10
Jun

Wednesday – Oil Inventory Preview

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T Boone Pickens Watch:

  • I attended an hour long presentation from T Boone last night at the Clinton Center. 
  • First, things first. His oil price prediction:
    • $150 oil in 2 to 3 years.
    • $300 oil 10 years from now.
  • He told a story in which Candidate Obama told him he had a plan to have 1 mm plug-in hybrids on American roads in 10 years. TBP told Obama that Obama didn't understand the problem. Obama said that he meant it about the 1 million cars. TBP told Obama that while 1 million cars in a parking lot would look like a lot of cars,  the U.S. has 250 million cars already. Obama then said "1 million cars isn't a lot, is it?" They then talked about natural gas as way to "get the U.S. off foreign oil".
  • He is therefore confident the Obama Administration will see the light on natural gas as a transportation fuel. Here is a good place to insert the president's quote on energy:

"And for the sake of our economy, our security, and the future of our planet, I will set a clear goal as president: In 10 years, we will finally end our dependence on oil from the Middle East". Please  note that Nixon said this too, in 1970.

  • TBP made a good case for natural gas availability, defended the frac water question easily and the inevitable chicken and egg question of refueling infrastructure for CNG cars and trucks. Basically on this last one, he said gas will make inroads by having refueling stations open up as you add compressed natural gas garbage trucks and buses, and corporate fleets and  then move to the 18 wheelers (he expects to win (WMT) over and is in talks with all of the big trucking lines). The play here continues to be (CLNE).
  • In most things I agree with T. Boone as he is essentially in favor of using the resources you have and not increasingly leveraging energy depedence to ones you don't. Not to be xenophobic but I believe that a country that consumes as much energy as the U.S. does (about 25% of the oil produced each day with a population of just 4 to 5% of the earth's total) should work to make itself more independent. There has been no energy plan in this country and on the topic of a need for such a plan I am in absolute agreement with him.

Reality Check Watch: Three congressman introduced a bill that seeks to put frac water under the control of the Safe Drinking Water Act.  They say they want to have EPA regulate the drilling of each well and thus close down the so-called "Halliburton loophole".

In Today's Post:

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

Holdings Watch

  • $10KP: $30,300 / 38% cash
  • No trades yesterday

Commodity Watch

Crude oil rallied $1.92 to close at $70.01 yesterday on a weak dollar and little else. Crude is trading at it's highest level since early November.  This morning crude is trading above $71 after API released fairly bullish looking inventory numbers yesterday afternoon.

  • Saudi Watch:  Khurais Online. Saudi Arabia's 1.2 mm bopd Khurais field came on line yesterday. Completion of this field is the key to Saudi's goal of bumping their productive capacity to 12 mm bopd. It is unclear how quickly the Kingdom will ramp Khurais up and what this will mean with regard to their currently production quota. They have been making comments lately that oil has "risen enough" for now.
  • MEND Watch: Rebels claim to have attacked a (CVX) pumping station. The military claims a fire at the pumping station was the result of an accident. Chevron has not yet verified or denied Mend's claims

Natural gas closed unchanged at $3.73 yesterday, lifted to even by an end of day climb in crude.  This morning gas is trading up a dime with crude.

  • Early Read On Natural Gas Inventories: The Street is looking for an injection of 110 Bcf tomorrow.
  • Tropics Watch: Zip, nada, nothing.

Oil Inventory Preview

  • API Watch: After the close yesterday API reported:
    • Crude: Down 5.959 million barrels

      • Utilization up 1% to 84% (EIA was at 86.3% utilization last week which looked high given the tepid demand for crude last week and the low product production levels)
      • Imports: Down 0.51 million bopd to 8.518 million bopd.  (this is pretty low)
    • Gasoline: up 27,000 barrels
    • Distillate: up 19,000 barrels


ZComment: Normally during this time of the year we expect to see smallish draws on crude and smallish builds in gasoline and distillate inventories. This makes sense as demand isn't really at its peak yet as far as summer driving goes while refineries are gearing up for higher demand in the hotter months. On the distillates side, the complete lack of a heating oil market this time of year leaves inventories building for spring less what is used by trucks and trains and sent abroad. The export market at present is lousy and storage abroad is high as well so I don't see anything but bloated inventories for some time here.  But in the summer gasoline will have the greater influence on oil prices. When distillate demand does turn, look for another leg up in crude as it will be a major reversal of trend from levels that are as high as I have ever seen them. 

Stuff We Care About Today

PXD Eagle Ford Wrap

From my converstaion with PXD yesterday:

  • They are disappointed by the mechanical issue here. The well had to be sidetracked and the lateral ultimately was not where they wanted it (high in the Eagle Ford) and also not as exposed to as much of the Eagle Ford as planned (500 of 3,000 feet)
  • Everything looked good as far as rock quality and gas content…as expected.
  • This in no way changes their thoughts on the Eagle Ford Shale, or in this area. They plan to drill another well in close proximity to this one next year.
  • They didn’t have their 3D reprocessed when they drilled this well. They will for the next well.
  • The next well in the play will be drilled some 40 miles to the southwest in an undisclosed county in the third quarter.
  • They are sticking with the $6 mm figure for well costs here ($4mm to drill and $2 to frac) (first well is more expensive but it’s loaded with tests so that’s to be expected). He would not comment on an EUR but said the ranges out there (4 to 7 Bcfe per well were likely to be reasonable) and did not balk at all at $1 finding costs (which suggests a 6 Bcfe well at $6 mm.
  • Also looking at a potential drillsite to the north east.
  • Had no comment on APA’s well but had apparently been getting lots of questions about it.

Analysts got on board later in the day:

  • Simmons basically said too bad on the mechanical issue, we expect them to come up the learning curve by the next well.
  • Johnson Rice upgraded the stock to Overweight after stating the results were very respectable given the number of mechanical issues encountered in the well.
  • JP Morgan said the rate per frac stage completed was better than the HK wells to the west .

(ATPG) - I'll be putting together a piece here soon. Hopefully next week with this one.

Deal Watch:

APC Prices Senior Notes:

  • $900 mm senior deal priced in three tranches from 5.75% due in 2014 to 7.95% due in 2039.
  • Replaced portion of the $913 mm floating rate notes due in September 2009
  • Deal window remains wide open, rates are getting a lot better for senior debt.

 

Odds & Ends

Analyst Watch:

  • (FSLR) cut to Hold at Soleil

217 Responses to “Wednesday – Oil Inventory Preview”

  1. 1
    zman Says:

    The Frac Act:

    http://www.fwbusinesspress.com/display.php?id=10396

  2. 2
    zman Says:

    CVX on the tape confirming fire at their Nigerian pumping station that was reported to have been attacked.

    VQ on the tape bumping up 2009 guidance by 7% after completion of a workover program.

  3. 3
    BirdsofpreyRcool Says:

    Credit Market Open — inflation fears be damned…. full speed ahead!

    Good article in the WSJ by Art Laffer on pending inflation. Fed is between a very sharp rock and a very hard place. But, for now, we rally.

    IG 121

    HY 85 — 85!! wow. major positive sentiment going on there.

