19
Jan

Wrap – Week Ended 01/18/19

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  • ZLT up a little over 4% last week (coming on the heels of two 7+% weeks) with the YTD bounce rising to up 19.3%. We have made no trades this year. 
  • Changes to the STEO, OPEC Monthly, and IEA Monthly were benign with global liquids demand thoughts unchanged for all three. We note EIA was already modestly elevated relative to the other two groups and remains so now.  EIA also established 2020 growth at 1.53 mm bopd.
  • Oil crested above the base formed before and after the OPEC and OPEC+ meetings in early December as demand held up and OPEC volumes for December were confirmed as falling with more to come in January. 
  • The Mid-Cush differential tightened to near $2 under last week.  Best level we've seen since early 2018 and much better than just about anyone expected.  See our thoughts on that and what we use to model it in comments under last Friday's post. 
  • Note the rig counts in the table below.  Long awaited slippage appears to be .... starting ... it will no doubt be choppy and and a major stacking event is not expected. 
  • Natural gas saw another sub normal withdrawal as mild temps met record production but prices were supported by colder weather and coming much larger withdrawals.  Please see our Friday slideshow here for subscribers for our 2019 hypothetical trough storage outlook. 
  • The Blotter is updated. 
  • The ZLT positions page will be updated over the weekend. 
  • The 4Q18 Energy Earnings Week 2 Calendar will be released over the weekend. 
  • We will have the Bakken and Permian Players update tables in the Tuesday post.  
  • Questions and comments under The Wrap will be addressed in the Tuesday Post.
  • Enjoy the long weekend. 

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14 Responses to “Wrap – Week Ended 01/18/19”

  1. 1
    zman Says:

    February map = wow cold

    http://www.cpc.ncep.noaa.gov/products/predictions/30day/
  2. 2
    brodway Says:

    interesting that the map above targets the mid west and south west and not the east coast. the lower start to the storage levels may yet play out this year. if so nat gas equities are extremely oversold and midstream names may do very well too

  3. 3
    brodway Says:

    haven't seen any technical notes earlier in the week, so just want to point out the S&P is up 300 points from lows and has now moved abo e the 50dma from below. the 200 dma is clearly within target at 2741 and i'd expect a bit of resistance there with possible retest of some sort and then a wait of gov't coming to terms and possibly China deal which will give nice boost to equities

  4. 4
    zman Says:

    re 2 – yep, prime gas weighted HDD country. 

    re 3 – thanks. 

  5. 5
    Baylor Says:

    Ryan daleo is calling for a 40% drop in the market. That will weigh on things as well. 

     

  6. 6
    brodway Says:

    re: 5

    40% from previous highs or from current levels?
     

    that would bring on another recession

  7. 7
    brodway Says:

    Baylor

    i think you were referring to Ray Dalio

  8. 8
    Baylor Says:

    Yes Ray autocorrected to Ryan 

    eclipse was cool

  9. 9
    tomdavis12 Says:

    Z:  Any thoughts about the CPE prfd, CPE.PA? I know you do not own them. The pfrd. was issued 5/22/13 10+% yield. Is callable as of 5/30/18. Why have they not called? Last bond issued was 6+% yield with B3 rating. Understand that this prfd. is not conv. but if in the case of change of ownership they have the right to convert to common. May be a partial reason for 2 years of elevated short positions.  

  10. 10
    zman Says:

    Trades at premium, they're not exactly swimming in cash, probably just not a priority for them. May be something to do with who the bigger holders are there but don't know. Otherwise, yes, would have made sense to roll the small pref into the next senior offering to reduce rate. 

  11. 11
    zman Says:

    re 8 – yes it was. 

  12. 12
    brodway Says:

    re: 10

    i guess when one has very little skin in the game, there's no hurry transitioning to lowering debt load.  

    that was one of the reasons why i followed myself out right behind the ZLT. didn't want to sell, but it was a blessing in disguise. love their assets, but don't care for the lack of support from insiders. stock collapsed from 14 to 5 and i would have expected insiders to have shown some sort of interest in saying this is our company and its too darn cheap to trade here. 

  13. 13
    brodway Says:

    with the recent interest in alternative energy, i thought this would be interesting to some

    https://www.investing.com/news/stock-market-news/australias-solar-wind-boom-to-power-past-grid-woes-in-2019-1751978

  14. 14
    zman Says:

    re 12 – I think they should be adding. 

    re 13 – thanks, will have a look. 

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