Thursday Morning – Macro Slideshow Update

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Market Sentiment Watch:  Official China PMI came in at 49.8 vs 49.7 for August. In today's post please find the natural gas inventory preview for this week, the oil inventory review for yesterday's numbers (big headline build but these are to be expected during this season, a drop in production, and record exports), the Monthly U.S. Crude Production Slide Show (a month to month build but it's due to the Gulf), the Monthly U.S. Natural Gas Supply and Demand slide shows, comments on the CXO offering , and some other odds and ends.


Ecodata Watch: 

  • We get jobless claims at 8:30 am EST (F = 270,000, last week was 267,000),
  • We get ISM at 10 am EST (F = 50.6%, last read was 51.1%),
  • We get Construction Spending at 10 am EST (F = 0.6%, last read was 0.7%),
  • We get car sales over the course of the day (F = 17.6 mm, last read was 17.7 mm)

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch - with natural gas storage preview
  3. Oil Inventory Review  
  4. U.S. Oil Production Update - 1% increase from June to July due to offshore volumes, while onshore Lower 48 continued to falter
  5. Natural Gas Macro Update - Imports remain at record lows, demand scores another monthly record high on near record electrical demand as gas outpaces coal for the second month this year, and production continues to plateau
  6. Stuff We Care About Today - CXO
  7. Odds & Ends

Holdings Watch:

ZMT (Zman Medium Term portfolio):

Yesterday’s Trades: None

ZLT (Zman Long Term portfolio)

Yesterday’s Trades: None

The Blotter is updated.


Commodity Watch:

Crude oil eased $0.14 to close at $45.09 yesterday, after EIA reported a mixed bag of a report with crude stocks in total up large and unexpectedly but the result of what we have been talking about for weeks now as we approach and now enter the refinery maintenance season (lower throughput meets the occasional bounce in demand) and U.S. lower 48 production resuming it's downward trajectory. Just before the close of NYMEX EIA released it's latest set of monthly data headlined by a 1% increase in month to month oil production. Closer examination shows the increase was driven by a Gulf of Mexico rebound and that Lower 48 production is slightly red to significantly easing in key driver states (please see the Oil Production Update Watch below).   This morning crude is trading close to $46. 


Oil Production Update Watch:  EIA released its Petroleum Supply Monthly yesterday with monthly data through July.  As noted above the month to month rise in total U.S. production is attributable to an increase in Gulf of Mexico volumes that had recently dipped and was partially offset by lower production in several key oil production growth driver states. 

Crude Supply July 2015 A


Crude Supply July 2015 B




Natural gas closed off 6 cents at $2.52 yesterday in another fairly light volume session. We continue to see the current period in pricing largely as noise as the shoulder slackness in demand weighs on pricing. After the close, EIA data showed the ongoing flat period continues as expected with Marcellus volume growth out of PA helping to stave off small declines in several oily states with large associated gas volumes. We continue to expect a lack of growth in volumes through year end (a declining flat spot) while demand continues to rise (gas fired generation again outpaced coal for a second month this year). Please see the review sections below. This morning gas is trading flat.

Natural Gas Production Brief View  (the more detailed data is further down in the post but here's the quick view)

ng sup dem quick july 2015

Natural Gas Storage Preview Watch:

  • Street is at +100 Bcf for today's report. 
  • Last Week: +106 Bcf
  • Last Year: +112 Bcf
  • 5 Year Average: +95 Bcf
  • 10 Year High: +112 Bcf
  • 10 Year Low: +75 Bcf

