11
Feb
Wrap – Week Ended 02/10/23
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The ZLT finished the week up modestly last week. Oil and gas names were buoyed at week's end by the Russian curtailment announcement and by positive developments for natural gas. We see the views of 4.3+ Tcf in storage at EOS 2023 as off the mark.
We covered 4Q22 earnings reports from 6 more names in energy last week leaving the heart of the season to report in the next few weeks with another 59 names for us to go. Next week we get the first oily E&P reports and another pressure pumper. Our latest iteration of So Far This Quarter can be found on the calendar page at left along with the latest 4Q22 Energy Earnings Calendar Update.
Free Stuff: Nothing last week but we will have one or two free pieces on Seeking Alpha near term.
Holdings Watch:
- We added one new name last week and increased a position in sand while taking profits in one solar tied name.
- Please see our IPO write up on NXT in Thursday's post.
- The blotter is updated.
A few comments on The Wrap table below:
- Oil:
- WTI rallied 8% on a fairly neutral EIA weekly (it was skewed by net imports and we expect a reversal this week). Refiner throughput continues to rebound in the wake of Elliot and some maintenance and we've seen the 1Q23 lows now.
- The basic 3-2-1 crack remains throughput supportive.
- The WTI-Brent spread remains exports supportive.
- The SPR was unchanged on the week again.
- We expect OPEC to increase their view of 2023 demand on Tuesday with the February MOMR.
- We see the rally in crude inventories as on borrowed time.
- Natural Gas:
- Gas rigs fell 8 last week. This may be noise or it may be repositioning to oilier plays. We note the drop was not Marcellus, Utica, or Haynesville. We expect the first two rig counts to be fairly resilient near term but expect to see some erosion in Haynesville counts soon.
- Note also the drop in active frac spreads. We may be seeing some moves from east to west as telegraphed recently by Liberty and Patterson.
- For a fourth week storage came in better (higher) than the consensus expected.
- Our worst case scenario for spring End Of Season is now off the books as we fell through it last week and our next worst case will be pierced in 2 weeks. See our most recent EOS spaghetti scenario chart in Friday's post.
- For next week we expect a weather based dip of 120 to 130 Bcf pulled from storage.
- Freeport is about to load it's first cargo since last June.
- Our EOS cases assume Freeport slowly ramps beginning in March.
- We see natural gas prices as overdone to the downside and have been slowing increasing our natural gas player exposure.
Questions and comments under The Wrap will be addressed in the Subscriber Mailbag section of the Monday post.
Questions about the site may be directed to zman@zmansenergybrain.com
Have a good weekend, Z
The calendar link at upper left has been updated.
February 12th, 2023 at 6:16 pmS&P Platts reports first LNG cargo shipment from Freeport on Sunday😯
February 13th, 2023 at 7:10 amPlatts link:
https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/lng/021223-freeport-lng-in-us-exports-first-cargo-since-june-2022-fire-vessel-tracking
February 13th, 2023 at 7:24 amre2/3 – thanks. Flows to Freeport jumped to 0.5 Bcfgpd after it sailed.
February 13th, 2023 at 7:28 amThe Monday post is up.
February 13th, 2023 at 7:32 am