Posts for Ticker ‘XLE’

Solar’s Shade: Nero or Blackout? (FSLR, JASO, LDK, SPWRA, TAN, KOL, XLE, USO)

solar-panel-pic5Notwithstanding a solid fourth quarter and an up year, First Solar, Inc. (NASDAQ:FSLR) is off more than 15% in early trading this morning. We noted its strong earnings report yesterday, but warned that guidance for 2009 was the important missing piece.  This is pressuring other solar stocks and is coinciding with moves in other sectors. It shows that even an Obama-favorite industry might not be able to escape the reality of the business climate.
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Posted on: February 25, 2009 – 10:31 am in Green Biz, Trading Alert, Utilities, , , , , , , ,

The Inevitable $100 Oil (OIH, XLE)

Media reports today are noting a $100 print in oil trading, although we would caution that this appears to be a paper trade from the floor and not an accurate market trading print.  We inquired with another agency and with an oil trading group in Houston and the "$100 OIL" appears to be mistake.  Neither could confirm electronic trading at that level.  The flip side of the argument is that it’s irrelevant as we’ve already hit record prices today.

On last look we saw oil up $3.32 at $99.30 per barrel and that was on the real market. We are over $99.00 and the mystical $100 oil is a mere difference in semantics at this point.  In fact, we’d now expect that oil could see a real $100 trade this week because the traders are more in control of oil prices than the fundamentals.

We’ve already got T. Boone Pickens maintaining $100 oil and he’s been right the entire run up so far.  Ken Heebner is also sticking with his oil names.  Oil has a large geopolitical risk premium assigned to it.  The exact amount is unknown.  Some feel the premium is $10 per barrel, and others have a $30 suggested premium.  We won’t even try to claim the answer if oracles like T. Boone Pickens can’t put an exact price on it. 

But what we do know for sure is that the Gulf of Mexico has largely escaped any real damage for the last two years from hurricane season.  We have had no steady net oil delivery misses at terminals throughout the Middle East, and depending on who you talk to the argument is that Iraq is close to being back on-line as a decent producer.  Russia and others are becoming more prominent players and there is enough oil from the Canadian oil sands that is much more than feasible at levels anywhere remotely close to today’s prices.

Imagine if Pakistan was a key oil player.  Imagine if Chavez in Venezuela could make more than a sting.  Imagine if we have an active hurricane season.  Imagine if our pipeline explosion seen last month was much larger.  Those geopolitical risks are there and we are up at $99+ with no significant supply issues.  A real oil trade at $100 is less than 1% away and at this point seems inevitable.

The Oil Services HOLDR’s (AMEX: OIH) are up over 1% at $191.20, yet the highs there over the last year are $204.62.  The more liquid Energy Select Sector SPDR (AMEX; XLE) are up marginally by 0.3% at $79.65, and the highs there over the last year are $80.60.

How much higher oil goes is anyone’s guess.  The case for much lower oil is a recession, so maybe high oil prices aren’t all that bad.

Jon C. Ogg
January 2, 2008

Posted on: January 2, 2008 – 1:05 pm in Oil & Gas, , , , ,

T. Boone Pickens Still Sees $100+ Oil (CLNE, OIH, XLE)

The great oil sage T. Boone Pickens was just on CNBC for a quick interview while he was out in California today to kick off the Long Beach and Los Angeles harbors to switch trucks over to natural gas for his Clean Energy Fuels Corp. (NASDAQ: CLNE).  This is his liquid natural gas company out in California that is meant to replace diesel.

He said oil prices will continue to rise because we have no control over our destiny there.  He is talking up natural gas to replace diesel, which he said natural gas can be 50% to 70% cleaner than diesel.  As far as price parity, Pickens said LNG measured gallons comes in today at $3.55 per gallon of diesel versus $3.29 for liquid natural gas and they both take you the same distance.

As far as future oil prices, Pickens said "Get ready for $100.00, you’ll see $100.00 oil before $80.00."  His point is that oil exporters have seen how high we’ll continue to pay, and he even said that this is likely going to become the norm.   He thinks that the global production capacity is 85 million per barrels per day now, and he noted you have to 1,000 wells pumping 1,000 barrels per day to get just 1 million barrels per day.

  • Clean Energy Fuels Corp. shares are up about 5% at $15.00 today, and the post-IPO trading range this year has been $10.81 to $20.65.   Pickens can sometimes impact the sector with his calls:
  • the Oil Services HOLDRs (AMEX: OIH) are up 0.6% to $186.47 today;
  • the Energy Select Sector SPDR (AMEX:XLE) is up 0.4% at $77.25 today.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 11, 2007 – 1:47 pm in Alternative Energy, Oil & Gas, , , , ,

ExxonMobil A Tad Light (XOM, XLE)

ExxonMobil (NYSE:XOM) did actually come in light on earnings as 24/7 Wall St. had worried that the chart was indicating.  The world’s largest oil company did post EPS at $1.70, slightly under the $1.75 estimate.  Its revenues were $102.34 Billion.

