswires Dow Jones Newswires
     08-20-08 1531ET

120. Sam: Thks for your US$ – oil article. Very interesting.

121. Sambone,

     Guy I know talked to a guy he knows, blah, blah. Any specific love or hate for STD?

122. exxi- Maybe Cote de Mer news…

123. DVN- time to sell. They are planning a 925′ tall skyscraper in Oak City.

124. Warren Buffett and Bill Gates flew into northeastern Alberta, Canada, yesterday (Monday) for a “quiet” visit to a multi-billion dollar project that, in effect, extracts oil from rocks.

     The Calgary Herald reports on its website tonight (Tuesday) that Buffett and Gates were impressed by their tour of the Canadian Natural Resources CANADIAN NAT RES LTDCNQ
     82.18 4.73 +6.11% NYSE

125. STD – Banco Santander?

126. Tini time

127. Hear ya Reef – often not a great sign. Maybe they need the space to take in an acquisition, lol.

     Beerthirty! Nice to see 2 whole straight days of ups with close near the HOD for the OIH and XNG.

128. Z, excellent let try for a Thursday repeat of today.

129. Sam – The CNQ project Buffett visited was the first phase of the Horizon oil sands project which I believe is due for startup by the end of 2008 and will be producing ~110,000 bbl/day (this is also going to be the start of the drain of nat gas from Canada due to new startups in Fort McMurray).

     CNRL’s facility is essentially the same as the Suncor facility and uses delayed coking. It is proven technology and they have gathered lots of people and expertise from Suncor. Future phases will expand the project significantly although cost increases are insane right now so they might be delayed from what is currently quoted on the website.

130. Sam,
     If you are still around, yes Banco Santander. Supposed to be a lot that does not meet the eye on this one. Thought you traded the banks, so I figured I’d get another opinion. No hurry, it needs a pop up before I’d try a play.

131. If Z asks me nicely and people are interested I could maybe write a knowledgeable article about oil sands mining/upgrading. I could maybe spend some time on a relatively simple version (compared to operation) that outlines everything.

132. V – pretty please.

133. No problem, but give me a bit so that I do it properly.

134. Seriously, thanks V.

135. VTZ, that would be great.

136. FAY HAS MAINTAINED A WELL-DEFINED STRUCTURE ON SATELLITE AND RADAR
     DURING THE PAST SEVERAL HOURS. THERE ARE NUMEROUS RAINBANDS
     SPIRALING AROUND THE CENTER BUT THE CYCLONE LACKS AN INNER CORE.
     SURFACE AND RECONNAISSANCE DATA INDICATE THAT THE INITIAL INTENSITY
     REMAINS AT 45 KNOTS. ALTHOUGH UPPER-LEVEL WINDS ARE VERY FAVORABLE
     FOR STRENGTHENING…THE INTERACTION WITH LAND SHOULD ONLY ALLOW SOME
     SLIGHT STRENGTHENING…IF AT ALL.

     FAY HAS BEEN MEANDERING FOR THE PAST SEVERAL HOURS BUT IT BEGAN TO
     DRIFT NORTHWARD IN THE PAST HOUR OR SO. THE MID-LEVEL RIDGE
     DEVELOPING NORTH OF FAY IS ALREADY BLOCKING ITS NORTHWARD
     PROGRESSION AND FAY SHOULD SOON BEGIN TO MOVE VERY SLOWLY TOWARD
     THE NORTHWEST AND THE WEST-NORTHWEST. THE MOST SIGNIFICANT ISSUE
     REGARDING THE SLOW MOTION IS THAT FAY WILL LIKELY CONTINUE TO DUMP
     TORRENTIAL RAINS ALONG ITS PATH…AND WILL PROBABLY BE REMEMBERED
     AS A VERY WET STORM. THE TURN TO THE NORTHWEST AND WEST-NORTHWEST
     KEEPING FAY OVER LAND IS CONSISTENT WITH MOST OF THE GLOBAL MODELS
     AND TROPICAL CYCLONE TRACK GUIDANCE. ONLY THE ECMWF MODEL BRINGS
     FAY OVER THE WATERS OF THE NORTHERN GULF OF MEXICO.