Oil Inventory Review

exp vs act 092515


EIA 092515 A


EIA 092515 B


EIA 092515 C

Natural Gas Production Slide Show

NG supply July 2015 A


ng supply July 2015 B


ng supply july 2015 C



Natural Gas Imports Slide Show

NG imports July 2015

Natural Gas Demand Slide Show

ng demand July 2015

Stuff We Care About Today  

CXO (unowned) Announces Secondary 

  • 7.7 mm shares (upsized from an initial 7 mm) plus an overallotment of 1.155 mm shares, 
  • Assuming a price of $92.50 net proceeds should be about $800 mm including the shoe,  
  • As of September 1 they had $421.4 mm on the revolver so that get's paid off with the balance bolstering cash. 
  • Liquidity pro forma the offering will be ~ $2.9 B (~$370 mm in cash plus the undrawn $2.5 B revolver),
  • Pro forma the deal, debt to TTM EBITDA for 2Q goes from 1.9x to 1.6x with the annualized figure running 1.6x with more than adequate interest coverage at > 8x,
  • Plan is to operate within cash flow in the current environment (they have not yet guided for 2016). 
  • Please see our comments of this primarily Delaware Basin centric player here who we do not yet own.
  • We see these guys as a large cap, high quality, "go to" Permian player name who is now better positioned for inclusion on the Shopping List than it was before giving them more flexibility to grow volumes should commodity prices warrant an acceleration. We'd expect fairly rapid acceptance of this offering as a positive item for the stock. 

CXO 093015

Odds & Ends

Analyst Watch:

  • TBA in comments

Click the link below to enter the comments area ... 

112 Responses to “Thursday Morning – Macro Slideshow Update”

  1. 1
    Wayne G Says:


  2. 2
    Wayne G Says:

    Libya Cuts ES Sider Official Crude Price to -$1/Bbl 

  3. 3
    sc4 Says:

    re yesterday's 149 nrgyman- thanks your thoughts. Agree with you that GP's are normally a superior long term choice over limiteds despite often lower yields.Have been holding a basket of your picks. Difficult to judge present prospects for KMI. BOA recently did detailed piece on them as did goldman. Both were positive. Appreciate your running commentery.tks again. sc4

  4. 4
    BirdsofpreyRcool Says:

    XACS weighs in with a comment on an energy company this morning


    CHK and its lending group decided to secure its unsecured revolver and add a more restrictive covenant. The announcement caused its longer dated bonds to immediately trade materially lower while shorter dated bonds are under modest pressure. 

    CHK 5-year CDS is being quoted 200bps to 250bps wider while its CHK 5-year to 10-year CDS credit curve has inverted.    

    Although the equity market is rallying so far this morning, we expect longer dated bonds to continue to weaken and essentially become quasi-equity. This long end bond pricing pressure is likely to cause CHK equity to reset a new 52-week low at some point this fall.  We expect short dated CHK unsecured bonds to stabilize NEAR current levels.

    One last thought, the leverage ratio covenant has the potential to push CHK into issuing equity to buy back debt at some point over the next 12 months – especially if energy prices stay low. In our opinion, bond market price action indicates that investors should avoid going long CHK equity until the pricing of its debt capital stack settles.

  5. 5
    Freeflow Says:

    Excellent post today Z – thanks!

  6. 6
    zman Says:

    Today's post above the comments area is open to the public so feel free to email and tweet the link about to those that like charts. 

    Crude approaching $47


  7. 7
    zman Says:

    re 4 – thanks 

    re 5 – you're welcome – a number of moving pieces continue to move in the right direction to solidify pricing

  8. 8
    zman Says:

    Anyone see a news item on PE?

  9. 9
    Zorgnak Says:

    500 Futures Short Term Levels Of Interest
    Notes- . Tested short term acceptance at 1929.25 in the overnight session. Minor support at 1860. Support 1840 Demand volume negative. Ease of movement negative. Sentiment = Extreme Fear. Small cap relative weakness
    Thoughts-  Oversold bounce back to long term acceptance at 1915. Bounce suspect until a close above 1929.50 which was tested in the overnight session. Market trading in dense long and short term congestion with considerable supply higher. 
    1995 Major CLVN/Resistance.
    1929 Short term acceptance
    1915 Major CHVN
    1900 Minor CLVN/Support
    1860 Short term range lows
    1840 Far Support

  10. 10
    tomdavis12 Says:

    PE  Don't even see the news bug?

  11. 11
    zman Says:

    re 10 – thanks found it, it's a bad bug from a TSX listed name that's accidentally linking to PE on my system, thanks for looking. 

