Posted by: zmanbackup | March 28, 2022

Monday Morning Backup Site Post

Our primary site is experiencing technical difficulties. Links back to portions of the primary site will not function during the outage. Formatting for some sections below is not what it will be when the primary is back on line. We apologize for any inconvenience.

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Market Sentiment Watch:  Big week for economic data. Big week for oil news with JCPOA 2.0 back in the spot light. Energy eyes also nervously eying Covid in Shanghai.

Here is a Ukraine relief donation option. 

Housekeeping Watch:

  • Please bookmark our back up site, just in case:  www.zmanbackup.wordpress.com.
  • ZBLAST Email update:
    • We are transitioning to a new contact system and are scrubbing our contact list this week.  
    • Some former subscribers who have been receiving ZBLASTs will be removed from the notification list. If they wish to continue receiving emails they can choose an option from the Membership Options link at left. 
    • We are working to make sure that emails get to your inbox and not your spam filter. 
      • We sent out a test email to Monthly subscribers last week. If you are a Monthly subscriber and didn’t get it please email us. 
      • We will send out test emails to “Quarterly” subscribers today at 10 am EST. Please let us know if you don’t get it. 

In today’s post please find:

  • The Week That Was,
  • The Five Things,
  • and some other odds and ends.

In case you missed The Wrap please click here.

Ecodata Watch:

  • We get the advance trade in goods at 8:30 am EST (no forecast, last month was -107.6 B)

The Week Ahead: 

  • Tuesday – Case-Shiller home price index, consumer confidence, job openings, job quits, 
  • Wednesday – ADP employment, GDP revision, EIA Oil Inventories, 
  • Thursday – Jobless claims, personal income, consumer spending, Chicago PMI, EIA Natural Gas Storage, OPEC+ Meeting, 
  • Friday – Nonfarm payrolls, unemployment rate, average hourly earnings, ISM manufacturing, construction spending, car sales. 

In Today’s Post:

  1. Holdings Watch – Positions page is updated. 
  2. Commodity Watch
  3. The Week That Was
  4. Stuff We Care About Today
  5. Odds & Ends

Holdings Watch:

ZLT (Zman Long Term portfolio)

Commodity Watch:

Crude oil re-rallied 10.5% to close at $113.90 last week with 12 month strip up 7% to $100.74 on the back of a solid EIA weekly and Houthi hits on Saudi oil infrastructure and despite no firm movement to embargo Russian oil volumes.  

  • OPEC+ Watch:  OPEC+ meets on Thursday. Current expectations are for another increase to group quota of 0.4 mm bopd.
  • Kuwait Watch:  U.S., U.K., and Japanese banks agree to loan Kuwait $1 B to increase production capacity.  
  • Covid Watch: Staggered lockdowns for Shanghai were ordered due to record new Covid cases (notably port to remain open).
  • This morning crude is trading down $6+ early (strong week last week+Covid+elevated CFTC net spec long position all helping to push an over sized reaction). 

Natural gas jumped 14.6% to close last week at $5.571 with the 12 month strip up 12.7% to $5.61 (yeah, firmly in contango and higher than prompt). European prices stopped falling last week after a couple of weeks of sharp profit taking as the U.S. and other countries agreed to send extra LNG volumes Europe’s way. 

  • Still, we have entered the shoulder season and volatility and price pull backs are normal.
  • Storage fell just below the low end of the storage range we had all year long.
  • Look for the first injection of the season this week.
  • We look for strong LNG exports and for storage to remain in deficit near term and medium term. 
  • We will issue a peak storage target range in May.  
  • This morning gas is trading down 3 cents.

Rig Count Watch:

Weather Watch:

  • Last week:  Gas-weighted Heating Degree Days (HDDs) came in at 97 vs 121 normal and 114 in the prior week.
  • This week’s forecast:  This week, CPC predicts HDDs will rebound to 117 vs 120 normal.

The Week That Was

Stuff We Care About Today

The Five Things ~ (Significant changes or re-highlights in RED)

