20
Mar

T.G.I.F.

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Market Sentiment Watch: Gaining Traction? If you missed our comments yesterday I had few things to say.

  • I've been in the energy space since '96.  This is essentially unprecedented volatility (3rd worst drop for oil in history on Wednesday and unrelated to the weekly inventory report followed by the biggest percentage rally in history yesterday),
  • I watched unemployed oil service workers marchdown Congress Avenue in Austin (pretty sure that was '98). I never want to see that again.
  • This group doesn't ever want a hand out. But they do want a fair deal.
  • The move by the United States to refill the SPR is a half measure at best. The SPR is not set up to accept the kind of crude the DOE is suggesting it will target (small and medium producers) for the purchases. Then just the very nature of the size it can take in is, in the scope of demand destruction and the potential for rapidly rising imports (likely in late April and beyond now), small.
  • And, as far as marching unemployed oil workers go, sadly I don't even think I'll see that kind of march again. Guys I talk to like the money in the field but the volatility is terrible on the family.  Each time they come back to the patch in fewer numbers. And don't bother to ask a geologist if he'd want his kids going to the Colorado School of Mines at the moment at least (I know some who would but others will just shake their heads).
  • It's time for the Administration to look at any coming tsunami of oil from Saudi and Co as anti-competitive dumping.  Saudi is over producing at a time when restraint is called for ... by their very own words ... the day before Russia broke with OPEC+ and Saudi went to war.
  • Contrary to the statements by some who don't look at this stuff daily (and shamefully by some that do within the energy media arena) the U.S. is not energy independent. Drill baby drill is stupid but we don't own any management teams that engage in that. The actions taken this month by foreign players are making the idea of U.S. energy independence any time soon even less of a possibility.  For those of you thinking green energy will take care of that I say sure ... at some point ... well into the future. Even if we go all EVs by 2030, the generation sources by then will be far from 100% green. We are set up strongly to take advantage of that green growth in the portfolio but hold considerable gas and oil positions as well. Again, please see our comments in yesterday's post on just how far away wind and solar are from being able to handle our generation needs.

Housekeeping Watch: We know that many who read the site work in the industry. I get emails everyone once in awhile telling me they read daily but I never hear from them otherwise. These are trying times. Our thoughts are with you. If we can do anything to facilitate connections or if you have questions about maybe switching firms and want to know if I have any thoughts positive or negative on your future work please shoot me a note at zman@zmansenergybrain.com.

Covid 19 Watch:

  • Amazon noted positive tests at one of its warehouses yesterday. Expect Prime delays and note that Prime Pantry has been temporarily suspended,
  • Useful link for graphs,
  • Useful link for maps,
  • Italy's death toll surpassed China's.
  • Market is focusing more on potential treatments that would arrive before a vaccine could,
  • California announced a stay home policy for the entire state last night and is projecting >25 mm infected over the next 8 weeks up from the current 1,030 testing positive.
  • Stay safe and good luck to our friends and family. According to worldometer data 95% of currently open cases are classified as mild.

In today's post please find: 

  • the the natural gas review (slightly bigger than expected withdrawal ... "meh" in the face of the storage overhang but see next bullet),
  • the near term supply / demand balance (we'll be glad to get into the shoulder, something I have rarely written but appropriate given this heating season's masking of non heating related demand),
  • comments on VNOM (we don't own it but we model it for our peeps),
  • and some other odds and ends.

Ecodata Watch:

  • We get existing home sales at 10 am EST (F = 5.51 mm, last read was 5.45 mm).

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watc​h
  3. Natural Gas Inventory Review
  4. Stuff We Care About Today - VNOM
  5. Odds & Ends

 

Holdings Watch:

ZLT

  • Yesterday's Trades: NONE
  • The Blotter is updated.

Commodity Watch:

Crude oil rallied $4.85 (23.8%) to close at $25.22 yesterday (the day after a 24% drop) on a combination of deadcat bounce and short covering action and likely on rumors of the story noted in the Texas RRC bullet below. There maybe something to the RRC story and to the idea that tariffs could happen though this needs to be done with care as it would present it's own set of issues (exports, API gravity for domestic refiners come to mind).  Early this morning crude is trading near $27.

  • Texas Watch:  Texas RRC mulls production curbs. Interesting reading from WSJ here.
  • Rig Count Watch:  Expect very near term cliff dive in the oil directed U.S. rig count. YTD the oil rig count is up 13.  This is a function of the 2020 capex reload in the wake of a sharp drop in the second half of 2019.  The downward glide path here is about to resume in earnest.

Natural gas closed up $0.05 at $1.65 on the slightly bigger than expected withdrawal and modestly cooler very near term forecast. This is noise.  We expect a slightly smaller withdrawal next week and could see a small build.   But it will be nice to not have weak heating related gas demand masking the strong elements in the fundamental supply demand picture as noted in the next section and we look forward to the coming shoulder season. This morning gas is trading off slightly.

