S-16 Up BIG on OPEC Agreement

[dan_s]

Several of the Sweet 16 are up double digits today because of the OPEC announcement to cut production by 1.2 million barrels per day.

CLR and SM lead the pack.

Think about harvesting some of those gains and adding more exposure to natural gas (AR, GPOR, RRC). Supply/Demand fundamentals should drive gas prices higher as weather forecasts now show a much colder pattern for North America starting December 7. See daily update at: http://www.weatherbell.com/premium/

Watch this video https://vimeo.com/187401085/833dc64725 to understand how important the OPEC Agreement is. If OPEC is able to hold production at 32.5 million barrels per day, we should see WTI move up to $60/bbl or higher by Q3 2017.

[wilmawatts]

Darn I hate days like today. They drive me to drinking.

Throw in NFX as one of the most undervalued, and CPE and REI for that matter.

The train left the station today.

[dan_s]

The strong U.S. dollar ( http://www.marketwatch.com/investing/index/dxy/charts ) is the only thing that I can see that is keeping WTI below $50.

[setliff]

i am concerned as long as Cl stays below 52---this is the 6th time since june that it has been in the 40-52 range only to pull back each time; so we shall see.

[dan_s]

I agree, which is why I wrote above that it may be time to harvest some gains.

I actually think the near-term supply/demand fundamentals are stronger for natural gas.

I did look at the official OPEC statement and I do think they are serious about these production cuts. If OPEC exports start going down, I think oil prices will firm up in the mid-$50s.

Supply / Demand for oil is actually close to being in balance already. We just need to see OECD inventories falling. Watch the TPH video that I sent out in today's Flash Alert.
Here is the link: https://vimeo.com/187401085/833dc64725

[setliff]

does gpor and rrc still have distribution issues in the marcellus and utica? which gassey has best price for their gas?

[dan_s]

RRC does not have any problem getting their gas to good markets. They have an outstanding marketing group and firm capacity on existing pipes.

GPOR had a compression problem, but that has been solved.

Read our recent profiles on each company.

You can find the realized prices net of hedges that all of the companies are getting at the bottom of my forecast/valuation models. AR has OVER 100% of their gas hedged at good prices, which explains why their realized prices are so high.

[setliff]

dan, the hedge box at bottom of gpor's forecast model has the bottom cut off. can't see the horiz axis. can you get it fixed?

[setliff]

dan, the hedge box at bottom of gpor's forecast model has the bottom cut off. can't see the horiz axis. can you get it fixed?

[setliff]

re hedge fund box---never mind- i remembered you have to do the bottom of the page download link

[dan_s]

The best place to find any companies' current hedge position is to go to their website and view the company's latest PowerPoint presentation. There is usually a slide that summaries their hedges. Also you can download the 10Q which is required to have a table of their hedges.

Yes, some of my forecast models are too large to fit on one screen on the EPG website. I think if you download the model to Excel you can see the whole thing.

Hedges are considered in the commodity prices that I use in all future periods.