  12. 12
    Wayne G Says:

    U.S. Is Net Oil Exporter to Mexico, 1st Time in 22 Yrs 

  13. 13
    Zorgnak Says:

    Crude Oil Futures-  Attempting to reject long and short term acceptance at 45.47 Levels are well defined with first test at 47.22, the short term value area for the past 30 days. So far the daily volume profile just shows a typical short covering pattern above 45.64 . Bulls need to see two way volume build above that level on retests lower (from overnight highs) today. Major resistance at 49.50.  Key short term support mid 43s. 

  14. 14
    Wayne G Says:

    IEA's Birol Says U.S. Oil Output to Fall 400k Bbl Next Year:Bht

  15. 15
    macguyver Says:

    Z….you win for most charts on any website today!!

  16. 16
    zman Says:

    Analyst Watch

    Simmons ferrets out the GOM rise – maintenance at Jack/St Malo 1 (deepwater) that we knew about and the rise of the 100,000 bopd Delta House  which I didn't have in my figures.   That should be the top near term for the Gomex rally near term.  

  17. 17
    Zorgnak Says:

    Re # 13Crude Oil Futures- Change "So far the daily volume profile just shows a typical short covering pattern above 45.64"  to 45.86 

    For entertainment only…  Here's the very short term volume profile….Noting yesterdays's volume point of control (45.38), long and short term acceptance all in alignment yesterday. Above 45.86 spooked shorts and ran price to the low 47s and minor resistance. Volume acceptance building above 46.65 at the moment. Watch reaction at 47.22.


  18. 18
    zman Says:

    re 12 – Nice!  More to come. 

    re 14 – depends on pricing but CLB would say he's going to be light by half. 


  19. 19
    zman Says:

    Tropics Watch

    Today's oil rally brought to you by Hurricane Joaquin – spooking fears of east coast refinery outages and prompting a rally in gasoline futures. 

    And Syria and Yemen to a lessor extent. 

    And China because PMI didn't step lower. 


  20. 20
    zman Says:

    ISM light at 50.2 vs 50.6% expected

    Construction spending at +0.7% vs +0.6%

  21. 21
    RB Says:

    re: PE…all I see on BB is one of their Bloomberg Industries mentions that essentially  says if oil prices stay low Laredo, Diamondback, Parsley, SM, Continental, EOG and Marathon will increasingly face the complex decision to shut-in negative cash flow wells….

  22. 22
    zman Says:

    re 21 – thanks. Surprised BB would write such a piece.  We can talk about why you might not spud or complete a well in a low oil price environment but shutting in existing production would only be prompted in the case of either a very high LOE position (something that particular list of characters doesn't have) or due to much much lower prices. Got a link to the story, I'd like to see it to see if they are talking about some pockets of mature legacy production that's costing a lot to maintain?

  23. 23
    Wayne G Says:

    Russia May Consider Iraqi Request to Fight Islamic State: RIA 

  24. 24
    james T Says:

    re- We have all seen firms put out negative stories near bottom and positive ones near tops,  who knows ?

  25. 25
    zman Says:

    We have noted in the monthly industrial gas demand figures, a category that was surging to monthly record highs in 2014, a moderation in 2015 to hold near the highs but not make new ones. This has happened while refining, which consumes a good bit of natural gas, has moved to record levels meaning it is offsetting some other consuming sector (steel seems more than the likely culprit but it's not broken out and their could be a contribution from another segment on the downside).  Seems to be matching up with ISM slow down well. 

  26. 26
    RB Says:

    re: 22…no link but the article is about stripper wells with negative cash flow…it's a crummy piece of blather

  27. 27
    zman Says:

    re 23 – thanks.  Getting pretty Tom Clancy like over there. 

  28. 28
    zman Says:

    re 26 – OK thanks, that makes a lot more sense. Sure, shut em in already, there is between 300 and 400,000 bopd of stripper capacity in the US at the moment, maybe a touch more as my data is dated on that.  Wells with less than 10 bopd of production and generally around 1 bopd.  Just not worth the cost of electricity, hauling, the occasional stripper version of a workover. 

  29. 29
    zman Says:

    Zorg – what's your current bulls back in charge (so to speak) level on the XOP?

    NG inventories in 7 minutes. 

  30. 30
    zman Says:

    Seeing headlines cross on EXXI on twitter – some just now seeing John's credit habits.  Stock still not caring. 