  • Industrial Demand Watch:  Please Please Please drop a line in the comments section today and in coming days if you see steel, concrete, glass, or other industry facility closures due to Covid-19. Thanks in advance.
  • Rig Count Watch:  Expect continued drop.  The gassy group was already planning on significantly less activity going into the year and had already issued guidance prior to year end and has since cut that guidance. There is no reason for rigs not to continue to decline near term. 

Natural Gas Supply Demand Watch: We've never looked so forward to the shoulder season.

Natural Gas Storage Review 

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Stuff We Care About Today

VNOM (unowned) Cheat Sheet and Mini Model Update

  • 2020 production growth essentially cut in half from 32% to 15%,
  • We note that the production mix is unaltered.
  • Company is adding hedges for the first time. See new section in the cheat sheet below for details but know they've gone from no hedges to majority hedged this year and likely next.
  • Long story short at $20 we see 4.6% implied yielder and at $40 we see 10.8%.
  • This is where we are now and this is subject to change. The largest portion of the production guidance drop is 3rd party (non Diamondback related activity). Should FANG (unowned) choose to extend the one month frac holiday meaningfully beyond the month period or otherwise further reduce activity VNOM's volumes could be further reduced, especially later in the year.

Other Stuff

  • We will have the Priority Names section back in the post on Monday,
  • Look for addition cheat sheet updates next week.

Rig Count Watch:

Odds & Ends

Analyst Watch:

  • TBA in comments

123 Responses to “T.G.I.F.”

  1. 1
    zman Says:

    GOLDMAN SACHS: ESTIMATE RESTRAINT BY CORE-OPEC COULD BRING 2Q BRENT TO $30/BBL, UP FROM ITS $20/BBL FORECAST

  2. 2
    zman Says:

    From Zorg overnight:

    “BCEI setting up an interesting profile……Overwhelming point of control at 10.48….sellers at 10.71….Next beat down below 9.79 looks attractive to me…. offer an attractive entry point….or a break above 10.71 would interesting in a hurry….”

  3. 3
    Baylor Says:

    Submitted for what it’s worth, Friend of mine who I would say is definitely not a nutzo whack job prone to conspiracy theories called me tonight to say a friend of his is some big wig at a multi national conglomerate in georgia and that friend told him to go now, right now, and buy everything that he could as everything, “everything” is shutting down (all food, etc)this weekend and will stay that way for some time

    Not sure what To do with that info but thought I’d pass it along

  4. 4
    zman Says:

    RUSSIA READY FOR CONTACT OVER OIL PRICES, KREMLIN’S PESKOV SAYS

    Oil was up 10% earlier, over $28, down now and approaching $25.

    https://www.dailyfx.com/crude-oil

  5. 5
    zman Says:

    https://www.bloomberg.com/opinion/articles/2020-03-20/oil-price-war-is-u-s-s-chance-to-protect-free-markets?sref=kOk687Pk

  6. 6
    james T Says:

    Re 1 Yeah they will change that story next week, all about options expire.

  7. 7
    zman Says:

    re 3 – me either, thanks. I try to keep a level head, stocked up pretty earlier, will go to the stores once a week or so, very early for short term perishables.

  8. 8
    zman Says:

    re 6 – just passing it along from late last night, have his latest piece and will peruse it in a bit.

  9. 9
    zman Says:

    JKS bought the ADS’s they said they would prior to the 4Q report.

  10. 10
    zman Says:

    Almost everything green today aside from COG which again looks like it got a pop for not being oil and is now falling back a little on current natural gas prices in the $1.60s (see post for comments, note that this does look a bit like a 2016 set up where we should have rising quarterly prices as we get away from the heating season and other fundamental improvement is able to be seen).

    Also note that, during the cooling season, the R&C (residential AND commercial) wedge of demand is far smaller and less important than in the heating season. So the C side demand impacts of business shut ins will be a little hard to see and themselves masked by very strong generation for cooling.

    Also please do drop notes in the comments section if you see big industrials shutter operations.

    Fast moving market conditions persist, especially in the oil market as it’s swinging lower again at the moment.

  11. 11
    zman Says:

    COP – up 7% this am on decent volumes.

    See rig comments above, expect near term drop. This week or next.

    Spreads likely fall hard for 2nd week this week but any one week is hard to say, that data arrives at the close.

  12. 12
    brodway Says:

    re: 3

    i think a run for food and supplies has been going on for some time. There is a toilet paper crisis in this country which is a bit perplexing as i had read the virus attacks the lungs not one’s rear end.

