06
Nov
Wrap – Week Ended 11/5/21
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Modest up week for the ZLT with renewables and infrastructure dragging and our upstream and oil service names boosting the portfolio.
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Recent Free Stuff:
Holdings Watch:
- No sales
- We added to one oil service, one gassy upstream, and one EV name last week.
- The blotter is updated.
Numbers of note from The Wrap table below.
- Note the 2023 crude strip, up in the wake of an OPEC meeting week and noise from D.C. regarding "tools" to reduce gasoline prices. We spoke enough about our views on that this week and won't belabor our view here that those tools would be ineffective.
- Natural gas storage - spot on with our injection for the week and while domestic storage is not the driver of price we are about to see a 1/3 or so sized injection sequentially in the coming week which along with very low stocks in the EU (see chart in Friday's post) and strong demand from Asia is leading to very resilient calendar 2022 and longer strips.
- Natural gas net speculative shorts at the Nymex remain near the highs of 2021.
- Oil speculators are even further net long and into territory that we dislike (as of the last few reports over 6.0x); we expect (and would in fact like to see) next week's report to show some retreat. Numbers over 6x often yield outsized bouts of volatility in price on what would otherwise appear to be less significant news flow.
- The oil directed rig count continues to rise, largely in the Permian, to support several maintenance programs next year and a few modest growth ones. Many of our names have chewed their DUC inventories down from the start of the year and are back to being DUCs only for operational efficiency. Note that this will be a portion of the expected 20+% capex increase for NAM 2022 (drilling more wells but potentially completing a similar number) along with inflation of 5 to 10+% (higher end is Permian, other basins are largely seeing/expected less).
- Refiner maintenance continues to play out in line with our expectations of late arrival, shallow, and short duration. Note that cracks, while well off the recent highs remain quite solid.
We have one more really busy week of 3Q21 reporting season ahead followed by a few stragglers.
If you have questions about the site please shoot them over to zman@zmansenergybrain.com.
Questions and comments under The Wrap will be addressed in the Subscriber Mailbag section of the Monday post.
Have a great weekend,
Z
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Local natural gas distribution company warns AR to see 42% increase in winter heating bills.
November 7th, 2021 at 10:01 amHELIOS, Srartup fusion energy company raises $500 million to demo commercial feasibility. Prototype…..in 2024….goal (timeline not specified) is GREEN FUSION ENERGY for 1 cent per KWH.
U.S. zero-carbon fusion energy startup Helion raises $500 mln
https://www.reuters.com/business/energy/us-zero-carbon-fusion-energy-startup-helion-raises-500-mln-2021-11-05/
November 7th, 2021 at 12:03 pmZ, Would you describe the steps an AR goes through to end up with a producing well and the time each step typically takes?
Something like this:
1) get permit
2) drilling rig
3) fracturing rig
4) hookup well to infrastructure
Also, remind me of the decline curve of a typical well if there is a typicall well. Is it true that the decline curve has been reduced with better technology?
Thanks
November 7th, 2021 at 2:12 pmThen, just thinking big picture, at one point you stated OPEC+ had about 6 million barels in Oil reserves that could be turned on when needed.
What are the reserves for natural gas?
November 7th, 2021 at 2:15 pmNotes
NG Futs Continue to establish acceptance in the mid 5s. Support/resistance on chart.
https://i.postimg.cc/sf4vB89B/ngd.png
AR Slow motion breakout. Inside day on Friday.
Daily https://i.postimg.cc/RZ83SmSf/ar.png
Weekly Long trend intact. Upside target at 26.34
https://i.postimg.cc/x84Qv0F3/arw.png
SWN Continues to consolidate within dense congestion as the company changes rapidly…Breakout/Down levels on chart.
November 7th, 2021 at 2:36 pmhttps://i.postimg.cc/Z5q7k8nn/swn.png
Weekly …6.08 longer term key upside level
https://i.postimg.cc/vT3rXKWz/swnw.png
CRK Bounced after post earnings dip. Back in value with support at 5.96
https://i.postimg.cc/x8CJj1zv/crk.png
GDP Nice bounce on earnings..consolidating within value. Breakout/Down on chart..
https://i.postimg.cc/v8JxwbmV/gdp.png
Weekly..Ran up on high volume. Low volume pullback into earnings…Looks ready to resume uptrend, IMO
https://i.postimg.cc/6p7P2VXS/gdpw.png
RRC At support, consolidating. Breakout/down levels on chart..
https://i.postimg.cc/KYr9X0b6/rrc.png
Posted some chart notes. Not showing up. May have jammed up the system..