    Thoughts — if/when inflation raises it’s ugly head, companies who borrow a lot now (like APC last night) will be able to pay back in cheaper dollars in the future. The benefits of that will incrementally accrue to their equity. So, may not be a time to focus one’s portfolio with stocks of companies with no debt. On the other hand, you want companies who can pay down some of that debt, if they wish. Don’t want to be caught having to rollover term debt in a high interest rate environment. E&Ps with large land/reserve/P3 holdings should rise to the top of the list here, i would think.

    Comments/thoughts welcome here.

  4. 4
    zman Says:

    BOP – At that TBP speech I sat with the director of research for Stephens, he said their strategist’s biggest concern was a return to hyper inflation. By the way, the director also covers a handful of mortgage related stocks himself and thinks the administration will get rates back down one more time with a spending push before they really launch.

  5. 5
    1520sbroad Says:

    BOP – i thought the Laffer piece was a good one too. Definitely on the recommended reading list for the next 10 years.

  6. 6
    BirdsofpreyRcool Says:

    z — thanks for sharing. The mortgage comment makes sense. Pimco has kicked their mortgage portfolio out of bed, worried about the same thing. On the other hand, in a increasing interest rate environment, IO’s might be attractive (as opposed to PO’s)… that negative convexity thing going for ya…

    Some comments (TechTrader) in a sec… stuff going on.

  7. 7
    zman Says:

    CLNE on the tape getting a contract to supply the city of Phoenix with liquefied natural gas for its 400 bus lng fleet.

    Interesting stat from TBP last night. Replacing a diesel powered garbage truck with a NG powered one he said is the equivalent of taking the pollution of 380 cars off the road, due to all the starting, stopping, idling, and 12 to 14 hour days. He said the CNG garbage trucks cost $50k more apiece but then you can fall back on that 7 to 1 fuel ratio (7 gallons of diesel to 1 Mcf of gas).

  8. 8
    Denise Says:

    Good Morning,
    Thanks for the TBP update-I miss seeing him on TV- is not getting much airtime even in his home town

    For those of you that did not have the tube on at 6:15 this am-some pearls of wisdom from D Kass that include energy.
    worth watching

    http://www.cnbc.com/id/15840232?play=1&video=1147713447

  9. 9
    Denise Says:

    More Pappa K if anyone is interested

    Thursday, June 4, 2009

    UP AND DOWN WALL STREET DAILY
    The Market’s Formula: A Square-Root Rally
    By RANDALL W. FORSYTH

    After nailing a 40% surge since early March, Doug Kass sees “potholes” in the road ahead.

    LONG-TIME SHORT-SELLER Doug Kass shocked many of his followers by turning bullish at the beginning of March — just before the stock market took off on a 40% tear.

    Now, with the major averages up sharply from what he called at the time “generational lows,” the skipper of Seabreeze Partners sees the road ahead to higher ground strewn with potholes.

    Speaking at a conference presented by Barry Ritholtz, the money manager and author of the popular Big Picture blog, Kass recalled that when he made his bullish call in early March, stocks had been through their second-worst bear market ever in terms of price and multiple compression.

    Price-earnings multiples had fallen to levels consistent with 6% inflation, while 46% of the Standard & Poor’s 500 stocks paid dividend yields exceeding the Treasury 10-year note. Other valuation measures also were rock-bottom; stocks traded at 90% of replacement value while the market’s capitalization was just 78% of gross-domestic product.

    After the subsequent sharp advance, however, Kass says the market now has to face up to its limitations, including a synchronized world recession; the increased cost and burden of government regulation; the impact of the obliteration of the “shadow banking system;” greater government role in the economy; potential protectionism; continued aversion to risk; the impact from deleveraging.

    Indeed, the economy could face a double-dip starting late this year or 2010, he adds. Weak job growth, heavy consumer debt and higher taxes could take their toll. The transmission of credit remains clogged with corporate bond yields remaining high even after their drop, he adds.

    As for the market, Kass sees an uncomfortable rise in optimism. The latest readings from Investors Intelligence found the lowest level of bears among advisors since January 2008, he notes. “The same talking heads who were scared witless in March have turned back into perma-bulls,” he adds.

    At the core of this newfound optimism is the expectation of a revival of corporate profits, but Kass sees that as disappointing. In the first quarter, he notes about 63% of S&P 500 companies missed their revenue targets, but 67% beat their profits forecasts. Cost cuts — notably job cuts — accounted for that feat. But falling employment and income and rising saving rates are keeping a lid on spending.

    It all adds up to a “square-root sign shaped rally,” says Kass. He originally called for a move up to 890-950 in the S&P 500 (from its infamous intraday low of 666 in early March), which has been achieved. Then could come a break-out and a last gasp as institutions such as pension funds reallocate assets from fixed-income securities to equities. And that will be it, he says.

    As for his longs, Kass says the biggest banks — those “that suck off the teat of the Administration” — offer the best opportunities. Biggies such as Bank of America (BAC) and Wells Fargo (WFC) are enjoying huge deposit growth and massive net-interest margins from the steep yield curve. The exception: Citigroup (C), which he sees trading between $2 and $5 share, versus $3.39 at Wednesday’s close, for years.

    Meanwhile, Kass is shorting asset managers such as Franklin Resources (BEN) and T. Rowe Price Group (TROW) because of the likelihood of slow inflows from a disillusioned investing public. In addition, 110 S&P 500 companies said in the first quarter they would stop matching employees’ 401(k) contributions, a major source of funds for the asset managers.

    Kass, who describes himself as the “anti-Cramer,” says most people like to rationalize reasons to buy stocks when prices are going up. Now Kass is looking toward doing the opposite of the crowd — just as when he was buying ahead of the March lows.

    ——————————————————————————–

    Comments: randall.forsyth@barrons.com

    URL for this article:
    http://online.barrons.com/article/SB124404271987981539.html

    CONTINUED

    Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved
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  10. 10
    BirdsofpreyRcool Says:

    TechTrader out with comments last night, predicting today’s trading. However, this morning’s gap up might change that prediction. Will let you know if I get an update.

    Meanwhile, TechTrader = 70/30 best trade is short today (caveat: doesn’t mean we crash, just best chance to make $ is on the short side). This also sets up high odds for a short day tomorrow.

    Again, the gap at open might screw this up. These comments came out last night.

  11. 11
    zman Says:

    Denise – thanks for 8. Good piece. He’s not wrong about momentum players being in the energy space again, seeing some bad, schizo trading here and there. Also agree with the double dip economy … restock the shelves and then what?

    Tristone cutting SUN and TSO to Underperform.

  12. 12
    Wyoming Says:

    re FRAC ACT

    How does a 1975 EPA exemption result in a “unconscionable Bush-Cheney loophole”? Not trying to drag politics into the day hours.

  13. 13
    bill Says:

    vq has been strong as of late

    they have calif oil

    —————————-

    “Halliburton loophole”.

    oh, that the evil company that cheney worked for..lol

    It seems like the the crap and trade legislation is out to get the state of Texas

    Saw something that 170,000 jobs could be impacted

    traveling to nashville today, yeehaw

  14. 14
    zman Says:

    Wyoming – dunno, math doesn’t seem to work does it.

  15. 15
    zman Says:

    I love these talking heads they get on CNBC. Just saw someone speaking for Canaccord who looked like he just graduated from college so naturally he’s a strategist for a brokerage firm.