  31. 31
    zman Says:

    Natural Gas Storage Report

    +98 Bcf 

    We now have 3,538 Bcf in storage

    up 14.7% from year ago levels (declining)


    up 4.5% to the five year average (flat with the prior week)

  32. 32
    mattlee Says:

    re 1 – So "neutral" = +75% from current price?  Wonder what their price targets are on "strong buys"?

  33. 33
    zman Says:

    re 32 – I thought the same thing. Way to sit on the sidelines and not put your mouth where your math is.  

  34. 34
    zman Says:

    Anyone have news on PVA?  I have a news bug but no story.

  35. 35
    zman Says:

    Broad market lacking traction

    Oil slipped $1.50 in 20 minutes. 

    Market is Fed up with this kind of volatility. 

  36. 36
    Wayne G Says:

    Senate Panel Votes 13-9 to Repeal U.S. Crude Export Ban

  37. 37
    zman Says:

    re 36 – I wonder if the White House would veto the eventual bill or not.  Guessing they will try to keep it from getting to the floor. I also imagine that it will take 60 votes, not 50 for this kind of bill to get cloture in the Senate. 

  38. 38
    tomdavis12 Says:

    34  PVA filing SEC form 4

  39. 39
    nrgyman Says:

    RE 35:  Fed's Lacker spoke–said a rate rise is still possible in Oct and he supports it.  He was the only dissenter to holding rates steady in the face of global deflation and US industrial slowing–he wanted to raise rates.  Now that we have seen lower than expected Chicago PMI and ISM numbers this week, it is not surprising he comes public with a reiteration of his raise rates mantra.  Markets dropped after he spoke.

  40. 40
    james T Says:

    Nat Gas -98  Ok Number I believe

  41. 41
    zman Says:

    re 38 – thanks Tom. I see it now. Several form 4's as the directors get their $0 shares. Not a single buy from them or management down here. Last sales were Baird before he said he was retiring, just north of $6 in May as part of a planned sale.  None of these guys stepping up now to buy the stock down here is pretty telling regarding their thoughts of how they planned for lower prices. 

  42. 42
    ButlerBaby Says:

    ….just as crude was testing the top of the pennant. 

  43. 43
    zman Says:

    re 39 – yeah.  And market not sure, at least in my view, of what it wants to see from payrolls tomorrow. I'd like to see strength in the numbers but not sure how the market is going to take that. 

    re 40 – yes, in line, quick stats are in #31 above. Adding a couple of new items to the storage section of the Friday post at the moment. 

  44. 44
    Wayne G Says:

    UBS Sees Oil Glut Clearing in 2H 2016 on Falling Non-OPEC Supply
       “Oil mkt remains in surplus to the tune of 1m b/d in 2H 2015, which should cap any upside to price rallies on a 3-mo. basis,” UBS analysts Giovanni Staunovo, Wayne Gordon say in note. 
    • “Falling non-OPEC supply and oil demand rising by 1.3m b/d next yr should clear this surplus in 2H 2016”
    • “Low probability” of hard landing for China’s economy
    • Keeps 12-mo. target for Brent of $72/bbl

  45. 45
    james T Says:

    re43- I posted that after 11:00  because I was not getting updates even when re loading page.  Now I got a whole bunch, weird.

  46. 46
    Wayne G Says:

    OPEC Oil Shipments to Rise 450k B/D to Mid-Oct.: Oil Movements 
       OPEC cargoes, excl. any from Ecuador and Angola, to rise by 450k b/d to 23.92m b/d in 4 wks to Oct. 17, tanker-tracker Oil Movements says in report. 
    • Mideast shipments, incl. from non-OPEC nations Oman and Yemen, to increase by 470k b/d to 17.31m b/d in same period
    • Crude on tankers to rise to 475.86m bbls in period vs 461.25m bbls in 4 wks to Sept. 19.
    • NOTE: Tanker data exclude volumes in floating storage

  47. 47
    zman Says:

    re 45 – ah, thanks for letting me know, we had some site congestion issues I think, checking. 

