Wrap – Week Ended 7/29/22



Solid first congested week of the 2Q22 energy earnings season with the ZLT ending up 18.8% on the week. Hat tip to Joe Manchin for strongest gains of 2022 for the modest renewables wedge in the portfolio.  Twenty-six 2Q22 energy earnings reports with 48 more to go in the season. We have another busy calendar next week.

Free Stuff Last Week:  None.

People Say The Nicest Things Watch:

"@ZmansEnrgyBrain is a rigorous analyst of small E & P plays and service companies with home run potential." ~ @rmoultoncapital

Z4 Comment:  thanks much, too kind.

Holdings Watch:  Very busy week.

  • We added to:
    • Three of our completion company holdings,
    • Our largest gassy holding,
    • Our sand trade only holding,
    • And added a new sand name
    • One commercial EV holding,
  • We sold our small trade in OII down 1% and our IEA position on a takeout, up 5%.
  • The blotter is updated.

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

Questions about the site may be directed to zman@zmansenergybrain.com

Numbers of note from the table below:

  • Oil 
    • Positive side of neutral weekly report from EIA. Notably:
      • Net U.S. crude imports hit a new low for this week of the year.
        • U.S. oil exports hit an all time high.
    • Not in the table but of note to us is the release of May monthly data on Friday showing May U.S. oil production below April which was below March. This helped prices higher on Friday and again points to over estimation by EIA in the STEO (we suspect the forecast growth gets pushed out in time again with the next iteration of the report in August). This in turn produces over estimation of production in the weekly data.  We should also note that much of the May issue was attributable to maintenance downtime for Shell facilities in the Gulf of Mexico. Still, US total production continues to be slow to grow.

    • Frac spread count hits new pandemic period high. Capacity is extremely tight.

    • Also of note this week, Valero said it does not see signs of demand destruction and having met with U.S. officials it believes the Admin understands that any export ban would be counter productive in reduced gasoline prices in the U.S.
    • OPEC+ meets this coming week and we expect a show of unity but not one of more production quota increases.


  • Natural Gas
    • Smaller storage build, again.
    • Next week we're looking for a 20 to 30 Bcf sized build on lower cooling demand
    • No change to our mid point EOS storage figure.
    • EU natural gas prices moved back up towards highs not seen since March ending above $60 per MMBTU.
      • Antero during their 2Q22 call noted the impact this is beginning to have on premium priced GC hubs.
    • Price Deck Watch:  We do note that the Street has come up to meet our $6.00 for 2022 and has slight passed us now for it's view of 2023 gas prices (we've been modeling Base Case as $5 and the Street is now $5.08)
  • Renewables 
    • The Inflation / Manchin bill completed an already in progress turn for solar and wind this week into something more chart notable.
    • TAN and FAN were up 18.8% and 5.7% respectively on the week:
      • and our four primary solar tied names were up 35% on average on the week (range of 31% to 42% for the week which is nice vs the strong TAN ETF performance).
        • Only one of these, ENPH, has reported 2Q22 results season to date (stellar results and guidance, see the July 27th post), is the largest solar position in our portfolio sitting in the #6 slot and ended the week up 34% on the week at an all time high.
        • The move even turned the until-this-week-lagging TAN from negative to positive for 2022.
      • Our two wind tied names names were up 32% and 10% on the week. Solid vs FAN.  
    • As of 6/30/22 the solar and wind wedges of the portfolio were 9% and 7% of assets.

Have a great weekend,



17 Responses to “Wrap – Week Ended 7/29/22”

  1. 1
    Nick Says:

    Good morning everyone, for your weekend reading, here are 2 WSJ early analysis pieces on the new Climate Bill:



  2. 2
    zman Says:

    Thanks much Nick.

  3. 3
    Nick Says:

    One more weekend read, this one mentions Civitas. All these links should let you through the paywall if you’re not a subscriber:


  4. 4
    Zorgnak Says:

    Broad Market.. Extreme chop and pop…
    This was the best July for the S&P 500 since 1939, up 9.1%.
    Of course, it was on the heels of 3rd worst June ever (-8.4%).
    H/T Ryan Detrick
    SPY broke out from Julys value area and rejected major acceptance at 391 as too low.
    Major supply/resistance above at 418. Support at previous major acceptance and this months Value Area Highs around 391. Short term demand volume has been strong. Longer term demand volume not yet supportive of moving much beyond 418, if/when it gets there.
    Weekly Broke above long term value area lows. 418 is the point of control and likely sticking point on the way up, if/when. Bulls need to see the value area low (405) hold on a weekly test.
    Previous results from a >9% monthly run?

