22
Nov
Wednesday to Friday Post – Happy Thanksgiving
.
.
Market Sentiment Watch: Expect a slow market today and for the half day session Friday. In today's post please find the oil and natural gas inventory previews (we get oil at the normal time and natural gas at noon eastern), the Permian Players update table, and some other odds and ends. This afternoon we plan to add the oil and natural gas inventory review slide shows to this post as time permits.
Please see the Housekeeping Watch at the end of today's post. If we don't speak to you in comments have a safe and happy Thanksgiving holiday.
Ecodata Watch:
- We get jobless claims at 8:30 am EST (F = 240,000, last read was 249,000),
- We get durable goods at 8:30 am EST (F = 0.5%, last read was 2.0%),
- We get consumer sentiment at 10 am EST (F = 98.0, last rea was 97.8),
- We get the FOMC minutes at 2 pm EST.
In Today’s Post:
- Holdings Watch
- Commodity Watch - with oil and natural gas inventory previews
- Oil Inventory Review - To Be Added ... In Progress ...
- Natural Gas Inventory Review - To Be Added ...
- Stuff We Care About Today - Permian Players Update
- Odds & Ends
Holdings Watch:
ZLT
- Yesterday's Trades: None
- The Blotter is updated.
- ZLT Cash: 21%.
Commodity Watch:
Crude oil closed up $0.41 yesterday at $56.83 on middling volumes in a fairly holiday looking session. After the close, API reported a bullish side of neutral report as reflected in the bullets below. We get the EIA oil inventory report at 10:30 am EST. This morning crude is trading up a buck early.
API Watch:
- Crude: Down 6.4 mm barrels,
- Cushing: Down 1.8 mm barrels,
- Gasoline: Up 0.9 mm barrels.
- Distillates: Down 1.7 mm barrels.
Oil Inventory Preview - See Update Section Below
Natural gas closed off 3 cents at $3.11 on the January contract on light volume. We get the EIA natural gas storage report at 12 pm EST. This morning gas is trading off 2 cents early.
Natural Gas Storage Preview - See updated review section below.
- Bloomberg Consensus: - 51 Bcf
- Last week: - 18 Bcf
- Last year: +2 Bcf
- 5 Year Avg: -21 Bcf
Oil Inventory Review
.
.
Natural Gas Inventory Review
.
Stuff We Care About Today
Permian Players Update
We have color coded the Players update with this edition.
- Pink = reason for caution, or excessive multiple for the name,
- Blue = neutral or elevated multiple, or notable number with notation,
- Green = good, cheap. As always a 9x multiple could be cheap for one name while being expensive for another.
- If you have questions feel free to ask.
Other Stuff
- Look for more cheat sheet updates next week (including WLL, MTDR, gassy names),
- Look for the final 3Q17 So Far This Quarter next week.
Odds & Ends
Analyst Watch:
- TBA in comments.
Robry is at -49 Capacity Model and -40 EIA model
November 22nd, 2017 at 9:25 amOil trading $57.70 with an hour until inventories
http://www.cx-portal.com/wti/oil_en.html
November 22nd, 2017 at 9:31 amre 1 – thanks
NG edging lower ahead of it on some near term aggregate mildness
November 22nd, 2017 at 9:32 amAcross the board green open in progress.
November 22nd, 2017 at 9:32 amTook a trade position in LPI
November 22nd, 2017 at 10:02 amEIA Oil Inventory Quick Look
Oil at $57.70 just prior to the report
Crude – Down 1.9 mm barrels (as noted, this includes impact of a 1.7 mm draw from the SPR)
Throughput – further increase to 16.8 mm bopd – again, what maintenance season, record figure again for this week of the year,
Imports – essentially flat week to week,
Exports – big rebound week to week, up 462,000 bopd over prior to ~ 1.6 mm bopd.
Lower 48 oil production – listed as up another 20,000 bopd. This number is on autopilot. Overzealous modeling and no impact shown at all for DW production known to be down.
Gasoline – Flat
Demand – big increase here, up 0.4 mm bopd to 9.6 mm bopd. Easily highest on record for this week of year.
