Tuesday – Can We Possibly Get Three Green Days In A Row?


Sentiment Watch: Guarded.

  • Fed creates TALF, Term Asset-Backed Securities Loan Facility, in an effort to jump start lending to consumers. The $200 billion TALF (come on guys, get better acronyms) is "designed to increase credit availability and support economic activity by facilitating renewed issuance of consumer and small business ABS at more normal interest rate spreads."
  • Revised 3Q GDP: down 0.5% from prior 0.3% but better than the 0.6% expected.
  • Futures liked the Fed's move and the GDP number enough to overcome early weakness but the predilection seems to be to sell the rally, sooner (this morning) or later (tomorrow morning) as Fed's cold medicine supplies a quick does of euphoria before the symptoms of the ailing economy re-assert themselves. 

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Stuff We Care About Today
  4. Odds & Ends

Holdings Watch: - The Wiki Tab is updated; $10KP now at $9,400; 30% cash.


  • (XOM) - $10KP TRADE Out XOM $75 December Calls for $7.25, up 119% since entry on Friday. I continue to hold the December $80 calls.


  • (EOG) - $10KP Trade: Sold (3) EOG December $80 Calls (EOGKP) for $10, up 58%. Nothing against the name, just strong run and need to reposition.


  • (EOG) $10KP- Bought (3) December $95 Calls (EOGLS) for $3.10 with the stock up about $10 today and within $2 of a 2 month high.


  • (OIH) - $10KP - Bought (2) OIH $70 December puts (OIDXN) for $3.35 with the OIH up 10% at $81. The theory on shorting the broader group of service names while staying long the Majors and E&Ps and even the deepwater drillers goes something like, rig rates are falling, but only slowly as the last of the 2008 capital budgets are used up. When 2009 numbers roll around they will be lower, putting further pressure on the rig count, day rates and pricing for other services as the rigs stack up week after week after week. This may be a little early but with the run of the last 2 days I took a shot and I'll add to this position upon a third day of strength if that occurs.

Commodity Watch

Crude oil rallied $4.57 to close at $54.50 yesterday on the back of a strong equity market, a very weak dollar and on word from OPEC's president that compliance with the recent production cuts has been high (85%). This morning crude is trading off slightly after an earlier $3 move to the downside. While yesterday was the first time in November for the equity markets to close higher for a second consecutive day it was also the first time for oil to do the same. Look for equity markets to continue to dictate price direction for crude in coming weeks.

  • Early read on crude oil inventories:
    • Oil: up 1.1 mm barrels
    • Gasoline:  up 0.5 mm barrels
    • Distillates:  down 1.0 mm barrels
  • Dollar Watch: The dollar had its worst day in quite some time falling 2.5% as stimulus plans prosper and bailouts bloom. The U.S. simply can't continue to print money and expect an ever rising dollar. In fact, when credit starts moving again either via current Treasury plans or some future mechanism, the likely outcome will be a flight from the dollar and into other assets.
  • OPEC Watch: Cartel President Khelil said, "An oil price below $70 is going to make sure that lots of new projects are not going to come on stream," and "I think if we had a meeting today, 1 million bpd (cut) is not going to be enough,"
  • Non-OPEC Watch: Russia's oil minister said it cannot rule out cutting oil production in coordination with OPEC. Russia is either the first or second largest producer of crude on the planet  (varies from month to month with Saudi).

Natural gas closed up $0.32 to $6.83 on more cold weather and the strength in commodities. This morning gas is trading off about 2%.


Crack Spread Update: Just when you thought cracks could not get any worse...they do. If you look at the last graph in this series you can see part of the explanation for the out performance of (SUN); New York Harbor gasoline cracks have stayed positive while the other four regions have been negative or teetering on negative for weeks. This makes for a strong combined crack (gasoline + diesel) for the northeast, the backyard of (SUN). This is now faltering as well. One thing might be interesting this week is the sudden surge in the anecdotal evidence that people plan to drive to see their families for Thanksgiving now that prices have fallen so far. AAA had originally been looking for one of the worst driving holiday weekends in a decade this coming weekend but now it looks like low prices are finally enticing people to get back behind the wheel.


Gasoline Cracks Have Suffered Mightily.

Refining Multiple: Estimates for the group as a whole continue to slip. Notable exception is (SUN) but that only applies to 4Q08. Other than a possible near term trade on next week's gasoline inventory number I'm probably going to shy away from the group into year end as I suspect many of the names will be subject to overhead supply on rallies (due to the numerous failed attempts by analysts and investors to pick a bottom here) and tax loss selling on the subsequent weakness which could yield news lows by year end.

Other Stuff We Care About Today

PCA To Examine Investing In U.S. Refining Space. Might make (FTO) a target, will do a little digging today.

Analyst Estimate Watch: This is going to be a regular feature because I think its important to track the analysts as they adjust their price estimates for oil and gas (their "price decks"). Right now, analysts are too high in their forecasts for 4Q and 2009 oil and gas prices as you can see in the following graphs.

