Wrap – Week Ended 04/06/18


Good Things To Know Watch:  It's tax time. Investment-related expenses that you may be able to deduct include fees for subscriptions to financial publications and research used to guide your investment decisions. Yeah, that's us but as always check with your tax guy. 


Volatile week.  Upstream underperformed vs the benchmark energy averages as the Permian group pulled back on a widening of the Mid Cush differential.

Questions and comments under The Wrap will be addressed in the Monday Post. 

The ZLT saw two trades last week. Please see the updated Blotter here for details.

Have a good weekend. 




12 Responses to “Wrap – Week Ended 04/06/18”

  1. 1
    Baylor Says:

    Z and z crowd, how concerned are you with the impact of gasoline prices hurting demand and weakening what’s been accomplished thus far and hasn’t quite yet trickled in to broader energy securities with commensurate broad based share price increases across the patch?

    with everyone and their dog seeming to want to will a major recession under President Trump’s watch and a 40% more or less drop in the stock market, this continues to be my biggest concern for the E&P space – a recession. I doubt they can make that happen before November elections but certainly before the 2020 presidency gets into full swing is a possibility. 

    Heres a wsj link



  2. 2
    Baylor Says:

    Going to be perilously close to a 12 handle when withdrawal season ends. 

    Will it matter with some predicting 4800 at end of injection (busting available storage?).   Likely an extreme prediction. Will be interesting if we get a tepid summer 


  3. 3
    zman Says:

    re 1 – stocks are pretty goldilocks there, not too high, not too low, keeping cracks in good place, with high to record throughput, output should soon curb demand.  Would also expect gasoline imports to tick higher this year. 

    re 2 – this is addressed each week in The Week That Was storage section. Those prediction near 5,000 Bcf are not looking at the math right. That's nuts. 

  4. 4
    zman Says:

    re 3 – re recession. I can't recall the last time some were not worried about one. 

  5. 5
    Baylor Says:

    Re 4 – I hear ya. It’s on “full blast” at the moment though

  6. 6
    zman Says:

    adding to 4 – and you just got a big tax cut which means more cash in pocket and I get no correlations on daily demand in barrels vs convention prices for 2017 to date (-0.06) and for 2010 to date (-0.45).  We have seen multiple weeks of record for time of year demand in recent mosths despite higher prices than we have seen since 2014.  I would point to higher payrolls as a demand driver.  Here are some graphs of price vs demand.

  7. 7
    zman Says:

    re 5 – the recession talk is on full blast or the demand impacted by price talk? 

  8. 8
    zman Says:


  9. 9
    zman Says:

    Sounds like US to strike targets in Syria very soon. 

  10. 10
    zman Says:

    Stepping out, back in a couple of hours. 

  11. 11
    Baylor Says:

    Re 7 – recession talk


  12. 12
    brodway Says:

    Agree with Zman on above comments, but wanted to add about pricing concerns. If you consider the cost of living increases between 2-5% a year, and the cost of gasoline has gone down since 2014, gasoline today is cheaper and more affordable than just about any other consumer staple (you can add nat gas to that list too). Also consider wages have risen over last 4 years in a relatively healthy job market and gasoline is very affordable whether its $2.50 a gallon or $3 a gallon….and really that is what the difference i'm seeing at the pumps as oil has risen from mid 40's to low 60's….I see more problems for anyone attempting to come into energy market to displace oil, if anything.

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