  1. Geopolitical and Political: 
    1. Iran Nuclear Deal (JCPOA 2.0) – “sources” say deal THIS WEEK (they said the same thing last week too). 
      1. Uranium enrichment beyond JCPOA limits continues. Iran wants $10 B in funds released pre deal, an end to most if not all sanctions, and demands a guarantee US won’t leave JCPOA again. Iran is said by U.S. general to be much closer to making a bomb than previously thought. Verification remains a sticking point. 
      2. Israel says it will not be bound from striking Iran by any agreement. 
      3. U.S. said to have prepared alternative measures if deal doesn’t happen.  U.S. says in the ballpark of getting a deal done.  U.S. waived sanctions on Iran civilian nuclear program. 
      4. Feels like the U.S. wants a deal for more than just nuclear proliferation reasons … wants a deal to help lower oil prices. 
      5. Iran said to be a few weeks away from “breaking out”.  This was a few weeks ago now. 
      6. Russia backed down on demands.  
      7. Iran struck a U.S. facility in Iraq on 3/13/22. Yemen struck Saudi facilities on 3/20 and again on 3/25 using Iranian support. Odd things to do when you want the deal to work. 
        1. We don’t understand how international signees to this deal would exclude oil from sanctions for future Iranian non nuclear transgressions. 
    2. Russia Ukraine War 
      1. Sanctions, oil import bans, and fear on the part of traders and shippers appear to have reduced Russian oil exports by > 1.5 mm bopd. 
        1. The EU is not banning Russian oil or natural gas volumes.
      2. Coordinated SPR release of 61 mm barrels announced March 2022. 
        1. The US says another release is on the table. 
      3. The war increases likelihood of JCPOA 2.0 
      4. Prompted new U.S. / Venezuela talks but these appear to be stalled now.   
      5. Prompted a deal to supply an incremental 1.45 Bcfgpd of U.S. LNG to the EU this year. We see this as doable. 
    3. Oil & Gas
      1. Biden Administration want lower gasoline prices … but less oil production  wait, no, more U.S. oil production
        1. Coordinated SPR release announced November 2021 and March 2022. 
        2. Export ban – unlikely.  
        3. Frac ban – very unlikely.  completely off the table. 
        4. FTC to investigate “oil and gas” players for price fixing – 11/17/21.  We said this was an empty threat. Now its really super empty. 
        5. Lease sales have resumed.
        6. Proposal to increase royalty rates and bonding fees on sensitive lands (10/26).  
        7. Pipeline approvals remain a sticking point, especially in/out of Appalachia. 
          1. FERC approved 3 pipeline projects (some new pipe, some compression) in late March.
        8. Fast Track LNG has been proposed by some in the U.S. congress, Canada, and Europe.
          1. FERC removed some barriers to approvals late March.
  2. Oil Sentiment: Strong 
    1. Coronavirus:  It’s still out there but  COVID NOT ON WORLD’S MIND AT THE MOMENT.  
      1. The next variant (is not on the market’s mind).  Scientists saying When, not If, and no guarantee it will be milder. This is our single largest worry point for oil in 2022. Oil despises Covid demand impacts. 
        1. Omicron 2 variant cases are rising. 
    2. U.S. Production – Production should be edging higher now but weekly EIA data has been stuck at 11.6 mm bopd for 2 months now and is down since the start of the year:
      1. Expect about 0.1 mm bopd per 3 to 5 week period.
      2. Expect 0.5 to 0.7 mm bopd increase in 4Q21 to 4Q22 U.S. Lower 48 oil production. 
        1. YTD production is down 0.2 mm bopd according to EIA.  Freeze offs? Slow start to completions?  Bad data?
    3. OPEC+ Production – increasing by 0.4 mm bopd per month – program began August 2021 forward. 
      1. March 31st meeting – expect production to rise 0.4 mm bopd. 
      2. OPEC+ is running > 1.0 mm bopd BELOW output limit. 
        1. Saudi said it cannot be held responsible for missing output targets due to terrorism. 
      3. Expect U.S. net imports to be higher in 2022 vs 2021 but remain low from a long term standpoint. 
      4. Russian volumes are being significantly impacted due to finance / sanction fears.  
    4. U.S. Rigs
      1. Discipline and maintenance or “maintenance plus” (1 to 5 % type growth) budgets more common than not but rigs will rise in 1H22 to help maintain rig / spread / “maintenance plus” programs. 
      2. Rigs at post pandemic high.
      3. We expect slower pace of growth in 1H22 and slower still in 2H22. 
      4. Expect DUC building to start in April/May 2022. 
    5. Frac Spreads: 266, no update last week ~ seasonal dip – expect new cycle highs in April.
      1. 2022 high so far of 290.
      2. 2021 high was 271.  Spreads average 224 in 2021.
    6. Oil Inventory Levels: At generally price supportive levels. 
      1. Expect positive YoY comparisons on U.S. throughput near term with weak product stocks and very strong cracks.
      2. Expect a shallow 2022 spring maintenance trough. 
      3. Expect throughput to move to a new pandemic period high in 2022, but to remain below all time highs. 
      4. We’d really like to see better gasoline demand but don’t expect it near term due to high prices at the pump. Cracks are strong as noted and this may mean refiners do what they can to max dist vs gasoline production. 
      5. Distillate stocks are sharply under stored. 
  3. Natural Gas and NGL Sentiment:
    1. Natural Gas Production is very slowly rising
      1. Biggest increases coming from New Mexico and Louisiana
      2. More muted growth from Appalachia (due to pipeline constraints; if you grow so does the basis differential).
