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Feb
Wrap – Week Ended 01/31/20
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Coronavirus fever prompted market drop (equities, commodities). Renewables held in fairly well while oil and natural gas continued their recent rolls lower. The recent pull back in crude came at a CFTC non commercial peak and this excessive net long position has now been reversed. Look for OPEC+ comments to step up next week. Questions and comments under The Wrap will be addressed in the Monday post.
The Blotter is updated - there were no trades in the ZLT last week as we largely sat on our hands last week as various portions of the market lost traction.
The 4Q19 Earnings Calendar is updated (note BE's date has been added mid next week)
Free Stuff This Week:
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Bonanza Creek Guides To Solid Growth and Turns The Corner On Oustpend
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PE Posts Strong 2020 Guidance, Cuts Capex, Maintains Volume Outlook, Commits To Free Cash Flow Generation (at $50), Increases Dividend
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Interesting reading watch:
Warmer planet has meant rapid greening which takes CO2 out of the system. Obviously not neutral but makes sense and interesting.
https://phys.org/news/2020-01-planet-greener-global.html
February 1st, 2020 at 10:55 amInteresting reading watch:
We see orders for this frequently for VWDRY, generally 15 to 25 year old wind sites, getting new life. Blade maker TPIC also sees an increasing wedge of business for repower blades (blades are the roughly 30% of the total cost of a wind turbine installation, easily the largest piece).
https://www.forbes.com/sites/tompfister/2020/01/30/repowering-wind-farms-for-their-second-act/#2eb79d342763
February 1st, 2020 at 11:13 amThis week we get reports / analyst days from a number of key renewable names. Please see our week ahead calendar here:
https://zmansenergybrain.com/subscriber-data/calendar/
February 1st, 2020 at 11:22 amtest
February 1st, 2020 at 12:18 pmtests
February 1st, 2020 at 1:06 pmThoughts on impacts to natural gas prices if we have fears escalate of a pandemic? Trying to assess how to handle my DGAZ short trade now that we have a black swan situation to at least consider (whether crazy or not it must be considered for risk management sake).
One argument could be people long DGAZ have made a fortune the last 90 days and fear may make them want to lock in those profits so it could become distorted in pricing regardless of how the price of NG is impacted.
We had the story of the Ohio school district completely shutting down at 1/4 of the 2,400 students called in sick with the flu. More of those headlines hit and moms will really begin to worry and react.
I’m reminded of the gas shortages in texas after the hurricane hit Houston. It had nothing to do with a shortage of gas, but the media created panic and created a legitimate gas shortage. I recall sitting in line for gas multiple times for 2 hours or more just to fill up my truck and some spare gas.
So back to the point, natural gas price impacts should something like that play out and how may it affect the price of DGAZ?
February 1st, 2020 at 2:33 pmre 6 – response in Monday post.
February 1st, 2020 at 2:36 pmwhere did NG storage bottom out last year?
February 1st, 2020 at 2:40 pmre 8 – see last Monday’s post, The Week That Was, Natural Gas Section.
https://zmansenergybrain.com/2020/01/27/coronavirus-monday/
We’ll be 700 to 900 Bcf over last year’s trough which was exceptionally low.
February 1st, 2020 at 2:53 pmTroughs
2015 1,461
2016 2,472
2017 2,051
2018 1,284
2019 1,117
Our trough target range this year is 1,800 to 2,000.
February 1st, 2020 at 2:58 pmChina Watch
US imposes travel restrictions Sunday at 5 pm EST. Denies entry to foreign nationals who have been in China in the last 14 days. US citizens who have been to Hubei province in the last 14 days will be subject to mandatory quarantine for up to 2 weeks. Delta, American Airlines, United have cancelled all flights with duration expected to be end of March or end of April.
February 2nd, 2020 at 2:46 pmThere’s also an outbreak of bird flu.
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