  13. 13
    zman Says:

    re 12 – pretty good restock effort in place, empty shelves getting refilled most places, also saw the TP shortage is not really a shortage, just people went in and bought, supply chain functioning, plenty of places that ran out are restocked. I think we had to get past a little panic on that account, now less people out, less people at the stores, will see it go in waves most likely.

  14. 14
    brodway Says:

    And there now i had thought we had under estimated the number of assholes in this country

  15. 15
    zman Says:

    Getting notes from analysts with the words “all in on hydroxychloroquine”

  16. 16
    james T Says:

    re15 This is the Game changer. Not sure what u r saying, buy stocks or happy about medicine ?

  17. 17
    zman Says:

    re 14 – thoughts:

    1) People get scared for themselves and their families.

    2) At least the TP hoarders didn’t try, for the most part, to corner the butt cleaning market, by buying it up and selling on ebay like the purrell brothers here:
    https://www.foxnews.com/us/coronavirus-tennessee-brothers-sanitizer

    3) And at least they didn’t get classified briefings on coronavirus in January, publicly say everything is good, and sell big chunks of their holdings February, before changing that tune. Now that would be a poor form. Any senator or congressman, either side of the aisle, who did that, would technically belong to the group you identified. Hard to imagine that would happen, right? 5 US senators and counting as of this morning appear to have done that to various degrees.

  18. 18
    zman Says:

    re 16

    • neither.
    • it’s been out there for about a month in various corners of the web.
    • Trump made it more household name yesterday.
    • just seeing it in morning notes from analysts who are latching onto it as a reason for hope.

    • I’m being patient as to adds; the numbers are going to get a lot worse before they flatten and the market is going to remain extremely volatile.

    • I have my list of names to add to or focus on so to speak.
    • I’d like to see more traction.
    • I’d like others to be with me and me not just saying, hey, this single piece of news is the game changer that gets me to add on the group.
    • I’d like to see a rolling bottom.
    • I’d like to see the Russians say “we’re ready to talk” (5 times by my count now) and have the Saudi’s say “me too” (pretty much 0 so far).
    • no rushing the trade, they can cut them in half again, for, like, no reason.
    • I don’t think they will but again, waiting on a more rationale market to add into.
  19. 19
    james T Says:

    We had a big drop in the market, I think if Trump announces cured patients with Cloroquine and that large quantities of the meds are available, not sure the market could fall further ? Interesting Trump mentioned the med day after Fox news hosts started talking about it with doctors. Did no one at CDC mention this med/protocol to him ? It only takes 6 days to work on average, potentially we could hear something in a week to 10 days.

    Curious if people still think we go to significantly lower on the SP500 ?

  20. 20
    brodway Says:

    re: 17

    we need to get our priorities straight as a country. greed, selfishness and lack of consideration for your fellow man are not the principles this country was built on.

  21. 21
    brodway Says:

    I’m being patient as to adds; the numbers are going to get a lot worse before they flatten and the market is going to remain extremely volatile.

    This is what scares me. The increase in numbers going to throw many folks into panic mode. Until the numbers start to drop it would be wise to stay put and preserve capital

  22. 22
    Denise Says:

    Worth a listen-Off topic but wishing our leadership was this good-such an inspiring and honest message to employees (CEO of Mariott)
    Believe you will need a Twitter acct to listen

    https://twitter.com/MarriottIntl/status/1240639160148529160

  23. 23
    Denise Says:

    Z great heartfelt comments in your opener today

  24. 24
    zman Says:

    re 19 – need to make sure first. For instance, you can’t say something is approved by the FDA and have the FDA come out within minutes and so not so fast. There is a process. Re Fox, LOL.

    re SPX – my thought is sure. Infected #s are going to go a lot higher. Also in that time frame I expect movement on the US/KAS/RUS front on oil.

    re 20 – yeah, that’s been the case for awhile. I’m trying to do my part in my tiny corner of the interwebs.

  25. 25
    brodway Says:

    I’d like to see the Russians say “we’re ready to talk” (5 times by my count now) and have the Saudi’s say “me too” (pretty much 0 so far).

    The Saudis are a proud bunch. They will not be brought down to their knees even if it costs them. Saudis made an extra ordinary effort to cut production at the OPEC+ meeting. Russian delegate ran off to seek Putin’s blessing which apparently didn’t come. There’s more than just oil and money that is in play here.

  26. 26
    zman Says:

    re 23 – thanks much, not too much of a rant the last 3 days then?

    re 22 – will go check now.

  27. 27
    zman Says:

    By the way, BRK (unowed) – energy unit said to be selling 5 year bonds, one guy’s thought is Warren getting set to go bigger on Wind. No size yet, will let ya know what I hear.

  28. 28
    brodway Says:

    re: 26

    the last few days its been ZMAN ALL HEART!!!