  48. 48
    Mark Wetzler Says:

    #39 nrgyman  Do you think that the MLP model will need to change to provide better returns to the LPs? As you mentioned yesterday the GPs get 50% of the up after a preferred return to the LP and the LP pays the capital costs. The deal has been lopsided but worked as long as there was robust growth in the LP distribution. With LPs recognizing the new risks, won't they charge more for their capital and reduce the benefits to the GP?

  49. 49
    choices Says:

    #39-I do not recall under Greenspan and The Bernank that the Fed was speaking with so many voices, constantly roiling the markets.  Of course, somewhat different circumstances as everybody now is waiting for the miniscule 0.25% raise but the many voices certainly are a distraction.

  50. 50
    Zorgnak Says:

    #29  Re XOP bulls in control……That's quite a question. Long term or short?   There's so much supply/resistance at so many levels that the various tipping points relative to various time frames will come step by step, to my eye. Today we saw a pop to defined resistance at 34.33 nearly to the penny. The subsequent pullback is now testing towards minor support at 32.75. If bulls support above that level and then are able to close above 33.64 I'd venture the swing low is in at 31.64. If we're picking bottoms this would be a spot to try. (right hand chart). I'd be wrong with a close below 32.75.

     If we're waiting for more confirmation then we need to see a close above 33.64 and then 34.33 taken out as the next step with a return to and close above major acceptance at 37.53, no small feat. Even then there are multiple major supply and resistance hurdles above, not to mention the general market and crude machinations and disconnects. In short I don't see a longer term all clear level for quite a while and by then there will have been quite a move to get there. Best I can offer for the bullish scenario is to pay attention to how each level is treated to confirm it along the way. The more confirmation required the more risk of both opportunity and reversals. I look for pullbacks to minor support along the way for entries. 32.75 is the near level of interest at the moment for short term trade entry and risk control.   

    Make any sense? Open to questions.




  51. 51
    zman Says:

    re 49 – I recall them speaking, especially under Ben, but seems to get more attention now. 

    re 50 – that all makes sense. As for me, not trying to pick a bottom. Looking for the sideways trade and then a move out of it higher with me planning to add fresh capital higher than here. I don't mind liking them higher as they are still well below were I see them 1 to 3 years from now. 

    Increasingly liking CXO by the way but not owned.  See comments in post and in the link in the post to prior write up. 

  52. 52
    nrgyman Says:

    RE 48:  I agree.  I think there should be a re-structuring of the IDR model.  EPD, MMP, MWE and KMI all combined the LP and GP interests to eliminate the problem.  Will not be a surprise to see more of this.  For example, MPLX is the LP of MPC who is in the process of acquiring MWE.  MWE has an integrated GP/LP model, so no IDRs.  But MPLX is still operating under the old model which means MWE unitholders will have to return to paying IDRs after the merger closing.  There are plenty of unhappy MWE unitholders and MPLX has tanked.  A simple solution would be for MPC to eliminate the IDRs for a modest consideration or go to a flat rate of, say, 20% for the GP sponsorship.  50% amounts to an untenable long term relationship and the market is noticing.  Making such a model change might actually help MPC because the value of MPLX would likely rise, which lowers the capital costs for MPLX acquisitions and raises the value of MPC's holdings in MPLX.  

  53. 53
    zman Says:

    NJ declares state of emergency re Joaquin

  54. 54
    tomdavis12 Says:

    EPD just announced increase in quarterly dividend. 45th quarterly dividend increase in a row. 

  55. 55
    sc4 Says:

    52  about two years ago it looked like IDRs might be eliminated from the mlp universe and yet that did not happen. With the changing environment, hopefully something more will happen now. Equally interesting is that all the yieldcos tried to use the same idr structure and paid GP type yields. Never could understand why anyone would buy them. With the present decline in pricing, many of these units have come down as well offering slightly better yields. Yet continue to avoid the yieldcos as the terms remain much more favorable to the gps.About four months ago several houses started to promote yieldcos . How they could do that was beyond me.

  56. 56
    Zorgnak Says:

    #51  Re XOP  sideways trade…If you're looking for the sideways trade then I'd venture this is the far end (32.75)of what will become a short term sideways trade. Short term point of control at 33.64. Major acceptance at 37.53 will be the longer term point of control for a longer term sideways and base building period. Far end of the long term sideways trade at 41.58 will be major resistance.

