Lots of questionable assumptions there. Oil sanctions have not been lifted. It's not at all certain that oil prices will drop and there is no reason that falling oil prices should have much impact on EEP. If you want comments you should make a better case as to why you think there would be an impact.
You are correct that most of the short term potential downside has already been eliminated now that it's in the $7's. I alluded to that last week when I suggested it would probably stabilize at these levels in the $7s, as indeed it has.
But finding a floor is not the same as expecting price recovery. There will be no 'recovery' in terms of the price going back to significantly higher levels (of course there may be volatility where the price goes up for a while to crash back down). Since there is no more drilling, the value of the trust goes down with each distribution (offset by changing NG prices). And each distribution can be expected to be smaller than the one before (again subject to NG price changes).
That means this can be a trading vehicle if you like to play the seasonal (3 month) pattern based on distribution announcements, but it will not be much of an investment and people who lost money on it up to now will not recover their losses, even though I am not suggesting further biglosses in the short term.
"Something is favorable because Aldw is up over $4 from the low."
Previously (if this is the real walrath) had made great emphasis on the fact that the market is often irrational and wrong. According to your prior statements, you should not read much into the fact that the price has risen over a short period.
"I have not read one single article regarding your new opinion on crude spread "
It's because I am thinking out loud and is not something I got from any article. Judge for yourself, if gas prices are now going down along with oil prices, then it should be obvious to see the implication with respect to refiner margins.
No, I never said I expect ALDW to go to $5 unless there are multiple quarters in a row due to some refinery accident. It appears you don't understand the mean ing of an 'IF' qualifier.
"Stop speculating and just provide credible data"
That's willy since the quarter is only a little more than half over. Are you saying all discussion here should stop now until the next distribution is announced. I could be wrong but I am explaining why I think many here may be too optimistic on Q4 based on them looking at the Brent-WTI spread and failing to note that US import/export prices have decoupled from Brent, which is a change compared to last time the Brent-WTI spread was at this level a little more than 6 months back. It sounds like your suggestion to "stop speculating" is really a request to "stop thinking" and that attitude is perhaps why your investment returns are not as good as they could be if you would try a little thinking yourself.
not a bit happy? I have no units, long or short. The only position I have is short puts which are well in the money, so any improvement in ALDW price lowers my paper loss on those puts. In that sense, I am happy with it. However I don't intend to cover the puts, rather I roll them forward every 3 months for premium, so I don't really care much about the price movement. You confuse pointing out facts about the distribution with being happy the price falls.
As for my revised prediction, I have explained many times that I don't make 'predictions'. my statements about the Q3 distribution were based on Credit Suiise estimates made after the quarter had finished. It's too early to make estimates of the Q4 distribution till the end of the quarter. All I will say is that I expect the Q4 distribution to be low although maybe higher than zero. And that Q1 has a good chance of being zero due to a major downtime planned for Q1. I am not making a prediction, simply stating some obvious facts.
the yahoo message boards are my "blog", you will have to follow me around from board to board.
CHKR price has dropped from $30 to $11. So whatever theoretical argument you can make about them having incentive to keep the price up is moot, imo, since it has been shown convincingly that they are not able to.
Agreed, to me Dan is the go-to source for up-to-the-quarter estimates for trust value for CHKR and the SD trusts. The many who dismiss him as a short do themselves a disservice.
Apart from which the premise of "Declare a dividend...and watch your stock bolt to the heavens... " is probably false. Declaring a dividend would not necessarily give a boost to the stock price.
WTS-WTI is important because that measures the discount for their input costs versus WTI.
But WTI-Brent is an indirect indicator in that the company does not directly deal with Brent. It is used as an approximator of refinery margins in that input costs will tend to track WTI (adjusted by the WTI-WTS spread) while refined products can displace imports (or be exported) at export/import prices (which have followed Brent).
But things are changing. and maybe the WTI-Brent spread may be less useful. Import/export prices at the gulf would be correlated with LLS (Louisiana Light Sweet). When quoting WTI-Brent before it was effectively the same as saying WTI-LLS because Brent and LLS were tightly correlated.
But now that the Cushing glut moved down to the gulf, LLS has become uncoupled from Brent and become coupled to WTI. So WTI-Brent no longer means WTI-LLS. Before Brent and LLS were very close to WTI-Brent was about the same as WTI-LLS. But now WTI and LLS are very close so LLS-Brent is about the same as WTI-Brent.
