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My Stock Value Strategy Starts Now (1 Viewer)
- Thread starter David Dodds
- Start date
David Dodds
Administrator
Real nice. I saw this coming a mile away and got out of sync when HEB and FREE were bleeding. Great patience with CENX. I think this thing will be actively traded and is a great buy on the dips going forward.
It reversed split. Something like 10:1 I believe.
This is LJ
Footballguy
I don't know how many of you have Level 2 but the last few minutes were absolutely crazy. Despite being red today, the market again finished with a higher high and a higher low than at any point during previous day. Pennies got hit at the end, I guess thats to be expected due to unwinding short-term positions before the week. SRSR near the highs of the day 
Both the Dow and S&P crossed into overbought territory for the first time since early 2008, but keep in mind the market historically hasn't sold off immediately after crossing into overbought status. In October 2007, we were overbought for an entire month. Higher highs and higher lows are very bullish, especially given the streak at which the market has been on. MACD spreads are still widening, so nothing is really flying in our face in terms of bearish sentiment. I think Dow 10k is going to be an unrealistic goal, though I'm not ruling it out.
I know peoplle are getting antsy to unwind and protect gains, and eventually every trend does breaks down, but this one hasn't just yet. Keep holding until it does.
Both the Dow and S&P crossed into overbought territory for the first time since early 2008, but keep in mind the market historically hasn't sold off immediately after crossing into overbought status. In October 2007, we were overbought for an entire month. Higher highs and higher lows are very bullish, especially given the streak at which the market has been on. MACD spreads are still widening, so nothing is really flying in our face in terms of bearish sentiment. I think Dow 10k is going to be an unrealistic goal, though I'm not ruling it out.
I know peoplle are getting antsy to unwind and protect gains, and eventually every trend does breaks down, but this one hasn't just yet. Keep holding until it does.
Cavalier
Footballguy
Ouch........
It was headed to zero so they had to prop up the number.
St. Louis Bob
Footballguy
Closed at .72 today. :wiggles:
Nice job.....when are you getting out?
NeoGenomics (NGNM) is a lab that does cancer testing. They are headquartered near me in Fort Myers, Florida, and had a CRAZY day today after announcing an agreement with Abbot (working together to develop a melanoma test and Abbot bought 9.6% of NeoGenomics stock).
http://finance.yahoo.com/news/NeoGenomics-...ml?x=0&.v=1
They finished the day up 27% to $1.85.
I might buy some soon.
http://finance.yahoo.com/news/NeoGenomics-...ml?x=0&.v=1
They finished the day up 27% to $1.85.
I might buy some soon.
parasaurolophus
Footballguy
NajehHajen and I are both in EXPH. Najeh has done a ton of research on them and even has called the company and spoke with the CEO. They have pretty much been riding up since we first posted about them in this thread. We both got in before .0075. The stock closed at .0134 today.
There is a conference call scheduled for this tuesday where it is rumored that they will be announcing a deal with Wal Mart. I must stress this is a rumor. The basis for this rumor is that they announced on March 16,2009 that they had passed the first step with Wal mart to get approved. Then they recently announced that they were increasing production for a large scale delivery for 10,000 stores with one of the largest retailers in the world.
This is a penny stock. They only recently started reporting to pinksheets.com. They have posted two years of financials on there and 1st qtr of this year. 2nd qtr should be on the way soon. They actually turn a profit.
They have a contract already for 1400 Lowe's stores. They have a contract with Stanley. If they secure a Wal Mart deal, this stock is going to go up fast. The run up so far has been great. Just keeps climbing pretty much every day.
Karl Malone is the largest non insider shareholder of this company.
Obviously this stock could tank at any time. It is a penny stock after all. However at the low price and the fact that they turn a profit, this stock sure seems for real and a great deal.
There is a conference call scheduled for this tuesday where it is rumored that they will be announcing a deal with Wal Mart. I must stress this is a rumor. The basis for this rumor is that they announced on March 16,2009 that they had passed the first step with Wal mart to get approved. Then they recently announced that they were increasing production for a large scale delivery for 10,000 stores with one of the largest retailers in the world.
This is a penny stock. They only recently started reporting to pinksheets.com. They have posted two years of financials on there and 1st qtr of this year. 2nd qtr should be on the way soon. They actually turn a profit.
They have a contract already for 1400 Lowe's stores. They have a contract with Stanley. If they secure a Wal Mart deal, this stock is going to go up fast. The run up so far has been great. Just keeps climbing pretty much every day.
Karl Malone is the largest non insider shareholder of this company.
Obviously this stock could tank at any time. It is a penny stock after all. However at the low price and the fact that they turn a profit, this stock sure seems for real and a great deal.
It would be too easy to make money if you didn't have to pay the dividend when short a stock. Why don't you think you have to pay the dividend if you are short?
NajehHejan
Footballguy
Unless the CC is overwhelmingly positive, there could be some pullback next week, which is fine with me. I'm sure guys will want to lock profits. I'm in this baby for a while. It is the best penny I've found, and doesn't appear to be a scam. I'm hoping to become a millionaire off this. Sure, I'm probably dreaming, but I'm sick of trying to time market dips and spikes. Frankly, I suck badly at it. Do your own DD and check it out. All I ask though, if you go in large, please sell at the ask when you unload. No large dollar dumping please.....
