TraderPlanet Market News - Futures
Gassy: UBS Talks Smack On UNG
In an interesting little exchange-traded products war of words, UBS (NYSE: UNG), year-to-date, during the last 6 months and since both products could be purchased on an exchange."It's no secret that UNG has had its struggles. A recently announced 4-for-1 reverse split indicates as much. As of February 1, UNG had almost 162.1 million shares outstanding with $821.5 million in assets under management. Amid record production and plunging natural gas prices, UNG has been in a downward spiral for over a year. The ETF flirted with $13 in June before falling below $5 earlier this year."GASZ is designed to capitalize on potential contango market environments typical to natural gas futures contracts. GASZ offers the potential to profit from the negative roll costs associated with the steepness in the short end of the natural gas futures curve, making it suitable for long-term investment horizons. Securities which fail to address the negative roll costs associated with contango markets lose value over time as investors are forced to repeatedly sell futures contracts at low prices and replace these with higher priced futures contracts," according to the UBS statement.Translation: The statement tells most ETF traders and investors what they already know and that is UNG stinks and its performance suffers because of continuous rolling of futures contracts.Still, there's no getting around the fact that GASZ has hammered UNG. Citing Bloomberg data as of Feb. 6, UBS points out that GASZ was up almost 6% year-to-date while UNG was down more than 14%. In the past six months, GASZ was up nearly 15% while UNG tumbled 45%. And since mid-June 2011, GASZ is up 14.9% compared to a 51.2% decline for UNG.GASZ is one of 41 ETRACS ETNs.
How to Trade a Greek Default
A new a day, a new headline for Greece. Today, reports are floating around the market that a Greek debt deal continues to inch closer. The European Central Bank is reportedly willing to take a haircut on its Greek debt holdings.Yet, given the general trend in the way events have transpired, investors may come to believe that a Greek default is all but assured at this point.In that event, traders may look to play the Greek in a number of ways.Financials: European financials remain under the protection of a short-selling ban. Thus, this trade could manifest itself in the form of a proxy trade on US financials or other financials around the world. This was theorized to be behind the movement in US financials last summer. Financials have rallied strongly to begin the year, perhaps shaking off that trading thesis. If a credit event occurs, US financials could come under fire once more; perhaps getting that major pullback the market has been looking for. Still, if a Greek default is well managed, value investors could look to get into these stocks as aggressive speculative short selling could send them lower than fair value.Currencies: The euro is the clear trade here. Whenever speculation has risen that Greece would soon default, the currency has sold off. Inversely, when traders have come to believe that the European situation was on the path to resolution, the euro has rallied. Following this pattern, traders should expect that a Greek default would send the currency trading down.However, this could be a rapid move in either direction, and traders who get in too early could be run over if the situation develops in an unexpected fashion.Other currencies can also be traded in a Greek default. For example, the US dollar and Japanese yen could be anticipated to rally. If a Greek default is interpreted as a deflationary event, commodity prices could take a hit and that could lead to a sharp selloff in commodity currencies like the Canadian and Australian dollars.Commodities: Commodities could move in the event of a Greek default. Industrial commodities like oil and copper could sell off on expectations of deflation and recession. Precious metals may initially trade lower but then rebound if central banks like the ECB or Federal Reserve intervene to keep the economy moving along.On Wednesday, Standard & Poor's Gill stated that current expectations are for an orderly default. In that instance, the market may have little volatility, as market participants already consider such a scenario to be "priced-in."Yet, has an event such a sovereign default ever been orderly? Neither nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.