As suspected, the shortfall is due to lower downstream refining margins.  Production decreased by 2% year over year on an oil equivalent basis.  Exxon also spent some $5.4 Billion on capital spending and exploration.  It repurchased roughly $7 Billion in stock.

The stock is actually indicated down almost 1.7% pre-market at $90.45 despite oil being over $95.00 this morning.  Sometimes those pesky little charts are quite indicative of upcoming news.  Exxon’s 52-week trading range is $69.02 to $95.27.  The Energy Select Sector SPDR (AMEX:XLE) is also now indicated down 0.9% in early pre-market activity.

Goldman Sachs did lower oil estimates this week, although so far oil prices are higher than when the call was made.

Jon Ogg can be reached at jonogg@247wallst.com; he produces the Special Situation Investing Newsletter and does not own securities in the companies he covers.

Posted on: November 1, 2007 – 7:18 am in Earnings, Oil & Gas, ,

Last Look At ExxonMobil Earnings (XOM, VLO, SLB, XLE)

Integrated oil giant ExxonMobil (NYSE:XOM) is set to report earnings on Thursday morning, and it is still a wonder as to why shares are lagging behind the market when oil traded up over $4.00 per barrel today to a new $94.53.

A chartist would say this doesn’t bode well at all for earnings.  Energy has definitely seen a bit of a sector rotation out into tech, which was partly noted on the Goldman Sachs downgrade on oil as a commodity yesterday.  Without owning a crystal ball, we can’t say which is right or if both combined make the explanation right.

First Call has estimates pegged at $1.75 EPS tomorrow.  The company’s buyback continues, but with shares up around $90 it’s a wonder just how many shares the largest oil company in the world actually bought.  Options are a bit hard to use as a comparison to others, but it looks like options traders have an expected price change in a range of $2.50 to $3.40 in either direction.  Analysts that follow Exxon have an average price target of about $97.00.

What is hard to imagine is that Exxon’s numbers would be bad with oil prices this high.  But Valero (NYSE:VLO) posted lackluster earnings because of refinery costs.  Schlumberger (NYSE:SLB) has also performed dismally since its earnings report.

Shares closed up 0.9% today at $91.99, and the 52-week trading range is $69.02 to $95.27.  Regardless of the actual number on EPS tomorrow, you can imagine the media headlines are going to be focused on the monstrous revenue number for its shock effect.  It will be interesting to see the reaction in the Energy Select Sector SPDR (AMEX:XLE) since ExxonMobil makes up some 21.38% of the ETF on last look.

Jon C. Ogg
October 31, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the Special Situation Investing Newsletter and does not own securities in the companies he covers.

Posted on: October 31, 2007 – 4:44 pm in Earnings, Oil & Gas, , , ,

Goldman Sachs Oil Call Overshadows ExxonMobil Earnings (XOM, SLB, BP, BHI, TSO, XLE, OIH)

Goldman Sachs may not be reversing its entire bullish stance on oil after oil traded over $93.00 per barrel on Monday, but it is recommending some old fashioned profit taking.  Goldman Sachs noted specifically that it is not necessarily calling a top here, but it is encouraging to take some profits and lock-in some gains.  Here was the prior equity analyst call on oil names out of Goldman Sachs.

At the end of last week, 24/7 Wall St. was looking at ExxonMobil (NYSE:XOM) ahead of earnings and we noted that its chart was not indicative of a great earnings report being priced-in.  Schlumberger Ltd. (NYSE:SLB) has been a disaster since its earnings were greeted with major selling, and BP (NYSE:BP) already noted that Q4 was going to be ugly.  The stock was not following oil prices and the price at the pump according to gasbuddy.com was not following the per barrel price trend of black gold.  Naturally, there is a "be careful what you wish for, you might get it" lesson here: yesterday at the pump the price was back over $3.00 per gallon.

This report isn’t entire out of line with Goldman Sachs’ recent lifting of its Super-Spike price band where it noted the possibilities under extreme circumstances for $135/barrel and $4.50/gallon at the pump.  Today’s call looks at a downside risk of $80/barrel at the end of Q1 2008.

You can bet this won’t change the stance of many oil bulls.  Ken Heebner of CGM is very bullish on oil properties and T. Boone Pickens recently called for $100/barrel.  Jim Cramer even went on the line and noted some key oil takeover names in Canadian Oil Sands Trusts.

The truth is that the fundamentals right now do not seem to justify the current prices, but 24/7 Wall St. still believes that $100 can easily be hit based upon the trading patterns.  There has still yet to be a single net delivery miss in and to the U.S.  If a net delivery miss were to occur you can imagine what the trading reaction will be, regardless of the price.  Traders are in charge of oil, just ask Tesoro’s (NYSE:TSO) analyst/economist that was saying just last week how the fundamentals in today’s oil markets should have oil in the $60’s rather than the $80’s or $90’s.