    Question: What do you do when new money comes in, what do you do with it?

    Answer: you sit on the sidelines with it and wait for a better entry point.

    But these same guys won’t enter when the market is falling because by that time they will be bearish. Ugh.

  16. 16
    zman Says:

    North Korea update:

    http://news.yahoo.com/s/time/20090610/wl_time/08599190371700

  17. 17
    Denise Says:

    Question for all-

    Saw an article yesterday that “Joe Bastardi predicts we have a year without summer”(except Dallas of course-it’s here!) touted as a long range expert?
    The prediction was up AG as a result.

    Any validity-Z? If so effect on NG?
    Thanks

  18. 18
    zman Says:

    Denise, do you have a link?

    If he means temps would be lower than normal it depends on how much lower but the impact would be negative. Gas is 20 to 21% of the generation pie, less generation is likely to mean less of everything used with only nuclear and hydro really holding their own (as they pretty much produce what they can although hydro can be scaled back for other reasons).

  19. 19
    zman Says:

    Gasoline red, crude looking a little shake with EIA in an hour. I will have finger on trigger of some June calls at report time.

  20. 20
    Denise Says:

    Z-#15-
    My Voodoo man makes the salient observation that the 90 days are up for the Mutual Funds that put money to work in March-

    they may start to take profits soon-food for thought

  21. 21
    Denise Says:

    Z-tried to find the article-think it is on the premium subscription of Accuweather.com yesterday-

    search pulls up multitude of Joe articles-all over the weather world gave up

    thought I’d ask my “expert”

  22. 22
    zman Says:

    Denise – valid point, quarter end is going to be interesting. A lot of fund managers are lagging their benchmarks. You’d think they will try to goose some sectors/stocks one last time with some new found sidelines cash.

  23. 23
    zman Says:

    Denise – I will try to run it down, it really depends on how bad (cool) he sees summer being. The guy is pretty good, and I have ignored him to my shagrin in the past, not infallible but who is? If generation is only down a between 0 and 0.5% of norm, gas, being as cheap as it is, could steal some share from coal. But if generation is really beat up, they will all suffer.

  24. 24
    Denise Says:

    Bad Omen in my opinion

    CNBC overlaying oil with Rimm chart

    has me selling energy and cautious. We will see

  25. 25
    zman Says:

    A little bird sent me a piece from a broker saying ceramic proppant prices have fallen in line with resin coated sand prices…not good for CRR.

  26. 26
    zman Says:

    Group hits 10 am est Wednesday and a brick wall on like clock work.

  27. 27
    zman Says:

    Kass is going to get an even bigger head if he calls the top to the day.

  28. 28
    BirdsofpreyRcool Says:

    Intra-day update from TechTrader —

    second largest gap up in history on this day, increases the odds of a short trade working to over 75/25, highs are usually on the gap at 9:35, the LOD is in the last hour 100% of the time at 3:15, 3:20, and 4:15. The “best” lows are at lunch 12:50, 1:10, and 1:50. Times in EDT.

  29. 29
    zman Says:

    Pretty amazing volatility in the group pre numbers. Saw a size seller in PXD that dumped shares hardest at 28. Sounds like a mo-mo guy to me.

  30. 30
    zman Says:

    Thanks BOP, oil numbers in 5 minutes.

  31. 31
    zman Says:

    Missed the ride on ROSE, will wait for a pullback there.

  32. 32
    BirdsofpreyRcool Says:

    Nicki — kudos for calling the mrkt jitters on higher oil prices. Seeing media reports citing that as the reason for today’s broader mrkt sell-off.

  33. 33
    zman Says:

    I’m not buying it will have a lasting impact. Last year the kill point on oil for the market was $120.

  34. 34
    zman Says:

    So when oil is up a bunch, they figure it will kill the market. There is no math I’ve seen that says $60 is ok, $70 is death for earnings.

  35. 35
    zman Says:

    crude down 4.4
    gasoline DOWN 1.6
    distillates down 0.3

    util pretty flat

  36. 36
    ram Says:

    Bullish numbers?

  37. 37
    BirdsofpreyRcool Says:

    z — personally, i don’t think we’ve reached the kill point. Just the pause, reflect, drop a little, then resume recovery point. But not a straight shot up from here. “New Normal” means stock picking and entry points are important.

  38. 38
    zman Says:

    gasoline demand inched up from 9.0 mm bpd to 9.141 mm bpd

    distillates up very slightly.

    Imports did ease from 9.646 to 8.970 mm bopd which is lowish for this time of year.

    Crude gain on the day doubled from time of release, now up $1.30 to $71.30.

  39. 39
    zman Says:

    ram – pretty much so although again, it falls into a “low quality” beat as this is imports, not demand driven.

  40. 40
    BirdsofpreyRcool Says:

    Gasoline Tops $2 a Gallon as Report Shows Stockpiles Declined 2009-06-10 14:33:39.504 GMT

    By Richard Stubbe
    June 10 (Bloomberg) — Gasoline futures extended their gains in New York, topping $2 a gallon, after a U.S. Energy Department report showed an unexpected decline in gasoline stockpiles last week.
    Stockpiles of gasoline decreased 1.55 million barrels, or
    0.8 percent, to 201.6 million, the report showed. Analysts surveyed by Bloomberg News had expected an increase of 750,000 barrels.
    Refinery use rates fell 0.41 percentage points to 85.8 percent. Analysts surveyed by Bloomberg had expected an increase of 0.2 percentage point.
    Gasoline for July delivery was up 3.91 cents, or 2 percent, to $2.0058 a gallon at 10:32 a.m. on the New York Mercantile Exchange. The price, which settled yesterday at $1.9667, was
    $1.9813 before the report was released at 10:30 a.m. in Washington.
    Regular gasoline at the pump, averaged nationwide, rose 0.5 cent to $2.627 a gallon, AAA, the nation’s biggest motoring organization, said today on its Web site.

  41. 41
    West Says:

    BOP, I’ll see if I get filled at 1.08 today

  42. 42
    ram Says:

    Do importers of oil in the U.S. “cherry pick” for quality which leads to low imports on occaision?

  43. 43
    zman Says:

    Cushing stocks fell nicely which helps WTI pricing, falling from 29.9 to 29.0 mm barrels.

    Gasoline production was up slightly which is probably follow through from last week’s number.

    Crude inputs to refiners were stuck at 14.750.

    In a nutshell, more supportive than not for crude. No wildly, I gotta have it at $80 or anything but no reason to sell it down. Still not seeing demand on the products side like you would think you’d be seeing in diesel, and my talks with a friend of friend who is a trucking analyst confirms nothing is moving compared to normal levels on the highways so we are not seeing the retail inventory restock just yet.

  44. 44
    zman Says:

    Ram – that’s a good question. Importers (refiners) do buy different grades of crude depending on what their facilities work best with. They blend different grades to get the desired mix. I don’t think that that would lead to week to week swings in the amount of imports as much as simple logistical issues (high seas, closed ports) or deliberately slowed down tankers does.

  45. 45
    ram Says:

    Regarding to on highway trucks and diesel consumption – I am seeing and reading about the “piggy back” approach to having trailers on rail cars for point to point. As that gains more momentum, won’t that affect diesel demand while still keeping goods moving?