Crimson Exploration Inc. Provides an Eagle Ford Shale and Woodbine Operational Update
Crimson Exploration Inc. (Nasdaq: CXPO) announced another successful oil well in Karnes County, Texas and provided status updates for current Eagle Ford and Woodbine wells currently in process. Eagle Ford Shale - South Texas In Karnes County, the Littlepage McBride #7 (53% WI) commenced production at a gross initial production rate of 1,019 Boepd, or 840 barrels of oil, 67 barrels of natural gas liquids, and 672 thousand cubic feet of gas per day, on a 16/64th choke and 2,119 psi of flowing tubing pressure. The well was drilled to a total measured depth of 16,435 feet, including a 5,950 foot lateral, and was completed using 19 stages of fracture stimulation. Average gross initial production rates for our seven wells in this area is 1,060 Boepd. One mile north of the #7 well location, the Glasscock A #1 (95.5% WI) is currently drilling at 14,439 feet toward a total measured depth of 16,870 feet, including a 6,000 foot lateral. We anticipate completing this well, using 18 - 20 stages of fracture stimulation, during the latter part of the first quarter. In Dimmit County, the Beeler #1 (50% WI) was drilled to a total measured depth of 14,428 feet, including a 7,200 foot lateral, and was completed using 20 stages of fracture stimulation. Flowback operations have recently begun and we anticipate having production results in the following weeks. In Zavala County, the KM Ranch #2 (50% WI) was drilled to a total measured depth of 12,875 feet, including a 6,100 foot lateral, and will be completed using 20 stages of fracture stimulation. This well was drilled in 15 days which is an 11 day improvement over the Beeler and the KM Ranch #1 wells. We anticipate completion operations to begin in the latter part of the first quarter with first production expected in April. Woodbine Formation - Southeast Texas In Madison County, the Mosley #1H (89% WI) is drilling at 14,065 feet toward a total measured depth of 16,930 feet. Crimson anticipates conducting 20 - 24 stages of fracture stimulation in the planned 7,500 foot lateral and remains on schedule to commence completion operations mid-February with initial production, given success, expected to begin in early March. Upon completion of drilling operations at the Mosley #1H, the rig will move approximately 1.5 miles to the north to begin drilling operations on the Grace Hall #1H (68% WI). As indicated in our capital budget, we anticipate being active in the Woodbine for all of 2012 and have already permitted 3 additional wells, with 6 more permits planned for the year. Crimson Exploration is a Houston, TX-based independent energy company engaged in the acquisition, development, exploitation and production of crude oil and natural gas, primarily in the onshore Gulf Coast regions of the United States. The Company owns and operates conventional properties in Texas, Louisiana, Colorado and Mississippi, including approximately 5,400 net acres in the Haynesville Shale, Mid-Bossier, and James Lime plays in San Augustine and Sabine counties in East Texas, approximately 8,000 net acres in the Eagle Ford Shale in South Texas, approximately 17,000 net acres in Madison and Grimes counties in Southeast Texas and approximately 11,000 net acres in the Denver Julesburg Basin of Colorado.
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Financial Breakfast: Morning News Summary for February 08, 2012
Wednesday, February 8, 2012 When Ronald Reagan took office, the U.S. national debt was only about 1 trillion dollars. Roche Holding (OTC: RHHBY) ILMN) without a fight, as the company's board has rejected a takeover bid of $5.7 billion, saying that it is "grossly inadequate." Time Warner (NYSE: TWX) Reports Q4 EPS $0.94 vs $0.87 Est; Revenues $8.19B vs $8.10B Est Sprint Nextel (NYSE: S) Reports Q4 EPS $(0.43) vs $(0.37) Est; Revenues $8.72B vs $8.68B Est CVS Caremark (NYSE: CVS) Reports Q4 EPS $0.89 vs $0.89 Est; Revenues $28.32B vs $28.12B EstDomesticU.S. Equity Markets trade higher as Dow futures trade up about 19 points. U.S. Dollar trades about 0.11% lower.To see more pre-market news, click OverseasEuropean markets are higher in afternoon trading. Britain's FTSE 100 added 0.09%, Germany's DAX gained 0.64% and France's CAC 40 advanced 0.42% on the session. Asian stocks ended the session higher as well. China's Shanghai added 2.4%, Japan's Nikkei 225 gained 1.1%, and Hong Kong's Hang Seng advanced 1.54%.To see more overseas news, click UpgradesPiper Jaffray Upgrades Open Table (NASDAQ: OPEN) from Neutral to Overweight, Raises PT from $38 to $64 JP Morgan Upgrades Vishay Intertechnology (NYSE: VSH) from Neutral to Overweight, Raises PT from $11 to $15.5To see more of today's upgrades, clickCitigroup Downgrades Walgreen (NYSE: WAG) from Neutral to Sell, Lowers PT from $35 to $28 Deutsche Bank Downgrades Netgear (NASDAQ: NTGR) from Buy to Hold, Lowers PT from $42 to $40To see more of today's downgrades, click OnMBA Mortgage Applications reported 7.5% from a -2.9% prior readingTo see more economic news, click EarningsTime Warner (NYSE: TWX) Reports Q4 EPS $0.94 vs $0.87 Est; Revenues $8.19B vs $8.10B Est Sprint Nextel (NYSE: S) Reports Q4 EPS $(0.43) vs $(0.37) Est; Revenues $8.72B vs $8.68B Est CVS Caremark (NYSE: CVS) Reports Q4 EPS $0.89 vs $0.89 Est; Revenues $28.32B vs $28.12B Est Level 3 Communications (NASDAQ: LVLT) Reports Q4 EPS $(0.80) vs $(1.06) Est; Revenues $1.58B vs $1.63B EstTo see more earnings announcements, click CorporateTime Warner (NYSE: TWX) Raises by 11% L-3 (NYSE: LLL) Increases by 11% to $0.50 Roche Holding (OTC: RHHBY) ILMN) without a fight, as the company's board has rejected a takeover bid of $5.7 billion, saying that it is "grossly inadequate."To see more corporate news, click CommoditiesPrecious metals are trading lower, with gold posting losses of about 0.01% Energy futures are trading higher, with crude oil posting gains of about 0.9% Natural Gas futures are lower by about 2.87% and copper is trading higher by about 1.01%To see more commodities news, click Technical Levels for Futures and ForexName Resistance-2 Resistance-1 Mid Pivot Support-1 Support-2 E-Mini S&P 500 1354 1349 1340 1335 1326 Gold 1777 1762 1737 1722 1697 Crude 101.19 99.96 97.90 96.67 94.61 Natural Gas 2.68 2.59 2.52 2.42 2.35 EUR/USD 1.3382 1.3320 1.3208 1.3146 1.3033 US Dollar Index 79.63 79.11 78.84 78.31 78.04Subscribe Click to subscribe to this newsletter. Receive it daily to your inbox!
Commodity Update
Mar Brent Oil 116.76 0.46% - Dec Carbon Emissions 8.56 -1.38% - Mar Copper 3.91 0.87% - Mar Crude Oil 99.59 1.20% - Apr Gold 1748.75 0.02% - Mar Heating Oil 3.1993 0.26% - Feb Lean Hogs 86.25 -0.90% - Apr Live Cattle 128.64 0.86% - Mar London Cocoa 1466 -0.41% - Mar London Coffee 1868 0.32% - Feb London Gas Oil 996.38 0.44% - Mar London Sugar 648.75 0.25% - Mar London Wheat 169 -0.29% - Mar Natural Gas 2.417 -2.20% - Mar Orange Juice 195.8 -3.12% - Mar Palladium 708.3 -0.12% - Apr Platinum 1652.35 -0.15% - Mar Rough Rice 14.075 0.97% - Mar Silver 34.363 0.49% - Mar US Cocoa 2271 0.07% - Mar US Coffee C 220.6 0.39% - Mar US Corn 646.88 0.67% - Mar US Cotton No.2 95.37 0.85% - Mar US Soybean Meal 327.3 0.58% - Mar US Soybean Oil 52.55 0.74% - Mar US Soybeans 1239.63 0.57% - Mar US Sugar No11 24.59 0.29% - Mar US Wheat 665.63 0.49% -
Comparing Germany to Italy
The German economy stands in sharp contrast to the rest of Europe. For example, unemployment, which has been troublesome for many of the other economies in Europe, is approaching its lowest level in 30 years, coming in at 6.7 percent in January.German unemployment has been decreasing steadily for about the last two and a half years. Recently, total German employment increased by 1.3 percent, which brought the number of jobs to a record 41.25 million.The flexibility of the labor market in recent years could be caused by the so-called Hartz reform. This labor reform first came into effect in early January 2005, focusing on the extreme flexibility of the job market.The Hartz reform began with the deregulation of labor laws. The reform was intended to create a more flexible labor market. It was believed that its implementation would improve conditions for small businesses and make it more attractive for companies to hire new employees.Among the most important innovations was the strong push towards the creation of more part-time jobs. In 1991, 25 percent of the German workforce was part time; now that figure stands at 42 percent.It is interesting to compare the situation in Germany to Italy. The Italian labor market is characterized by its rigidity. In Italy it is not uncommon for an individual to stay with a single company for the duration of their career. However, this lack of mobility limits the creation of new jobs.A debate currently rages in Italy about the decline of the concept of a “permanent” job. The debate was partially triggered by a controversial statement from the Italian Prime Minister in which he criticized the concept of workers being able to stay with a single firm their entire lives. The metalworkers union IG Metall (3.3 million members) is proposing that the average wage be increased by 6.5 percent. The union argues that this increase in wages would actually boost employment by increasing the spending power of Italian workers.According to François Cabau, an economist at Barclays Capital, the gap between the German economy and other Eurozone countries should increase this year.It will interesting to see what effect this divergence has on the Eurozone going forward.