  • 2009 Street Oil Forecast Fell 10% Since Last Week. Over the last week, they did make significant progress in cutting their 4Q numbers which makes sense since the fourth quarter is nearly two-thirds complete. In the same time the 2009 strip rose 1% to $59.62.
  • Gas price forecasts were essentially unchanged last weeks as was the 2009 strip.

CHK Closes Marcellus Deal. Deal done quickly,  no change in original metrics, my guess is they wanted to say, "look market, we have the cash on hand" prior to year end.

Odds & Ends

Analyst Watch: Tanker stock (FRO) started at Sell at Goldman. Bulkers (OCNF) and (FREE) started at Perform at Opco, with (ESEA) picked up at Outperform.


83 Responses to “Tuesday – Can We Possibly Get Three Green Days In A Row?”

  1. 1
    Sambone Says:

    By Nick Heath

    LONDON (Dow Jones)–Crude oil futures shed more than $2 in European trade
    Tuesday on doubts that crude can sustain moves higher amid a weakening global
    economic outlook that threatens demand for crude.
    Equities continue to pave a path for crude prices, meanwhile, with crude’s
    intraday lows coinciding with an initial drop in European bourses.
    While crude prices were helped off their earlier lows by a recovery in
    equities, traders were nonetheless wary of fresh U.S. macroeconomic readings
    that could potentially pile further pressure on crude Tuesday, with U.S.
    third-quarter gross domestic product data due at 1330 GMT chief among them.
    “Traders might not get carried away with a pre-Thanksgiving rally today as we
    are faced with consumer confidence data, latest house price data and updated
    GDP data. All are likely to confirm negative trends,” said Rob Laughlin, energy
    analyst at broker MF Global in London.
    At 1155 GMT, the front-month January Brent contract on London’s ICE futures
    exchange was down $1.24 at $52.69 a barrel, having earlier dropped to $51.71 a
    The front-month January light, sweet, crude contract on the New York
    Mercantile Exchange was trading $1.48 lower at $53.02 a barrel, up from it’s
    $52.10 a barrel Tuesday low.
    The ICE’s gasoil contract for December delivery was down $7.00 at $546.50 a
    metric ton, while Nymex gasoline for December delivery was down 201 points at
    112.24 cents a gallon.
    While the Organization of Petroleum Exporting Countries’ president Chakib
    Khelil Monday appeared to scotch the possibility of a production cut being
    unveiled at the group’s consultative meeting in Cairo this Saturday, Libya’s
    oil head Tuesday said OPEC may still opt for a production trim, lending fresh
    uncertainty to the meeting’s outcome.
    Nonetheless, a production response from OPEC is widely anticipated, either at
    this weekend’s meet or the next scheduled gathering in Algeria Dec. 17,
    although the crude market’s current demand focus is likely to dampen an
    immediate market response, analysts said.
    “It will take time for the markets to become convinced of the OPEC cuts – very
    likely the second half of December or January, given six-week tanker transport
    times from the Persian Gulf to the US Gulf Coast,” said Michael Wittner, head
    of global oil market research at Societe Generale in London. “In the meantime,
    the fundamentals will be perceived to be weak, in line with the macroeconomic
    Underscoring the bleak outlook for the global economy, the Organization for
    Economic Cooperation and Development said Tuesday the economic downturn will be
    the worst since 1982, with 21 of its 30 members facing a long and protracted
    recession. It now expects the combined gross domestic product of its members to
    fall 0.4% next year, having previously forecast it would fall 0.3%.
    With the U.S. Thanksgiving holiday Thursday and the OPEC meeting over the
    weekend, market participants expect the week’s activity to wrap up early, most
    likely after weekly U.S. Department of Energy inventory data are published
    -By Nick Heath; Dow Jones Newswires
    Dow Jones Newswires
    11-25-08 0719ET

  2. 2
    Wyoming Says:

    Couple of comments:

    1. A funny thing happened on my way to the Expo … There was a Prius 4 Sale by I-20 near Tyler. No joke, had in big white crayon on the windshield “50 MPG”.

    2. One of my buddies/Comrad (for Taters new lingo) told me that a head hunter called looking to see if we were hiring.

    3. BOP, I’ll take it as a compliment being lumped in with the Old Timers … LOL almost got some coffee out my nose.

    4. To our Smith Engineer, hang tight about the cost reduction thing. Yearwood is probably one of the best to ride through a downturn in the service sector.

  3. 3
    BirdsofpreyRcool Says:

    z – great idea to track the analysts vs the strip. thanks for providing.

    The credit markets this morning have already lived through an entire trading day, it seems. First tighter (good), then wider (bad), now a lot tighter (better) on the lastest moves from our flip-flopping Credit Czars. Oh well, market seems to like it. Although, strangely, treasury bonds are also rallying. Treasury bonds almost always do NOT go up when stocks go up these days. A treasury rally is a “flight to quality, get me outta here” trade… so, one side (treasuries) or the other (stocks) is gonna get hurt today.