  5. 5
    Zorgnak Says:

    XOP Selling dried up and went away after the high volume swing lows on 7/6. After the following low volume retest the ease of movement through supply has been impressive/unusually strong. Demand volume now is turning positive just as price is close to clearing congestion…
    Weekly Demand volume trends supports a test of June highs….

    XLE Blew through major acceptance at 77 on strong demand volume. Both XLE and XOP have had impressive runs. If/when we get consolidation next week, 77 is where I’d expect the sector to rest for a bit. If the demand volume continues supply dries up above 80..

  6. 6
    Zorgnak Says:

    TAN Solar had the highest relative strength in the stock market last week. It also broke major resistance (75) moving into it’s long term price/volume base on more than 200% above average volume for the week. TAN was nicely setup for the break above resistance and demand volume is supportive of higher. I see the 87 area as a possible consolidation level on both the daily and weekly time frames ahead of the political drama. Beyond that, 98 the top of the long term volume base and the next major level of interest.
    Daily Relative and demand volume was off the charts on the news…I would expect some consolidation around 86-87…If not there is a low volume zone that runs quickly back to previous major acceptance at 96…
    65 Minute Extreme price extension on Friday’s close with extreme relative volume for time of day on the last two hours. Profit taking?
    Short term support/acceptance at 82 is the level to watch for the bulls appetite.

  7. 7
    Zorgnak Says:

    I ran a relative strength scan of the clean energy universe and ZLT’s top holding leads the pack with a number of other holdings in the chase…
    I’ll post them in Monday’s room…

  8. 8
    Zorgnak Says:

    OIH O&G Service Sector
    Demand volume suggests a break of resistance and move back into it’s previous value range. Looking for a return to previous acceptance at 284.

    Weekly Strong rejection of the long term price/volume base. Demand volume supportive of higher. Previous acceptance and double top at 307 looks to be longer term target if 284 is taken out.

    The largest O&G service holding in the ZLT portfolio leads the relative strength race. here…

  9. 9
    Zorgnak Says:

    Crude Continues to consolidate within it’s recent value range between 94-102. High volume reversal at the value area highs on Friday… Demand volume flat…noise within a tightening range.
    Weekly. Price continues to coil around major acceptance at 101.

  10. 10
    Zorgnak Says:

    Nat Gas
    Bounced all the way back to it’s recent value area high..
    Likely consolidation around multiple levels of short term acceptance 8.50-8.60. Support at 7.84

    Weekly Golf ball bounce off major price/volume base shot back/overshot major acceptance around 8. Retesting that level late last week. Demand volume supportive of higher.

    Of all the nat gas stocks in the FCG Nat Gas ETF the ZLT Portfolio has the number one in relative strength and all ZLT nat gas stocks are in the top 10 stocks in that universe…

  11. 11
    Zorgnak Says:

    Broad Mkt. Monday…
    My upside target for Friday was 4116, (412 SPY) It over shot that into potential resistance . ST area of interest below at last weeks value area high/breakout level at 4006 on the futures (399 SPY).
    65 Minute

  12. 12
    zman Says:

    Thanks for all the levels Zorg, will take a look overnight.

  13. 13
    Zorgnak Says:

    NAT Gas Off some in the Sunday night session…
    Testing last weeks short term support at 7.95…Noise
    65 Minute

  14. 14
    Zorgnak Says:

    Two solar installers, not a part of the ZLT portfolio, reaching major areas of “trading” interest with room/volume gaps to run higher if/when they move above their respective levels. High short interest in both. They both look extended at the moment to my eye …I never know where 15% short squeeze stocks stop though… Looking for a consolidation ahead of RUNs earnings and potential bill passage.
    RUN Above 35, 40 is first major supply. Above that 44 becomes the next acceptance level/target. 15% short…Reports after market 8/3
    NOVA A break above 27 works to 31 before first supply. Next major upside target around 34. 17% Short. Reported on 7/28

  15. 15
    Zorgnak Says:

    Broad Market
    Non commercial speculators continue to increase their short positions. They were heavy net short in the QQQs before last week…
    H/T Christian Fromhertz

  16. 16
    Zorgnak Says:

    Broad Market
    Traditional asset managers continued adding exposure last week. Still very low..
    H/T Christian Fromhertz

  17. 17
    Zorgnak Says:

    Broad Market
    Relief rally or more?
    A rare & important momentum event just happened: The 20-day High-Low reading for $SPX just crossed > 50%, and *stayed there for 2 days*. The key is being able to hold that strength for more than one day. N=9 since Nov-85 vs N=66 when using only one day. Fwd results in table.
    H/T Jonathan Harrier

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