      3. Expect 2022 to see grow to 2.5 to maybe 3.5 Bcfgpd. 
      4. Majority of big cap Gassy names are engaged in “maintenance budgets/programs”.  Several see back end loaded growth with lower first halves. 
    2. Supply is rising less quickly
      1. LNG exports pressing 13+ Bcfgpd of late.
        1. All time high of 13.77 Bcfgpd set March 2022 for a single day. 
        2. Capacity to rise from just over 12 at YE21 to just over 14 Bcfgpd by YE22. 
        3. More capacity approved for export week ended 2/11/22 and more likely approved 1H22.  
        4. AR’s view of LNG export capacity:
          1. 11 Bcfgpd accessible to AR now. 
          2. 15 Bcfgpd in progress. 
        5. SWN’s view of LNG export capacity:
          1. 12 Bcfgpd in service now and fully utilized. 
          2. 3 Bcfgpd at FID
          3. > 20 Bcfgpd in “next wave” projects under consideration. 
      2. Mexico exports holding just under record high levels. Demand seems more consistent lately. Exports to Mexico set a new record twice in Summer 2021. We may see a move to just over those record levels in summer 2022.
      3. Russian LNG exports being impacted tightening an already tight LNG market. 
    3. Watching for higher price impacts on gas-fired generation this summer.
    4. International natural gas pricing remains very high. 
      1. All time highs were set for European natural gas in December 2021 and again March 2022. 
    5. Net short position remains near 2021 record. 
    6. Natural Gas Storage:
      1. Significant deficit to year ago and five year average levels. 
      2. We now expect End of Season storage to fall just below the low end of our long expected 1.4 to 1.6 Tcf range. 
    7. NGL prices to be strong over the winter and through 2022.  So far so good. New highs for portions of C3+ recently and ethane has warmed up as well in the opening weeks of 2022. Now at highest prices of the cycle for the composite and several components. 
      1. Propane inventories are below low end of range for time of year. 
      2. In 2H22, rising ethane recovery may slow a U.S. “natural gas” production growth as it is stripped from the gas stream to be sold as ethane.
        1. Large ethane cracker to come on line in U.S. mid 2022. 
      3. Strong NGL pricing is positive for our positions in AR, RRC, SWN, BCEI (CIVI), and MGY.
      4. OPEC NGL production growth is expected to be muted again in 2022.
      5. U.S. NGL production from the refining segment should pick up modestly in 2022 due to higher throughput. 
  4. Renewables: 
    1. Infrastructure Bill signed.
      1. Positive for our IEA, SHLS, STEM, PTRA, ENPH, and probably for our TPIC and VWDRY too though supply chain may hold them down longer.  Most see the impacts on revenues arriving in 2023. 
      2. What’s in it that matters to us:
        1. Roads and Bridges – $110 B (IEA)
        2. Public transit – $39 B (PTRA)
        3. EV’s – $7.5 B for charger stations, $5B for E-buses increases to EV tax credits (new and used) – GOEV, PTRA, SHLS
        4. Modern Grid – $65 B (STEM)
        5. Airports – $25 B (maybe IEA)
      3.  Note there is a proposed SPR sale to help pay for some of this. 
    2. Build Back Better – Expect to see elements broken into new bills sometime in 2022 or 2023 with pieces finding their way into “Make It In America” styled bills.  Probably late in the year or 2023 now. Midterms will be key if after:
      1. BBB energy items of note: 
        1. Incentives for U.S. made wind, solar, EVs. This includes PTC (wind and solar to 2026) and ITC (solar, geothermal, also to 2026), extensions. For the first time energy storage, linear generators, biogas properties qualify for the ITC. 
        2. Includes up to a $12,500 EV tax credit. 
        3. Mechanism to reduce roof top solar cost. 
        4. Bolstering of domestic supply chain via incentives, grants, loans in steel, concrete, aluminum.  
        5. Mechanism of promoting transit buses in addition to what’s in the signed infrastructure bill. 
    3. Renewables likely see stronger demand due to Russia/Ukraine.
      1. In Europe – several wind projects are being talked about and a number are being accelerated.
      2. In Japan – we’ve seen one wind project acceleration. 
      3. We’ve see a number of nuclear extensions spoken to.  
  5. 4Q21 Earnings Season: Done and almost exactly as expected as far as 2022 programs. 
    1. Maintenance to be the rule, not the exception for 2022 gassy budgets (with only a few smaller growthy names).
      1. CNX (unowned) declared what amounts to a maintenance budget: 1.5 Bcfgpd (gas portion). 
      2. EQT (unowned) reiterated maintenance of 5.5 Bcfepd. 
      3. AR reiterated maintenance (really slightly less) of 3.2 to 3.3 Bcfepd (lower in 1H, higher at 3.4 to 3.5 Bcfepd in 2H22).
      4. RRC reiterated maintenance for 2022.
      5. SWN reiterated maintenance for 2022.
      6. CTRA (unowned) guided to lower natural gas only volumes. 
    2. “Maintenance plus” or low to mid single digit growth to be common for oily names.
      1. Some smaller names like HPK to show massive growth.
      2. MGY to show mid single + digit growth. 
      3. CIVI expected to be maintenance.
    3. Budgets to be up 10 to 20% domestically on fewer DUCs to complete vs D&C wells and inflation. 
    4. Oil Service was more upbeat (so far so good on this comment via comments from SLB and unowned names HAL, BKR, RES.
      1. Russia sanctions will impact some larger oilfield service players. 
    5. Active frac capacity in short supply – prices rising
    6. Sand is in short supply, prices are rising, capacity is constrained. 