  46. 46
    BirdsofpreyRcool Says:

    west — shhhhh….. must be very quiet to wait in weeds… don’t want to alarm the target…

    😉

  47. 47
    ram Says:

    I have read here and elsewhere about tankers of oil sitting in ports waiting for price possibly. Wouldn’t you expect a flood of oil relatively soon if the price stays at these levels?

  48. 48
    zman Says:

    Rolled back the DVR to get the pit trader read on the numbers. He layed oil prices all at the feet of speculators, said we are trading contrary to the fundamentals. I think this is partially true and partially a function of the knowledge that the future will hold higher demand, that refining utilization is low now because demand for end products is low now. This will at some point reverse and the futures market is after all, forward looking. But the popular thing for traders to do is to blame speculators (a group who they apparently don’t think they are a member of)

  49. 49
    West Says:

    ok , thx for traders tip went with SRS for trade on move down

  50. 50
    zman Says:

    re 45 – pretty impossible to quantify at least by me and my staff. Surely a modest negative for diesel demand.

    47 – I think that too contributes to the sudden surges and retreats in imports in the U.S. They have little interest in rushing in all at once though.

  51. 51
    zman Says:

    Did anyone ever see anything published yesterday from the analyst community on WRES, stock still inching up.

  52. 52
    BirdsofpreyRcool Says:

    west — patiently waiting with ya… think mrkt moving our way today.

    And that is really the whole point of saying pick your stock, do your homework, pick your target entry point, then let volatility be your friend.

  53. 53
    zman Says:

    Gasoline hitting $2 wholesale. Not good for gasoline demand in this shaky demand market.

  54. 54
    ram Says:

    You have a staff?

  55. 55
    BirdsofpreyRcool Says:

    west — by the way, if the short trade works today, TechTrader says the trend will continue tomorrow. TechTrader rarely makes 2 day calls.

  56. 56
    gaamblor Says:

    SPR didn’t budge this week after moving .1 last week they might be done with that?

    Z how does the gas demand # line up to last year and the avg for this week?

  57. 57
    BirdsofpreyRcool Says:

    Hugely important strategy piece to read. Proves i’m not coconuts. 🙂

    http://www.capmarkets.com/ViewFile.asp?ID1=300333&ID2=317076777&ssid=2&directory=11608&bm=0&filename=Wow_6-10-09.pdf

  58. 58
    Denise Says:

    Catching up on my reading and felt everyone on the board would enjoy this piece(forgive me if you saw last week)

    From Barry Ritholtz-his general suggestions as to how to “fix” what needs repair on not just CNBC, but all FinTV.

    How to Fix Financial Television

    1. Stop Yelling. Stop interrupting. Stop Talking Over Each Other: This is not Jerry Springer, its serious business. People’s retirement and investments are at stake. Please treat it that way.

    2. Bring us People We Don’t Have Access to. What various FinTV channels do really well is when they bring us long, thoughtful interviews with the likes of Warren Buffett, WIlliam Ackman, David Einhorn, and others. People we wouldn’t ordinarily have access to. Example: This morning, CNBC had on James Rickard. More of this please.

    3. S – L – O – W D – O – W – N

    4. Risk: All traders must appreciate the potential downside of trades. So too, must FinTV. Explain stop losses. Understand Risk/Reward. Recognize there are periods when Buy & Hold is a jumbo loser.

    5. Lose the Octobox. Fire whoever came up with the Decabox. ‘Nuff said.

    6. Separate the Signal from the Noise. Understand that most of the day-to-day action is simply noise. Look at a long term chart, you can barely see 9187 or 9/11. If those major events get lost in the long term trend, what does the intraday jags, kinks and reversals mean? Very little. Recognize that not every data release, slice of news, or rumor is at all significant. Stop treating them as if they were.

    7. Fact Check: An awful lot of things on air get stated with authority and confidence. Much of them are little more than junk or pop myths. Why is it that the more dubious a proposition is, the greater the confidence the speaker seems to muster? Consider fact checking as much of the statements that are made on air as possible, and making frequent corrections.

    8. Accountability is important: I am astounded at some of the money losing hacks that are various shows again and again. These are the “articulate incompetants” to use Bennett Goodspeed’’s phrase. Why not keep track of the records of guests — and let the viewers know how their past few calls have been. Are they Perma-bulls or bears? Are their stock picks awful? Are they reliable money makers? If not, let us know. (Of course, the better question is, if not, why even have them on?)

    9. Bring Back Louis Rukeyser: Not the man, but rather, his style. Wall $treet Week — Rukeyser hosted it from 1970 to 2005 — was plain-spoken, thoughtful and accessible. Quiet, contemplative, discussions, with intelligent market participants, revealing helpful information. The investing public would appreciate something of that sort — again.

    10. Sound FX: What is with all the bizarre sound effects every time a screen changes? Its financial news, not a video game. Kill ‘em.

    11. Embed your video (on your own website or YouTube) instead of using WMP. At long last, thank you.

    12. Investigative Pieces: David Faber seems to have a monopoly on deep, long thoughtful analyses. Be they on Wal-Mart, the credit crisis, whatever, his long format work is a highlight of CNBC. More of these, please.

    13. Most stock picks are losers. That’s normal, but the audience does not realize this. A big part of the challenge is informing the viewer that finding the biog winners is a low probability, high outcome event. As in a baseball, a 350 hitter is a star. Explain this to your audience.

    14. Stop the Bull/Bear Debate: This is a vast over-simplification of the market, and often does not serve the audience well. There are nuances and variables that get lost when you reduce everything to black and white.

    15. Partisanship: Leave your personal politics at home. Viewers don’t care what most of you think.

    16. Respect the Audience: We are adults. Treat us that way.

    >

  59. 59
    zman Says:

    Gaamblor – could be but I have not seen a press release or news story to that effect. At — mm barrels its not quite full.

    Gasoline down 3% to last year. This is about 260,000 bpd less.

    Down 2.5% to the five year average.

    When looking at the inventory numbers, we are still 4% low to both last year and the five year average on total gasoline in storage. That’s the lowest it has been to the 5 year average since October 2008 but the U.S. is still pretty well supplied for gasoline.

  60. 60
    zman Says:

    58 = booyah! Oh wait, that probably has the wrong connotation. How about amen.

  61. 61
    Denise Says:

    BOP-
    Thank you for that piece-shareholder enhancement a lost art form (kind of remember those days)

    Would love to read Brian Renyolds if you do not mind posting-he is usually spot on.
    Most of us do not have access to him -he used to share on Minyanville or maybe Cramer’s site? can’t remember where I used to read him.

  62. 62
    BirdsofpreyRcool Says:

    Denise — Brian is the Best in the Business. Thanks for pointing that out. You’re right, he used to work with the bears at thestreet.com and published on Minyanville. But, he broke ranks with them in 2003 or 2004 then went to work with a private brokerage. He has been spot on. If Brian was Ben B, the credit crisis would have been a normal down-cycle correction… and not the gut-wrencher we had to live through (before Ben saw the light).

    I’m not sure I can post him very often. His new employers keep him on a tight reign… but his stuff is secretly circulated to a wide — and appreciative — audience. Will try.

  63. 63
    VTZ Says:

    PXD is quite volatile today.