  57. 57
    zman Says:

    re 56 – thanks much

  58. 58
    zman Says:

    Re MHR – someone asked about it earlier this week, got busy and forgot the exact question, what would you like to see on them?

  59. 59
    nrgyman Says:

    RE 55:  Agreed.  Banks and GPs are betting that enough investors want relatively high current yields to go for the LP stakes.  They do not equally sell the risks or the lopsided sharing arrangement favoring the GP over the longer term.  Yet these become long term investments due to high taxes that must be paid to change (the tax shelter of the current income turns into a long-term tax headache, prompting many to hold these for life).  GPs are counting on that to fill their long term coffers.  One reason I hold only GPs, except for MLPL which is a very different story and even there EPD, MMP and MWE are top holdings.

  60. 60
    elduque Says:

    That was Matlee- wanted to know how the could have a book value so much higher than the stock. I believe.


    Thanks for all your hard work. Just wish the train would leave the station at a faster pace. 

  61. 61
    zman Says:

    re 60 – thanks, I don't recall book value but will go back and find the question. 

  62. 62
    zman Says:

    Found it, 

    "Z, when you get a chance would you mind giving a take on MHR's asset valuation (in case of liquidation)?  As mentioned last Friday, their September slides show a valuation that may or may not be way too optimistic.  Thanks in advance."

  63. 63
    mattlee Says:

    re MHR

    Basically, I'd like to get your take on their estimate of their NAV in their September slides.  As a preferred shareholder, I'm preparing myself for a liquidation event and am concerned with Gary's claims that their assets should easily cover these preferreds.  They show a lower and upper range of values for their assets, which seem a tad unrealistic to my untrained eye given the current environment.  Also, as someone who is not knowledgeable in these things, is their NAV even pertinent to preferred shareholders?  Thanks in advance.


  64. 64
    mattlee Says:

    Sorry for the redundancy.  Was typing #63 up and didn't see the responses.

  65. 65
    nrgyman Says:

    BofA analyst looking for a 40% rally in natgas, beginning in Q4.  Also looking for crude to move higher.  Coming up on CNBC.

  66. 66
    zman Says:

    re 63 – No problem, sorry for delay, it'll be in the morning post, a table and some thoughts, not a name I cover but happy to try to help. 

  67. 67
    tomdavis12 Says:


    Maybe market overestimating the pain of bond refinancing. 

  68. 68
    zman Says:

    re 65 – thanks, have the dvr on, stepping out for lunch

    re 67 – yes. That story was out earlier in the week and I agree with it. 

  69. 69
    nrgyman Says:

    BofA's Blanch looks for 3.9Tcf peak in storage, and a 40% rally in Q4.  Demand factors are bullish for it he says.  Looks for balanced crude inventories into YE, first time in 8 Qs, leading to a rally in crude in Q4.  

  70. 70
    zman Says:

    re 69 – thanks – we're upper end of our band so 4.05 max, markets would rather see BofA number as short term considerations go. Agree demand is bullish but supply (is still high relative to Sept/Oct last year by just over 3 Bcfgpd.  If we assume ongoing demand strength is maintained at YTD level on normal weather then I can get to that lower number.   

  71. 71
    zman Says:

    adding to that, this is from tomorrow's post:

    NEW Table: Additions from current week to end of season vs supply at that time    
      Additions Rest of Season     Sept – Oct    
      to Storage Average Number    Average     
      from Current Additions per of weeks Seasonal  Supply    
      point in time Week  from here Peak (prod + imp)    
      (Bcf) (Bcf) to peak (Bcf) (Bcfgpd)    
    2005 353 59 6 3,282 56.6 (Gulf volumes impaired)
    2006 134 45 3 3,461 61.9    
    2007 292 42 7 3,539 64.2    
    2008 388 55 7 3,486 63.2 (Gulf volumes impaired)
    2009 248 28 9 3,837 64.0    
    2010 429 61 7 3,843 68.4    
    2011 540 68 8 3,852 71.6    
    2012 284 57 5 3,926 72.9    
    2013 347 58 6 3,834 73.9    
    2014 511 85 6 3,611 78.6    
    ZEB 2015 E       3,950 to 4,050 80.5 to 81.5    
    EIA 2015 E       3,840 (end of October)  
  72. 72
    james T Says:

    ZMAN- SWN seems to stand out among others:

    2 day approx




  73. 73
    james T Says:

    re72- Don't buy SWN on my advice, just noting charts,  weather is everything with the nat gas story in the short run.