Other Stuff

  • Look for additional cheat sheet updates near term (both owned and unowned names). 
  • Look for the first post 4Q21 update of the Gassy Players update soon.

Odds & Ends

Analyst Watch:

  • TBA in comments
Posted by: zmanbackup | February 4, 2022

Friday – 2/4/2022

Housekeeping Watch: We are experiencing technical difficulties with the primary site. An email will be sent when the main site is back on line.

In today’s post please find:

  • the natural gas review (slightly smaller than expected withdrawal; look for a 200+ Bcf type withdrawal next week),
  • comments on the NOV 4Q21 results,
  • the Gassy Players Update (liquids rich version),
  • and some other odds and ends.

Ecodata Watch:

  • We get Nonfarm Payrolls at 8:30 am EST (F = 150,000; last read was 199,000),
  • We get the unemployment rate at 8:30 am EST (F = 3.9%, flat),
  • We get average hourly earnings at 8:30 am EST (F = 0.5%, last read was 0.6%).

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watc​h
  3. Natural Gas Inventory Review
  4. Stuff We Care About Today – NOV,  Gassy Player Update (Liquids Rich),
  5. Odds & Ends

Click the link directly below this to … .

Read More…
Posted by: zmanbackup | January 28, 2022

January 28th and All Is Well

The site is fine. You can visit at http://www.zmansenergybrain.com or http://www.z4energyresearch.com.

Here is a link to our last free non Wrap post:

Posted by: zmanbackup | July 19, 2021

Monday Morning

Site troubles today. We will advise when the main site is back on line. In the meantime …

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Market Sentiment Watch:  Inflation and Delta on market’s mind.

Housekeeping Watch:  

  • The request line is open
  • Please see the note at the end of today’s post.

In today’s post please find:

  • The Week That Was ,
  • The Five Things,
  • and some other odds and ends.

In case you missed The Wrap please click here. We included a number of comments regarding the quarter to date.

Ecodata Watch:

  • We get the NAHB home builders’ index at 10 am EST (F = 81, last read was 81). 

The Week Ahead: 

  • Tuesday – Building permits, housing starts, API oil inventories,
  • Wednesday – EIA oil inventories, 
  • Thursday – Jobless claims, existing home sales, leading indicators, EIA natural gas storage, 
  • Friday – Markit manufacturing and services PMI. 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch – OPEC+ agreement reached
  3. The Week That Was
  4. Stuff We Care About Today – The Five Things, Calendar
  5. Odds & Ends

Click the link directly below this to …

break

Holdings Watch:

ZLT (Zman Long Term portfolio)

  • Last Week’s Trades:
    • Sold VCVC down 25%. We kept the warrants.
    • Sold ENPH, up 39%. We may re-enter after the 2Q21 report.
    • Added small to PTRA.
    • Added small to BCEI.
  • ​The Blotter is updated.

Commodity Watch:

Crude oil fell 3.7% to close at $71.81 with a neutral looking weekly from EIA, a move by EIA to up shale play growth again, and uncertainty from OPEC+ (see below) helping with profit taking. Longs vs shorts actually advanced to 9.5x (the highest level of the year) and we see this setting up further volatility. Crack spreads remain healthy but we do need to see more robust, more consistent gasoline demand in the U.S. This morning crude is trading off $2.40 in part on  Covid Delta fears

  • OPEC Watch: Agreement reached. OPEC+ met over the weekend:
    • Production to increase by 0.4 mm bopd per month beginning in August.
    • 5 countries received an aggregate base line increase of 1.63 mm bopd over prior quota levels (no effect on near term group production, just a higher baseline to eventually get to)
    • Russia says it will be back to pre Covid production levels in May 2022 and is as part of the agreement increasing volumes by 0.1 mm bopd (or 25% of the monthly increase).
    • OPEC+ agrees to monthly meetings. 
    • OPEC+ now seen as unified with long term plan to stick together.  

