20
Oct
Wrap – Week Ended 10/19/12
Wrap table comments will be included in the Monday post, however note that coal is waking up and finally smelling the natural gas rally. With the natural gas strip hovering just under $4 look for more stories regarding lost gas-fired generation share in coming weeks however at this point this should not significantly alter the flatter slope of the injection line theory as we approach the end of he season nor the coming steeper slope of the withdrawal profile as we move into colder weather. The rally in coal prices will help with this and we'll have some heat rate comments in a post in the not too distant future.
Energy Earnings Week 2. Next week look for a lot more on the earnings front than is typical for the second week of energy earnings of the quarter, including a number of ZLT names, and the full calendar with brief comments on the names we care about will be in the Monday post.
Also in the Monday post please look for The Week That Was with summary comments on oil and product inventories (record low distillate inventories for this time of year) and natural gas storage, changes in our holdings, and comments on the HAL, MMR (Davy Jones flow test between Halloween and Thanksgiving (likely closer to Turkey Day)), SLB, and NE quarters as well as summaries on post items this week including Friday's comments on HK.
Speaking of Halcon, here's a link to that piece from yesterday on Seeking Alpha in case you need more reading over the weekend.
The ZEB Positions tables will be updated before the open on Monday and the ZLT Blotter is current.
Don't forget to follow us on Twitter at ZmansEnrgyBrain (not a typo) and if you are new subscriber or have been around for the last 7 years we say Thank You.
Thanks for reading and have a great weekend.
Saturday, October 20, 9:42 AM The Canadian government late last night blocked Malaysia's Petronas' $5.2B bid for Progress Energy Resources (PRQNF.PK), raising doubts over the fate of Cnooc's (CEO) acquisition of Nexen (NXY). Most had originally expected smooth sailing for the Petronas bid, but after the Cnooc move (and now Exxon/Celtic), perhaps the government has to say "no" to at least one. (from Alpha)
October 20th, 2012 at 9:51 amThis is another planned Canadian natgas development/LNG export arrangement that is now delayed or blocked. Yesterday the Kitimat project was delayed by APA, citing lower priced competition from Cheniere Energy (LNG) for customer contracts.
CHK, natural gas deal history, T Boone, et al-very long article tracing NG deals: (for a weekend read)
October 21st, 2012 at 9:56 amhttp://www.nytimes.com/2012/10/21/business/energy-environment/in-a-natural-gas-glut-big-winners-and-losers.html?pagewanted=1&_r=0&hp
October 21st, 2012 at 2:41 pmS&P 500 Futures Weekly Notes/Thoughts
Notes… High volume selling through the 1428.50 CHVN to minor support CLVN at 1421. Low volume area below 1421 to 1409 CLVN. Major CHVN at 1396.50 and key intermediate support at 1386. Demand volume negative on the daily and intraday time frames, positive longer term. Breadth supportive. POMO not supportive. Options ratios/ volatility spike, supportive. Currencies neutral.
Thoughts…. Market unable to established balance after the post Fed/ECB move higher. Low and Double distribution of volume = lack of consensus/commitment between buyers and sellers. A break below minor support at the 1421 CLVN puts sellers in charge for a likely test of support at the 1409 CLVN and possibly lower to 1396 CHVN. Longer term demand and breadth supportive above Major CLVN at 1386. Still expecting the back half of October to be volatile. Key levels early in the week for bulls are near support at 1421.50, far support at 1409. Bears do not want to see trading above 1428.50 and a return to the previous trading range.
CLVN=Low Volume Rejection Zone – CHVN= High Volume Price Acceptance and Congestion Zone
1478 CHVN
1464 Minor Resistance
1455.75 Minor CHVN, Acceptance. Rejected as too high on high volume.
1428.50 CHVN. Short term volume pivot
1421 CLVN…Minor Support
1409 CLVN. Support. Break out levels.
1396 CHVN, Intermediate Volume Pivot,
1386 Major CLVN, Support…low volume area below
S&P Futures
http://www.charthub.com/images/2012/10/21/ES_Composite.png
XLE Closed relatively strong on Friday above support. Demand volume still positive longer term.
October 21st, 2012 at 2:47 pmhttp://www.charthub.com/images/2012/10/21/Stock_Weekly_3.png
XOP E&P ETF back to middle of trading range and long term congestion with near support at 55. Demand flat short term, positive longer term.
October 21st, 2012 at 2:52 pmhttp://www.charthub.com/images/2012/10/21/Stock_Weekly_3_2.png
FCG Nat Gas ETF working through long term congestion and consolidating above short term support at 17 and trend line from June lows. Demand positive from the Monthly on down. Best demand volume in energy land.
October 21st, 2012 at 2:58 pmhttp://www.charthub.com/images/2012/10/21/Stock_Weekly_3_3.png
OIH back to support (40.70) above long term volume base. Demand volume positive.
October 21st, 2012 at 3:01 pmhttp://www.charthub.com/images/2012/10/21/Stock_Weekly_3_4.png
Crude Futures..Acceptance at 92 with swings between support and resistance 89.50/93.75. Big swings in range on Friday. Demand is negative in all time frames.
October 21st, 2012 at 3:06 pmhttp://www.charthub.com/images/2012/10/21/Crude_Composite.png
Nat Gas Breaking higher with minor supply overhead. Support at 3.547 and 3.33. Demand volume positive in all time frames, extended short term.
October 21st, 2012 at 3:11 pmhttp://www.charthub.com/images/2012/10/21/NG_Composite.png
$USD..bouncing off oversold at support. Watch reaction at $79.90 acceptance. A break higher would pressure markets. A break and hold above $80 would be more significant.
October 21st, 2012 at 3:16 pmhttp://www.charthub.com/images/2012/10/21/DX.png
Euro..A break below 1.30 would pressure the markets.
http://www.charthub.com/images/2012/10/21/Euro_Composite.png
Article on the recent Nat Gas cycle with a some familiar names….
October 21st, 2012 at 3:24 pmhttp://www.nytimes.com/2012/10/21/business/energy-environment/in-a-natural-gas-glut-big-winners-and-losers.html?pagewanted=all&_r=0
Thanks Zorg for sharing your work with us!!!
October 21st, 2012 at 5:57 pm12 x 2…
October 21st, 2012 at 7:15 pmawesome stuff Zorg. love that XLE stayed strong in the face of a pretty large drop on Friday. energy continues to be in favor even with crude dropping to $90 a barrel. this phenomenon feels different than the scenario played out over in early summer where we go to the $80's and energy equities were collapsing. this time around oil is trading off the highs but equities continue to show accumulation.
October 21st, 2012 at 9:10 pmnatural gas equities continue to show strength and gut tells me to add more on any drop. i had shed some XCO shares along with Zman and would love to get them back for 10% less. also would love to get back into RRC in low 60's.
rock on.
#12 you're welcome..hope it helps…Early O/N session holding near acceptance at 1428 so far after bouncing off minor support at 1421. Very light econ early in the week.
October 21st, 2012 at 9:11 pmhttp://www.charthub.com/images/2012/10/21/FT71_ES_Intraday_52512_3.png
Halcon buying acreage from Petro-Hunt…..
October 22nd, 2012 at 6:40 amHK on the tape with another big acquisition, deets in the Monday post.
October 22nd, 2012 at 6:48 am