Distillates – Up 0.3 mm barrels
Demand – flat week to week at just over 4.0 mm bopd
Nutshell: Neutral to slightly bearish report on the headline numbers; better looking on the internal numbers. Not as good as API last night so initial reaction a negative but basic improving trends remain intact.
November 22nd, 2017 at 10:37 amre 5 – I take it you saw my comments last night?
November 22nd, 2017 at 10:44 am7 – yes thx
November 22nd, 2017 at 10:54 amIt's really crazy looking at many equities charts the last 3 months when compared to the price of oil over the same time period
November 22nd, 2017 at 10:57 amre 12 – last 3 months they've at least shown on average a good rebound. YTD average vs end of year expectations on oil vs stocks is indeed off kilter.
November 22nd, 2017 at 11:01 amMassive step higher in gasoline production noted last week, nearing record high levels (not for time of year, for any time of year)
November 22nd, 2017 at 11:03 amAnd distillate production reached an all time record high.
November 22nd, 2017 at 11:05 amCan't see the Tesla or Prius impact yet …
Re 16 – while the reduction is small, what do you think is driving a reduction this year in gas demand given record employment etc
November 22nd, 2017 at 11:15 amDespite the massive gasoline production level
Stocks are now 0.4% below the 5 year average, lowest yet this cycle and down 6% YoY (also lowest yet)
November 22nd, 2017 at 11:15 amre 18 – argely blending issues early in the year affect how demand is reported, since spring it's been largely in line and sometimes outpacing and 2016 was itself a very strong year for demand (strongest since 2007) .
Natural Gas Storage in 30 minutes.
November 22nd, 2017 at 11:36 amI'm still very surprised we haven't passed 2007
November 22nd, 2017 at 11:39 amNatural Gas Inventories
– 46 Bcf, essentially in line with consensus
We now have 3,726 Bcf in storage
Both deficits increased sharply.
Now 7.9% below year ago levels
Now 3.1% below the five year average
We will have the oil inventory slide show posted in 15 minutes and the natural gas inventories in another 30 to 45 after that.
November 22nd, 2017 at 12:01 pmA lot of desks are empty at this point but of note, oil drifting to $58 post inventories
http://www.cx-portal.com/wti/oil_en.html
November 22nd, 2017 at 12:02 pmBaylor
i also suggest you take a look ar RB's note earlier this week on LPI set up…..i think he was constructive
November 22nd, 2017 at 12:04 pmIf you scroll up the oil inventory review section has been added to the post.
Natural Gas storage review to be added soon.
November 22nd, 2017 at 12:21 pmHappy Thanksgiving to anyone still hanging around.
November 22nd, 2017 at 12:39 pmre 26 – to you and yours as well!
The Natural Gas storage slides have been added to today's post.
November 22nd, 2017 at 12:51 pmGroup in green treadwater action. Expecting no individual company news flow until at least next week and not much at all before Nov 30.
I'm stepping out but will monitor for questions.
This post is open to the public so feel free to share it out.
Have a good, warm, safe holiday.
November 22nd, 2017 at 12:53 pmGot asked in email about EPE again, comments from the site last night
re 34 – re EPE (unowned)
– down 20%,
best thought would be the exchange offer announced the previous evening didn't make people happy
It's a higher rate and costly on the exchange (overall debt goes up and the rate is a good bit higher than what it replaces) but they get a modest extension of maturity
You can see on the minute chart it hovered about in the first half of the session edging lower until it hit the prior recent low of $2.30 and when that snapped it fell apart technically, having no obvious daily chart support and being well below the 200, 50, and 20 day sma's already.
It's possible someone on the sellside gave at nudge on the after call, maybe a bit of extra attention given the lack of news flow in the space. Basically prompts a panic on on high volumes.
November 22nd, 2017 at 1:02 pmRig Count Watch:
Oil up 9 to 747 vs 747 a year ago
NG down 1 to 176 vs 118
Horizontals up 10 to 786 vs 475
Verticals up 3 to 66 vs 66
Permians up 2, DJ up 1, Cana down 1 – rest of big basins listed as flat. Squirelly #s.
