Wrap – Week Ended 12/17/21



Omicron sentiment swings. Solid week one week. Sloppy the next. Last week was a sloppy one and we largely sat on hands.

Holdings Watch: Quiet week. 

  • We did sell a portion of our AR holdings, up 111%. AR remains our third largest position.
  • The blotter is updated

Free Stuff Last Week:

  • None

Other Stuff Last Week:

  • Thanks for the donations to the Red Cross.
  • If you have questions about the gift of 30 days of site access in exchange for Red Cross donations (it makes a great last minute stocking stuffer and we get no $ from this program and are not offering discount subs this year) please contact zman@zmansenergybrain.com

Numbers of note from The Wrap table below:

  1. Energy was weak across the board last week with XOP and OIH showing some outsized moves on light volumes. The group, like the market, looks a little tired with concerns about Omicron on the oil and gas side causing some fear selling as investors remember 2020 (sort of) and expect to see more travel of restrictions and closures (we're seeing school and business closures starting to ramp up which may eventually impact travel related demand).  The renewables segments were also weak last week as the BBB bill went from "passed by year end" to "maybe February?".
  2. Natural gas
    1. 6% front month and 2022 strip drop. It's warm. Very warm. European pricing is helping but gas is still a local, not global market. We have been at $3.50 for 2022 for a few months while the Street went $4+.  Sigh. Anyway, the gassy equities didn't really ever discount that kind of gas price deck for 2022 or 2023 and we actually took some profits in our overweight in AR with an eye towards adds in more recently established gassy positions (RRC).
    2. Nymex speculative natural gas net short position remains at 2021 high.
    3. The natural gas storage report was slightly better than expected but well year ago and 5 year average levels. That will be the tale of this coming week's report as well.
    4. We do not see a reason to increase our 1.4 to 1.6 2022 trough storage level at this time. However it's clear that winter needs to show up in January or our trough will migrate higher putting pressure on our 2022 price thoughts.
  3. Oil rig counts moved to a new high for 2021.  This is prep for DUC replenishment in 2022 and we expect the move to slow near term.
  4. Active frac spreads ebbed after hitting a 2021 high in the last two weeks.  Holiday related moves.

Questions and comments under The Wrap will be addressed in the Monday post.

Questions about the site can be addressed to that email address noted above.

Have a good weekend,



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