Natural gas inched up 0.2% to close at $3.682 last week with the strip rising 2 cents to $3.49 despite last week’s larger than expected storage build.

  • Storage is now 17.1% below year ago levels and 6.7% below the five year average.
  • We are on track for bullish storage peak and 2022 trough levels at this time.
  • Nymex shorts remain very much in place (the more to cover this coming winter),
  • This week we expect a smaller build.
  • This morning gas is trading Up 7 cents.

Weather Watch:

  • Last week:  Cooling Degree Days (CDDs) came in at 79 vs 73 normal and 76 in the prior week.
  • This week’s forecast:  This week, CPC predicts CDDs will hold flat at 79 vs 75 normal.

The Week That Was

Stuff We Care About Today

The Five Things(Significant changes or re-highlights in RED);  we are shortening this section to “just the key of key thoughts” on a weekly basis. 

  1. Biden Admin: 
    1. Renewables. We seeGreen/Renewable names doing well under Biden – our sense is that after a post inauguration dip that green space names will begin to base and then carry higher.
    2. Iran Nuclear Deal – Uncertain If/When A Deal Will Be Struck – indirect talks continue
      1. Possible sanctions will come off Iranian oil barrels this year but chances appear to be falling. 
      2. Iran is doing several things that will make a deal tougher to reach.
    3. Executive Orders ~  We have become less concerned about Biden Administration really impacting oil and gas companies. 
      1. Watch for drill and frac setback ruling – early 2022. 
      2. Expect NO nationwide frac ban. 
      3. Federal permit resumption – summer 2021. 
      4. Reserve liability component.  No news is good news for oil and gas names here. Very very quiet on this front. 
    4. Infrastructure – Very uncertain – vote this week, unlikely to pass. Would likely be good for renewables segment, especially EVs and grid.
  2. Coronavirus:  Delta Numbers are NOT Good.  
    1. U.S. is mostly open.  Big ups lately among unvaccinated. Concern re fall / winter.  
    2. Rest of world far less vaccinated.  Outside U.S. said to be 1% of total population. 
    3. Variants largely addressed by vaccines.
    4. 2Q21 conference call season will be interesting as supply chains show positive signs and some raw materials costs are already starting to come off spikes. 
    5. Expect very strong summer 2021 travel season.  In progress. 
  3. Oil Production / Sentiment:
    1. U.S. Production – Production edging higher now; expect about 0.1 mm bopd per 6 week period.  
    2. OPEC Production – increasing by 0.4 mm bopd per month beginning August 2021 forward.
    3. U.S. Rigs – The 2Q21 call season should again point to discipline but there are also likely to be some outlier managements who step up activity more than previously expected on the recent move in oil.
    4. Frac Spreads:  242 last week (another new pandemic high).  Our play here has very much been LBRT and we also added PUMP.   We are likely to add NEX (unowned) as well. 
      1. LBRT thinks:
        1. 165 spreads needed to hold U.S. flat in 2021. That’s just oil.
        2. and we need 25 to 30 more spreads to maintain natural gas production.
        3. additional 80 spreads to grow U.S. oil production by 1 mm bopd in 2021.
        4. Therefore, to MAINTAIN oil and gas production in 2021, at end of 2020 levels, we need 190 to 200 spreads (as an average for the year).
        5. we expect spreads to rise in 1H21 to handle DUC completions.
    5. Oil Inventory Levels:
      1. Crude stocks are ~ 8% below five year average.
      2. Gasoline stocks are below five year average. Need more consistent demand rest of summer. 
      3. Distillate stocks are 4% below five year now too.   
      4. Expect positive YoY comparisons on U.S. throughput near term with weak stocks and strong cracks where they are.
  4. Natural Gas Sentiment:
    1. Supply is weak (but improving as U.S. production rises)
      1. LNG exports are holding near record high levels.
      2. Mexico exports holding near record high levels. Exports to Mexico set a new record twice in June.
      3. Imports from Canada – uncertain at this time, likely low but not as low as expected previously due to higher U.S. pricing. 
      4. Production is above year ago levels, but still off peak.
      5. Therefore, Net supply is down YoY and not set to improve (significantly) until later this year.
    2. Watching for higher price impacts on gas-fired generation.
    3. Shorts have grown increasingly confident again, poised for typical shoulder season weakness. The more to cover later.
    4. We continue to simply expect better sentiment from gassy upstream names than we saw in 2020. So far so good on this call. 
    5. Natural Gas Storage is in deficit to year ago and five year average levels now. 
    6. We have large positions in AR (4th in ZLT) and VEI (5th). We are re-growing a position 
    7. Expect more consolidation in the gassy space. We’ve see public gas for public gas. We’ve seen public gas for private gas.  We expect to see public oil for public gas some day soon (2H21 or 1H22). 
    8. NGL prices are at 1 year plus highs… week after week – very strong.
      1. Propane prices inventories are very low. Propane and ethane pricing are counter-seasonally strong.
      2. Ethane recovery may slow U.S. production bounce.
      3. Good for our positions in AR, SWN, BCEI, and MGY.
  5. Renewables & SPACs: 
    1. Sentiment is “guarded and … starting to recover”, an improvement from our recent thoughts of “weak” AND the stocks appear to be basing. Expect bottom fish action soon, already seeing this in solar and middle tier EV.
    2. Renewables are just under 50% of assets in the portfolio via 12 names.
      1. We want to add more grid exposure and recently added more STEM.
      2. We are working to balance our renewable holdings among Wind, Fuel Cells, Solar, EV, and Storage/Grid resiliency.   We are currently heavily skewed towards Wind but have recently been bolstering Solar (recent adds to ENPH and SHLS) .
    3. SPACs (the SPAC % in the portfolio is captured in the nearly 50% Renewables wedge noted above)
      1. Sentiment remains negative but we are seeing greater bifurcation in performance for those SPACs that brought more “real companies to market. Those with more near term revenue and the promised of positive EBITDA and built out manufacturing facilities. Those that could have successfully IPO’d.
      2. An example of this is STEM and the recent jump in the shares off the SPAC hate induced lows.
      3. A future example of this, we believe, will be PTRA.
    4. Infrastructure Bill – unsure if this can pass, will hurt sentiment in the space when/if it fails, at least briefly. 

