Wrap – Week Ended 10/01/21

Posted on by zman

.

.

Volatile week if positive week with the ZLT was up % on the week. One of our long held top 5 upstream names made an all time high while two of our top 10 names against punched 52 week highs. Upstream continues to work well and gassy upstream is awake now.  Our short list of oil service holdings also starting to wake up ahead of the 3Q reporting season.  Solar and wind continue to be a mixed bag awaiting DC action on infrastructure.  Next week we get the OPEC+ meeting and if "sources" are correct we could see the group edge up the monthly de-curtailment beyond the now standard 0.4 mm bopd per month increment as the group attempts to continue to address rising demand expectations and balance potential demand destruction fears.  With 3Q21 now in the bag for prices look for strong mark-to-market for 3Q21 and mark-to-reality for 2022 and 2023 pricing in gas land over the next two weeks (estimates and targets to rise in much of the gassy upstream space).

Free Stuff Last Week:  None

Holdings Watch:

Numbers of note from the table below:

  • Active U.S. frac spreads again set a new 2021 and pandemic period high. Active spread are likely 10 to 15% above levels needed for maintenance type volumes as per LBRT commentary.
  • Note the front month profit taking in natural gas relative to the 12 month, 2022, and 2023 strips.
  • The natural gas NYMEX non commercial (speculator) net long position fell to a new low for 2021.
  • Note the strength in RBOB and HO.  Note further that distillate vs gasoline production appears to be picking up ahead of refiner maintenance season, likely due to the whopping 12.5% deficit to the five year average for distillates as we head towards the heating season. And lastly note the improvement in the simple 3-2-1 crack that results from those product price gains. We continue to expect to see at least one 2021 record for throughput set before maintenance season really gets underway.

Questions about the site can be addressed to zman@zmansenergybrain.com.  Questions under The Wrap will be addressed in the Monday post.

Have a good weekend,

Z

.

.

22 thoughts on “Wrap – Week Ended 10/01/21”

  2. Z,
    Re MCF
    Any new insight?
    Is the lack of G& G types in Mgmt why they ANALYSTS are cool to them?.
    Would you consider adding in the current environment?

Comment below here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

s2Member®