  64. 64
    zman Says:

    Market is over-riding the pull of higher oil, for the most part, in the group. I’m content to sit on my hands a little longer and am inclined to begin raising cash again fairly soon, maybe as early as late today.

    I don’t think there is much chance of a compellingly small build in natural gas tomorrow but I’m not sure the stocks much care about $3.50 vs $3.70 vs $4 natural gas right now. I think a fall much below $3.50 will bring selling to the gassy E&Ps.

    I am pleased with the action in PXD today relative to the group and am holding on there for a little longer in the Junes but not going to hang out for a swing at the fences next week.

    KWK – I can sell at any time and come back to on a pull back.

    HK – I am likely to add July exposure soon and give up on the Junes soon.

    WRES – holding

    EOG calls – hmmm, mulling, they always seem to have a delayed response to higher oil prices, so I expect that in short order but may run out of time on the Junes.

  65. 65
    zman Says:

    VTZ – agreed, seems to suffer from bouts of panic selling, then a drifting recovery higher. Hopefully, hot money is playing more in other names now.

    I do think the energy complex will jump higher with any kind of a green print on the S&P. We’ve seen this pattern too many times on inventory day. Group mostly green but not a lot, oil and products greener, and broad market red but shifts to green late. Bumps the percentage moves nicely in the group and since we are just over a week out from June expiration, for us option types, the prudent course is to take profits/losses and watch for a bit with a higher cash %.

  66. 66
    DrLink Says:

    BOP do you have yesterdays Brian Renyolds letter? ” Yesterday we came up with a list of companies whose credit derivatives have already reversed the bulk of the losses seen during the credit crisis”

    Thanks

  67. 67
    zman Says:

    Back in the U.S.S.R. watch:

    http://news.yahoo.com/s/ap/20090610/ap_on_bi_ge/us_executive_pay

  68. 68
    BirdsofpreyRcool Says:

    DrLink — just for you.

    http://www.capmarkets.com/ViewFile.asp?ID1=300129&ID2=316857857&ssid=2&directory=11608&bm=0&filename=Will_The_Credit_Crisis_Reverse_In_Some_Cases_It_Already_Has_6-9-09.pdf

  69. 69
    zman Says:

    Got sent a link to a piece on China’s growing demand for natural gas in an email. Here is my response:

    Thanks. The plays on natural gas in China are EOG and COP (which bought Burlington resources), NFX is messing around over there but offshore and in oil. I think EOG will ultimately run hard onshore in gas bringing horizontal gas drilling to the Szechsuan basin. The play on the gas powered car and truck fleets is Boone’s CLNE.

  70. 70
    zman Says:

    KWK closing on $12, will take profits there pretty soon.

  71. 71
    zman Says:

    Tater – if you get a chance can you cast the bones on KWK?

  72. 72
    elijahwc Says:

    #48 Dan Dicker? This appeared yesterday which lead to his CNBC appearance today.

    Opinion Return to Article
    Oil’s ‘Endless Bid’ Returns
    Daniel Dicker
    06/09/09 – 12:29 PM EDT
    It’s baaack! The endless bid for oil.
    Oil has been rallying because of the weakness of the dollar and because of the specter of impending inflation.

    Or at least that is what I continue to hear.

    Yet in the last several sessions, the dollar has found some amazing strength, and gold, the best proxy for inflation, has come down quite a bit. So what is going on with oil?

    What’s driving oil now?

    It’s the endless bid.

    Goldman Sachs recently revised its oil targets for 2009 and 2010, raising its $52 target price for the near three months to $75. It gets worse, according to Goldman. Year-end targets for the crude barrel in 2009 were revised up to $85 and a $95 target was set for 2010. How do they come up with these figures?

    Goldman analysts cite increased demand. Yet there is absolutely no sign that demand is increasing, quite the contrary. Goldman argues that oil is rallying on expectations of increased demand along with similar expectations of recovering economies in the second half of ’09 and into 2010. Even if this gargantuan leap of faith were true, why isn’t natural gas, a perfectly wonderful and plentiful energy source, rallying as well? Why is it languishing at a mere $4s/mmBTU, while crude streaks ever higher?

    And how do those Goldman oil analysts even create these mythical target prices?

    It’s so hard to gauge the strength of the endless bid.

    The endless bid is what I’ve begun to call the incessant, unrelenting and often unreasonable desire of investors to have exposure to oil. In commodity index funds, through ETFs and directly in futures markets, there is a renewed interest in having oil as a part of every investor’s portfolio.

    The oil market is a delicate market. Even more importantly, it is a relatively puny market. New York Mercantile Exchange crude oil futures, the most widely quoted, relied-upon price gauge for oil, have about 1.3 million contracts of open interest. The average price per barrel is about $70. Therefore, the entire notional value of crude oil traded on the Nymex is a little under $100 billion.

    That sounds like a lot. But not if you consider that the notional value (market capitalization) of even one oil company like Chevron(CVX Quote) is 40% more. The market cap for Exxon Mobil(XOM Quote) is 3.5 times more. Intuitively, we can expect that even a relatively little amount of new investment interest in oil futures is going to have a huge impact on the price.

    That’s the endless bid.

    We saw the endless bid fuel the run-up in oil to $147 in July 2008.

    We saw the endless bid withdraw just as quickly in late 2008 and through February of 2009 with a resultant low of $32 a barrel.

    And now, it’s baaack … and makes any estimate of a target price for oil a total shot in the dark, a complete guess, practically unrelated to any economic forecasts or supply/demand estimates.

    And where will it end?

    It’s an important question we’ll save for the next column.

  73. 73
    reefguy Says:

    z- Do we have confirmation that the APA well is EF?

  74. 74
    zman Says:

    Reef – No, PXD IR guy had heard about it, called it the infamous REOS press release well, did not know it was APA’s and had no comment on it. He did say they were going to drill their 3rd well up and over in that general direction though but he said they are getting tighter lipped on the future well locations due to leasing concerns. Said leasing is heating up in the play.

  75. 75
    reefguy Says:

    74- The areal extent of that play looks to be 3x the Haynesville

  76. 76
    zman Says:

    Reef – yep, massive. Higher TOC it seems as well, some commenting that it is more natural fractured and the wells are certainly cheaper, too early to call on EURs (people saying 4 to 7), lots of gathering infrastructure around those parts too. Wonder about H2S issues but have only seen the stray comment so far.

  77. 77
    zman Says:

    Ram – just looking at the imports data it looks like we went right back to the trend that was beginning to form over the last week so I need to add that diversion of crude from the U.S. to someplace like China may be impacting imports now as well. I have seen stories saying they are done with their own SPR and others saying they are just getting started and still others saying they are quickly building stage 2 there to get them an SPR that is as big as the U.S.’s 725+ mm barrel capacity.

  78. 78
    zman Says:

    Product test update:

    1 week in on the Acer Aspire One and all is well, reliable, fast, quickly connects in the coffee shop around the corner. I’d type a post on it but its keyboard is a bit small for that, feels like I have Shrek fingers similar to how you feel holding one of those half sized coke cans. Anyway, thanks for the tips on the netbook guys, highly recommend, and it was cheaper than my blackberry.

  79. 79
    ram Says:

    ZMAN – Is there an “official” estimate of natural gas in the EF area?

  80. 80
    ram Says:

    Do you recently upgrade your blackberry?