2Q21 Earnings Calendar So Far

Housekeeping Watch:  I will be on the road the first week of August taking one last partial vacation before intern #1 departs for college. We will cover all the earnings that week but the posts will be even more bullet point format than usual.

Odds & Ends

Analyst Watch:

  • TBA in comments
Posted by: zmanbackup | November 18, 2020

All Is Well

The Main Site at http://www.zmansenergybrain.com is functioning properly. Please go there for the latest post.

Check out Z’s rating on Tipranks:

https://www.tipranks.com/bloggers/steve-zachritz

Posted by: zmanbackup | September 11, 2020

Friday Morning – Primary site went down overnight

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Market Sentiment Watch:

  • 9/11 –  We hope you and yours are well.
  • Non event day on the economic data front.

Housekeeping Watch:   We apologize for the inconvenience. We hope to be back on line at the primer site shortly and will advise.

  1. Please bookmark our back up site: http://www.zmanbackup.wordpress.com.  In the rare event our site goes down that one will be activated.
  2. If you reset your password please check your email’s spam folder for it.
  3. Most email providers have a safe list function. Please put zmanalpha@gmail.com and zman@zmansenergybrain.com on your safe list.
  4. The site is searchable by using the pull down menu at upper left.
  5. If you click on the main logo of the site at the top of any page this will take you to the most recent post.
  6. If you can’t find something please just ask in comments.
  7. Subscribers, if you would like to receive trade notices (ZBLASTs) please shoot us an email at zman@zmansenergybrain.com.
  8. There are no dumb questions here except for the one that doesn’t get asked. If you want to keep it private you can email me at the address above. However the answer may be shown in comments if it’s something that would be beneficial to the group. If your question isn’t fully addressed always feel free to redirect.
  9. If you want your screen name changed please email us.
  10. Thanks.

In today’s post please find:

  • the natural gas review (essentially as expected; next week look for modestly larger injection),
  • the oil inventory review (modestly negative as weeklies go, expect throughput bounce next week),
  • comments and a cheat sheet update for FCEL,
  • and some other odds and ends.

Ecodata Watch:

  • We get CPI at 8:30 am EST (forecast of 0.3% headline and 0.2% core; last reads were 0.6% for both),
  • We get rig counts at 1 pm EST.
  • We get the federal budget at 2 pm EST (no forecast, last month was -$200 B).
  • Next week we get the September OPEC monthly.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watc​h
  3. Natural Gas Inventory Review
  4. Oil Inventory Review
  5. Stuff We Care About Today – FCEL
  6. Odds & Ends

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Posted by: zmanbackup | May 28, 2019

Tuesday Morning

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Market Sentiment Watch: Trump says U.S. is “not ready” to make a deal with China. All energy eyes on U.S. inventory levels as everyone awaits higher throughput near term. In today’s post please find The Week That Was and some other odds and ends.

Ecodata Watch:

  • We get Case-Shiller at 9 am EST (no forecast, last read was 4.0%).

