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Denbury Resources Inc. Message Board

  • pddane_01929 pddane_01929 Nov 29, 2007 10:39 AM Flag

    EIA commentary

    Moosebit et al.

    http://www.eia.doe.gov/oil_gas/natural_gas/ngs/ngs.html

    A draw of 12 Bcf in relation to 144 HDDs for the week is very bearish but expectedly so. Next week we actually have some real cold weather so we ought to get a better test of the proposition.

    Regards,

    Peter

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    • All,

      A surprisingly high 104 Bcf build:

      http://www.eia.doe.gov/oil_gas/natural_gas/ngs/ngs.html

      That's a bit of a head-scratcher since electric generation increased significantly last week to 88,047 GWH from 82,135 week prior. We'll have to see if this is a pattern.

      Regards,

      Peter

    • During a week in which, all other things being equal, we had slightly more CDDs and electric production, we were able to store 16 less Bs. The market isn't taking that into account, but at some point it absolutely will. >pddane

      My thought as well. Spent the last week deciding on which "gassy" e&p to take a position in to along with current holdings in ECA and DVN. Eventually picked SWN out of a finalist group that included CHK,SGY,BBG,WMB, and XTO. Have now reinvested about 40% of the cash I raised from early May sales. Give myself a market grade of C- so far regarding timing of sales and subsequent buys to date. Oh well.

    • from Andy Busch, BMO Harris Bank:
      Mining&Oil Linkage:
      There's been a consistent theme emanating on industrial production around the globe and it's down. For May, US IP was -0.2%, France IP was -2.6%, Italian -1.4%, and 1st half Chinese auto sales were down 5.19% yoy for the first half of 2008. (June Chinese trade surplus -20.6% yoy) This means demand for what goes into what gets produced has to decline. This means that industrial metals (Nickel, copper, zinc, tin are all well off their highs) have see a cooling for their demand and thus a cooling for the mining companies. (Yes, I realize China is reducing aluminum output, but why did they do this?) The Payoff: we should see demand for oil decline as well. It's almost impossible for energy use to continue to increase when industrial production is declining sharply. This is already showing up in the decline in oil prices from their peak to where they are today. From the consumer standpoint, we know that demand for gasoline is dropping as consumers change their driving habits. According to the EIA, US gasoline consumption is down 3.3% this year and is the lowest since 2003. When I spoke with French Finance Minister LaGarde, she said France is seeing a drop in the petrol tax revenues due to drop in demand. The drivers in the UK are also driving less with estimates of a 15-20% decline. Finally even with refiners producing fewer gallons of stock, supplies of gasoline are building.

    • All,

      A very bullish EIA report for natural gas:

      http://www.eia.doe.gov/oil_gas/natural_gas/ngs/ngs.html

      Let's do a bit of comparative work even though it was a holiday week and, therefore, possibly funky. Last year, we built 106 Bcf as compared to 90 this year. Last year we had 81,057 GWH of electric generation. This year we had 82,135 GWH of electric production. Last year we had 60 population-weighted CDDs and this year we had 62.

      Result? During a week in which, all other things being equal, we had slightly more CDDs and electric production, we were able to store 16 less Bs. The market isn't taking that into account, but at some point it absolutely will.

      Regards,

      Peter

    • Upper,

      Every once in a while in the energy sector the market simply decides "Holy crap, they're going to kill the goose that laid the golden egg!" If the broader market does not sell off substantially further, expect energy to come back. Why? Because that will be a living embodiment of the idea that the goose is not killed. If the broader market does sell of further, however, then we could see continued rolling over in energy as the market simply completes the cycle of crushing all multiples.

      If one is talking about the e & ps, it is very hard to see any evidence of a blemish on the bullish picture when thinking fundamentally. Could slowing world oil demand or slowing natural gas demand take the bloom off the rose, so to speak? First off, we can't see any slowing world demand for oil or natural gas. We see just the opposite. We see very high tanker rates, for example, and very high rates for LNG cargoes internationally. But, to the question, since it does appear that we have very little ability to increase supply of any hydrocarbons internationally (a bit different in the US where we have made up for lost LNG by increasing domestic natural gas production), it would take an actual reduction of world demand for them to change the S/D equation. It would take a worldwide recession to do that. If world economic growth slows by half we still have exactly the same S/D problem that we have now.

      Regards,

      Peter

      Regards,

      Peter

    • It will be a welcome relief when the market closes today and we have three days rest. My brain is fried I need to compose myself. Oil goes up, Gas goes up, Oil and Gas stocks go down. My simple brain can't understand what is going on. Will this trend continue?

    • All,

      A build of 85 Bcf which is less than expected and less than normal and therefore bullish. There is some talk that the EIA has changed their method of collecting data. Unless they've screwed up, the number is extraordinarily bullish for a simple reason: the week's weather was close to normal and, at $13+ natural gas we didn't store as much as normal. A reasonable person would say, therefore, that natural gas pricing should rise from here.

      Regards,

      Peter

    • All,

      A build of 57 Bcf:

      http://www.eia.doe.gov/oil_gas/natural_gas/ngs/ngs.html

      I cannot quickly find Roberbre's electricity generation number but it must have been in the high 80s. It is a little hard to believe that front month natural gas has sold off on the number but perhaps that has to do with the malaise at WTIC.

      Regards,

      Peter

    • All,

      A build of 105 Bcf, roughly in line with both expectations and with 5 year historical norm for the week. Weather maps are telling us however that we should get 2 to 3 weeks of lower than normal builds based on significantly warmer than normal weather in the South and Midwest.

      http://www.eia.doe.gov/oil_gas/natural_gas/ngs/ngs.html

      Regards,

      Peter

    • All,

      A build of 85 Bcf, in line with expectations but less than typical for this week of the year.

      Regards,

      Peter

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