19
Jan

Wrap – Week Ended 01/17/20

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

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The Blotter is updated.

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The Positions page will be updated by Monday.

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18 Responses to “Wrap – Week Ended 01/17/20”

  1. 1
    zman Says:

    Regular posts will return Tuesday.

    In the Tuesday post we’ll have The Week That Was, the HAL quarter (see Friday’s post for the preview), and some other items.

    Have a good long weekend.

  2. 2
    Baylor Says:

    NG collapsed on the open wow

    May set up opportunities in MR to retouch its lows

    Pondering what opportunities this may present. Historic

  3. 3
    Baylor Says:

    6th time Since 2002 under $2.00

  4. 4
    zman Says:

    Gas has seen this level many times. Noted it could fall through $2 on Friday. Group think on the drop with record short interest in place. Please see Friday post for comments but I don’t see it as all that surprising – chalk it up to a poor run of weather and a pretty obviously needed test of $2.

    MR is > 60% hedged as noted Friday. It will come off with gas names but between the hedge and the oil in the mix, it’s cash flow is highly hedged making the name all the cheaper.

  5. 5
    zman Says:

    re 3 – and it’s never stayed there long.

    I saw Bloomberg last week speaking to a fall below $2 like that really means much. They asked, if below $2 what next?

    I responded:

    “maybe this”
    4Q15 $2.23
    1Q16 $1.98
    2Q16 $2.24
    3Q16 $2.53
    4Q16 $3.18

    As I’ve said many times of late, I’m not a gas bull. But I know an irrational move when I see it.

  6. 6
    zman Says:

    As noted in last week’s The Week That Was section:

    “Near Term:
    WE ARE NOT GAS BULLS AT THIS TIME
    1) Strip: We continue to see the long term natural gas strip as sharply under valued at this time
    2) This week’s storage change: 2x+ last week’s pull (back over 100 Bcf)
    3) Storage is above year ago and five year average levels due to unseasonably mild weather. Traders are focused on record production, the weather, and on weekly withdrawals and how much under “normal” glide path they are and do not appear to be focused on slowing/stalling production growth and rising non heating related demand/exports.

    4) The speculative net short position is near record levels. An improvement in the rest of winter forecast would likely see a good sized covering bounce, not nearly the whole position but would mean gas prices $0.25 or more higher than current.”

  7. 7
    zman Says:

    Would add that the more balance sheet levered names, the names in the gassy space that we do not own, are likely to see new lows with moves worse that natural gas sees. Rock, hard place.

  8. 8
    zman Says:

    Last week we included a number of charts on demand and on available generation capacity. ~ $2 gas seals the deal on our comments that 2020 would represent a new record demand year for gas (barring of course a particularly mild summer).

  9. 9
    zman Says:

    Libya exports largely shuttered as guessed they would be in Friday’s post. Expect this to be a short term impact only for now but timing uncertain and variability in output now appears to be more likely as Haftar backs this move.

  10. 10
    zman Says:

    Added the last 10 years of prompt gas prices to the bottom of The Wrap.

  11. 11
    Baylor Says:

    Agreed on NG. Hopefully this time
    Plays out the same. We are at a big extreme at the moment

  12. 12
    zman Says:

    re 11 – right, two big extremes, price, short positions.

    The calendar has been updated.

    https://zmansenergybrain.com/subscriber-data/calendar/

  13. 13
    james T Says:

    Nag Gas already off the bottom a bit and effective volume shows large players bought it at the bottom, I will take a look again tomorrow after market has been open for a hour or so.

  14. 14
    zman Says:

    re 13 – hear ya

    From tomorrow’s post:

    Most exposed (by revenue) to natural gas prices:

    COG – 100% natural gas, no hedge.
    GDP (unowned) – 91%, 1/3 of expected gas swapped at $2.67.

    GPOR (unowned) – 83%, about 40% swapped at $2.88.

    Least exposed to natural gas prices:

    MR – 57% natural gas by revenue, ~60% hedged > $2.60 for gas; 30% of revenues from oil in 3Q.

    AR (unowned) – 62% NG, but also 34% from NGLs. NG is highly hedged at $2.87.

    RRC (unowned) – 60% NG but also 30% from NGLs. 40% hedged on the NG at $2.65.

  15. 15
    Baylor Says:

    Is it a widow maker or a once in a couple yearnopportunity? I’m pretty ova Lu going to build the DGAZ short position if TDA has any shares.

    Risk is almost 0% to make money if willing to weather some losses for a little while

    High risk trade

  16. 16
    Baylor Says:

    Z thoughts on the recent EQT and Chevron writedowns?

  17. 17
    zman Says:

    re 16

    EQT https://zmansenergybrain.com/2020/01/14/tuesday-morning-wiowio-part-5/

    CVX https://zmansenergybrain.com/2019/12/11/wednesday-morning-opec-lbrt/

    The Monday post is up.

  18. 18
    Tuesday Morning – HAL | Zman's Energy Brain ~ oil, gas, stocks, etc… Says:

    […] Wrap – Week Ended 01/17/20 21 […]

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