  74. 74
    zman Says:

    Thanks – it would make sense to have it crop up on institutional buy lists now.  Cheap, gassy, highly liquid, and gas is oversold. 

  75. 75
    zman Says:

    Iran ground troops to enter Syria, Russia bombed CIA trained rebels in Syria.  


  76. 76
    zman Says:

    Mattlee – I can tell you now I don't agree with the look he gives on NAV.  It's going to be high.  I'll have details on how I look at this in tomorrow's post.  

    adding to 75 – I wonder if creating a wider conflict in the ME could be Russia/Irans way of plumping up the risk premium?

  77. 77
    choices Says:

    Shooting at Roseberg,Oregon community college, 7-10 killed, up to 20 wounded.

  78. 78
    james T Says:

    re77- Not the country I grew up in, very sad.

  79. 79
    nrgyman Says:

    Sept auto sales rate at 18.17 million annual.  Strongest rate in many years.

  80. 80
    zman Says:

    re 79 – thanks, and above estimates. 

  81. 81
    mattlee Says:

    re 76 – thank you, look forward to it.

  82. 82
    Freeflow Says:

    CXO now green on the day

  83. 83
    Justin Says:




  84. 84
    ButlerBaby Says:

    JPM cutting Q3 GDP estimate to 1.5%

  85. 85
    zman Says:

    Beerthirty – back in a bt. 

  86. 86
    nrgyman Says:

    Pipeline expansions reducing basis for Bakken crude continues:


  87. 87
    nrgyman Says:

    MLPL:  up +33% in the last two days, but still below where it closed 4 days ago.  Volatility unnerving for a supposed income investment.  Got to believe many typical midstream investors are a bit shell-shocked.  Turnaround led by EPD and MMP, two of the best names in the space due to strong balance sheets.  Irrational selling in the last week of Q3 provided a great buying opportunity in these names, along with WMB/ETE.  Still attractive imo, but ST the big gains likely are in.  Expecting a slower slog higher over time in the midstream space, though a crude/natgas rally in Q4 could see investors use these names as a safer way to play an energy rally.  Highly likely we have seen the capitulation lows in the midstream space, imo.

  88. 88
    brodway Says:

    re: 79

    Wow….they were expecting auto sales to be in the mid 17 million range….that is an impressive number….are those electric cars or those that run on gasoline???? LOL

  89. 89
    Wayne G Says:

    Cheniere Energy Holder Carl Icahn Boosts Stake to 12.07%

  90. 90
    zman Says:

    From tomorrow's post:

    China Watch: According to Platts, China oil demand was up 10.2% YoY in August reaching 11.19 mm bpd with August China refinery throughput averaging 10.49 mm bopd. YTD demand vs the first 8 months of 2014 was 11.14 mm bopd, up 8.2%.  

  91. 91
    ctb14 Says:


  92. 92
    ctb14 Says:


    Some of those Chinese demand numbers are very large…and they are saying there were large draws on refined stocks too.

  93. 93
    Wayne G Says:

    Alaskan North Slope Production 494k B/D in Sept.: State 

  94. 94
    zman Says:

    re 92 – yep

  95. 95
    zman Says:

    From tomorrow's post:

    PDCE Borrowing Base Comments

    • Borrowing base reaffirmed at $700 mm (again) with commitment level self limited at  $450 mm level (also again),
    • Maturity of the borrowing base was extended 2 years (not much fear in that particular set of bankers),
    • As of the end of 2Q PDCE had liquidity of $387 mm (they see keeping the budget matched with cash flow in 2016) and net debt to TTM EBITDA of 1.3x. 
    • We took a Starter Core position here in the ZLT in June and have not yet added to it.  PDCE remains on the Shopping List for adds later this fall. 
  96. 96
    zman Says:

    Offtopicthirty, back in a bit. 