November 7th, 2021 at 2:37 pmNotes
November 7th, 2021 at 2:44 pmNG Futs Continue to establish acceptance in the mid 5s. Support/resistance on chart.
https://i.postimg.cc/sf4vB89B/ngd.png
R Slow motion breakout. Inside day on Friday.
November 7th, 2021 at 2:44 pmDaily https://i.postimg.cc/RZ83SmSf/ar.png
Weekly Long trend intact. Upside target at 26.34
https://i.postimg.cc/x84Qv0F3/arw.png
#7 Is AR
November 7th, 2021 at 2:45 pmSWN Continues to consolidate within dense congestion as the company changes rapidly…Breakout/Down levels on chart.
https://i.postimg.cc/Z5q7k8nn/swn.png
Weekly …6.08 longer term key upside level
https://i.postimg.cc/vT3rXKWz/swnw.png
CRK Bounced after post earnings dip. Back in value with support at 5.96
https://i.postimg.cc/x8CJj1zv/crk.png
GDP Nice bounce on earnings..consolidating within value. Breakout/Down on chart..
November 7th, 2021 at 2:46 pmhttps://i.postimg.cc/v8JxwbmV/gdp.png
Weekly..Ran up on high volume. Low volume pullback into earnings…Looks ready to resume uptrend, IMO
https://i.postimg.cc/6p7P2VXS/gdpw.png
RRC At support, consolidating. Breakout/down levels on chart..
https://i.postimg.cc/KYr9X0b6/rrc.png
Crude Futs Demand volume rolled over last week. Prices held support. Support and resistance on chart.
Break of support has a volume gap below…
https://i.postimg.cc/wjVCLX4Q/cld.png
XOP Trying for another leg up..
https://i.postimg.cc/G2QT1SXs/XOP.png
OIH Stuck in congestion. Many individual stocks below heavy supply..
November 7th, 2021 at 2:50 pmhttps://i.postimg.cc/HxxdVZpM/OIH.png
PBW Clean Energy correcting sideways at major level of interest as it begins to clear supply. Looking for the next leg up..
November 7th, 2021 at 2:56 pmDaily
https://i.postimg.cc/3J77GxJ7/pbw.png
Weekly
https://i.postimg.cc/hPpF785b/pbww.png
Infrastructure Largest one week inflow ($1.1 B) ever into infrastructure stocks last week, before the latest congressional action.
November 7th, 2021 at 3:00 pmPAVE ETF
https://i.postimg.cc/pTG8F6KM/pave.png
QS Tested the 6 month volume base highs..Volume gap above. Next supply level at 36.90 if it continues to squeeze higher..
November 7th, 2021 at 3:04 pmhttps://i.postimg.cc/rwfQJQ1g/qs.png
PLUG Pulled back to support after being extended..
November 7th, 2021 at 3:07 pmhttps://i.postimg.cc/X7QfSXrY/plug.png
VWDRY Pulled back to major longer term support last week.
November 7th, 2021 at 3:09 pmWeekly chart…
https://i.postimg.cc/fTTdKZ8n/vwdry.png
PTRA Support begins at 10.42
November 7th, 2021 at 3:16 pmDaily
https://i.postimg.cc/pdDyv1sJ/ptra.png
Thanks for the levels Zorg.
Bill – your questions will be addressed in the Monday post.
November 7th, 2021 at 5:20 pmRE 5 Thanks Zorg, I was trying to figure out where to put in a buy order for SWN when I saw that.
November 7th, 2021 at 8:18 pmFWIW Small cap stats give a favorable scenario for the rest of the year…
November 7th, 2021 at 9:26 pmhttps://i.postimg.cc/J00fCLvF/small-caps.png
COP $1.5 B new investment in NORWAY
ConocoPhillips plans $1.5 bln Norway gas and condensate development
https://www.reuters.com/business/energy/conocophillips-plans-15-bln-norway-gas-condensate-development-2021-11-08/
November 8th, 2021 at 5:41 am