    Eco reports have come in more negative on the economy, but not more negative than expected. So, “good,” in the weird parlance of the street.

    IG was all over the place this morning, but is now about 1 bps tighter from last night’s close.

    IG 257 -1bps.

  4. 4
    BirdsofpreyRcool Says:

    The Case-Shiller 20-City Home prices was just reported: prices are down 17.4% Year-over-Year for Sept. This is slightly more than the -16.9% expected… but, when numbers get this large, it’s tough to be precise. So, ballpark, i think it’s in line with expectations again.

    No suprise that housing prices are still falling. One need only to look at the graph of housing prices back to 1980 to see how far from the mean we drove from 1998 to 2006. We are seeing mean-reversion in action. It will continue. So, anyone who says that “home prices have bottomed” doesn’t know how to read a graph. (Graph avail on demand)

  5. 5
    BirdsofpreyRcool Says:

    For what it’s worth… the upper midwest is doing it’s part to support nat gas prices. It’s snowing again today.

  6. 6
    Jay Reynolds Says:

    MEND has allies… Pirates have “spokesmen”, so why not?


    Nigerian Rebels in Oil-Rich Delta Threaten to End Cease-Fire

    By Antony Sguazzin

    Nov. 25 (Bloomberg) — The Movement for the Emancipation of the Niger Delta, the main militant group fighting in Nigeria’s oil region, said it may end a cease-fire after a request to do so by allies in the area.

    The group, known as MEND, “has been contacted by its Delta state cousins to support is renewed fight against the military Joint Task Force,” it said in an e-mailed statement today. “MEND is mulling over the urgent request in the face of its cease-fire declaration but will have no choice other than to join the fray if the violence escalates.”

    While MEND declared a cease-fire on Sept. 21, it reported a skirmish with the military on Nov. 20.




    Total to Buy Heavier Crudes as North Sea Oil Supplies Dwindle

    By Nidaa Bakhsh

    Nov. 25 (Bloomberg) — Total SA, Europe’s third-largest oil company, is planning to source heavier crudes for its Lindsey refinery in the U.K. as North Sea supplies dwindle.

    “Total foresees a requirement for the ability to bring deeper draught vessels into Immingham Oil Terminal” and is investigating the possibility of deepening the approach to the Humber estuary, the Paris-based company said yesterday in an e- mailed statement.

    Total is planning to secure heavier, sour, highly sulfurouos crude grades from the Middle East and Russia as it shifts from using light, sweet oil from the North Sea, it said.


  7. 7
    zman Says:

    ZTRADES: $10KP

    For a quick trade: (5) XOM Demcember $85 calls (XOMLQ) for $1.73 with the stock about flat on the day.

    For a longer term repositioning: (3) XOM April $95 calls (XOMDS) for $3.10.

  8. 8
    BirdsofpreyRcool Says:

    z – those were new buys, correct?

  9. 9
    zman Says:

    JR – pretty funny that MEND says it is threatening to end the ceasefire. Ceasefire? Hmmm.

    BOP – yes.

  10. 10
    zman Says:

    Dollar sinking for a second day, down almost 1% from up in the pre market. Could be the beginning of a new move there. Odd now favorable reaction for oil which so far this morning is putting the kibosh on a move higher with the broad market for many of the energy names. Energy indexes all show green up 1% but that doesn’t reflect the amount of red I see.

  11. 11
    BirdsofpreyRcool Says:

    Again, treasury mrkt not buying the stock market rally. Someone is going to end in tears here.

  12. 12
    Sambone Says:

    Any other time this would spike crude, oh well.

    LAGOS (AFP)–Nigerian troops clashed with militants in the restive oil-rich
    Niger Delta, who suffered “serious casualties,” local army spokesman Lt. Col.
    Rabe Abubakar said Tuesday.
    He said the militants came in some 30 speed boats Monday to attack soldiers at
    Okwabge in the Ughelli area of Delta state.
    “The attack was…successfully countered with no casualties on (our) own side,
    but (we) inflicted serious casualties on the militants,” he told AFP.
    He said the Joint Task Force protecting oil personnel and facilities in the
    region also seized ammunition from a “notorious militant,” Osaisai Digieneni
    Timi, who was arrested in the neighboring Bayelsa state Monday.
    Abubakar said three illegal local oil refineries operated by militants in the
    region had been destroyed in another operation.
    “This is in continuation of the JTF’s fight against illegal bunkering –
    stealing of crude for sale to foreign vessels – in the Niger Delta,” he added.
    Officials say that millions of dollars are lost daily in crude oil stolen in
    the Niger Delta, home to Nigeria’s multi-billion-dollar oil and gas industry.
    The gunmen also regularly carry out kidnappings and robberies.

