12
Mar
Wrap – Week Ended 03/11/22
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Housekeeping Watch:
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Another solid week with the ZLT up 3%. 4Q21 reporting season finally wound down to an almost end (we have a few stragglers that will report later due to late year acquisitions and newness as public companies). The latest edition of So Far This Quarter is on the Calendar page at left covering highlights from calls we were on this quarter and we'll add another dozen plus to the final edition of the table this week.
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Free Stuff Last Week:
Questions about the site can be directed to zman@zmansenergybrain.com.
Questions under The Wrap will be addressed in the Subscriber Mailbag section of the Monday post.
Wrap Table Points of Interest:
- Oil
- Modestly positive weekly EIA report - see the slide show in the Thursday post. Nutshell: benign with solid U.S. refiner throughput and another week of no growth for L48 oil. Net imports remain low in the envelope but are an almost random walk on a net basis from week to week (but still no real sign of OPEC+ imports to U.S. pickup).
- Prices eased last week on Venezuela chatter and strongly rumored JCPOA 2.0 progress. Prices falling back from blowout highs are a good thing for equities.
- Our oily equities continue to perform well but by no means are discounting $100+ WTI. Not even close.
- Refiner cracks eased but are very strong and this does not impact our view of an increasingly likely short and shallow refiner maintenance spring turn followed by new "pandemic period" highs for refiner oil throughput.
- NYMEX net longs are nutty high. We use 6.0x as the demarcation line between not really concerned about so many longs and these longs will get touchy and sell on small bits on incremental news/noise in the market. Over 9.0x is just turning the dial way up on this thinking.
- Active frac spreads eased for a second week after hitting a pandemic high of 290 two weeks ago. This is seasonal action. Capacity is extremely tight. This is not some nefarious move on the part of the upstream. If you want to chat about why 9,000 permits don't translate into a near term more rapid than currently expected rise in U.S. production I'll be here to chat on Monday.
- Natural Gas
- Natural gas speculators remain very short.
- The storage pull was a little bigger than expected.
- This week we expect a sequentially half size withdrawal.
- Storage is now essentially at the mid point of our long held 1.4 to 1.6 Tcf trough range and we expect it to go just under the low end of our range which we view, along with strength in exports and ongoing strong non heating or cooling related demand as supportive of our $3.50 2022 price deck. This deck is under review for modest upward revision at the end of this month.
- Renewables - we continue to note traction in non EV portions of the greater green space including solar and wind. Battery levered names are likely to see some near term trepidation over raw materials costs.
If you want to donate to Ukrainian relief this is one way (we did and will again). If you purchase any of our drink or other wares at upper right we will donate the profits on that stuff this year to that same fund as well.
We wish you a peaceful weekend,
Z
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