137. You those interested in gold, here’s a link to a Seekingalpha article that attempts to explain why the price of gold is falling on the metals exchanges at the same time that it has become very difficult (at times impossible) to buy physical gold or silver. Even the US Mint has suspended sales of gold and silver ealges, because they can’t get bullion in quantity. Welcome to our Orwellian world!
     http://seekingalpha.com/article/91357-the-disconnect-between-supply-and-demand-in-gold-silver-markets

138. Z,and all,

     Pardon me all, my joy is showing.

     After cascade extreme,
     my screen has gone green.
     Where have you been,
     long time no seen.

     Should have gone down
     if followed same patterning.
     But no, it went up!
     Blessed end to the battering.

     Sentiment says there is something anew.
     Maybe this downphase is over, whew!

     ‘Heart says it’s over.
     It’s no shake and bake!
     ‘Head says $10 bbl lower.
     Another head fake!

     Even if so.
     The end is in view.
     my fear has gone low,
     that portfolio falls into the loo.

139. Mahout = priceless.

     At the 11 est check on Fay. Starting to think it may have a shot at the gulf yet. From the NHC:

     FAY HAS PULLED UP STATIONARY WHILE CENTERED ONLY ABOUT 20 N MI OFF
     THE EAST COAST OF CENTRAL FLORIDA…AS SHOWN BY NWS WSR-88D
     RADAR DATA AND CONFIRMED BY AN AIR FORCE RECONNAISSANCE AIRCRAFT.
     DURING THE PAST SEVERAL HOURS THE RADAR PRESENTATION OF THE STORM
     HAS OCCASIONALLY LOOKED FAIRLY IMPRESSIVE…WITH CONVECTIVE BANDS
     WRAPPING AROUND WHAT ESSENTIALLY QUALIFIES AS AN EYE. WSR-88D
     VELOCITIES ALONG WITH FLIGHT-LEVEL AND SFMR DATA FROM THE
     RECONNAISSANCE AIRCRAFT SUPPORT AN INTENSITY OF 50 KT. THE MOST
     RECENT COUPLE OF AIRCRAFT FIXES INDICATE THAT THE CENTRAL PRESSURE
     HAS SETTLED FOR NOW AT 994 MB. ANOTHER AIRCRAFT WILL INVESTIGATE
     FAY IN A FEW HOURS.

     A MID-LEVEL RIDGE DEVELOPING TO THE NORTH OF FAY OVER THE
     MID-ATLANTIC STATES SHOULD GET FAY MOVING GENERALLY
     WEST-NORTHWESTWARD…ALTHOUGH SLOWLY…WITHIN THE NEXT SEVERAL
     HOURS. BETWEEN NOW AND LANDFALL ALONG THE EAST COAST OF
     FLORIDA…SINCE ATMOSPHERIC CONDITIONS ARE CONDUCIVE FOR
     STRENGTHENING…THERE IS A SHORT WINDOW OF OPPORTUNITY FOR SLIGHT
     INTENSIFICATION. ONCE FAY MOVES BACK OVER THE NORTHERN FLORIDA
     PENINSULA TOMORROW…GRADUAL WEAKENING SHOULD COMMENCE. A GENERAL
     WEST-NORTHWESTWARD TRACK ALONG THE SOUTHWESTERN PERIPHERY OF THE
     RIDGE IS THEN FORECAST BY NEARLY ALL OF THE MODELS FOR THE NEXT FEW
     DAYS. THE MODEL CONSENSUS HAS SAGGED A LITTLE TO THE SOUTH…AND
     SO HAS THE OFFICIAL TRACK. ALTHOUGH THE FORECAST POINTS LISTED
     BELOW DO NOT EXPLICITLY INDICATE IT…THE EXACT FORECAST TRACK HUGS
     THE GULF COAST OF THE FLORIDA BIG BEND AREA AT 36 TO 48 HOURS. IF
     FAY ENDS UP MOVING FARTHER SOUTH THAN FORECAST…AND SPENDS MORE
     TIME THAN FORECAST OVER THE NORTHEASTERN GULF…IT COULD BE AT
     TROPICAL STORM STRENGTH A COUPLE OF DAYS FROM NOW.
     IF…HOWEVER…IT MOVES NORTH OF THE OFFICIAL TRACK…IT COULD
     WEAKEN FASTER THAN INDICATED BELOW.

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