    (END) Dow Jones Newswires
    11-25-08 0915ET

  13. 13
    Sambone Says:

    By Jacob Gronholt-Pedersen and Gurdeep Singh

    MOSCOW (Dow Jones)–Russia Tuesday indicated that it may cut oil production in
    tandem with Organization of Petroleum Exporting Countries to support prices.
    Analysts, however, said Russia’s output is likely to continue to fall, in any
    case, as producers cut capital spending.
    Speaking on the sidelines of a conference in New Delhi, India, Russian Energy
    Minister Sergei Shmatko said Moscow would actively coordinate with OPEC to
    determine production levels and protect its interests as a major producer.
    “(It includes) the exchange of information on market development and the
    finalizing of investment programs. We can’t rule out cutting production as
    well,” Shmatko said.
    OPEC member states meet Saturday to discuss lowering production, with oil
    prices now around a third of the record levels they reached in July.
    The cartel has already made two output cuts totaling 2 million barrels a day
    in separate decisions in September and October. Venezuela, OPEC’s third-biggest
    producer, supports a third cut.
    “OPEC is discussing measures to protect the current oil market and reduce
    production,” Shmatko said.
    “Today, oil prices are not determined in a traditional way, that is, by demand
    and supply, but influenced by the economic slowdown and speculation on
    hydrocarbons,” he said.
    Russia asked to broaden its cooperation with OPEC at a meeting in Vienna
    earlier this year and said during a recent visit to Moscow by OPEC
    Secretary-General Abdalla Salem El-Badri that it may store some oil to buoy
    But with Russia’s oil output down 0.5% in the first ten months of the year to
    9.8 million barrels a day, and with further declines likely, such steps may not
    be necessary.
    “The fact that Russia’s oil production is already in a decline comes in very
    handy for the government,” said Chris Weafer, chief strategist at investment
    bank UralSib, which sees Russian output falling 2%-5%, or up to 400,000 barrels
    a day, next year.
    Indeed, companies like OAO Lukoil Holdings (LKOH.RS), TNK-BP Ltd. (TNBP.RS)
    and OAO Gazprom Neft (SIBN.RS) have all reined in billion-dollar capital
    expenditure programs for 2009 as Russia grapples with its worst financial
    crisis in 10 years and global crude prices hover around $50 a barrel.
    Helping lift oil prices higher would improve Russia’s relationship with OPEC.
    But higher prices are also vital for budget revenue and for Russia’s trade
    Russia’s 2008 budget is based on an average oil price of $70 a barrel, which,
    despite the recent weakness, should be achievable.
    But next year envisages $95 a barrel which, if not achieved, would put
    pressure on budget spending and the ruble.
    Shokri Ghanem, head of the Libyan National Oil Co., told Dow Jones Newswires
    Tuesday that Russia had a very important role to play in determining oil
    prices. “It has a very good stake in the market.”
    Asked if there were ongoing talks between OPEC or its members and Russia over
    a joint cut, he said Russia “has an interest” in coordinating with OPEC. “It’s
    normal there should be contacts” between this country and the oil-producing
    cartel, he said.
    But Ghanem said he didn’t know whether OPEC members would call on Russia to
    lower output.
    “Members will share views on the market Saturday. We don’t know” what the
    outcome will be.
    Russian Energy Ministry Web site: http://www.minenergo.com
    -By Jacob Gronholt-Pedersen and Gurdeep Singh, Dow Jones Newswires (Benoit Faucon in London and Andrew Langley in Moscow contributed to this

    Dow Jones Newswires
    11-25-08 0829ET

  14. 14
    zman Says:

    BOP – stocks still trying to pick a direction, volumes look light, looking people to pack up and go home after today. Tomorrow’s going to be very thin. B-team traders on board with little appetite for risk aversion.

  15. 15
    BirdsofpreyRcool Says:

    IG 248 -10 bps. The IG has decided to side with stocks, not treasuries.

  16. 16
    BirdsofpreyRcool Says:

    Consumer Confidence came in waaaay higher than expected… 44.9 vs 38 exp’d. Wow… what are they so confident about again?

  17. 17
    zman Says:

    Just a guess but much lower gasoline prices and a new administration (don’t laugh, some people are).

  18. 18
    BirdsofpreyRcool Says:

    z – this is the textbook “sloppy market.” It could go either way. Could be a “stopped clock mrkt.” Just pick a price or direction, you’ll be “right” at some point during the day. But, you’re totally right. The B Team is on the field. The A Team is running errands in Greenwich today. (“What wine goes with turkey again?”)

  19. 19
    BirdsofpreyRcool Says:

    z – i know it sounded like a political comment… it was really centered around the credit market. We have fallen so far, so fast, so deep… with no “relief” (TARP or any other form), that it’s tough as a bond person to see what people are so happy about.

    No credit market, no stock market. Irrespective of what people “feel” or what stocks do. Just passing along the facts.

