Papaya; I think we can break at any moment, but at least by next 1-2 weeks API's
... with yet another another 3-5 M boe draw, that will bring them to that 'ole fashioned religion. Also, all we need is the weather to cooperate a bit - merely for a sentiment shift.
I'm hearing that the big money "momenteum" crowd is looking at the oilpatch here - watching how crude behaves; and is nervous as the proverbial "Whore in Church" about NASDQ & iNet valuations here... all we need is something, anything - to trigger that move. It could be a move up in crude, or nat gas, a news event,or weather etc, or something in the overall market as a negative catalyst; either strong profit taking, more talk to the likliehood of another rate hike, a big move in the bond market etc - which is very likely imho .
We will have strong driving season draws here from all the Holiday travel & initial week of Xmas Shopping etc. We will continue to draw down at about 6 M boe per month imho - even with moderate weather; so worst case scenario - is another 6 weeks before we turn & have a coiled spring bounce. I think it happens by Xmas however and we will trade in a narrow range here - that is why I am not waiting when I see XTO under $10, UPR under $13, PXD in the low $8's - OEI mid $7's etc - we aren't going much lower, if lower at all imho in the E&P's, maybe a bit more in the OSX as its held a little better here.
I really like seeing the institutional buying interest here. We are still seeing 100K buy blocks here with regularity. The hardcore energy funds are buying smartly here. But, they are in & out; trying to time the turn around here. There are lots of shorts - that will also magnify the initial move here imho.
Nat Gas is not as bad as the shareprices would reflect here. Ask ANY E&P company if they would have been happy with $2.20 Dec Nat Gas & $2.30+ Jan Nat Gas earlier this year? They would have been VERY happy - and obviously so; as they hedged at $1.85-$2.00 through year end here in many cases... This is STILL a very positive Nat Gas price environment!
It simply makes no fundamental sense for NBL to be near a 5 year low and right back to price levels of last January when it was looking at $1.75-$1.90 Nat Gas. Especially so; since many companies now will enjoy the flip side to that "double edged sword" efffect from hedging.
Interestingly enough; these companies were propelled to highs here this summer into Sept - when they had under the market Nat Gas hedges & actual price realizations of $1.90ish in effect ! NOW ! - when they are hedged above market prices and will ACTUALLY receive higher Nat Gas prices than they did all damn year ($2.25-$3.00) - and they sell off 30-50% !?!?!?! - go figure ?
When the Street's allows sentiment alone to effect the price to fundamentals relationship to this degree, or when because of rotational outflows; this anomalous price to fundamental & commodity price relationship exists - I will make huge, huge bets against the grain.
This can not and will not last; never has - never will. It takes some guts and a little insight to recognize market anomalies for what they are.
PS:O/T
I am not trying to start another "electronic food fight" here; but notice the total absence of all the monday morning quarterback , ankle biting critics here... They NEVER make a call, share any opinion, or analysis. They merely cherry pick minor individual calls and nick away... never to been seen, or heard from in the heat of the battle; only to slither out of their cold, dank holes after the dust of battle has settled (VBG).
Where are the critics now ? The time to bite my ankles is now folks; stand up and tell me how much lower we are going and why - what you are selling, or shorting and why etc... or save the penny ante-pissant monday morning QBing the next time... |