The Week Ahead: 

  • Wednesday – No economic data release scheduled, API,
  • Thursday – Jobless claims, GDP, advance trade in goods, pending home sales, EIA Weekly Natural Gas, EIA Weekly Oil,
  • Friday – Personal income, consumer spending, core inflation, Chicago PMI, consumer sentiment.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. The Week That Was
  4. Stuff We Care About Today
  5. Odds & Ends

Click the link directly below this to …

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Holdings Watch:

ZLT (Zman Long Term portfolio)

  • Last Week’s Trades: We doubled our 2% position (now 4%) in MR last week.
  • ​The Blotter is updated.

Commodity Watch:

Crude oil fell 7% to close at $58.63 last week. The drop was precipitated by a poor weekly report out of EIA and came despite further geopolitical tension and new outages in Nigeria. Brent closed off 5% (taking the spread to WTI over $10 … good for exports) adn the OPEC basket was off 7% (look for price supportive OPEC chatter this week).  This morning crude is trading close to $59.

  • OPEC Watch 1:  Kuwait sees oil market coming into balance by the end of 2019 (which aligns well with their recent call to extend current production cuts.
  • OPEC Watch 2: Sources say a number of countries do not wish to set the date back from late June to early July for the next OPEC meeting.
  • Iran Watch 1:  Iran says it has no interest in negotiating with the U.S. after Trump says he’s not looking for regime change there but wants a summit.
  • Iran Watch 2:  The WSJ reports almost all buyers of Iranian crude have now found alternatives less than one month after the U.S. tightened sanctions by granting no further waivers.
  • Russia Watch:  May 1 to May 26 production at 11.126 mm bopd, down 6% from April average due to contamination.
  • Rig Count Watch:  Progression lower into mid year continues much as expected.

  • Rig Count Watch: Oily basins seeing continued activity decline.

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas eased 1% closing at $2.60 last week after EIA reported a slightly smaller than expected injection but data also pointed to another large injection this week as the weather over the U.S. still remains very much a mixed bag with a colder central patch over the Lower 48.  This morning gas is trading off 4 cents.

Weather Watch:

Last week:  

  • Gas Weighted Heating Degree Days (HDDs) came in at 37 vs 32 normal.
  • Cooling Degree Days (CDDs) came in at 34 vs 27 normal.

This week’s forecast:  Good to see the heat. 

  • This week, CPC predicts HDDs will drop sharply to 10 vs 24 normal.
  • This week, CPC predicts CDDs will rise to 53 vs 33 normal.

The Week That Was

Stuff We Care About Today

Other Stuff

  • Look for the Gassy Players update in tomorrow’s post,
  • Look for a number of cheat sheet updates this week,
  • An update piece was submitted to SA on Friday for MR

Odds & Ends

Analyst Watch:

  • TBA in comments if we see any.
Posted by: zmanbackup | May 20, 2019

Monday Morning

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Market Sentiment Watch: Broad markets still focused on China (trade talks are reportedly entirely halted at the moment). Energy markets focused on OPEC (Saudi vs Iran) and the directionality of 2H19 OPEC+ output.  In today’s post please find The Week That Was, our week ahead, and some other odds and ends.

Ecodata Watch:

  • We get the Chicago Fed at 8:30 am EST (no forecast, last read was -0.15).

The Week Ahead: 

  • Tuesday – Existing home sales,
  • Wednesday – FOMC minutes,
  • Thursday – Jobless claims, new home sales,
  • Friday – Durable goods, core capital goods.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. The Week That Was
  4. Stuff We Care About Today –  Our week ahead
  5. Odds & Ends

Click the link directly below this to …

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Holdings Watch:

ZLT (Zman Long Term portfolio)

  • Last Week’s Trades: None
  • ​The Blotter is updated.

Commodity Watch:

Crude oil rose 2% to close at $62.76 last week on a positive side of neutral weekly report from EIA and benign monthly reports out of OPEC (they actually moved the call on OPEC volumes up) and IEA. The strip and Brent were up 2% as well with the spread to WTI ending the week over $9. Crack spreads remains very strong (generic 3-2-1 crack at $23.90) and we expect further sawing higher action in U.S. refiner throughput near term.  This morning crude is trading up slightly.

  • OPEC Watch: The Sunday meeting of the JMMC yielded a statement pointing to a continued focus on achieving a balanced oil market.  Saudi indicated there is consensus to continue bringing inventories down while reassuring customers that all demand will be met.  UAE indicated now is not the right time to increase output.
  • Saudi Watch:  Reports of additional Houthi attacks in Saudi were reported overnight.
  • Russia Watch:  Russia said it is open to increased output but said it will comply with whatever OPEC+ decides at the June meeting.
  • Iran Watch:  Trump told Iran to never threaten the U.S. or face the end of Iran.  This comes after parts of his administration looked to de-escalate tensions late last week.

