26
Nov

European Black Plague Friday

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Market Sentiment Watch: Welcome to one of the slowest half day trading sessions of the year. Today we have no economic data releases and no exchange of cross border fire from the Koreas. This is normally a day reserved for computer and 3rd string office minions. However Europe is again taking center stage this morning and US futures are being hit after someone decided that Spain should be a focus today. In energy land there is very little going on in the way of news. I expect that to change next week as we have a number of catalyst list names that should providing operational points of interest. Today I will be around in the morning and we plan to migrate to our own server after the close at 1 pm EST.  

Ecodata Watch:

  • None

In today's post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas and Oil Inventory Reviews
  4. Stuff  We Care About Today
  5. Odds & Ends

Holdings WatchZCAT (Zman Catalyst portfolio):

  • $5,100
  • 99% Cash
  • Yesterday’s Trades: None

ZIM (Zman Inefficient Markets portfolio)

  • $9,000
  • 4% Cash

Commodity Watch 

Crude oil for the January contract closed off 3 pennies at $83.83 yesterday. This morning crude is trading off 75 cents with equity futures.

  • Imports Watch: Enbridge reported a power failure had curtailed volumes on its 670,000 bopd pipeline bring Canadian crude to the States. No details were provided on size of the outage or timing for repair. 

Natural gas closed down 2 cents at $4.37 yesterday. This morning gas is trading flat. 

  • Tropics Watch: Nada - official end of the tropics season is November 30th. 

Natural Gas Review 


ZComment: First withdrawal of the season is little to cheer about but market is keying off cold weather and will be watching the rate of withdrawal over the next few weeks to decide how weak prices should be in the early part of winter. That last graph below will be interesting to watch. Forecasts for early and mid winter now show colder than normal temps in the U.S. midsection and then warmer than normal temps respectively. The northeast looks to be set to have a "normal" looking winter. 


Oil Inventory Review


ZComment: Utilization is bouncing back from the Fall maintenance turn more quickly than I anticipated. This is good for crude stocks as long as imports do no surge in parallel fashion (they did this week but I don't expect this to be a new trend). However, what's good for crude stocks will also mean more end product and while we have pulled away from the recent large surplus to the YoY average stock levels, demand has not been consistently robust, meaning that stocks could quickly be rebuilt, especially if the winter turns out to be mild.  

Stuff  We Care About Today 

Nada

Odds & Ends 

Analyst Watch:

  • Nada

45 Responses to “European Black Plague Friday”

  1. 1
    zman Says:

    Housekeeping Watch:

    Please bookmark the backup site:

    http://www.zmanbackup.wordpress.com

  2. 2
    zman Says:

    We should get a fresh set of supply numbers for natural gas on Monday

  3. 3
    crysball Says:

    Frac'in  in the BAKKEN:
    The big three  are: Schlumberger, Halliburton, and Sanjel.

    BJ Services (now owned by Baker Hughes), Superior Well Services (now owned by Nabors), PumpCo and Cal Frac are all fracin in ND.

    Halliburton has the majority of the work with 10 crews, but BJ is also very busy. 

    All of them are  currently adding crews, and/or going  to 24 hour /dday operation

    Cal Frac was in the Bakken in 2008 , left, and has just came back within the last month or so.

  4. 4
    zman Says:

    Thanks Crys – is Sanjel a part of some bigger firm?

  5. 5
    jiveyjr Says:

    thx for the morning note Z…thx for that frac crew info. crys…

  6. 6
    zman Says:

    BEXP at all time new highs on holiday light volumes. Again, expecting an operations update there in the next 2 weeks, also at WLL (probably next week) and CXPO (any day) along with EXXI/MMR – probably next week, but that's a logging update so it could be longer. 

  7. 7
    zman Says:

    CNBS was doing a good job of hyping satellite photos of mall parking lots earlier as a sign that this year the consumer is back. S&P500 apparently starting to care more about that and less about S and P in PIGS.  Interesting to note that in energy, the strongest sub group in E&P is the Bakken players list. No big move but half of them are flat or up on a day when all else is red. 

  8. 8
    zman Says:

    ROSE looking unstoppable on a chart. 