  29. 29
    zman Says:

    Re Mariott Re 22

    • it’s a 5 minute video
    • well done
    • low employee infection count so far
    • Covid-19 is nothing like we’ve ever seen before. Worse than 9/11 plus 2008.
    • 75% below normal level business in most markets.
    • 100s of hotels closing
    • putting in place contingency plans globally.
    • suspending all non essential
    • paused new hires
    • gone dark on advertising
    • no salary for top 2
    • 50% cut in exec team pay
    • closing parts of some hotels
    • good news – signs of early recovery in Greater China. Bringing manufacturing back on line and seeing
    • very tough to listen to the end regarding his thoughts on impact on associates.
    • closes with wish of good heath and sense of optimism.

    Damn. He should run for president.

  30. 30
    brodway Says:

    re: Marriott

    that is leadership at its finest. wish our leaders would learn from private sector and follow course.

  31. 31
    james T Says:

    re24 Let the FDA try and tell people they can’t have the Meds that can save their lives, that will be interesting.

  32. 32
    brodway Says:

    SEDG actually reached my price target this week, but attempting to put in a buy order felt like catching a sharp knife dropping from a tower

  33. 33
    zman Says:

    re 28 – Ha,

    The constant mantra oil and gas guys are evil is something I try to ignore. They’re good guys. Managements take too much $ in my view but that’s not evil and you can see that in a lot of industries. But the worker is simply a hard working guy that helps break milli or even nano darci rock (just crap by historic standards), extract oil and gas from it, all while operating in the blind, 2 miles down and 2 miles over so that people can drive, heat, cook, have lights, hold rallies against them, etc.

    Calling them frackers is much more of an oversimplifying pejorative than we me call Green Peace a bunch of whale hugging sailors. I’ve been on a frac site with Wyoming, I’ve held the return sand in my hand (no ill effects going on a decade now) and I had to be assured that the HAL van I was in did not belong to NASA. I’ve watched shows on Green Peace ships and was far less impressed.

    The media is part of the problem here. It likes to quote #s when it helps them. But ignores some really high level, big picture #s when speaking against the oil and gas group. I drafted a piece to hand off to Reuters this week on jobs in the space after getting a request from a reporter for some information on another matter. Crickets now. So I try to get a little info out there. I’ve got relatives retired now at API who get it. I’ve got relatives who would shutter every well in the US today given a chance. Turkey Day can be interesting.

    But getting back to the tables in the tops of the last two posts, there is no way Bernie’s anti frac plan would have worked. I mean, sure, you could catalogue all wells in the US, we know were they all are, each has an api number, and you could I assume, as president, order all of them within whatever setback you choose from an occupied structure to be shut.

    So, that shuts in some unknown by me but large amount of U.S. volumes.

    Then he moves on to no fraccing. So you are left with varying legacy base declines for the basins. These are going to range from low to high single digits. The more recent vintage production, the part that drives growth, is going to be down as much as 50% after twelve months.

    Wind and solar are not baseload. We’re working on that but we’re no where close yet. Storage options are growing by the week. But actual capacity is not and it’s tiny. Thoughts of turning into hydrogen are great, totally love that. But nascent.

    So just looking at generation, you have wind and solar as 10% of US generation. Wind is often remote and I note that summer generation is off vs spring like clock work (the monthly data looks like a sine wave, tilted up to the right, slowly growing). They’re both growing at capacity, by this I mean there was a tax credit rush into 2019 and now 2020 and we really can’t add it faster than its being added. So, you get a lot of wind and solar stories of rapid growth, again that ‘s great, but it’s from a small base and again, it’s not baseload.

    Nukes just not growing. Went through that yesterday but in the States its a slow slog to add and every last nuke out there has been uprated multiple times and several are more likely to go away than be uprated. Cheap on a cost per kwh to run to be sure, especially if you don’t care about waste and the idea of mini reactors that consume the waste are very interesting to me (I devour green tech news at night, much more than say, I don’t know, Huffpost). Anyway, the mini reactors may or may not happen in a meaningful way but they are years away. As is fusion.

    Hydro – not growing.

    Oil – always been tiny in the US

    Coal – dying.

    That leaves natural gas and if you try to kill this industry overnight at least, good luck keeping the lights on.

    Lastly, I used to have a lot of communication with EIA. They’re not dumb (their STEO model is adequate) so I see guys calling them idiots and that’s unfortunate. They work an incredibly complex data set with multiple unknowns. I used to run a complex but much less complex demand and imports model for Jefferies that took into account everything from line by line volumes across the boards, to nuclear fuel reload schedules to regions gas weighted HDDs and their model has a lot more variables including economic ones (they also have required form returns which would have been nice but I digress). Anyway, some of their models like the STEO are in need of further tweaking and I see them as missing the boat on some stuff but they’re not idiots.