I suspect WTI-LLS is now more important because the refined products can displace imports. If so, rather than focussing on WTI-Brent which looks great for the refiners at more than $15, it might be more meaningful to look at WTI-LLS which is only a few dollars. If so, refinery margins may be not that much better than Q3.
Also think as follows: earlier when LLS was coupled to Brent, lower WTI prices were not translating into lower gasoline prices. That was good for refineries since they had lower input costs but still got high prices for their refined products. But now that LLS has become coupled to WTI, gas prices are falling along with oil prices, right? That is not good for refiners as it means that the lower input costs are being offset by lower prices for the refined products. So, ask yourself if you are seeing gas prices falling and I think they are.
Don't get too excited about Q4 being much better than Q3 as it might not be.
Yes, however unlike last time when WTI-Brent spread was this high, LLS is now tracking WTI rather than Brent like it used to. WTI-LLS is now a minimal spread whereas when we had this WTI-Brent spread 6 months or so ago the WTI-LLS spread was about as wide.
As an approximate indicator of refinery margins, WTI-LLS may be a better rough indicator than Brent-WTI, in which case margins may not be much better now than in Q3.
"Also, in regards to Liz. A couple of weeks ago, she was saying the price of ALDW was going to hit the 5 dollar range."
Furthermore, I have stated that I sell puts on ALDW. You think I would sell puts if I thought the price was going to $5. Never said it, except in the hypothetical case of a big refinery accident. You are either making things up or misattributing comments from other posters.
It was a silly suggestion. I hardly think CS analysts are likely to spend hours a day posting anonymously on yahoo message boards. People imagine the most ridiculous stuff on these boards.
"I doubt analysts know any more than you or I do."
Depends who you are talking about.
If you are referring to self-described "analysts" posting on SA, then you may be right in many cases.
If you are referring to Credit Suiise, Wells Fargo or the other major MLP covering brokerages then you are wrong as they sit down with MLP management in making their forecasts. Since CS got the Q3 distributions predictions spot on (for NTI 30c versus 31c actual) they clearly have much better information than people on the MB, most of whom were predicting amounts double that.
"A couple of weeks ago, she was saying the price of ALDW was going to hit the 5 dollar range."
You are making it all up. I think I suggested that IF ALDW had a refinery accident and there were no distributions for many quarters that it could visit that range. But that was an IF, not a prediction. Since there has been no such major accident, why would I expect the price to have gone down there. You probably mix up my posts with those of others. I often mentioned the distribution expectation but generally do not attempt to predict unit prices.
I'm flattered. You are suggesting I'm the CS analyst covering ALDW?
Be serious. I am just a regular small investor like many here. I don't write anything for SA or anywhere except yahoo boards and sometimes on Investor Village boards.
All you can judge is that I don't visit the boards every day.
I'm back now, making my comments and then you won't hear from me till next time I check in a few days later.
"The price action in the last 2 weeks tells me there will be distribution at the end of this quarter."
Crazy comment. Even the company probably doesn't know yet if there will be a distribution, how could the market know. There may be one but I'm guessing it will be low (less than 10c).
"Liz is on record claiming that there will be zero distribution for the next 2 quarters."
No, I said there may be no distribution for 3 quarters. There is no way I could know for sure when the quarter is not even over.
"She also predicted that it would never cross 15 in 12 months."
And I never even said anything remotely resembling that remark. I generally do not make price predictions. Why are you making things up I never said?
"The tide has changed."
Pretty silly conclusion to a silly post. Refinery margins likely improved a bit versus last quarter but if you are expecting a large distribution you'll probably be disappointed again. It will probably be at least mid 2014 before things really improve and that is dependent on future commodity prices. They have another big turnaround coming in Q1 which will likely mean no Q1 distribution.
"Hesus, liz, don't you believe anybody? The CEO did say it."
He may have said it, but clearly he didn't mean it because they subsequently did not pay a distribution. So either he spoke out of line, was misquoted or was lying. Take your pick. Either way, the point is moot since we already know there is no distribution.
"She said the CEO never made the statement,"
I did not say, he didn't say it. I said I wouldn't imagine he meant to say that or maybe you misunderstood what he said. Anyway, the discussion is pointless since they already demonstrated they are quite willing not to pay a distribution.