22
Jun

Wrap – Week Ended 6/21/19

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Items of note, not related to Iran:

  • U.S. throughput continued it's climb out of maintenance, reaching a post season high of 17.26 mm bopd, expect another 0.8 or so over the next several weeks. This may be tempered by the PES fire. 
  • Net imports continue to be beyond tame and well below range of year.   Exports came in at their 2nd highest level on record.
  • Gasoline demand set an all time record last week (not for the week of the year but for any week of the year).  The previous week was just short of the record.  EV impact trumped by low pump prices, high employment, and high airfares.   
  • EIA reflected a second week of reduced Lower 48 oil production, down another 0.1 mm bopd.  STEO and DPR have been reflecting slower growth; lower rig count is a lagging factor in their output, weekly giving that a nod now.
  • CFTC showing net length added for crude; first time of note since April.  Expect a bigger short cover in next Friday's figures. 
  • Permian and the HZ rig count continue to ebb.  

On natural gas: 

  • Bigger than Consensus expected and definitely bigger than Z4 expected weekly report.
  • Our thought is very extended shoulder season meets high but slowing dry gas supply on the weekly report but gas sank to 3 year lows (prompt down 8%, strip down 7%). 
  • Fundamental improvement being masked by mildness.  This too shall pass as we heat up but shoulders will continue to be problematic for pricing.  Strip is overdone to downside.  
  • Exports to Mexico set an all time high this week. 
  • Total net exports set an all time high this week.
  • Power burn continues to climb into the start of the summer, and has largely been ahead of year ago levels YTD despite the mildness. 
  • New cycle low for gas directed rigs. 

At Z4 Research:

  • Last Monday:  The Week That Was, comments on Iran (more threats to close Hormuz, uranium stockpile climbing towards JCPOA limits), comments on likely OPEC+ curb roll
  • Last Tuesday:  ZLT sector pies, ZLT near term reshuffle plan, comments and an updated cheat sheet for CPE (and they decided to finally redeem the preferred), comments on the EIA DPR (note the shale slowing)
  • Last Wednesday:  More Iran items, OPEC to early July, comments on the new CRK and a pro forma cheat sheet, 
  • Last Thursday:  The Oil Inventory Slide Show, yet more Iran noise with a US drone take down, further OPEC+ curb support chatter, comments and a cheat sheet update for CXO, big contract for OII. 
  • Last Friday: Comments and an updated cheat sheet for levered Eagle Ford/Delaware player CRZO and another AMZN tied contract for VWDRY. 
  • Service, oily names and even gassy names rebounded, largely on the Iran news induced oil price bounce.  Midstream names tread water. 

The trading blotter is updated.

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

Questions about the site can be directed to zman@zmansenergybrain.com.

Have a good weekend. 

 

16 Responses to “Wrap – Week Ended 6/21/19”

  1. 1
    Baylor Says:

    How levered to NG pricing is CRK here?i believe NG won’t be staying at $2.15 for too long and they have very deep

    locketed backers. Any way they could screw the common holders? Seems a great opportunity as it was trading 50% higher just a few short months ago before the latest acquisition 

  2. 2
    Baylor Says:

    To add to #1 there are more shorts now in NG per CFTC than at any time in the last 4 years. This is going to seemingly set up an epic NG short cover eventually. Timing it right could repair a lot of damage and UGAZ could be a way to do it 

    anyone trading UGAZ here?

  3. 3
    zman Says:

    re 1 – see our thoughts on CRK here:

    https://zmansenergybrain.com/2019/06/19/wednesday-morning-crk/

  4. 4
    Baylor Says:

    Yes thx

  5. 5
    zman Says:

    re 4 – super gassy before and obviously gassier post Haynesville pickup. 

  6. 6
    Baylor Says:

    It would just seem Jerry can’t be in this for a 10% yield. There has to be more upside than that. It was near $12 a year ago. I’m trying to understand why he’s all in on it and how to product from that

     

  7. 7
    zman Says:

    re 6 – listen to the lastest deal announcement transcript, he's on there a number of times explaining at length why he is in. 

  8. 8
    zman Says:

    adding to 7 – replay upper left here:

    http://phx.corporate-ir.net/phoenix.zhtml?c=101568&p=irol-irhome&SP=IL3syfV2WInAYy4ikOVJSRf1RtlCQGFRdxnUh3bpukDxfZkwXvekslmevIln7oTAXzu+vg84HSRnCYY/kUCbgg==

  9. 9
    Baylor Says:

    Thx

     

    also re ET

    https://finance.yahoo.com/news/super-cheap-high-yield-stock-203800606.html

  10. 10
    Baylor Says:

    Re 8 – listened to it. What’s interesting is he said he expects a 300% return on each well they drill. I’m not sure what that translates to in share price though. Any thoughts there?  

     

  11. 11
    zman Says:

    re 10 – no strict math on that, he's payback oriented, using lose numbers anyway. 

  12. 12
    Baylor Says:

    Could CRK become like an XTO 25 years ago?  I know a couple of people that invested early there and would tell you because they followed Simpson, they never have to be right again in their lives

     

  13. 13
    Baylor Says:

    FWIW Jerry said “With CRK, were making more money than anything I’m involved in”

     

  14. 14
    zman Says:

    re 12/13 – out of pocket tonight, happy to discuss tomorrow under Monday post. 

  15. 15
    Tips On How you can Appropriately Says:

    Tips On How you can Appropriately

    Wrap – Week Ended 6/21/19 | Zman’s Energy Brain ~ oil, gas, stocks, etc…

  16. 16
    Angelina Evarts Says:

    more tips here

    Wrap – Week Ended 6/21/19 | Zman

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