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Greek Rumors Continue to Boost Euro
On Tuesday, the EUR/USD pair rallied in early morning trading. After headlines broke that suggested that Greece was about to finalize a deal with its creditors, the chart of the currency pair had a notable move, with the euro spiking about 0.50% against the US dollar.The move in the euro makes intuitive sense, as the currency has been under a tremendous amount of speculative pressure. Many currency traders may have gone short the euro on hopes that the currency would weaken significant—either in the event of a disorderly Greek default or a Greek exit.If Greece were to default, holders of euros may run to other currencies, as the possibility of the euro staying fully intact would decline notably.However, if Greece is able to come to terms with its creditors in a manner that would lead to a clean resolution, then the euro could quickly rally and may continue to rally. The currency may even strengthen to an illogical degree, propelled higher by shorts forced to cover in a cascading, short-squeeze effect.Yet, traders may have seen this headline before. In fact, it has been consistently rumored in the past few weeks that Greece was on the verge of reaching a deal. Each of these supposed imminent deals has lead to short-term buying pressure for the euro, but the currency has later pulled back after no deal appeared—continuing to hover right around the $1.30 price level.Thus, Tuesday's headline may be seen to have little merit. Still, traders with large short positions may use any headline to back out of some of their position, lest they be completely run over in a dash to cover positions.Greece in a massive general strike on Tuesday, with reports that 15,000 workers and members of leftist organizations were marching in Athens to protest continued budget reforms.Another interesting wildcard in the greater predicament is the possibility that later Greek governments could ultimately renege on any deal reached this month.Even if the deal was favorable to the Greek budget, future elected Greek governments could fail to meet their obligations. There may little to compel them, and poverty-stricken Greek government workers could prove to be a powerful electorate.At the same time, the desire to avoid another "Lehman Event" may compel Eurozone officials to prevent a disorderly default from occurring. Although European officials have been adamant in their desire to ensure that Greece does not default explicitly, they have had over a year to prepare for that occurrence.Neither nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.
Credo Petroleum Updates Bakken and Three Forks Activity; Seven New Bakken and Three Forks Wells Currently Underway
Credo Petroleum Corporation (Nasdaq: CRED) today provided an operations update.Michael D. Davis, Chief Executive Officer (interim), stated, "Credo passed the milestone of becoming primarily an oil producer in the fourth quarter of fiscal 2011, just as oil began selling for five times more than natural gas on an energy equivalent basis. We will build further momentum in fiscal 2012 by setting new drilling records, with 85 gross (37 net) oil wells currently on our drilling schedule. As a result, our 2012 drilling budget of $35,000,000 is more than double last year. Sixty‑five percent (65%) of our 2012 budget is allocated for Bakken and Three Forks drilling where we started the year by successfully completing the Company's first Three Forks well. This press release highlights our new Three Forks discovery, and updates our drilling activity in the Bakken and Three Forks oil resource play."Initial Three Forks Well Tested at 1,700 BOEPDThe Petro-Hunt 148-94-17D-08-2H ("2H"), located in Dunn County, North Dakota, was completed in the Three Forks formation and produced at a 24 hour flowing rate of 1,700 BOEPD (barrels of oil equivalent per day). The new well was drilled to a total measured depth of 20,800 feet and was fracture-stimulated in 28 stages. The well is operated by Petro-Hunt and Credo owns a 10% working interest in both the well and the 1,280 acre spacing unit ("17D").The 2H well is the second well drilled on the 17D spacing unit. The previously announced 1H well was completed in the Bakken formation and was placed on production at an initial flowing rate of 1,490 BOEPD.The 17D spacing unit is located in a very active drilling area in the southwest portion of the Ft. Berthold Reservation where Credo owns interests ranging up to 25% in 17 spacing units operated primarily by Petro-Hunt, Williams, Marathon and Enerplus.Seven Bakken and Three Forks Wells Currently Drilling or Completing20 Wells Projected for Fiscal 2012To date, the Company has completed 12 Bakken and Three Forks wells, all high rate producers, with cumulative gross production from the wells nearing 1.2 million BOE. The Company's average working interest in the wells is 7.5%. Drilling activity is escalating on the Reservation, and the Company currently projects that it will drill at least 20 Bakken and Three Forks wells in fiscal 2012, with an average working interest of 10%.Seven of the 20 wells are currently in various stages of being drilled or completed. Three of the wells target the Three Forks formation and four target the Bakken formation. The Three Forks wells are located in the southwest portion of the Reservation where the 17D spacing unit is located. This activity represents a significant ramp-up of Three Forks drilling in the area by Petro-Hunt.Credo owns approximately 8,000 gross (6,000 net) acres, virtually all of which is located on the Reservation. The acreage consists of approximately 62 initial well spacing units in which Credo currently owns an average 12% working interest. The Company believes that at least two Bakken and two Three Forks wells are likely to be drilled on most of its spacing units for a total of about 250 wells. However, many of the larger Bakken operators predict that up to eight wells could ultimately be drilled in the primary Bakken and Three Forks zones, which could double potential Company wells to 500.