  81. 81
    zman Says:

    No official one. It would probably be in the low hundreds of TCFs ballpark. The U.S. consumes 20 to 22 Tcf each year.

  82. 82
    VTZ Says:

    Netbooks are a good product in my opinion. Kicks the crap out buying either an iphone/blackberry or a full laptop for the cost. I find that with laptops, they become obselete in the same amount of time as a netbook and have marginally more utility for 3, 4, 8 times the cost.

  83. 83
    zman Says:

    80 – No, ATT won’t carry the storm so I still have the Curve II. Hate that dirty little trackball.

  84. 84
    zman Says:

    VTZ – agreed. Wish I had never bought this Toshiba Satellite. Nice idea as a desk replacement on which you can add a second monitor but when I took it to IPAA last fall it was like carrying a boat anchor around.

  85. 85
    ram Says:

    ZMAN – Do you see CLNE gaining momentum with your current administration?

  86. 86
    elduque Says:

    BOP- do you have any thoughts re today’s auction?

    Thank you

  87. 87
    VTZ Says:

    Re 81: Low hundreds of TCFs in place not estimated reserves, right?

  88. 88
    zman Says:

    I do. I think the game plan at CLNE is a good one.

    TBP explained it this way last night. Essentially, getting someone, be it a trucking company or a municipality, to change out their fleet to natural gas is very difficult because of the capital costs. So they get people to look at replacing diesels, as they are retired from service with natural gas fired vehicles. This model worked well with the garbage trucks in some part of California. The Natural Gas Act, which you can read about here:

    http://www.govtrack.us/congress/billtext.xpd?bill=h111-1835

    This will potentially provide a catalyst for CLNE and for gas prices.

  89. 89
    ram Says:

    I still have the curve as well. I’ll probably keep it and upgrade memory. If we consume 20 TCF annualy, what is the current state of inventory above and below ground in years? Is that number without EF and potentially others TBD?

  90. 90
    zman Says:

    VTZ – no, a ballpark I read somewhere, that was early on as well when most thinking was that drilling would be in southwest Texas only, Maverick, McMullen, La Salle counties, and not the broad swath that is the Edwards trend covering a big chunk of south Texas.

  91. 91
    zman Says:

    Ram – above ground would be the 2.1 Tcf we are at now in storage in the states so a little over a months supply if there was no further production and depending on the time of the year as to demand.

    Below ground, that is not in storage, but in the form of potential reserves, that is very, very ballpark, the U.S. should have at least 100 years of gas supply, at current consumption rates, give or take a few decades and not taking into account leaps in technology which could lead to higher recovery rates or find ways to get gas from new plays.

  92. 92
    zman Says:

    Nicky – any thoughts on the near term direction of the dollar, looks like we are in 2 steps down and 1 step up mode. How does it look from an EW perspective?

  93. 93
    ram Says:

    Thanks ZMAN. Nicky, is there any validity to Serge and his EWF?

  94. 94
    zman Says:

    Got an email from BOP – they stepped out for a bit.

  95. 95
    rseidman Says:

    Z: Here’s an interesting video for all

  96. 96
    reefguy Says:

    $oil/$gas= 19.1

  97. 97
    reefguy Says:

    95- A great 8 minute youtube resume

  98. 98
    zman Says:

    Thanks RS – listening now.

    Market sold off with results of the 10 year auction.

  99. 99
    zman Says:

    BOP – looks like TT called the “best low” at 1:10 EST.

  100. 100
    BirdsofpreyRcool Says:

    elduque — just got back… didn’t have the expectations for the 10 yr today… but, it looks to have disappointed the mrkt. These reactions to auctions tend to be short-lived however. With the 30-yr tomorrow, could completely reverse. But, won’t matter too much, after they are over.

    Think mrkt was particulary skittish about the 10 yr today, in light of Russia’s comments about the dollar this morning. JMHO.

    I’ll pass along any official comments, if i see anything worth posting.

  101. 101
    BirdsofpreyRcool Says:

    10-yr auction… looks like the yield to entice buyers was a bit higher than expected at 3.99. But, demand was pretty good, at 2.62 bid to cover. Only see 15.1% indirect bids… but, don’t know what is typical of the 10 yr.

    It’s the 3.99 yield that really got under people’s skin. Mortgages are priced off the 10 yr, so this is a negative for the housing mrkt, all else equal.

  102. 102
    reefguy Says:

    A new question for the team. Large companies leasing in South Arkansas for a horizontal oil play in the lower Smackover Brown dense?
    Any color on this question? Buehler?

  103. 103
    zman Says:

    Reef – no comment from me re 102.

  104. 104
    BirdsofpreyRcool Says:

    reef — as i recall from my geology class, the Smackover is a tasty middle-Jurassic carbonate, deposited in a low-energy environment. Like a denser Austin Chalk. What’s up there?

  105. 105
    zman Says:

    Volumes in the group are on the very light side today, both in the winners and losers column for E&P.

  106. 106
    BirdsofpreyRcool Says:

    10-yr auction. The yield on the “when issued” 10 yr was trading at 3.94 before the auction results… so, the 3.99 indicated weak demand.

    That said, the bid to cover and indirect bid (at 34.2%, corrected) were strong. So, investors just demanding higher yields.

    In light of all the corporate bond issuance this week, treasuries are having to make themselves a bit more attractive, yield-wise, to attract investors.

  107. 107
    zman Says:

    Broad market pounding back everything, including oil, and obviously the energy group. I’m not selling into this.

  108. 108
    VTZ Says:

    Re 106 BOP – June 16th BRIC meeting and associated rhetoric will be the death of the long bond?

  109. 109
    BirdsofpreyRcool Says:

    VTZ — maybe that’s part of the fear.

    It used to be that the US was the only country to issue a 30-yr sovereign note. Is that still the case?

  110. 110
    VTZ Says:

    Don’t know? Japan maybe?

  111. 111
    BirdsofpreyRcool Says:

    And the Govt news just keeps getting worse… May deficit up to -189.7B vs -181.0B expected.

  112. 112
    BirdsofpreyRcool Says:

    On the other hand, the Beige Book sees improvements in 5 of 12 districts.

    So, private sector getting better. But Govt is still the 800-lb Gorilla… and growing.

  113. 113
    zman Says:

    Beige Book looks similar to last release, market off a little more following the release.

  114. 114
    BirdsofpreyRcool Says:

    VTZ — good call. Japan issues a 30-yr and a 40-yr too. Looks like Germany only goes out to 5 yr, but UK has a 30-yr too.

  115. 115
    VTZ Says:

    I think it’s safe to say that the deficit for this year will be approaching 2 trillion, next year will be 1.5 and who knows after that.

    WHY ARE PEOPLE FOCUSING ON THE AUCTIONS EACH WEEK. IT’S GOING TO HAPPEN FOR ANOTHER 100 WEEKS!!!

    Drives me insane!

  116. 116
    zman Says:

    Lion oil tells House Committee that it will have to shut down an El Dorado refinery and lay off 1200 if cap and trade is enacted. Company says under current structure their costs for carbon credits would be $180 million over 5 years. Their annual profit has been $13 million over the life of the company, don’t know about last year’s profit there but it sounds pretty dire.

  117. 117
    cargocult Says:

    Bill, looks to me like big call action on FRO in the June $30’s. Any reason why?