  34. 34
    rmd Says:

    29 Marriott pay cut of 50% shows real balls, where the normal 10-15% is just virtue-claiming. He’s got my vote.

  35. 35
    zman Says:

    Not sure if you midstream guys noted it but Colonial is reducing product shipments on lack of demand. Gasoline, diesel, other.

  36. 36
    zman Says:

    re 34 – I know right.

    Also Brodway, locals have been stepping up. Our local distillery switched from making vodka (sad Z) to making hand sanitizer (safe Z).

  37. 37
    zman Says:
    • SAUDI ARABIA’S BUDGET DEFICIT NOW EXPECTED TO REACH 7-9% OF GDP – BBG
      • OIL PRICES, CORONAVIRUS WILL AFFECT BUDGET DEFICIT: FIN MIN
      • SAUDI TO BORROW MORE THAN PLANNED IN 2020

    and by the way no non Saudi’s are going want to buy shares in Aramco now for a long time.

  38. 38
    zman Says:

    WTI at $24 and falling. Was $28 overnight.

  39. 39
    zman Says:

    Financial ETFs acting like they sell oil.

  40. 40
    zman Says:

    OXY (unowned) – no rally as Chazen comes back. Had not looked at that chart in awhile. $40 to $10 in 30 days on a name that size …

  41. 41
    zman Says:

    NY orders 100% of non essential businesses to work from home.

  42. 42
    zman Says:

    US tax filing deadline moved to July 15.

  43. 43
    Natus Says:

    Virus Task Force update about to start.

  44. 44
    zman Says:

    Covid-19 task force briefing about to begin.

  45. 45
    zman Says:

    re 43 – thanks much

  46. 46
    Skeptcl Says:

    re: 29 Zman, it’s been awhile but I’m back. Question on the MAR video. Says they are placing employees on temporary leave for 60-90 days. I’ve seen conflicting reports as to whether this is paid leave and if not, whether the employees are eligible to file for unemployment. Thoughts?

  47. 47
    Viper1 Says:

    DJ OPEC and U.S. Oil Regulators Discuss Price Slump, Sources Say
    *DJ U.S. Shale Companies Complained to OPEC About Falling Oil Prices
    *DJ U.S. Oil Cuts Could Lead to Saudi-Russian Ceasefire on Prices Later This Year

  48. 48
    Viper1 Says:

    https://on.wsj.com/3ddF4k5

  49. 49
    brodway Says:

    re: 41

    yup just got the order of shut down….voluntarily paying my staff for next 2 weeks…its not easy for them as many live pay check to pay check

    re: 36

    that conversion shouldn’t be that difficult as they already have the alcohol….all they need is aloe vera plants

  50. 50
    zman Says:

    re 46 – hey Skeptcl, good question, I can look again, give me a bit, listening to the task force folks at the moment. No doubt a lot of workers are simply let go for the time being at other places. I saw McDonald’s taking heat for its reluctance to pay for 2 weeks.

  51. 51
    zman Says:

    re 49 – wow, good on you!

  52. 52
    zman Says:

    Thanks for the headlines Viper.

  53. 53
    zman Says:

    From Zorg

    “BCEI…missed my entry by .08….look for it to slow now coming into the point of control at 11.49…breakout above 11.70….not looking for that today but seeing more than a few of these Z oil stocks trying make a base”

  54. 54
    zman Says:

    TRUMP SAYS HE AND SENATE DEMOCRATIC LEADER SCHUMER ARE “NOT THAT FAR AWAY” IN RELIEF PACKAGE NEGOTIATIONS

  55. 55
    zman Says:

    Oil moving up over $25

    https://www.dailyfx.com/crude-oil

  56. 56
    zman Says:

    Trump yelling at reporters.

  57. 57
    elduque Says:

    Which country started using hydroxychloroquine for treatment?

    Surely they must have run a trial to see how effective it was.

    Do we really need to run our own tests?

  58. 58
    zman Says:

    Zorg on

    “COG Back to defined support @ 15.50 after buyers disappeared…..Long”

  59. 59
    zman Says:

    re 57 – data I saw was in China.

    I know that medcram who does youtube videos covered it awhile back, at which time they also mentioned Quercetin as an alternate for roughly same purpose (that’s over the country)

    Medcram #35, just after 6 minutes in, just search on youtube. Consult your physician re taking anything, I don’t give advice and certainly medical advice and some of these things can cause cardiac issues. Medram does a fantastic job of drawing viruses and cells and how things work if advanced bio has been a long time ago for you. Also explains why soap is so good at killing viruses. Anyway, that’s where I think I saw it first, may have been on one other youtube channel that is corona specific and has been broadcasting daily for 2 months.