We still wonder if Baker Hughes Inc. (NYSE:BHI) is going to make an acquisition after that last filing for it to raise $2 Billion in cash, which has been a signal in the past since it does not need cash.

Oil is down almost $2.00/barrel at $91.60 on last look.  The Energy Select Sector SPDR (AMEX:XLE) is down over 2% to $75.47 (year range $53.89 to $78.50) and the Oil Services HOLDRs (AMEX:OIH) is down 2.8% at $188.28 (year range $125.81 to $204.62).

Jon C. Ogg
October 30, 2007

Posted on: October 30, 2007 – 12:37 pm in Analyst Calls, Earnings, Oil & Gas, , , , , , , ,

T. Boone Pickens Calling For Higher Oil Prices

The famed T. Boone Pickens came on CNBC for a telephone interview again with new predictions for high oil prices.  It was a bit interesting that he doesn’t have a stated target for oil this time but he did note the likelihood of $85 to $88 oil in Q4, and he thinks the the fourth quarter will be exciting times in energy trading.  Here are some other things he noted:

  • BP said Mexico’s problems could be a problem for us.
  • Higher odds of a recession will cut oil prices if demand drops.
  • $80 oil, if you are on the brink of a recession, could push you into one.
  • He said he didn’t know what price the oil levels would impact the stock market.
  • Natural gas is still in an oversupply, but maybe not as much as first thought.

Yesterday, we gave a Best of Breed list of stocks with oil at $80 per barrel and gave the link for the first time T. Boone Pickens said that we’d see $80 oil before he turned 80 years old.  As a reminder, the two key energy ETF’s are: Energy Select Sector SPDR (AMEX:XLE) and Oil Services HOLDRs (AMEX:OIH). 

Jon C. Ogg
September 13, 2007

Posted on: September 13, 2007 – 7:15 am in Oil & Gas, , , ,

Ramifications of $80 Oil: Best of Breed Oil & Energy Stocks

Today was a landmark in oil: $80.00 per barrel was hit briefly.  If you were hoping that the OPEC raised production targets yesterday was going to be a huge help, guess again.  There are still supply near-shortages and perpetual disruptions and this could even be just an admission that OPEC countries were admitting to cheating.  T. Boone Pickens was right: he predicted $80.00 oil before he turns 80, and that isn’t until next May.

Determining exactly who wins in the sector is not a fair task to most companies if they are in the energy patch, because the answer is "almost all of them."  Here is a brief note:

Exxon Mobil (NYSE:XOM) is mostly unhedged and takes current market conditions meaning it runs the course and pays current rates and charges current rates rather than entering as many forward contracts.  As a fully integrated company, it’s the go-to name.  Shares are up 1.5% at $88.20, and that is after more than a $2.00 gain yesterday.

Schlumberger (NYSE:SLB) is the winner for the international oil services sector.  National Oilwell Varco (NYSE:NOV) is far smaller (relative basis, its market cap is over $24 Billion) but it has been able to charge nearly whatever it wants and if production is going up and commodity energy prices remain they will get to charge whatever they want for what may be an indefinite period.  With an embedded license to gouge, it’s hard to argue against the premium.

Valero (NYSE:VLO) is the largest independent refiner with a $37 Billion market cap. The only issue that is there besides outages and interruptions is that higher oil prices ramp its expenses and that mistakenly creates a worry among analysts that their net earnings numbers may be at risk.  If you go look at the earnings history as prices have risen, you’ll see they win despite those fears.

You’d think that solar power players would be the key winners, although the alternative energy ETF’s and First Solar (NASDAQ:FSLR) is down 1% (down almost 20% from year highs) and SunPower Corp. (NASDAQ:SPWR) is up 1% (and only about 10% from highs).

What is even harder to fathom is the higher coming pump prices as many are paying less now than when oil was screaming up previously when it was more than common to see $3.00 this Spring.  Less is a relative term, as my own gas buffet runs over $50.00 to be topped off.

It turns out that owning oil patch and energy companies is going to end up being one of the few hedges to higher energy costs for the public.  When these critical milestones are hit, it is frequent that higher prices ultimately prevail.  It’s obvious that this list has butchered off many names on here, and we left off the names that are in pending mergers.  There are now literally hundreds of plays out there. 

The easiest basket you can get for this is generally these two ETF’s: Oil Services HOLDRs (AMEX:OIH) and Energy Select Sector SPDR (AMEX:XLE).

Jon C. Ogg
September 12, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the 24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Posted on: September 12, 2007 – 2:16 pm in Oil & Gas, , , , , , , ,