  97. 97
    james T Says:

    Link to shopping list ?   

  98. 98
    besherman Says:


    Agree and own it BUT I'm far from convinced we've seen the end of the volatility. 3Q reports from some of the midstream MLP's could be disappointing and many may well revise guidance downward. The analysts are almost sure to bring growth projections down further (WF has started to telegraph that they will do so soon). Distress in the HY markets and among stress among  E&P C-corps could exacerbate volume concerns in the weeks ahead (remember, declining US production may be good for oil/gas prices but lower volume is NOT good for pipelines). And then there is tax loss selling and fund liquidations/window dressing at year end. Hope you are right and I am wrong but I think MLPL could easily drop back to the low 20's before the year is out.

    I'd really appreciate your reaction to these thoughts.


  99. 99
    Zorgnak Says:

    #77 I live in Roseburg….There are at  least 5 kids I know well that go there. I have two friends who teach there. The whole town is stunned into a sort of numbness. Me too. The impact of this stuff is more than I could imagine until it happens in your home. 

  100. 100
    nrgyman Says:

    RE 98:  Agree about volatility, which usually is greatest as markets feel out a bottom. So a re-test is definitely possible.  That said, I do think the bottom is in, even if the market probes lower from here.  The factors you mentioned are in the market pricing atm.  And natgas volumes are not likely to decline much–if they do it would be temporary.  Demand growth for natgas is robust and supply will follow–of that I'm very confident.  There may be winners in the space due to positioning and balance sheets, so it is possible a broad portfolio like MLPI may not keep up with the best in class names.  Also, that portfolio is mostly LPs, so that means it is focused more on income than growth.  The GPs are mostly absent in that portfolio, except for EPD, MMP and MWE which have combined GP/LP structures.

  101. 101
    besherman Says:


    Thanks. Very much appreciate your thoughts.

  102. 102
    zman Says:

    re 99 – very sorry to hear that Zorg, best thoughts to you and yours. 

  103. 103
    elduque Says:

    re 99- always at a loss of words in expressing my feelings. It seems so senseless and is senseless.  

  104. 104
    thumper Says:

    Zorg….Thoughts are with your family and everyone in Roseberg, senseless!!!

  105. 105
    Zorgnak Says:

    #104 Thanks for your thoughts….

  106. 106
    BirdsofpreyRcool Says:

    Zorgnak — unspeakable evil.  Stay strong.  98.999% of us are Good People.  Focus on that.  But so very very sorry.

  107. 107
    sc4 Says:

    The former Miniter for Energy in China spoke today at Columbia. Said a couple of interesting things.

    l. China does not now have a 90 day buffer stock. Not clear how much stock they have but he indicated he expects that they will build out more capacity so that they hold. such a stock.This and sustain growth should support demand for imports.

    2.Appearently for shale drillers in china there is a rmb 40 subsidy for each unit produced but the system has many problems as they are not always clear which production comes from shale and which from conventional drilling. Sounded like they should change this system.

    3. There have been several arrests of senior people involved in arranging imports- Not sure if the guy who spoke can even return to China. No  talk about that issue. Overall the guy seemed experienced and as if he had a clear grasp of total dynamics. One point brought home was that reductions in coal use will result in major social problems in the mining sector and how to  handle miners looms as a significant political issue for the state. Not saying that it can not be done rather that it plays a greater role in central government thinking than I had expected.

  108. 108
    Zorgnak Says:

    OT  #106  Thanks everyone..I'm fine. Going to be a while before this little town (22,000 pop) recovers though. It's a one high school sort of town and so everyone is connected to everyone in some way at the local community college.


  109. 109
    tomboy style clothing Says:

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  110. 110
    DBOL Reviews Says:

    DBOL Reviews

  111. 111
    cohiba cigars Says:

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    Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Thursday Morning – Macro Slideshow Update

  112. 112
    The wheels on the bus Says:

    The wheels on the bus

    Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Thursday Morning – Macro Slideshow Update

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