Wrap – Week Ended 09/17/21



Solid if volatile week with energy proxies ranging from 1 to 5% and the ZLT up 4%.

Holdings Watch:

  • No sales
  • We added to one pressure pumper, two solar tied names, and one very large cap unhedged E&P.
  • The blotter is updated. 

Free Stuff This Week:

  • The Friday post (comments and cheat sheet update on COP, the natural gas storage slide show)

Numbers of Note This Week:

  • Frac spreads marked a new pandemic period high of 252 (thanks Primary Vision).  Again, glad to have been adding of late to pressure pumping segment of the ZLT.   Higher commodity prices plus less white space in the calendar and just more spreads back to work should translate into net pricing gains and fixed cost leveraging in 2H21.
  • Natural gas non commercial net shorts at highest level of year, reversing 3 weeks weeks of net covering as longs take profits and new shorts drive the position towards the 2021 absolute high.
  • The natural gas storage number was a rare miss to the larger than expected side this week.
    • Look for a flat to modestly larger build next Thursday.
    • Note Nicholas took a modest amount of LNG export capacity off line last week, after Ida had little impact on volumes.
  • Ida idled less oil and gas volumes from the Gulf last week but the recovery has been slower than usual.
    • Shuttered oil started the week at 1.2 mm bopd and ended it at 0.422 mm bopd.
    • Similarly curtailed gas improved from 1.7 Bcfgpd to 0.765 Bcfgpd as of Friday.
    • Expect some small portion to remain shuttered for weeks as there appears to have been damage in more than one location.
  • EIA weeklies getting set to normalize. Crude, gasoline, and distillates remain in sharp deficit to year ago levels and increasing deficit to the five year average. Crude stocks are closing on even with the 10 year average.
  • Watching imports for signs of more OPEC+ barrels.
  • Refiner throughput likely remains tame near term but expect a run to 2021 high prior to maintenance and then a stronger shift towards distillate makes on the other side of maintenance vs normal given where stocks are.
    • Heating oil prices are starting to respond.
  • Oil prices are in the upper half of our long held near term (I guess now medium term) expected range.
  • Natural gas prices are ahead of themselves. The fundamental set up is bullish, just not uber bullish.  A little retrenchment should be in the offing.  However, gassy equities are far from adequately discounting current pricing and analysts price decks for 2022 are well below the 2022 strip (not even close at $3.17).  Expect to see 2022 and potentially 2023 edged higher and modestly higher following the end of the third quarter and the quarterly mark to market season.
  • So far high natural gas prices have not yielded a meaningful hit to Industrial demand or power burn nor have they resulted in a marked increase in imports from Canada. We expect the later to occur should prices remain this buoyant for long, especially in the shoulder.
  • Not in The Wrap table below but very much worth noting that the NGL composite price and all of the components are at new 2021 highs.  Chaching for AR, SWN, RRC, BCEI, MGY, COP and more.

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

Questions under The Wrap will be addressed in the Subscriber Mailbag section of the Monday post. 

Have a good weekend, 



4 Responses to “Wrap – Week Ended 09/17/21”

  1. 1
    gringo Says:

    Z, from twitter… given that NG rigs have essentially been flat for months, is there a supply response without rigs going up? If so how? If not, do you see rigs going up soon?

  2. 2
    crysball Says:

    New home for PERMIAN & EAGLEFORD ETHANE…..


  3. 3
    zman Says:

    re 1 – thoughts in Monday post.

    re 2 – thanks

  4. 4
    zman Says:

    The positions page is updated.

    Broken down by segment and stock.


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