Wrap – Week Ended 08/04/23



The ZLT ended last week up 0.1% on the week and up 19.9% over the last 6 weeks. Earnings season is going well with another 26 names of interest (several of them owned names) reporting last week most of which were well received. Earnings season continues next week and the calendar is updated at left. 

Holdings Watch:

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

Questions about the site can be sent to zman@zmansenergybrain.com

A few quick notes on the table below with a graph or few:

  • Last week saw a record crude draw reported by EIA. Markets were pre-occupied with the US downgrade by Fitch at the time but we note the Big 3 chart moved into new low territory. We don't expect a linear drop from here but we do expect this chart to set a series of lower highs and lower lows through 3Q and into 4Q.  

  • The active rig count continues to ebb and we have to wonder just which energy producers the White House is referencing when they say they are working with them to ensure energy security.  

  • Same comment applies to frac though most upstream and oil service names expect to see a counter seasonal rebound in 4Q after 3Q trough. 

  • Turning to natural gas this week's injection was again a bit below our read and consensus. This is kind of noise to us as we are: 1) not natural gas traders but instead upstream and service investors and 2) we're using for purposes of pricing annual averages for our equity models. The supply demand model is designed to output peak storage and we're spot on with where we thought we would be at this point in the year (3 Tcf in the charts below) from our first published iteration in March. We have made some tweaks to the production forecast (up) and net exports forecast (down) as the weeks have rolled by and the result is about a 100 Bcf increase in peak storage from 3.8 to 3.9 Tcf. Which is not meaningful to our pricing thoughts at this time so no change to our 2024 average gas price of $4.  

Have a good weekend, 



10 Responses to “Wrap – Week Ended 08/04/23”

  1. 1
    zman Says:

    Saudi raised OSP’s today.

  2. 2
    crysball Says:

    This is not only interesting……..it could be a DISRUPTIVE GAME CHANGER, for energy storage…….and it utilizes widely available low cost materials….concrete, carbon black, sand…………and it has the credibility of MIT!


  3. 3
    Skipton Says:

    re2 yes but 10 kwhr requires 1500 cu ft of material and the average house uses somewhere around 20Kwhr per day

  4. 4
    Zorgnak Says:

    WTI Sunday AM Pre-Open. Will be interesting to see if the recent Black Sea event moves the needle.
    Closed 28 consecutive days above the 10 SMA. Poking above-defined resistance (82.39) on Friday with continued strong demand volume. Support at 80. Low volume zone to 84. Major resistance/previous supply at 87.94.
    Breaking above major defined resistance/longer-term value range low.
    Red down arrows on the chart note extreme large spec positioning this year roughly equal to where large specs are now. But the demand volume much is more positive than at any time in 2023.

    Large specs still chasing higher. Still below Nov 22 levels.

  5. 5
    Zorgnak Says:

    Nat Gas Sunday AM
    Daily Trading around major acceptance (2.25) and at resistance at 2.59. Demand volume suggests a choppy downside bias.
    Choppy sideways price action Demand volume falling off. Large specs added to shorts for the third week in a row. Not yet at extremes.
    NG COT

  6. 6
    zman Says:


  7. 7
    Zorgnak Says:

    Demand volume still pushing northward on multiple time frames.
    Next supply level at 150 and then more major resistance around 153.

  8. 8
    Zorgnak Says:

    XLE Energy sector (large caps) breaking out from longer-term value range on expanding demand volume.

  9. 9
    zman Says:

    re 8 – interesting that XLE is still -1% on year.

  10. 10
    Zorgnak Says:

    Broad Market Tested value range low at 4509 on Friday. The weak market structure below 4509 suggests previous acceptance at 4410 as the next support. If 4509 holds look for continued choppy action between 4509 and 4621 as breadth has a downside bias as of Friday’s close.
    Breadth and demand volume metrics weakened last week.
    Lower panels. Click on chart to enlarge.

    COT Large specs are no longer short large cap equity futures. Still holding net short in the small caps.
    Dow Jones Futures

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