  9. 9
    crysball Says:

    Z,
    Sanjel  is   the largest  privately  owned  Oilfield Service Company in Canada,  with   HQ  in Calgary.    Has  approx.  1500   employees, founded in 1982.     Offers  a range of  services [not  as  wide  as HAL or BJ].
    Here  is their  website:
    http://www.sanjel.com/

  10. 10
    crysball Says:

    Z,
    Sanjel,………forgot to  mention   US  operation,  Canada {Western} operations  and  website say international………but does not  specify  where.
    Has  approx  25  service  centers,  and  seems  to be  expanding  aggressively………i.e  'MAKING HAY WHILE THE SUN SHINES'.

  11. 11
    zman Says:

    Thanks Crys – Canada and private explains why I don't know them. 

    KOG putting in another 52 week high. 

  12. 12
    elduque Says:

    Good morning Z- What do you call waking up early because you have eaten too much? Seems to me we are getting colder than normal weather. Just maybe that will stop the short selling in Nat Gas Futures. Also noticed that Conoco in Canada was laying off workers as they were cutting production in gas. I do think that we will at least see the top of the range in the next few weeks.
     

  13. 13
    zman Says:

    antitryptophanexia

    As to Canada, it helps with sentiment but the amount of gas curtailed is smallish. Less than half a Bcfgpd when Canada sends 6 to 8 south of the border daily.

    I think we are probably near the top of the range now … just don't see it going higher without lower production levels. Gas rig count hasn't retreated to speak of and even after it does there will be about 3,000 drilled but not yet completed wells that will get completed over the course of the first 6 months or so of 2011 mitigating what would historically have been a rapid commensurate drop in volumes. 

  14. 14
    zman Says:

    Intern #2 just created lightning in the office microwave behind me by installing the wire racks from the nearby toaster oven and punching the start button. Gotta love the smell of ozone in the morning. 

  15. 15
    jiveyjr Says:

    GOK…Geokinetics has been making a huge move….seismic company providing data offshore…don't know anything about it except it has a good chart

  16. 16
    zman Says:

    J – SLB's last call indicated an uptick in business coming for their Western Geophysical subsidiary. 

  17. 17
    elduque Says:

    How is the transition going to work. Do we just go straight into the site?

  18. 18
    jiveyjr Says:

    thx…looking at GOK's website..they are apparently a result of several fairly recent biz combinations and are pretty diversified in where they provide services…not just offshore….as for SLB…I've enjoyed a nice ride there….GOK is just one that popped up on momentum screens

  19. 19
    andy Says:

    GOK  was slammed by geno recently for not paying bills on time.  sure didn't hurt the stk tho!!!!

  20. 20
    zman Says:

    re 17. Should be no change for you. If you do not see a Monday post on Monday then it may be that yo will need to clear your cache. If they doesn't help then it is an ISP issue and that will sort itself out in a matter of a few days. I will be posting on the backupsite as well through probably mid next week. I'll also post a wrap post this week and we may doing a debug test post or two. 

  21. 21
    andy Says:

    z –  DUNE trying to rise from the dead. heard anything???

  22. 22
    zman Says:

    Re DNE, haven't seen anything. END also rising uncharacteristically following a 7 for 1 reverse.  

  23. 23
    RMD Says:

    20 how do you clear a cache? (What is pirates have already cleaned out the booty….ok, a sily moment on a slow day.)

  24. 24
    crysball Says:

    VOYG……Here  is a new  Thompson  Reuters  analyst  report :  https://www.etrade.wallst.com/v1/common/pdf.asp?docKey=24-A9D45-20101124&User_SessionID=758CD7CF52FF39AA26C62425F20A893D&researchProvider=REUTERS
    EGY…… The  Gabonese  Government  has  approved   the  EGY/ Total   50/50 agreement  for  the  On-Shore  Mutamba  Concession [a little  over 250,000 acres] .    There  was  not  really any  question if  they would approve it………..but  now  drilling plans  can move ahead  now that  they have  approved  it.

  25. 25
    zman Says:

    RMD – it's not hard, but depends on browser used.

    Thanks Crys

    Sleepthirty. Have a good weekend. Real market opens again Monday. 

  26. 26
    elduque Says:

    Lots of football to watch today. Enjoy the weekend.

  27. 27
    RMD Says:

    24 report uses DIS and GE as comparables for VYOG:  pretty funny.

