22
Nov

Wednesday to Friday Post – Happy Thanksgiving

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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:

  1. Holdings Watch
  2. Commodity Watc​h - with oil and natural gas inventory previews
  3. Oil Inventory Review - To Be Added ... In Progress ... 
  4. Natural Gas Inventory Review - To Be Added ... 
  5. Stuff We Care About Today - Permian Players Update 
  6. 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

 

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Natural Gas Inventory Review

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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. 

52 Responses to “Wednesday to Friday Post – Happy Thanksgiving”

  1. 1
    elduque Says:

    Robry is at -49 Capacity Model and -40 EIA model

  2. 2
    zman Says:

    Oil trading $57.70 with an hour until inventories

    http://www.cx-portal.com/wti/oil_en.html

  3. 3
    zman Says:

    re 1 – thanks

    NG edging lower ahead of it on some near term aggregate mildness

  4. 4
    zman Says:

    Across the board green open in progress. 

  5. 5
    Baylor Says:

    Took a trade position in LPI

  6. 6
    zman Says:

    EIA 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. 

  7. 7
    zman Says:

    re 5 – I take it you saw my comments last night? 

  8. 8
    zman Says:
      Refiner Throughput (000 bopd)  
    YTD 2016                                      16,199  
    YTD 2017                                      16,490  
    Delta                                           291  
    Delta % 1.8%  
         
    Four weeks ago                                      16,025 Record for week of year
    Three weeks ago                                      16,015 Record for week of year
    Two weeks ago                                      16,305 Record for week of year
    Last week                                      16,639 Record for week of year
    This week                                      16,838 Record for week of year
  9. 9
    zman Says:
      Net imports (imports-exports)   Crude Imports
       (000 bopd)     
    YTD 2016                                        7,440    
    YTD 2017                                        6,995    
      YoY Delta                                          (445)    
      % Delta -6.0%    
           
    Four weeks ago                                        6,199                            8,123
    Three weeks ago                                        5,438                            7,571
    Two weeks ago                                        6,508                            7,377
    Last week                                        6,769                            7,898
    This week                                        6,282                            7,873
  10. 10
    Baylor Says:

    7 – yes thx

  11. 11
    zman Says:
    Crude Stocks Change (000 barrels)
    YTD Build '15                                 107,229
    YTD Build '16                                  38,044
    YTD Build '17                                 (21,900)
       
    2016 to 2017 Delta                                  (59,944)
    % 16 to 17 Delta -157.6%
       
       
    Note:  2017 includes impact of 28.3 mm barrels released from SPR YTD
  12. 12
    Baylor Says:

    It's really crazy looking at many equities charts the last 3 months when compared to the price of oil over the same time period

  13. 13
    zman Says:

    re 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. 

  14. 14
    zman Says:

    Massive step higher in gasoline production noted last week, nearing record high levels (not for time of year, for any time of year)

  15. 15
    zman Says:

    And distillate production reached an all time record high. 

  16. 16
    zman Says:

    Can't see the Tesla or Prius impact yet …

    Gasoline Demand (000 bpd)  
    2015 YTD                                    9,128  
    2016 YTD                                    9,375  
    2017 YTD                                    9,293  
         
    Three weeks ago                                    9,461  
    Two weeks ago                                    9,496 record for week of year
    Last week                                    9,172  
    This week                                    9,595 record for week of year
  17. 17
    zman Says:
    Distillate Demand (000 bpd)    
           
    2015 YTD                        3,905    
    2016 YTD                        3,765    
    2017 YTD                        4,014    
           
    Three weeks ago                        3,534    
    Two weeks ago                        4,486    
    Last week                        4,029    
    This week                        4,057    
           
    YoY Change to '17 6.6%    
    YoY Change to '17                           249    
  18. 18
    Baylor Says:

    Re 16 – while the reduction is small, what do you think is driving a reduction this year in gas demand given record employment etc 

     

  19. 19
    zman Says:

    Despite 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)

  20. 20
    zman Says:

    re 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. 

  21. 21
    Baylor Says:

    I'm still very surprised we haven't passed 2007

     

  22. 22
    zman Says:

    Natural 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. 

     

  23. 23
    zman Says:

    A 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

  24. 24
    brodway Says:

    Baylor 

    i also suggest you take a look ar RB's note earlier this week on LPI set up…..i think he was constructive

  25. 25
    zman Says:

    If you scroll up the oil inventory review section has been added to the post. 

    Natural Gas storage review to be added soon. 

  26. 26
    james T Says:

    Happy Thanksgiving to anyone still hanging around.

  27. 27
    zman Says:

    re 26 – to you and yours as well!

    The Natural Gas storage slides have been added to today's post. 

  28. 28
    zman Says:

    Group 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.

  29. 29
    zman Says:

    Got 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.  

  30. 30
    zman Says:

    Rig 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. 

  31. 31
    Baylor Says:

    We're there no SPR releases in 2015 and 2016 to ensure apples to apples comparisons in the tables above?

     

  32. 32
    Baylor Says:

    Also sold some $10 LPI December 15th puts

  33. 33
    ram Says:

    Happy Thanksgiving Zman, to your family and the ZEB family. Safe travels to all. 

  34. 34
    Baylor Says:

    24 – thanks broadway. I checked that out as well

  35. 35
    Baylor Says:

    Happy T Day z crew!  

  36. 36
    zman Says:

    re 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

     

  37. 37
    zman Says:

    re 33 – thanks Ram, to you too

    re 35 – backatcha!

  38. 38
    zman Says:

    Oil closed up $1.19 at $58.02.

  39. 39
    zman Says:

    COG – new 52 week high. 

  40. 40
    zman Says:

    Turkeythirty, 

    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. 

  41. 41
    Sean J Says:

    Per CNBC: Ichan just announces 13% stake in Sandridge.  He opposes BCEI purchase.

  42. 42
    bill Says:

    Happy Turkey Day

    NG jan 2018 down from 3.30 to 3.01 in 8 days …dont you think a bit overdone due to weather?

  43. 43
    bill Says:

    Duc'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

  44. 44
    Baylor Says:

    Oil up another $0.50 today to $58.56

  45. 45
    Bill Fraser Says:

    Ichan bot 13 % of SANDRIDGE

    I wonder why he picked that name over all the others

  46. 46
    Baylor Says:

    Will he interesting to see how ECR and other natty names hold up in the face of collapsing natural gas prices for a few weeks

     

  47. 47
    Bill Fraser Says:

    Absolute 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!

     

  48. 48
    zman Says:

    re 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. 

  49. 49
    zman Says:

    Also noted JAG, tied for 4th largest position in ZLT, hit an all time high today. 

  50. 50
    zman Says:

    Novak comments on potential for a global natural gas price crisis likely weighed on prices today as well. 

  51. 51
    Bill Fraser Says:

    ty re 47/50

    http://www.cpc.ncep.noaa.gov/products/predictions/814day/814temp.new.gif

  52. 52
    nrgyman Says:

    OT:  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

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