November 22nd, 2017 at 1:08 pmWe're there no SPR releases in 2015 and 2016 to ensure apples to apples comparisons in the tables above?
November 22nd, 2017 at 1:34 pmAlso sold some $10 LPI December 15th puts
November 22nd, 2017 at 1:58 pmHappy Thanksgiving Zman, to your family and the ZEB family. Safe travels to all.
November 22nd, 2017 at 2:17 pm24 – thanks broadway. I checked that out as well
November 22nd, 2017 at 2:31 pmHappy T Day z crew!
November 22nd, 2017 at 2:33 pmre 31
Ostensibly all SPR release or adds impact crude stocks ex SPR since they supplant imports or exports or otherwise offset demand.
2015 saw a 4 mm barrel increase in the SPR.
2016 change was de minimis
November 22nd, 2017 at 2:45 pmre 33 – thanks Ram, to you too
re 35 – backatcha!
November 22nd, 2017 at 2:46 pmOil closed up $1.19 at $58.02.
November 22nd, 2017 at 3:18 pmCOG – new 52 week high.
November 22nd, 2017 at 3:18 pmTurkeythirty,
A great safe holiday to all.
I will check in from time to time on the half day session Friday but won't post anything new.
The Wrap will be out on Sunday.
November 22nd, 2017 at 3:43 pmPer CNBC: Ichan just announces 13% stake in Sandridge. He opposes BCEI purchase.
November 22nd, 2017 at 4:10 pmHappy Turkey Day
NG jan 2018 down from 3.30 to 3.01 in 8 days …dont you think a bit overdone due to weather?
November 23rd, 2017 at 10:05 amDuc's up 35 %
https://seekingalpha.com/article/4127133-permian-duc-wells-surge-massive-implications-wti-oil-prices-inventories-permian-oil-producers?ifp=0&app=1
Not enough crews to complete and other logistical bottlenecks
November 23rd, 2017 at 10:21 amOil up another $0.50 today to $58.56
November 23rd, 2017 at 1:50 pmIchan bot 13 % of SANDRIDGE
I wonder why he picked that name over all the others
November 24th, 2017 at 7:38 amWill he interesting to see how ECR and other natty names hold up in the face of collapsing natural gas prices for a few weeks
November 24th, 2017 at 8:44 amAbsolute thrashing in NG sub 3 for Jan and Feb with inventories being "relatively" low and we have a lng export capability
Was 3.32 2 weeks ago , down 40 cents in 2 weeks to 2.92!
November 24th, 2017 at 1:15 pmre 47 – pretty typical action for natural gas, it got close to the upper end of our near term band for the first time in 2 months, then ran the other way accelerating lower on a mild near term forecast and after a bout of covering exhausted itself. We're in 8th place as far storage for time of year goes but supply headwinds are a price restraining factor as previously noted and our 2018 $3.25 deck has modest downside revision risk to it. At present we only hold the 3 gassy names on the ZEB positions page for our gassy exposure, one, COG, is toying with 28 month highs and remains unhedged. The other two are leverage recover and/or catalyst driven names with stronger hedges in place and sites on improving differentials. But in total, primary gassy exposure in the ZLT remains just over 10%.
ZLT ends the week up 2%. Moot in front of next week's OPEC action.
Gotta run, The Wrap will be out on Sunday. Have a great second half of the holiday.
November 24th, 2017 at 1:37 pmAlso noted JAG, tied for 4th largest position in ZLT, hit an all time high today.
November 24th, 2017 at 1:39 pmNovak comments on potential for a global natural gas price crisis likely weighed on prices today as well.
November 24th, 2017 at 2:19 pmty re 47/50
http://www.cpc.ncep.noaa.gov/products/predictions/814day/814temp.new.gif
November 24th, 2017 at 2:29 pmOT: Interesting article on the 'Arab Spring' in Saudi Arabia. Good color on the aims and challenges facing the Crown Prince, MBS.
https://www.nytimes.com/2017/11/23/opinion/saudi-prince-mbs-arab-spring.html
November 24th, 2017 at 3:46 pm