Natural gas closed up a penny last week at $2.63 with the strip up a percent at $2.77 as EIA reported another large but in line with expectations injection. We expect a modestly smaller injection this week on higher exports and stronger demand.  Prompt and strip gas continue to make slow headway off the April lows as injection run high in the shoulder but perhaps less high than some fear. This morning gas is trading up 5 cents.

Weather Watch:

Last week:  

  • Gas Weighted Heating Degree Days (HDDs) came in at 47 vs 41 normal and 48 in the prior week. .
  • Cooling Degree Days (CDDs) came in at 20 vs 20 normal and 18 in the prior week.

This week’s forecast:  Warming up

  • This week, CPC predicts HDDs will drop to 23 vs 32 normal.
  • This week, CPC predicts CDDs will double to 42 vs 27 normal.

The Week That Was

Stuff We Care About Today

 

Other Stuff

  • Look for additional cheat sheet updates this week,
  • Look for updated comments on VNOM (unowned),
  • Look for the return of the Permian Players Short Form Update and Orange Charts,
  • Look for the Gassy Players update this week.

Odds & Ends

Analyst Watch:

  • TBA in comments
Posted by: zmanbackup | November 30, 2018

Monday Morning Backup Post

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Market Sentiment Watch: Much calmer weak on the economic and political fronts. In energyland eyes remain focused on Venezuela and are increasingly focused on Libya as energy earnings 1Q rapidly approach as well as on monthly reports out of EIA and OPEC. News flow in the group is quiet ahead of earnings. We expect few to no changes in general to capital spending plans with the 1Q announcements which begin in the next two weeks.  In today’s post please find The Week That Was and some other odds and ends.

Ecodata Watch:

  • We get factory orders at 10 am EST (F = -0.5%, last read was 0.1%).

The Week Ahead: 

  • Tuesday – NFIB small business, job openings, EIA STEO
  • Wednesday – CPI, FOMC minutes, federal budget, OPEC Monthly,
  • Thursday – Jobless claims, PPI,
  • Friday – Import price index, consumer sentiment, current Brexit deadline.

In Today’s Post:

  1. Holdings Watch – more re-balance trades coming this week; we are coring up.
  2. Commodity Watch
  3. The Week That Was
  4. Stuff We Care About Today –  Our week ahead
  5. Odds & Ends

Click the link directly below this to …

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Holdings Watch:

ZLT (Zman Long Term portfolio)

Commodity Watch: 

Crude oil – the front month WTI contract rallied 5% to close at $63.08 last week with the strip up 4% to $62.46, both above our near term expected range. Iran and Venezuela outages, increased tensions in Libya and good OPEC + constrain buoyed prices.  Brent closed up 4%, above $70 for the first time this year, at $70.34. This morning crude is trading up slightly.

  • Russia Watch: Russia says OPEC+ should lift production levels after June.
  • Libya Watch: Increased fighting around the capitol over the weekend. No word of supply disruptions at this time but airstrikes hit Tripoli and the airport has been taken by western forces.
  • Saudi Watch 1:  Saudi says it did not threaten to shift from the dollar over NOPEC legislation as stories indicated last week.
  • Saudi Watch 2:  Al Falih said demand for oil in the U.S. continues to grow, is strongest in Asia and is flattening in non U.S. OECD countries.
  • Saudi Watch 3:  Al Falih says oil market approaching balance but is still 70 to 80 mm barrels above the five year average.  Falih says May will be key month in deciding OPEC+ cut extensions.

Natural gas eased 1% front month to close last week at $2.64 after a larger than Street expected natural gas injection was reported.  Note that the 12 month strip and the non winter strip both closed the week unchanged with only a few months changing a penny or two on the week.   This morning gas is trading flat.

Weather Watch:

Last week:  

  • Gas Weighted Heating Degree Days (HDDs) were not available at post time vs 116 in the prior week.
  • Cooling Degree Days (CDDs) were not available at post time vs 4 in the prior week.

This week’s forecast:  Much warmer than normal

  • This week, CPC predicts HDDs will drop to 58 vs 100 normal.
  • This week, CPC predicts CDDs will rise to 13 vs normal.

The Week That Was

Stuff We Care About Today

Our week ahead:

  • Look for a requested name update,
  • Look for two ZLT top 10 updates,
  • Look for Permian Players, Bakken, and Gassy Players short form table updates,

Odds & Ends

Analyst Watch:

  • TBA in comments if we see any.

 

Posted by: zmanbackup | October 7, 2018

Wrap – Week Ended 10.5.18

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