  28. 28
    choices Says:

    30 minute film-ShaleGas-not sure if it has been posted here yet-prob does not add anything new to board members here but it is something that is "out there."  seems to be "fairly" balanced to the NG arguments but the drillers need to get out in front on the PR issues-I was surprised to learn on a C-span hearing on the issues that the drillers do not always establish a base reading of the toxic readings in the area BEFORE they begin drilling-this would seem to be crucial to refuting any charges that the drilling activity caused the water supply to become toxic.  RRC seems to trying to get in front by publishing the composition of their fracing materials.
    Anyway, FWIW, here it is if anyone gets bored with football: 
    http://www.shalegasfuture.com/

  29. 29
    petra Says:

    test test test

  30. 30
    zman Says:

    Can you see me now?

  31. 31
    petra Says:

    Si

  32. 32
    zman Says:

    Fantastico!

  33. 33
    zman Says:

    Can anyone else see me now?

  34. 34
    choices Says:

    Not looking good at all:
    http://www.bloomberg.com/news/2010-11-26/ireland-races-to-secure-weekend-aid-deal-amid-bank-debt-concern.html

  35. 35
    choices Says:

    Da, I can see you now.

  36. 36
    zman Says:

    Choices, thanks much. Welcome to my new home. 

  37. 37
    choices Says:

    Seems like it works fine w/o any transitional glitches-thanks for the upgrade!

  38. 38
    zman Says:

    You're welcome, thank Scott, my very able IT guy. We may have a few things to tweak next week but so far so good. 

  39. 39
    ftc88 Says:

    Don't know if you need a 2nd confirm, but okay here. Windows 7 Home Premium.

  40. 40
    zman Says:

    FTC – thanks much. Do you see another post atop today's? A test post?

  41. 41
    RMD Says:

    I see post 29 "test test test"

  42. 42
    zman Says:

    RMD – great, you should also see a string of comment since then. There are also two posts after this one if you go to the top of the site.

    Also, check your email, just sent you a message regarding tonights meeting of the single digit midget round table. 

  43. 43
    RMD Says:

    Last post on 11/26 was Z to FTC #40 starting "thanks much…"

  44. 44
    zman Says:

    Thanks RMD.

    I'll have the wrap out tomorrow. 

  45. 45
    irongate Says:

    Normal
    0

    Coal notes
    Australia supplies half of the seaborne metallurgical (coking) coal market.  US Applachian coal, due to the distance from China, is not normally competitive into the Chinese market.  Suddenly however, we find ourselves more competitive (even factoring in the large shipping costs).
    The flooding is Queensland Australia has surpassed that of 2008.  Seeing some estimates of 1 to 2 yrs to get back up to full production http://tvnz.co.nz/business-news/nsw-coal-rides-tide-boom-times-4005460  In 2008 met coal went from $130 to $305 with 12mln tons shut in due to flooding.   Today estimates are already running at $15mln tons shut in and we still have 2months left to the rainy season. We came into this season at $225 for met coal and I am already seeing $350 on the spot market.  UBS estimates that for every week the AU industry is closed 2.4Mt of coal is lost.  As it stands now it will be shut for at least 6 weeks. http://seekingalpha.com/article/246884-expecting-australian-coal-mines-to-remain-under-water-for-months?source=email_watchlist
    The increased prices due to the flooding however is most likely not going to benefit Q1 eps for most miners,  as most miners had already contracted for Q1 back in Dec.  Any uncommitted coal that can be delivered this quarter is likely to be worth at least $300/ton.   And $300/ton is likely going to be at least the starting point for Q2.

    Normal
    0

    The question remaining then is….   Which US coal producers still have uncontracted coal yet to be priced, and how much of that coal is metalurgical coal?  According to a Jan 5th UBS coal report I have the following:
    Metalurgical production only (I don’t have contribution to ebitda yet)
    MEE – mgt guided 2011 production of 10-14mln tons (5mln unpriced)
    PCX – mgt guided 2011 production of 8mln tons (5mln unpriced)
    WLT – mgt guided 2011 production of 9mln tons (1st Qtr likely priced)
    ANR – mgt guided 2011 production of 13mln tons (4mln unpriced)
    ICO – Mgt guided 2011 production of 2.5mln tons
     
    PCX remains my favorite.. I found this over on stockhouse
    http://www.stockhouse.com/Blogs/ViewDetailedPost.aspx?p=112170

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