09
Jan
Wrap – Week Ended 01/07/22
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Solid first week of the year for traditional energy. ZLT up 6% supported by very strong oil service and oily name moves with gassy names in a supporting role. Renewables wedge continues to be a drag with solar, wind, and EV technologies continuing the ebb from a faltering rally attempt in December prior to the delay/relegation of the BBB plan. The move in NEX is a first week move for the record books. Overall in the energy space however it's one week and not something to get overly excited about. 4Q21 Oil Service calls begin week after next and sentiment should be more optimistic than cautiously so. We'll have our 4Q21 energy earnings calendar out this week.
Free Stuff Last Week: None.
Holdings Watch:
- We added to one Oil Service name and one Gassy name last week.
- The trading blotter is updated.
Numbers of Note From The Wrap Table:
- Oil prices remain buoyant (OPEC+ steady, Libya, Kazahk, solid U.S. throughput), with the 2022 strip leaning more towards our Stretch $75 oil case than our Base $65 current 2022 oil price case.
- Our primary oil names are cheap on our $65 deck and silly cheap on the $75 Stretch case.
- We model EBITDA at increments of $10 above and below our base price deck.
- We would rather be low on the Base case than too high and surprised later.
- We continue to run with 3 primary oily names.
- The basic 3-2-1 crack remains elevated. We expect new pandemic period highs for throughput following a shallow spring refiner turn.
- Natural gas prices continue to seek a balance between mild weather and strong exports to higher priced Europe and Asia.
- Last week's storage withdrawal was extremely low.
- This week's will be 5x+ as large and back into near average territory (better temps, freeze offs, solid exports).
- Storage is in modest five surplus territory now.
- Our 2022 deck remains $3.50 (2022 strip is a solid $3.80). The Street, at $4, is likely too high.
- We have 4 gassy names in the portfolio with NGL rich names outweighing dry gas companies.
- Natural gas non commercial net position remains near shortest level in 12 months.
Questions and comments under The Wrap will be addressed in the Monday post. Questions about the site may be addressed to zman@zmansenergybrain.com.
Have a good weekend,
Z
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Cypress reports first cases of “Deltacron” (25 cases of Delta + Omicron).
January 9th, 2022 at 12:43 pm