  20. 20
    zman Says:

    BOP – didn’t take it that way but this week I really don’t care, lol. Be effusively political if you wish, I just don’t like it if we take it down the wrong path. For instance

    “Obama is probably going to mean higher oil prices as he’s anti Big Oil, anti-drilling, and likely to cause producers to constrain spending more than a Republican would” – I think that’s a fair statement…in fact, it was said by me so of course its ok.

    “Obama is a Dumocrat” – that’s just stupid and unproductive and not, I’m pretty sure, an investment theme.

    Tater – If you are around, thanks again on the EOG thoughts. Glad to know my simplistic approach is sometimes right, even without all the squiggles. EOG at $85 now.

  21. 21
    zman Says:

    Anybody see a broker comment on XOM this morning or yesterday?

    It started underperforming COP and CVX yesterday and though it is more expensive than those names the divergence is somewhat pronounced. It did outperform them earlier so perhaps they are just playing catchup. But if you see a note, please pass it along. Thanks.

  22. 22
    zman Says:

    Can someone get a hook for Paulson. I mean, keep him off TV for more than 15 minutes. That would be great.

  23. 23
    BirdsofpreyRcool Says:

    z – hmmm…. i can’t seem to quite get it right with you today. I didn’t think you thought i was making a political statement, but I did want to clarify the basis for my exclamation.

    We’re good now.

    P.s. Waxman is NOT a positive replacement for Dingell. He is a west-coast, Beverly Hills idealist. Pragmatists are usually better policy setters in the long run.

  24. 24
    BirdsofpreyRcool Says:

    It must be tough to wake up every morning and realize you are Paulson, if you are Paulson.

    He is so: Get me outta here!!

  25. 25
    zman Says:

    You’re right, he’s an unblinking tree hugger. Just thought it would be nice to have someone tackle the conservancy side of the equation as the undying hatred for the producers was already a given.

  26. 26
    zman Says:

    Well, he did shoot Lehman in the head, surely someone will give him a seat for that alone, lol.

  27. 27
    BirdsofpreyRcool Says:

    Gee… “no magic bullet”… Paulson says the most reassuring things.

  28. 28
    zman Says:

    NG is very range bound. Big moves in both directions. Today down 31 cents. I’d say this looks like bottoming action (and a move with oil) but its hard to say. We get storage numbers a day early there and we have to get a withdrawal. Were we to see an injection you’d be looking at a $5 handle in a heart beat.

  29. 29
    zman Says:

    I would pay for the hook. Can’t he just go quietly into thither board seat somewhere?

  30. 30
    zman Says:

    FYI – for those of you who miss Nicky, she has been wrapped up with family, an understandable condition this time of year. She’ll be back when possible.

  31. 31
    BirdsofpreyRcool Says:

    z – #25…. ha! The old Treasurer of ARCO (in the 1990s) was a “tree hugger.” It ain’t bad to support nature… Birds of prey LOVE nature (and gas-efficient vehicles!)

  32. 32
    BirdsofpreyRcool Says:

    IG 243 -15 bps so far. Still supportive of a stock market rally.

  33. 33
    Popeye Says:

    NG gas numbers tomorrow, is that correct?

  34. 34
    BirdsofpreyRcool Says:

    IG 245 -13bps

  35. 35
    zman Says:

    NG # tomorrow at 12 EST

  36. 36
    benbobby Says:

    Zman, recently, site is much slower loading/updating tks

  37. 37
    zman Says:

    BB – third party vendor having a little glitch on occasion last couple of days. Have noticed it myself a couple of times yesterday and today, usually clears up in a day or two. Thanks.

  38. 38
    BirdsofpreyRcool Says:

    IG 248 -10bps. the Red Team takes the field for now.

  39. 39
    tomdavis12 Says:

    How the bailouts work: Chuck moved to Texas and bought a Donkey from a farmer for $100. The farmer agreed to deliver the Donkey the next day. The next day, the farmer drove up and said, “Sorry son, but I have some bad news, the Donkey died.” Chuck replied, “Well,stuff happens. Just give me my money back.” The farmer said, “Can’t do that. I went and spent it already.” Chuck said, “OK, then just bring me the dead donkey.” The farmer asked, “What ya gonna do with him?” Chuck said, I’m going to raffle him off.” The farmer said, “You can’t raffle off a dead donkey!” Chuck said, “Sure I can, watch me. I just won’t tell anybody he’s dead.” A month later, the farmermet up with Chuck and asked, “What happened with that dead donkey?” Chuck said, “I raffled him off. I sold 500 tickets at two dollars a piece and made a profit of $898.” The farmer said, “Didn’t anyone complain?” Chuck said, “Just the guy who won. So I gave him his two dollars back.” Chuck now works for Goldman Sachs.

  40. 40
    BirdsofpreyRcool Says:

    IG 250 -8bps

  41. 41
    zman Says:

    Tom = lol.

  42. 42
    zman Says:

    Credit Suisse cuts SU target from $50 to $46. This with the stock at $18.50.

