Final Friday
Posted by zmann on March 16, 2007
Friday Topics
- Intro
- Natural Storage Gas Review & Outlook
- Opec
- Snafu Watch
- Expiry – yawn
- Odds and Ends
- The end of zmann(.wordpress.com)
Intro : Oil failure day. What a disappointment. At $57.49 April crude is resting on my target. Next stop $55. – see further drivers of the decline in the Snafu Watch below. Stocks followed the market around until oil did a swan dive into the close. RBOB fell nearly a nickel on profit taking and a lack of hysteria. It’s funny how everyone expects gasoline and oil to rise after it’s been rising and now call for a fall the minute it starts dropping.
Natural Gas Storage Review. 115 Bcf in line with Street estimates (way above my 90).
- April Gas fell $0.12 on the news to $6.96.
- We have 1,516 Bcf in storage an average March will get you to 1,380 ish Bcf at the end of the month, vs 5 year average trough storage of 1,025 Bcf.
- There was no 12 Bcf adjustment to last week’s number. I got into it with the EIA and we were apples to oranges and I think their methodology is less than perfect for comparing YoY storage but whatever. I may or may not post a technical piece over the weekend. I’m probably the only one that cares at this point.
Next stop $6.50. I think we bottom between there and $6. It’ll be interesting to see what happened to the net short position when the CFTC data is released at 3:30 (or so) EST today. Recall that last week we dove back into net negative territory .
Opec Watch: Slam Bam See You In September. I’m not even sure the ministers sat down. No action taken in adjusting production quotas. Seems they’re thinking everything is slowing down too. In fact, given the “well supplied” state of the oil markets their unwillingness to increase volumes at this time speaks volumes about their confidence in the rising demand forecasts for 2007 and the ability of the markets to absorb more barrels anytime soon (well, at least through September).
Snafu Watch. Thanks to El Diablo for his continued quest for the truth. See the Snafu page for detrails but here are the highlights:
- Imperil Oil’s Toronto refinery is back up on schedule with prior guidance. This is one of those three legs of the stool holding up gasoline(although not in the US it’s close enough that it was making that region tight),
- regenerator restart at a VLO Houston refinery,
- Shell has regained access to a large leak in a Nigerian,
- Nigeria’s oil minister says he thinks all shut in production could be back on line by the end of the year. I’ll believe that when I’m there, on the ground, seeing it all flow.
All of these combined should pressure gasoline and oil prices today.Options Expiration Day. Expiry combined with March Madness should lead to a very dull day after the first few hours. No DTs today I promise. Too much good roundball on the tube.
Odds & Ends
Analyst Watch: nada
This is the end of zmann.wordpress.com. It’s been real and it’s been fun but after careful consideration I have decided to quit posting to my wordpress.com site. ZEB is moving to a hosted site which offers greater storage (my charts are taking up an unbelievable amount of space) and more flexibility. There’ll be a link posted here over the weekend and/or Monday morning and I’ll keep posting on this site for another week or so for those who’re slow to bookmark new things.
Many thanks to the guys at wordpress.com for a great free platform but I’ve got to grow!
Everybody have a safe trading day and a great weekend!
zman's Energy Brain 
zmann said
Flipped through the END 10K last night.
Netherland Sewell is their reserve enegineer on the UK stuff,
a little more cost guidance but nothing really stood out to report.
zmann said
Bow Valley (BVX.to) North Sea acquisition
Bow Valley buys an undeveloped 13 mm boe field (net to them) for $67.1 US million. It had some addional interest in another block but the straight line math is $5.16 / barrel which would, on the surface, seem like a very good deal.
Assuming the reserves are close to accurate, that’s cheaper than they could find it with the drill bit, basically doubles the size of the company
Production from the field is estimated to be over 4,800 boepd by 2008 vs 2006 total company production of 2,440.
Stock’s been languishing. I may do some more homework over the next few weeks but am now just watching.
Dave said
Zmann OIH over 140 again. I hope to see a higher market than this by 11:30 or so. Hate to have to wait till 1pm area.
zmann said
Oil is up as gasoline takes back half of yesterdays loss despite all the stuff El D alerted us to.
Looks like some early pinning action. Lots of volume but the stocks are stuck in tight ranges for the most part.
zmann said
PTSG just won’t die. They knock it down every few days into the low $1.30s and it springs back to life shortly thereafter.
I probably need to do a report there.
zmann said
OMM seeking alternatives has got the stock and the rest of the tankers rocketing higher.
It stands to reason that in the long dull silence from Opec until September, cheating is going to happen and tanker rates are going to rise.
zmann said
Thanks Canada GTA re Snafu
Are gasoline prices coming down in the Ontario region. I saw a story a few days ago saying they were there and in the greater Great Lakes area
Dave said
Stops in, calling it a day. More good luck in everyones trades. I can not believe no ramp up.
zmann said
If you had any doubts about CNBC or what really goes on:
Cramer on how to be a good hedge fund
my favorite quotes: “fundamentals don’t matter” and
“here’s how you keep a stock down”
funny if weren’t so sad
SaneObserver said
Just reinforces my belief that the market is a lot of hot air 😦
-SaneO
nltd said
Z
Dropped a note on each of your tests. Be here 1/2 hour or so if you want anything…I’ll check over there before I leave.
N
zmann said
Took the VLO 60Ps at $0.10 which I don’t recommend doing. Worked out this time with plummetting oil late in the day.
APC really working now!
TSO getting gigged!
COP getting beaten down hard.
zmann said
N – ty, will check it out.
zmann said
Thanks for the post N. Yes, day just turned from ho hum to fantastic. Still trying to figure out who to root for in the Memphis v N. Tx game. I lived in Memphis for a time…good cue, born in Tx and like those underdogs. Very tough.
nltd said
Z
What a dilemma…life is so hard! Next you’ll be trying to decide what kind of beer to buy…
Bugging out now. Check in late tonight/tomorrow.
N
zmann said
AM – I’m sure you’re not around there but BQI restated their 2Q results. Moves to $0.12 from prior $0.21.
Attacking Mid said
z- That’s -$0.12 from -$0.21. Really doesn’t matter at this point, as this company will not start generating revenues for several years.
The thing that could kill this company is if they struggle proving resources this year. They can’t keep issuing more stock for ever, so the plan is to prove enough resources to entice a big(ger) oil investor to form a JV. BQI would provide the resource, while the JV partner(s) would provide exploration and development capital. Even someone like Suncor would potentially be a logical partner. Shell explored some of this acreage back in the 70’s and knew there was oil. Some have speculated that they may eventually step up to the plate via Shell Canada.
I was patient 2 years ago with the Petrokazakhstan deal and eventually made a boatload. I’m hoping to accomplish something similar here.
Doing pretty limited trading otherwise. Busy with work and have been “cold” with my picks as of late. Hence, I haven’t had much to contribute lately. I still check in daily however. Thanks for the site. Looking forward to seeing the new one.
Best regards,
AM.