Jacobs Receives Contract from Methanex
Jacobs Engineering Group Inc. (NYSE: MEOH), supplier of methanol to major international markets, to provide engineering services for a potential methanol production facility in Louisiana. The plant would be relocated from Chile to Louisiana and could be operational in the second half of 2014.Jacobs is currently executing site-specific engineering for the 225-acre location in Geismar, La. from its offices in Baton Rouge, La.; Santiago, Chile; and Marble Arch, London, UK. The project is expected to create numerous direct and indirect job employment opportunities. In making the announcement, Jacobs Group Vice President Mike Autrey stated, "We are very pleased Methanex selected Jacobs to be a part of this project. The U.S. Gulf Coast is a prime location for a methanol facility, especially since demand for methanol is expected to grow in the coming years."
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PXP Provides Preliminary 2011 Full-Year Operational Results; Reports Substantial Increase In Proved Reserve Value
2011 Fourth-Quarter Average Daily Sales Volumes:Daily sales increased 13% to 105,396 barrels of oil equivalent per day, or 26% pro forma for asset sales, compared to fourth-quarter 2010 Oil/liquids volumes increased 12% to 52,262 barrels per day, or 16% pro forma for asset sales, compared to fourth-quarter 20102011 Full-Year Average Daily Sales Volumes:Daily sales increased 12% to 98,950 BOE per day, or 23% pro forma for asset sales, compared to 2010 Oil/liquids volumes increased 7% to 48,964 barrels per day, or 8% pro forma for asset sales, compared to 20102011 Total Proved Reserves:Total proved reserves, pro forma for asset sales, increased 16% to 410.9 million BOE Standardized measure of discounted net cash flows increased 66% to $5.1 billion from $3.1 billion in 2010 PV-10 value increased 58% to $7.9 billion from $5.0 billion in 2010 Reserve replacement is 222% or 290% pro forma for asset sales 2011 Oil/Liquids Proved Reserves:Oil/liquids reserves, pro forma for asset sales, increased 18% to 244.0 million barrels Oil/liquids are 59% of total proved, up from 54% in 2010 Oil/liquids reserve replacement is 280% Oil/liquids reserve-to-pro forma production ratio is 14 yearsPlains Exploration & Production Company (NYSE: PXP) today reported preliminary 2011 operational results and an update to its derivative position.DAILY SALES VOLUMESPXP's 2011 fourth-quarter daily sales volumes averaged 105,396 BOE per day, a 13% increase over 92,994 BOE per day in the fourth-quarter of 2010. Adjusting for the 2010 and 2011 asset divestments, the 13% sales volume increase would have been 26% and 2011 fourth-quarter daily sales volumes would have averaged 90,349 BOE per day.PXP's 2011 fourth-quarter oil/liquids daily sales volumes averaged 52,262 barrels per day, a 12% increase over 46,658 barrels per day in the fourth-quarter 2010. Adjusting for the 2010 and 2011 asset divestments, the 12% sales volume increase would have been 16% and 2011 fourth-quarter daily sales volumes would have averaged 47,464 barrels per day.The robust volume growth is driven primarily by strong performance in the Eagle Ford Shale and Haynesville Shale asset areas combined with steady, consistent performance in California.