  60. 60
    zman Says:

    re 57 – also re test, I used to cover some biotechs in the 90s’, you can do pretty fast testing on drugs that have been around for as long as this one, but you need to check safety and efficacy.

  61. 61
    zman Says:

    Mexico border shutting down for non essential travel.

    Student loan payments can delay for 60 days.

  62. 62
    zman Says:

    Pompeo saying he’s been very critical of China on their Covid data information sharing.

  63. 63
    zman Says:

    Good Trump answer to a question about shutting down the US economy vs 11 mm dead Americans. I don’t know who said that but it was a good presidential response to the question.

  64. 64
    zman Says:

    Rigs in 2 minutes. Would not be surprised to see a muted set, also not surprised to see a big drop in oil and Perm counts, would be surprised to see big ups anywhere. Even XOM (unowned) is said to be talking to restraint in the Permian now.

  65. 65
    zman Says:

    COP action interesting. Up 9%, good but not huge volume.

  66. 66
    zman Says:

    Rig Count Watch

    Oil down 19 to 664 vs 824 a year ago
    NG down 1 to 106 vs 192
    Hz down 17 to 696 vs 900
    Permian down 13 to 405 vs 459.

  67. 67
    zman Says:

    Pence says Coronavirus is about 3x more contageous than flu.

  68. 68
    zman Says:

    Trump says GM (unowned) will be making ventilators.

  69. 69
    zman Says:

    COG – insider sale

    VP of marketing sold 200K shares at average $18.32, leaves him with about 330K shares. That would be part of the pressure on the shares today.

  70. 70
    rmd Says:

    article said WMT, TGT and others will pay workers who stay $2/hr more, also mpre for dep’t heads. Offers older, pregnant, and others a chance to opt out of working.

  71. 71
    nrgyman Says:

    Fed will do $1 Trillion of repos every day for the rest of the month. Global dollar liquidity squeeze is extreme atm. Fed also doing BS purchases at rate of over $1B a day. Mortgages and treasuries.

  72. 72
    zman Says:

    El-d – circling back, wikipedia on Chloroquine.

    https://en.wikipedia.org/wiki/Chloroquine

    Note that you can overdose on this.

    I’m also seeing stories about people buying Ick Guard on eBay, bidding up the price. Ick Guard is what you give your fish to cure ick. It contains Chloroquine. Someone is likely to die from this kind of stupidity.

  73. 73
    nrgyman Says:

    Shale producers negotiating with OPEC:

    https://seekingalpha.com/news/3553883-u-s-shale-producers-open-talks-opec-wsj?utm_medium=email&utm_source=seeking_alpha&mail_subject=apa-dvn-u-s-shale-producers-open-talks-with-opec-wsj&utm_campaign=rta-stock-news&utm_content=link-3

  74. 74
    zman Says:

    re 70, 71 = thanks

  75. 75
    zman Says:

    re 73 – thanks

    OT, grabbing lunch

  76. 76
    rmd Says:

    73 OPEC saying to themselves, “Well, we got their attention.”

  77. 77
    zman Says:

    re 76 – heh.

    Rig charts added to bottom of post.

  78. 78
    james T Says:

    3 Countries at least did studies on Cloroquine, China Australia and France with and without z pac Arythromicin (spelling) , they were saying 100% effective with Z pac. I am guessing maybe less than 100% without Z pac. South Korea also used it, but I believe previous to the studies above. Also has been used with Zinc.

  79. 79
    zman Says:

    The last bit shows Washington doesnt’ get it yet:

    RRC Chairman Wayne Christian Comments on Oil Markets, Proration, and Filling SPR
    03/20/2020

    AUSTIN – As Saudi Arabia and Russia flood the international energy market with a glut of crude oil, prices have dropped to unsustainable levels that threaten the future of the Texas oil and gas industry, its associated benefits to the state economy, and American energy dominance.

    The United States recently became the largest producer of oil and natural gas in the world, producing a record 12.4 million barrels in August 2019. Texas is responsible for about 40% of this production. The industry directly employs more than 361,271 Texans and exceeded $116 billion in taxes and royalty payments over the last decade, including a record $16.3 billion in 2019.

    None of this is temporary, as the U.S. Geologic Survey assessed a recent oil discovery in the West Texas to be 46 billion barrels of oil. RS Energy Group estimates this find could actually be as large as 230 billion barrels. This is the largest oil find in the history of the world. To put this in perspective, proven reserves in the U.S. from Alaska to Brownsville were estimated to be 36.4 billion barrels in 2014.

    In order to stabilize markets, a few oil and gas producers have suggested that the Railroad Commission of Texas resume prorating the production of oil.