  43. 43
    Sambone Says:

    From Art Cashin’s comments today;

    Holiday Notice
    There will be no Comments on November 26, 27, 28 as
    Wonder Woman becomes the Duchess of Domesticity.
    Wednesday paring, peeling, and preparing; Thursday
    Cooking and carving; Friday scraping and scouring.
    (So, since the brains of the operation is out –
    There’s no sense writing Comments.)

  44. 44
    zman Says:

    Sam – now that’s a smart guy.

    Energy news = nada on the micro. On the macro, numbers coming out tomorrow likely amount to 30 minutes of volatility and then hit the elevator and worry about it next week.

  45. 45
    BirdsofpreyRcool Says:

    Stopped Clock Market.

    I am going to go find out what wine goes with turkey.

  46. 46
    zman Says:

    Ram – If you have any Turkey wine suggestions please speak up.

  47. 47
    zman Says:

    Market actually looks like it wants to rally. After 2 days and nearly a thousand points added to the DJIA, that’s odd.Can’t recall the last time the broad market put together 3 green days but I think it was in September.

    HK – cut by Tristone to Perform four OutP. I have to say if you are cutting it at this point, you are giving them 0 credit for the Eagle Ford, and little for any upside to the Haynesville. Kind of hard to get to an NAV twice this low.

  48. 48
    BirdsofpreyRcool Says:

    IG back down to 245 -13 bps

  49. 49
    zman Says:

    Here’s an example of how messed up the Street is on the producers right now. They are all adjusting their price decks or about to.

    Today on SU

    Genuity cuts target from 52 to 42
    Tristone cuts target from 51 to 26
    Credit Suisse cuts target 50 to 46

    So depending on how big an axe you take to your commodity price estimates it will either shave or slash your targets

    Probably explains the hit they put on HK although that’s gas and not oil.

    Anyway, the Street has already taken it out of the hide of the stocks’ prices and its good to get the analysts out of the way so there isn’t that shoe to drop.

  50. 50
    zman Says:

    Like watching paint dry. I would expect more of the same with maybe one sharp break one way or the other. If it rallies, I’ll take more OIH puts.

  51. 51
    PackMan Says:

    UNG getting whacked

  52. 52
    zman Says:

    Re UNG. Stuck in a trading range, see 28

  53. 53
    PackMan Says:

    could this be playing a part in UNG selloff ? 10:30 am article


  54. 54
    zman Says:

    Pack – Hmmm. Those guys talk about the ETFs like they are independent from the underlying commodities. What the ETF has done to date has nothing to do with what it will do in the future. Oil is off 6% after a bigger rally yesterday. Gas is off 6% too. This week’s weather is a little warmer than last, that’s part of it. Injections have been bigger than expected and we get another report tomorrow. I have not yet seen what the Street is expecting but I’m looking for a draw down. If we get another surprise that would be bad for gas so there is some pullback in gas today in front of the number.

  55. 55
    mahout Says:

    Tom #39,

    I think i bot one of those tickets.
    Always looking for a good deal.


    I know absolutely nothing about TA, but i took a glance at a GMXR chart and it looks like it’s almost a double bottom. Does almost count? I’m serious, does it have to have the low prices coincide perfectly to qualify as a DB? Remember old GMXR? It looked like a sure winner at 62, but then the world changed. Now at the 27 level it’s a different world. I know they have too much debt but i’m keeping my eye on it anyway.

  56. 56
    Bleemus Says:

    On the wine question. It’s not so much the turkey, it’s the sides you have to match. Brussels sprouts w/pancetta, sweet potatoes with marshmallows (I never got that one) or heaven forbid…the dreaded turnip ( not in MY house!).
    Many people do zins…an american grape for an american holiday. They have the body to stand up to weirdness. Syrah is another good choice. It brings out sweetness which is why it’s so good w/BBQ or lamb. Pinot Noir goes with all food but with that you need to find a fuller bodied one, something from the pacific northwest is a good choice. We are having the Abundace Zinfandel from Lodi CA.

  57. 57
    PackMan Says:

    Good points, as always, Z.

    I just find it curious when these articles coincide with a sell-off, which could be done to support short plays in the commodity itself.

    Maybe I am conspiracies where none exist !

  58. 58
    zman Says:

    SWN gameplan – I hold calls here over a wide range. Good number on gas out of the EIA tomorrow will likely get me to stay. Bad numbers and I’ll kill off the $45s. Really good (big, big withdrawal) and I’ll kill all of them off into the close. Full day of trading tomorrow which is pointless but there ya go.

  59. 59
    zman Says:

    Oh how much things have changed.

    Goldman starts FRO at Sell and the stock rises. That used to be cruelest blow for an energy name coming from that firm. No more.

  60. 60
    zman Says:

    Dow off 100 suddenly.

    Like how this plays out:
    XOI down 0.2%
    XNG down 0.3%
    OIH down 2.0%

  61. 61
    zman Says:

    XOM still acting funny compared to peers, no one sees a news item from an analyst?