  118. 118
    zman Says:

    Oil holdings up well as we approach the close of NYMEX. This was one of the fears of the, worry of the minute, talking heads on CNBC.

  119. 119
    West Says:

    eog- ready to rock….kog paint drying…exit srs

  120. 120
    1520sbroad Says:

    #115 – the quarterly refunding is now scheduled for weekly.

    Staggering numbers when you look out at how much debt there is to be issued.

    BOP – to follow up on your thought from early this morning. Co’s that are reasonably levered right now that have cash flow/ability to repay debt with cheaper dollars – do you think we will see a race (i.e. APA) to issue new debt?

  121. 121
    elduque Says:

    vtz- I think that the market understands just how important the yield on the 10 yr. is. Mortg. financing is directly correlated to it. Besides the market needs something to focus on.

    BOP correct me if I am wrong, but isn’t some of the improved credit spreads a function in part of the 100 basis points plus on the rise in tsy’s.

  122. 122
    zman Says:

    Gasoline prices may be up 55% year to date but consider that they are still down 35% from year ago levels. They normally rise 25 to 35% from winter to early summer. This year the rally is bigger because they had fallen so far from the September/October highs.

    If we look at consumption of 9.1 mm bpd of gasoline this year vs 9.4 mm bpd a year and apply current retail average prices of $2.62 per gallon and $4.04 per gallon respectively, that comes to an average daily cost of $24 mm per day this year and $38 mm per day at this same time last year. Suddenly it does not seem so crushing for the consumer.

  123. 123
    West Says:

    anyone keep up with CXO, Concho Resources

  124. 124
    zman Says:

    West – I thought they interesting a year ago when I wrote this, have not looked at in quite some time but I probably should.

    This was from June 2008:

    Acquisition Watch: Concho Buys Henry. Concho (CXO) paying $565 million in cash for Permian Basin private E&P Henry Petroleum. 1P reserves of 163 Bcfe yield an acquisition price of $3.47 / Mcfe but they have identified an additional 283 Bcfe of probable and possible reserves. Hair cut those by 50% and the F&D cost drops to a more palatable $1.86/Mcfe. These are Sprayberry/Wolfberry assets in the Permian of W. Texas, Concho’s backyard, and the stock should rally strongly on the purchase.

    * Based on CXO’s TEV prior to the acquisition the market had been valuing Concho’s reserves (546 Bcfe, 99% Permian) at $5 / Mcfe so they got these assets cheap.
    * They’ve id’d 1,650 drilling locations, greatly bolstering the 2,500 location CXO had in inventory.
    * They are hedging an undisclosed amount of the production from the acquisition, wise.
    * They are a low cost producer with LOE at about $1 per Mcfe this year. Yields a high cash margin business.
    * They trade at just under 7x 2009 CFPS estimates which is not high given the 26% production growth (prior to the acquisition) guidance for 2008 and an 18 year reserve life.
    * They have plans for the Bakken (42,000 acres)

  125. 125
    zman Says:

    Crude closed over $71 despite the 0.75 bp rally in the USD. Gotta step out for 30 minutes, back before the close.

  126. 126
    VTZ Says:

    BOP – Let me know what you think…

    On one hand, the massive amount of debt will help to mop up all the liquidity in the US financial system if yields increase a bit and they become more appealing. But in this scenario, all the liquidity is coming from the government.

    On the other hand, if the BRICs decide that they’ve had enough and China doesn’t want to add another trillion to the trillion it already owns in US debt (which they’ve made clear they don’t) then they’ll probably be happy to diversify. This leaves the US with more QE and monetary inflation as the only option.

    In a high-yield, inflationary environment what wins, equities with inflated revenues (energy, other consumables)or bonds with high yields? I’d say those equities increase faster until inflation peaks at which point high-yield govt bonds become attractive again?

    In yuans, it doesn’t seem like you win buying bonds now in either scenario hence the commodity investments?

  127. 127
    West Says:

    CXO, has new oil play in new mexico that is a money maker.

  128. 128
    BirdsofpreyRcool Says:

    1520s – yes. I think we will see a lot of debt issuance from now through the end of the year.

    1) pent up demand from the Credit Freeze

    2) expectations by Treasurers that USTreasury rates are headed up; absolute yields will rise

    3) any improvement in economy means reinvestment in business; companies will want a cash pile and/or access to a line of credit

    4) issuing debt (in a normal market) is cheaper currency than issuing stock; mrkt getting back to “normal”

    5) the re-leveraging cycle has begun. keep your eyes open for announcements about company stock buy-backs. it is coming.

  129. 129
    BirdsofpreyRcool Says:

    elduque — no. spread tightening is spread tightening… no matter if treasury yields go higher and corporate yields stay the same… or treasuries stay the same and corporate spreads tighten. bonds (like stocks) are a “relative value” investment process. So, relative to treasuries, corporate bonds are rallying.

  130. 130
    BirdsofpreyRcool Says:

    VTZ — in an inflationary environment, equity in companies with hard assets wins. In this global environment, equity in companies with hard assets that China wants really wins.

  131. 131
    BirdsofpreyRcool Says:

    I am not in the camp that says we see “hyper-inflation.” There is too much excess capacity out there. However, doesn’t mean that the cost of some global commodities with high marginal costs to produce don’t go sky-high.

    Just in time for all of us to buy a Chevy Volt, i guess.

  132. 132
    zman Says:

    CXO – yeso?

  133. 133
    reefguy Says:

    104-A thought on brown dense Smackover:
    When I was a rookie at Union of Cal. we “fingerprinted” every produced oil we could get a sample of in the Gulf Coast. The Belief was that the source rock for oils left a unique chemical fingerprint. We collected 70+ samples from Pleistocene thru Jurassic age reservoirs. Every one was sourced by lower Jurassic aged rocks known as the “varved section”. This is a zone that is about 100′ thick and in the Jurassic were thick stomatolites; essentially colonies of algae.
    Union Oil believed that all oils(not gas) in the Gulf coast, Arla-Tx and Missisippi Salt Basin were from this Jurassic source.
    The Brown dense immediately ovelays this source material. When drilling through it you get shows, but rarely did you encounter “reservoir” rock in that section.

  134. 134
    zman Says:

    BOP – end of the month on KOG soonest, right, barring leakage?

  135. 135
    zman Says:

    Reef – Thanks reef. All I have heard in the area is talk that the Haynesville play extends into Ark (SWN, MUR others seem to be snooping, CHK I think too). I have a call in with a guy who should know a thing or two, shoot me an email if you have a specific question on it.

  136. 136
    BirdsofpreyRcool Says:

    z — KOG — going to start fracing well #3 around June 20th. Will report results from #3 and 4 together. “End of June.” Whatever that means…. but, if fracing on 20-22nd (or so), how long from there to get a 24 hr IP? So, June 26th, maybe?

  137. 137
    zman Says:

    Last time around Lynn said 3 weeks to frac which seemed like a really long time.

  138. 138
    VTZ Says:

    BOP- Excess capacity in what though? Cars? Doesn’t seem to be lots of excess going forward in agriculture and energy. Isn’t that what most spending goes towards?

  139. 139
    tater Says:

    KWK – added a 60 Min view. Looks like it is in an ascending triangle with the breakout number at 12.09. Appears to be looking at this number right now.