    “I am very concerned about the impact the international oil market instability has on the Texas economy, state budget, and the hundreds of thousands of Texans who rely on the oil and gas industry for a paycheck,” said RRC Chairman Wayne Christian. “A couple of operators have suggested pro-rationing oil as a solution. While I am open to any and all ideas to protect the Texas Miracle, as a free-market conservative I have a number of reservations about this approach.”

    “First, Texas does not operate in a vacuum. If we prorate our oil, there is no guarantee other nations, or even states will follow suit,” continued Christian. “From a practical standpoint, the Railroad Commission has not prorated oil in over forty years; we do not have staff at the agency with experience in this process and our IT capabilities to handle this process are limited at best.“

    Earlier this morning, Chairman Christian had a conference call with the Department of Energy (DOE) to discuss what the United States can do to stabilize the oil market. On the call, the DOE asked Christian to notify Texas operators that they have initiated an initial solicitation for 30 million barrels to begin filling the Strategic Petroleum Reserve (SPR).

    Christian instructed staff to put out a notice to operators to ensure the Texas industry is aware of this opportunity. You can read the notice to operators on the RRC website at https://rrc.texas.gov/media/56836/nto_chairmanchristian_og.pdf.

  80. 80
    zman Says:

    re 78 – the US is studying it now.

  81. 81
    zman Says:

    Oil dropped $2 in the Nymex close

  82. 82
    zman Says:

    Someone tell the president that oil and the stock market are now linked.

  83. 83
    nrgyman Says:

    Crude with a $19 handle.

  84. 84
    zman Says:

    re 83 – I don’t show that. What contract?

    I show WTI at 23.26
    Bretn at 27.36

  85. 85
    zman Says:

    Oh now I do, data hiccups, crazy.

  86. 86
    zman Says:

    RONIN CAPITAL UNABLE TO MEET CAPITAL REQUIREMENTS AT CME: CNBC

  87. 87
    zman Says:

    NEW YORK FED SAYS IT WILL OFFER $1 TRILLION IN DAILY REPO OPERATIONS FOR REST OF THE MONTH

  88. 88
    rmd Says:

    “Ronin Capital is a global, multi-strategy proprietary trading firm. We focus on providing our traders a level of independence they desire,”

    what could possibly go wrong??

  89. 89
    zman Says:

    re 88 – these kind of headlines and the soon to be more swiftly rising infected count, and the lack of progress on the oil situation are the concepts that continue to stay my trigger finger as to new adds.

  90. 90
    zman Says:

    Intern #1 does her service hours at a local nursing home that just announced 13 cases.

    She was there 11 days ago.
    Children’s hospital doesn’t want to see her because she’s asymptomatic at this time.
    Self quarantining.

  91. 91
    zman Says:

    Got a note from a guy with an account at Infinity Futures, warned him not to hold anything overnight. Margin requirementss going up.

  92. 92
    zman Says:

    Oil acting weird, now showing $23.50.

  93. 93
    zman Says:

    COP – really weird action all day, still up 8%.

  94. 94
    zman Says:

    Yeah, panic punting going on into the close.

    I will be around all weekend.

    The Wrap will likely be out Saturday late.

    Be safe and stay positive. If your stuck in side and overdosed on Netflix this is really good.

    https://artsandculture.google.com/project/streetviews?fbclid=IwAR21k0K_D_oQAdFbEq56XjGGgSXw8RNxThd7Fozq3K9JPV6h38EyWWJgYTU

    Winethirty.

  95. 95
    zman Says:

    FOR THE WEEK,

    S&P 500 DROPS 14.99%,
    THE DOW FALLS 17.30%,
    NASDAQ DECLINES 12.64%

  96. 96
    nrgyman Says:

    RE 92: Showing that on the May crude contract. The April contract still shows $19.84, down 21.33% today.

    Brent, shown by BNO, was up 2% today.

  97. 97
    brodway Says:

    re: 90

    prayers that interns are safe and Corona Free

  98. 98
    zman Says:

    re 96 – thanks.

    Showing an April last of $22.43

    https://www.barchart.com/futures/quotes/CLJ20/performance

    Showing May at $22.63
    https://www.barchart.com/futures/quotes/CLK20/performance

    Maybe some quad witch weirdness there.

  99. 99
    zman Says:

    re 97 – thanks much and same to all of you. She’s doing well, no symptoms, sad/worried about her bunch of 80 and 90 something year old friends.

  100. 100
    zman Says:

    Active frac spreads drop from 298 to 280.

  101. 101
    Baylor Says:

    Re 91 – what’s that mean?

  102. 102
    Baylor Says:

    Prayers for interns and everyone to stay corona free. 60 million Americans got swine flu. Lots of people will get this I assume

  103. 103
    Baylor Says:

    A friend of mine confirmed They have it. They are in day 8. Said they feel like they have the flu. Hopefully that’s the worst of it for any of us that get it

  104. 104
    Baylor Says:

    From my friend in Italy:

    Here in Italy we see death, we are shaken, the American army is in the city of Salerno and Napoli helping the population. Thanks to the Americans.