  62. 62
    Sambone Says:

    Z – Nothing on my screen to show negative on XOM. Something about charities (2.49M) and something on Wildlife.

  63. 63
    tater Says:

    EOG comments: I’m usually making fun of myself when I say stuff like “obvious” because I feel like I’m not adding anything to the knowledge of the people who look at my work. So please don’t feel like I’m condescending at anybody, quite the opposite, sometimes I feel like I’m wasting people’s time. One other caveat, everybody please remember that TA is no science. Just like looking at fundamentals and projecting future earnings estimates, it is very subjective. I stand by my efforts, but it doesn’t mean it’s going to come true, and even if it does, you still have to figure out how to trade it.
    Good example today for me. I had a proper read on today’s oil sell-off, luck or whatever I still had it right, but then I got cute and traded the wrong vehicle to take “extra” advantage of the down swing. My money. My bad. Anyway, just trying to stress the “look at TA at your own risk” side of the coin.

    Mahout, I will give GMXR a look see.

  64. 64
    Sambone Says:

    Z – XOM, Don’t think this is it from late yesterday.

    By Bernd Radowitz

    MADRID (Dow Jones)–About $400 billion will be needed to develop Brazil’s
    promising pre-salt oil area over a 10-year period, according to a preliminary
    estimate, Haroldo Lima, the president of Brazil’s National Petroleum Agency, or
    ANP, said Monday.
    The estimate is based on calculations by the ANP, Brazil’s state-run oil firm
    Petroleo Brasileiro SA (PBR), or Petrobras, and Brazil’s government, Lima said.
    He spoke to Dow Jones Newswires ahead of the Brazil-Spain Investment Forum in
    Oil found in the area lies usually at water depths of 2,000 meters or more,
    and then several thousand meters further under layers of salt, rocks and sand,
    which makes production expensive and challenging.
    According to preliminary estimates, the pre-salt could contain between 50
    billion and 70 billion barrels of oil, Lima said.
    Due to recent discoveries, Brazil’s proven oil reserves likely jumped to about
    14 billion barrels in 2008 from 12.6 billion barrels in 2007, Lima also said,
    adding that the 2008 figure still isn’t consolidated. The ANP usually gives its
    annual reserve estimates in January.
    Spanish oil company Repsol-YPF (REP), Portugal’s Galp Energia SPGS SA
    (GALP.LB), BG Group (BG.LN), ExxonMobil Corp. (XOM), and Royal Dutch Shell PLC.
    (RDSA), have significant stakes in Brazil’s pre-salt area.
    Web site: http://www.anp.gov.br
    -By Bernd Radowitz, Dow Jones Newswires
    Dow Jones Newswires
    11-24-08 0633ET

  65. 65
    zman Says:

    Tater – I hear your caveat but I still appreciate your read on the charts.

    Sam – thanks, can’t find a thing, I suspect it’s just noise.

  66. 66
    ram Says:

    Well….. I thought of Thanksgiving as the ultimate challenge in pairing food and wine in my family gatherings. It’s not about what to serve, but the different personalities involved with who brings what and how the cheap person will drink up someone else’s good stuff. It’s very comical stuff.

    Thanksgiving is about good wines with great food and trying to enjoy family you haven’t seen in a while.

    Therefore, a consistent Sauvignon Blanc that seems to please many is made by Kenwood out of Sonoma. Kendall Jackson, Chateau St. Jean, Ferrari-Carano, and Meridian Vineyards make good value Sauvignon Blancs as well.

    If you must have Chardonnay as your white, then Kenwood, La Crema, Berringer, Byron, Chateau St. Jean, and Hess are all good values.

    For the must have red wine guys and gals: Have your big bold Cabernet Sauvignon or Syrah that will stain your teeth purple for days and have food as an after thought. Or, if you want to enjoy a relatively light red wine with great food, Pinot Noir can be a great match for Thanksgiving. Good value Pinot Noirs are made by La Crema, Chateau St. Jean, Kenwood, Edna Valley and De Loach.

    As I travel throughout the country, wine distribution is all over the place. The wines above are good value and well distributed. If you have a wine retailer in your area, always challenge them based on your taste. If they fail, let them know it, that’s how they learn.

  67. 67
    douglas51 Says:

    Jack Daniels goes with everything!

  68. 68
    Sambone Says:

    Home cooked “White lightin” aways works at our place.

  69. 69
    zman Says:

    as does Petron silver label.

    Wyoming seemed partial to Bud Light.

  70. 70
    zman Says:

    Call me crazy but the strength in energy today, if you can call it that on these light volumes, is pretty odd given the commodity retrenchments and a series of sector wide downgrades. Could be that the names have suffered enough. Gassy SWN and HK working well despite gas off 6.5% now and both downgraded by Tristone today. Hmmm.