  140. 140
    tater Says:

    Doesn’t mean that it can’t have a false breakout above 12.09. Just appears to be an area of significance. Watch the gap from Oct at the 13.30 area. Resistance is at the top of that gap.

  141. 141
    zman Says:

    Thanks much Tater.

    We’ve had a few new signups this week and for those of you who are new Tater and Nicky do a good job with the technical reads among other things. Tater’s TA can be found under that link in the link list at upper right. Use the pulldown menu to page through the names.

    There’s also a bios page where a lot of the commenters bios are located, helping to give you a little context.

  142. 142
    West Says:

    cxo-yeso; kog r a big huge flare going

  143. 143
    zman Says:

    Hey, you guys that use Think or Swim, how is their theoretical pricing stuff?

  144. 144
    BirdsofpreyRcool Says:

    VTZ — excess capacity in people (jobs), factories, shopping malls, office buildings, dog-walkers, cars (yes), drilling rigs, clothing manufacturers, furniture makers, restaurants… basically, salaries and home values will continue to fall. Don’t know about food… depends on weather more than anything else. The cost of govt and energy will go higher.

  145. 145
    zman Says:

    West, got a photo, lol?

  146. 146
    BirdsofpreyRcool Says:

    west — cagey kog comment… elaborate?

  147. 147
    VTZ Says:

    Germany had 30% unemployment and tonnes of slack in the 20s and they ended up with crazy inflation.

  148. 148
    West Says:

    no,no just saying that if they start flaring someones going to see it. Although, there only about 50 people within 20 miles of this location except the drlg crew. Sorry about that

  149. 149
    zman Says:

    VTZ – yes, they had to pay war reparations so they printed money 24/7. They got help via loans from the U.S. Maybe the U.S. will get loans from China to … no wait, already done that.

  150. 150
    zman Says:

    West – thanks for the clarification, seemed early but your comments in the past were generally spot on so I had to ask. BOP, you should take out a scout ticket on the well.

  151. 151
    zman Says:

    Seeing story that SP500 is on target for its 8th close over its 200 day average. Does that mean much, more than the 5 th such close but less than the 10th, more likely to bounce after the 8th or just something for some journalist to get paid by the word on?

  152. 152
    Denise Says:

    Read a interesting (but cynical)comment that:
    Russia’s comment about Russia moving away from our debt to IMF (right before the 10 yr auction)
    could be to help prop Oil’s price which they sorely need. hmmmm food for thought

  153. 153
    BirdsofpreyRcool Says:

    z — got something even better going… well-watching at it’s finest!

  154. 154
    Denise Says:

    BOP-those video cams have gotton pretty cheap!

  155. 155
    zman Says:

    Now see that is what batteries should be used for. Not pushing trucks. But powering remote cellular linked cameras left in the woods by speculators.

  156. 156
    zman Says:

    Lot of shorts going to be disappointed with today’s close I think.

  157. 157
    BirdsofpreyRcool Says:

    Denise — the Russians spend a great deal of time, energy, and brain power on conspiracy theories… mainly, because they are involved in so many themselves.

    So, your comment makes sense, from a Russian point of view.

    Disclosure — i made money in Gazprom from 2003-2007. So, i have nothing against the Russians. Heck, our govt/economy is becoming more like them every day!

  158. 158
    BirdsofpreyRcool Says:

    Denise — you outted me! Got a Teddy Bear-Cam in the Dog House on site 3/4. Sshhhhhh…..

  159. 159
    zman Says:

    Beerthirty!

  160. 160
    Denise Says:

    BOP-
    Please share when you see the flare!

  161. 161
    BirdsofpreyRcool Says:

    Denise — i think west has a higher-speed connection… but, will do.

  162. 162
    Dman Says:

    Z – #143 Well, I find their theoretical price is usually bang in the middle of the spread. But i wonder if you are asking about more elaborate stuff.

  163. 163
    zman Says:

    More on that technical read on the SP:

    http://www.marketwatch.com/story/sp-and-the-dow-undaunted-by-200-day-averages?link=kiosk

    Dman – my system is almost on the bid at least on its B/S calc. I was just wondering if they had a way to look at several potential outcomes at once, mine is only one at a time.

  164. 164
    West Says:

    Just a question, but would any of the maps such as Google be current. Most recent Google didn’t have the southern wells yet. Does anyone have link to a site with current images? BOP you r a funny guy no doubt.

  165. 165
    BirdsofpreyRcool Says:

    west — if you have a high-level CIA or military security pass, i think you can get the current satellite imagines. t
    The rest of us non-commissioned slobs have to wait 6 months or so.

  166. 166
    BirdsofpreyRcool Says:

    cool interactive view of a drilling rig… see if you can find the DogHouse. heh, heh, heh… 😉

    http://www.bseec.org/flash/3drig/index.html

  167. 167
    BirdsofpreyRcool Says:

    Actually, just watched the video in the link above. Well worth the time. Even for those who know the process pretty well, it’s a nice refresher course. (Love the shot of Jedd Clampett at the beginning… also, see if you can spot the “BOP” in the video.)

    Brought to you by the Barnett Shale consortium… before Aubrey got those margin calls.

  168. 168
    TEXWS6 Says:

    RE #25: CRR is the one dropping ceramic prices, but just one of their product lines, very profitable for them still!

  169. 169
    bill Says:

    my vq got sold today as my gtc order went off…we need a pull back so i can reload

  170. 170
    BirdsofpreyRcool Says:

    Penn Virginia (PVA) just priced some juicy bonds this evening. $300mm of Sr notes, due 6/2016, 10 3/8 coupon, priced at a discount of 97 to yield 11%. Issue rated B2/BB-.

    These notes are SEC registered, so us normal people can buy them.

    just FYI.

  171. 171
    zman Says:

    Crude trading 72.10 tonight with the dollar backing off below 80.

  172. 172
    VTZ Says:

    I still stand by my call that the dollar is going to fall off a cliff for the next few years.

  173. 173
    zman Says:

    V- I’m with you. I am shocked it held up as well as it did as long as it did.

  174. 174
    VTZ Says:

    Manipulation… I truly believe the US govt manipulates smaller markets to send signals to the larger margets… gold… bond auctions. The only thing is it can only last so long.

    Too many dollar outflows for too long and too many entitlements which are bound to increase.

    I hate to sound so cynical but with a couple beers in me I speak only the truth.

  175. 175
    zman Says:

    They’re taking on oil speculators again by the way, new bill introduced to limit trade size a bank holding company can have in oil and gasoline contracts.

  176. 176
    VTZ Says:

    I saw that and its completely disgusting.

    I stand by the fact that Santelli is the only respectable person on CNBC. Today on Kudlow (I need to listen to something on the ride home other than NFL radio) Santelli said that the speculator attack should be quashed before it starts and that the US dollar should be identified as the cause before they start another witch hunt.

  177. 177
    VTZ Says:

    If they want to curb ‘speculators’ don’t allow anybody to take a contract if they can’t take physical delivery… there solved.

    I would actually support that as someone in the energy industry.

  178. 178
    VTZ Says:

    http://www.bp.com/productlanding.do?categoryId=6929&contentId=7044622

    BP statistical review is out… didn’t see.

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