  105. 105
    Baylor Says:

    Wasn’t there a poster her by the name of Italy? How is he / she?

    Anyone heard from BOP?

  106. 106
    Baylor Says:

    Re 34 – I liked the qantas CEO taking salary to $0

    We know scary isn’t where these guys and gals make their money so taking a 10% or whatever cut is really meaningless and doesnt get the front line worker enthused that you’re down for the struggle

  107. 107
    Baylor Says:

    Scary = this*

  108. 108
    rmd Says:

    BOP is fine as of y-day.

  109. 109
    Baylor Says:

    2 week national quarantine to be announced later this weekend once the military are in place to Prevent looting and rioting. President Trump will then invoke the Stafford Act. Quarantine will require all “non essential” Redone to remain in their homes

    Gird your loins

  110. 110
    Baylor Says:

    Redone = personnel

  111. 111
    zman Says:

    re 101 – they’re upping margin requirements, basically tightening up and that can put people in margin cal territory as things fall.

    re 102 – thanks much. Been running math on the progression here, 1 case 3/11, 100 by 3/20, I put week’s end at 400 to 500+ but have a reset case that gets me closer to 1,000. Hearing our state locks down this weekend.

    re 103 – thanks for the color, best to them, that’s tough. See Utah congressman account of fluids intake vs flu and staying at home though you feel like you want to be in a hospital, not fun.

    re 104 – I did not know US troops helping there.

    re 105 – yes, military, not sure, will check. BOP answered a question Friday on Warren Buffet debt deal for me, she seems fine.

    re 106 – yeah, I liked the Marriott guy’s speech, also Singapore PM puts out a well thought out press conference.

    re 107 – yeah
    re 108 – thanks

    re 109 – rumor? got a source for that one? Trump said no as recently as Friday to that I thought.

  112. 112
    zman Says:

    Signing off, the Wrap will be out late today.

  113. 113
    zman Says:

    re 109 – lot of bond traders after close swapping stories on deployments/national shut down coming. Again, Trump said no at the daily press conference but that was so 15 hours ago.

    UK moving to buy into airlines, also 80% pay for lay offs for 3 months minimum announced.

  114. 114
    Baylor Says:

    Wonder how $2T package affects market as much of that has to be priced in

  115. 115
    zman Says:

    Elon Must to have 1,000 ventilators in a week.

  116. 116
    zman Says:

    re 114 – yeah, 2T is 2x as big as expected. May be a temporary wow.

    Heard mortgage rates shot up, had to go check and yeah, they did, people are doing cash out refis big time.

    https://www.marketwatch.com/story/mortgage-rates-surge-to-highest-level-since-january-even-though-the-fed-just-brought-interest-rates-to-0-heres-why-2020-03-19

  117. 117
    zman Says:

    FAA halts all NYC air traffic.

  118. 118
    zman Says:

    now says lifted, that’s odd.

  119. 119
    Baylor Says:

    Yep. ATC tested positive. Not sure why you shut down 5 airports airspace over that but sure we’re getting some misinformation

    My theory is for next week or two, headlines like “1 person every hour NYC alone dies from Coronavirus” will move the market more than a headline like “congress approves $2 trillion spending package with “free” checks coming to your bank account post haste”

  120. 120
    Baylor Says:

    Z can we do 2 things:

    1) force ranked list of companies that we believe will survive and may be good opportunities
    PE
    MGY
    WPX
    XOM, CVX, COP (which may be best 1,3,5 years from now to buy here)
    Etc (just ideas and not saying these would be in the list)

    2) list of companies (non energy if you don’t mind but given all the brains here) that may yield outsized returns and cash flow)
    HLT
    AXP
    KO
    MO
    WMT
    GOOG
    MSFT
    FB

    Etc

    Huge opportunity is coming and I believe it’s only going to exist for a relatively small time so best to have our list ready

  121. 121
    Baylor Says:

    WYNN

  122. 122
    brodway Says:

    Baylor

    a friend put me on OKTA

    have been following it for a few weeks. big buyer came in and bought up shares around $95

    i think the techs should come back faster than the brick and mortar type names.

    AMZN is going to make hand over fist with folks ordering online to avoid going out

  123. 123
    Baylor Says:

    re 109 just rumor. Family in national guard have been called up whatever that means exactly. Friend heads a multi national congolmerate in close contact with the government in Georgia and said this is happening once everything is in place.

    They have no reason to lie but i’ll believe it when i see it . Since it’s 3rd hand maybe a lot is lost in translation.

    Although all the governors doing it vs President Trump may not make any difference in the net of the outcome.

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