Gas Preview & Oil Review

By: Zman Thursday, June 19, 2008 11:45 AM

Symbols: CHK, CVX, FTO, PQ, TSO, UBS, VLO

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The range for this week over the last five years has been injections of 56 to 114 Bcf.

Street Consensus: 60 Bcf injection (from the Bloomberg survey).

Relentless Bull Watch: Goldman Sachs sees natural gas prices in the 12.70 to 13.20 for the remainder of the year with risk "skewed to the upside." ZComment: Pretty tepid prediction from GS as that's where we are now, more like an EIA prediction than one from the guys who coined the term "super spike". Goldman did cut their estimate for LNG consumption in the U.S. to 1.54 Bcfgpd (still double what's been taken in all Spring).

Crude Oil: closed up $2.67 at $136.68 yesterday. July crude reversed sharply during the day when word came that Pengassen, the Nigerian oil workers union, was an inch away from striking on (CVX), potentially shutting in 350,000 bopd. After the close, the union said government intervention brought both sides back to the table. And then …

Nigeria Watch: MEND launched an attack on an offshore Shell facility. Shell has shut in the 200,000 bopd the Bonga field produces. If its not the unions, its the "freedom fighters" … who obviously have Bloomberg terminals. MEND also said that they may start attacking oil tankers. This morning the strip is rising across the board in early trading.

EIA Oil Inventory Review

CRUDE OIL: Essentially in line draw down. Inventories appear to have peaked early this year.

Utilization / Refinery Inputs. Refinery utilization recovers slightly to 89.3% and while this is in line with year ago figures and I'd like to see the sector curtail runs further to bump margins before I step back in. I continue to avoid the independent refiners as stronger cracks a few weeks ago got barely a nod from the market in their share prices.

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