21
Nov
Wrap – Week Ended 11/19/21
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Tough week for energy names, especially traditional energy with the XOP off 8% and oil service names as represented by the OIH off 11%. WTI continued to retreat in the face of re-worsening Covid numbers and fresh lockdowns in Europe and more Biden Administration threats (pardon the minor rant below). Wind and solar were mixed. The ZLT was off for a second consecutive week after 9 weeks of up or flat action.
Holdings Watch:
- We added to our middling sized position in PTRA last week in the wake of earnings in the previous week and more partnership announcements. If you missed our SA editor's pick article on PTRA from the prior Friday you can see it here.
- We added to a middling sized holding in GOEV as they announced a modestly accelerated production schedule (now 2022 instead of 2023) that is more weighted towards U.S. based manufacturing, shifted their HQ to WMT's home town (interesting), and announced new test production and R&D centers along with big state oriented sales targets and another round of state incentives.
- We added a personal position in freshly IPO'd SEV. Look for a requested-by-Seeking Alpha article there soon.
- And we took profits in half our ENPH position, up 70% since our re-entry over the course of September. No issues with management's performance, far from it, just a little "too far too fast" action and we plan to fully reload once it inevitably sees a bout of profit taking by others.
Wrap Numbers of Note And A Little Rant Watch:
- As noted, oil rolled lower with Brent and the OPEC basket off roughly 4% and WTI off closer to 6%.
- The weekly EIA oil inventory report was generally better than expected despite another >3 mm barrel SPR release.
- Cracks actually improved slightly week to week.
- U.S. throughput inched up more sequentially and the expected later, shallower, shorter U.S. fall maintenance continues to appear to be playing out as/better than expected.
- Net imports to the U.S. remain very low.
- U.S. oil production is creeping slowly higher (though not last week).
- Gasoline prices are coming off their peaks ahead of the holidays but it will take a little time to filter through to the pump.
- A little rant:
- The Biden Administration wants someone, anyone really, to produce more oil. OPEC, Russia, the U.S. upstream ... anyone. The idea being that more oil = lower gasoline = one less headache. Nothing different there really than with past administration aside although it's a bit ironic given the efforts to eradicate the industry. After requests for domestic producers to up production were apparently rebuffed the Admin is accusing the "Oil and Gas" industry of price fixing.
- The Administration seems to think that an industry that saw negative oil prices just last year should be able to "turn on the taps" and, when told that's not really how things work, that there isn't some large vuggy oil patch with straws in it, ready to go that could be used to sabotage prices in a self defeating and undisciplined manner, the Admin has resorted to threats. That's sad. Also the SPR is not gasoline. This is not a political discussion; we're just attempting to work your issue. Maybe cajoling refiners into producing more (they are not close to pre pandemic throughput levels) despite solid to strong cracks would be a better idea if you are looking for a quick fix. Or tell consumers they should drive less. Given that inflation is rampant from Turkeys to Christmas Trees and that home heating is your next big issue, well beyond paying $4+ at the pump, maybe there are other base causes that should be examined instead of targeting an industry that moves, heats, and lights the economy.
- Meanwhile:
- The U.S. oil directed rig count is up 73% YTD and 100% YoY ...
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- ... And the U.S. active frac spread count, according to industry tracker Primary Vision, is up 103% YTD and 112% YoY.
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- ... And according to government's own EIA DPR data, Permian oil production will hit an all time high in December. While other shale regions are less able to rebound at that kind of rate the overall U.S. picture is up and to the right.
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Questions and comments under The Wrap will be addressed in the Subscriber Mailbag section of the site.
Questions about the site, and it really does make a nice Christmas gift, can be addressed to zman@zmansenergybrain.com.
Have a good rest of the weekend,
Z
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TAN Solar…Group consolidating. Demand volume supportive of a break higher…Support.resistance levels on chart.
https://i.postimg.cc/s2V4b75Q/solar.png
PBW Choppy sideways consolidation at major acceptance S/R levels on chart.
https://i.postimg.cc/cLj8B3XG/pbw.png
ICLN Consolidating above well defined support at 24.12
November 21st, 2021 at 9:11 pmhttps://i.postimg.cc/Hs8m77cy/ICLN.png