Wrap – Week Ended 09/05/08

Holdings Watch: Slow, cautious week in trading and you know things are dire when my profitable trades center around entries into the refiners and calls on (DUG), the double short energy ETF.

  • DUG Sept $38 Calls sold up 40% on 9/3
  • DUG Sept $40 Calls sold up 31% on 9/5

On To The Wrap:

1) OPEC Watch: All eyes are on the cartel this week as they meet on Tuesday to decide the fate of member quotas. My sense is that this meeting will see no changes to quotas but instead result in more talk of quota discipline. Venezuela and Iran, both price hawks, will argue for cuts and not get them.

2) Cracks Continued To Bottom Last Week. Look for product prices to reflect the track of Hurricane Ike this coming week. Right now Ike's track puts it on course to enter the heart of Gulf Coast refining country, which is still trying to get power back in the wake of Gustav. The independent refiners continue to find more favor among my current holdings than at any time in 2008.

3) Coal & Dry Bulks Got Hammered Last Week. Anecdotal evidence out of China indicates that the country did not flip a switch and start adding to its depleted coal stocks after the Olympics. I would expect them to start soon but its hard to get solid data out of that quarter of the globe and this may be a play to get both commodity and shipping costs down.

For MD: Weekly and Monthly Gasoline Demand Data. They look like they trend together pretty well.


15 Responses to “Wrap – Week Ended 09/05/08”

  1. 1
    zman Says:

    MD – I’ll put the monthly vs weekly gasoline chart up this after noon.

  2. 2
    zman Says:

    Freddie and Fannie seized by the government:


  3. 3
    Pete Says:


    You may like this site for weather. I find it is a composite of other weather sites and sometimes more current.


  4. 4
    zman Says:

    Thanks Pete – will file under weather commentary. I think right now my favorite sites are Ham, crown and the fox compilation on the weather tab.

  5. 5
    zman Says:

    Oil opening up $2 plus on Ike track. Wonder impact of the Freddie /Fannie news on $.

  6. 6
    apbd Says:

    Does this suggest strong opening on SPY and DIA?

  7. 7
    john11 Says:

    SPY futures up 2.4% and DIA futures up 2% in sunday nite trading.

  8. 8
    zman Says:

    Thanks john11

    MD – I’ve added a weekly vs monthly gasoline demand graph to the bottom of the wrap above. They track pretty well.

    Oil up $2.20, NG up 21 cents

  9. 9
    zman Says:

    APBD: At 5 til 9 PM EST Sunday night:

    SPY up 2.68%
    Gold up $16
    Crude up $2.53 (up 2.4%)
    Gasoline up 11 cents (up 4.2%)
    NG up $0.24 (up 3.2%)

  10. 10
    apbd Says:

    Thanks, Z, See you in the morning.

  11. 11
    md Says:

    Any chance to find opportunities off Gustav hangover and Ike when market opens. If Rita is any indication your TSO will be very timely. Which NG producer will be the most to gain.

  12. 12
    zman Says:

    MD – safest E&P names would be the onshore, domestic gas players. Biggest % moves probably in things like GMXR, GDP and HK. A bit less trendy but also due a bounce would be CHK and SWN. I’m avoiding names with Rockies exposure for now so that leaves out PXD (who is dirt cheap but no one cares) and BBG. NFX has an analyst meeting in NY this week and the stock did well last week after their Lehman presentation. SD has had the gas knocked out of it as well and is probably due a bounce. And then there is OII ….Ike set to pass through the biggest mass of platforms in the Gulf on center of current tracks.

  13. 13
    Bleemus Says:

    OPEC considers cutting oil production….


  14. 14
    zman Says:

    Bleemus – saw that earlier, I think the part about the Saudi’s considerations are the most important.

  15. 15
    Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Monday Morning – Ike and OPEC Loom Says:

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