  71. 71
    BirdsofpreyRcool Says:

    wow. Great wine comments… y’all are very clever (and funny) people.

    I especially like the one about “cheap people” vs “someone else’s good stuff.” Reminds me of the best way to start a wine collection: Throw a Holiday Open House… everyone will show up with a great bottle of wine. Key thing: do NOT open the wine at the party… Promise each and every person that you are going to save their gift “for a special occassion.”

    I think of “special occassions” as Mondays, Tuesdays, Wednesdays… etc.

    Anyway, I’ve discovered some really wonderful wines, hosting a party.

  72. 72
    tater Says:

    Posted the GMXR. I see what you want to call a double bottom but that’s not really as important as a couple other things. Last 2 charts at the link.


  73. 73
    BirdsofpreyRcool Says:

    IG 250 -8bps, backing up again

  74. 74
    zman Says:

    Stepping out for a funeral. See you tomorrow.

  75. 75
    VTZ Says:

    Still rallying.

  76. 76
    Sambone Says:

    By Brian Baskin

    NEW YORK (Dow Jones)–Crude oil futures fell sharply on concerns about weak
    demand, erasing most of the previous day’s rally.
    Light, sweet crude for January delivery settled $3.73, or 6.8%, lower at
    $50.77 a barrel on the New York Mercantile Exchange. January Brent crude on the
    ICE futures exchange settled $3.58, or 6.6%, lower at $50.35 a barrel.
    Oil prices had gained 9.2% Monday, as investor confidence soared in response
    to the government plan to bail out Citigroup Inc. (C). But a Commerce
    Department report Tuesday showing a 0.5% contraction in third-quarter gross
    domestic product provided a stark reminder the economic climate, and therefore
    future oil demand, remains grim.
    U.S. equities also failed to rally for a third day, after the Dow Jones
    Industrial Average rose nearly 900 points Friday and Monday. The oil market has
    followed equities closely over the last few weeks, using stocks as a leading
    indicator for the health of the economy.
    “When the stock market didn’t come surging out this morning and maintaining
    any new gains, a lot of oil traders started to get nervous,” said Peter Beutel,
    president of the trading advisory firm Cameron Hanover.
    Despite the gloomy economic outlook, demand is starting to recover, by some
    measures. Gasoline demand was down 3% from a year ago in the four weeks ended
    Nov. 21, the smallest such drop since the month ending July 4, according to
    MasterCard Advisors LLC, a division of MasterCard Inc. (MA).
    The U.S. Energy Information Administration’s closely watched demand data has
    yet to show signs of a rebound, however. Refined product demand was down 7%
    from a year earlier in the four weeks ended Nov. 14. Updated figures are due
    Wednesday, when the EIA releases its weekly oil and product inventory report.
    Oil inventories are expected to grow by 900,000 barrels in the week ended Nov.
    21, according to a Dow Jones survey of 16 analysts. Gasoline stocks are seen
    building by 100,000 barrels, and distillate inventories decreasing by 800,000
    “The market has been concerned about demand for the last few months, it’s
    probably the most important factor in the selloff,” said Andy Lebow, senior
    vice president for energy at brokerage MF Global Ltd. in New York. “Some
    (improvement) from the EIA (data), there’s at least a little ray of hope.”
    Front-month December reformulated gasoline blendstock, or RBOB, settled $4.76,
    or 4.2%, lower at $1.0949 a gallon. December heating oil settled 8.56 cents, or
    4.8%, lower at $1.6988 a gallon.

    -By Brian Baskin, Dow Jones Newswires

    Dow Jones Newswires
    11-25-08 1518ET

  77. 77
    BirdsofpreyRcool Says:

    Stopped Clock Market… everyone’s “right” at least twice a day!

  78. 78
    Hoss Says:


    “Do not drink too much. Do you hear me? I don’t want you passing out or going to the dark side. No going to the dark side!”

    Nice moves on MERpF +20% and CpG +50% since your mention.

    You still like CHKpE?

  79. 79
    mahout Says:


    Thanks much. Old GMXR doesn’t look so good on your chart. Doesn’t look like its got much chance with that strong resistance at 30. I’ll keep watching it though. The stock kind of intrigues me.

  80. 80
    Wyoming Says:

    Had to drive 3.5 hours home. A good Killeans Red or Shiner is always a must on any social occasion.

    Just wanted to remind folks about #2. Points 1 and 2 are key to me and my mid term future.

  81. 81
    BirdsofpreyRcool Says:

    hey Wyoming… missed the #2 post this morning, for some reason. Guess I didn’t mean to lump you in with the “old-timers” in some of my comments. But the old-timers (who i KNOW are old-timers) I talk to say just about the same things you do. So, there ya go. Sounds like you are just “wise for your age.”

    Thanks for your comments and observations. Helpful to have grounded information these days.

  82. 82
    zman Says:

    -66 Bcf

  83. 83
    zman Says:

    5,000+ centrifuges in Iran, up from 4,000 in August.


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