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I did make an erronous statement there. You are liable for the dividend prior to the ex-dividend date. Afterwards and on, you are not. My understanding is that you can short on the ex-dividend date at the open. Here's the recent example with DUK with May 14 being the ex-dividend date.PRICES Date Open High Low Close Volume Adj Close* 18-May-09 13.61 13.69 13.40 13.55 6,946,900 13.55 15-May-09 13.70 13.73 13.39 13.48 7,143,200 13.48 14-May-09 13.92 14.00 13.61 13.73 8,550,200 13.73 14-May-09 $ 0.23 Dividend 13-May-09 14.41 14.43 14.00 14.04 11,485,700 13.81 What I'm seeing is that you could have shorted at $13.92 at the open on the ex-d date and covered around $13.40 over the next few days. Please correct me if I'm wrong.For reference qqqq over the same time period. Shows that the market was up over this same time period.PRICES Date Open High Low Close Volume Adj Close* 18-May-09 33.60 34.28 33.39 34.24 114,333,400 34.20 15-May-09 33.34 33.82 33.23 33.37 117,938,100 33.33 14-May-09 33.10 33.70 33.08 33.39 140,021,700 33.35
parasaurolophus
Footballguy
totally agree about the CC. I was going to ask you if you thought we should sell right before to be safe, then listen to the call and if it is positive we could always buy right back in. What happened with that stupid HEB CC is kinda sitting in the back of my mind.Unless the CC is overwhelmingly positive, there could be some pullback next week, which is fine with me. I'm sure guys will want to lock profits. I'm in this baby for a while. It is the best penny I've found, and doesn't appear to be a scam. I'm hoping to become a millionaire off this. Sure, I'm probably dreaming, but I'm sick of trying to time market dips and spikes. Frankly, I suck badly at it. Do your own DD and check it out. All I ask though, if you go in large, please sell at the ask when you unload. No large dollar dumping please.....
NajehHejan
Footballguy
The price could go down next week for several reasons:1. Buy the rumor, sell the news2. Profit taking3. No Walmart update - this would be an asinine reason, but read around and too many are drinking the Walmart koolaid. I read on yahoo where someone compared a Walmart contract to an FDA approval, and I had to turn on the National Geographic channel just to resore some lost brain cells. I'm holding long and strong as I think it's too hard to play the swings. I'll wait a few years if need be to get my $1/share.Springroll, can't thank you enough for this tip. Good luck to us.I'm going to sit tight and hope for the best.springroll said:totally agree about the CC. I was going to ask you if you thought we should sell right before to be safe, then listen to the call and if it is positive we could always buy right back in. What happened with that stupid HEB CC is kinda sitting in the back of my mind.NajehHejan said:Unless the CC is overwhelmingly positive, there could be some pullback next week, which is fine with me. I'm sure guys will want to lock profits. I'm in this baby for a while. It is the best penny I've found, and doesn't appear to be a scam. I'm hoping to become a millionaire off this. Sure, I'm probably dreaming, but I'm sick of trying to time market dips and spikes. Frankly, I suck badly at it. Do your own DD and check it out. All I ask though, if you go in large, please sell at the ask when you unload. No large dollar dumping please.....springroll said:
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bigfishboy
Footballguy
PRGN 4.78 after hours....MOATLOADS!!!!!!!!!!!!!!
100 shares
100 shares
kaa
Footballguy
Spot gold did not move at all this week. Gold stocks essentially hit a double peak this week but closed lower. Spot silver rose slightly. Crude oil rose slightly but lagged behind. Meanwhile, you got real breakouts in stocks.
The story of this week is a potential top in commodities and decoupling from stocks which are on the rise. It appears I got the top, but missed what could be a new trend emerging.
The safest play now is buy the dips in a new bull market in stocks.
The story of this week is a potential top in commodities and decoupling from stocks which are on the rise. It appears I got the top, but missed what could be a new trend emerging.
The safest play now is buy the dips in a new bull market in stocks.
kaa
Footballguy
Here's the HUI - a gold stock index
http://finance.yahoo.com/q/bc?s=^HUI&t=1y
The last 5 days
http://finance.yahoo.com/q/bc?s=^HUI&t...&q=l&c=
Its a weak sister. We're seeing decoupling.
http://finance.yahoo.com/q/bc?s=^HUI&t=1y
The last 5 days
http://finance.yahoo.com/q/bc?s=^HUI&t...&q=l&c=
Its a weak sister. We're seeing decoupling.
Looks good but it was a "bad" trade. 100 shares.http://www.nasdaq.com/aspxcontent/Extended...p;mkttype=afterPRGN 4.78 after hours....MOATLOADS!!!!!!!!!!!!!!
100 shares
Otis
Footballguy
and then all
St. Louis Bob
Footballguy
This is a complete gamble for me. I can't decide on just what I want to do really.eoMMan said:
This is LJ
Footballguy
James Daulton
Footballguy
How do you guys trade these penny stocks, and how much do you pay per trade? Tradeking wants to charge me like ten cents per share to trade.springroll said:
This is LJ
Footballguy
Limit orders on etrade. Commissions are the same for all stocks, regardless of quantity.
siffoin
Footballguy
Ya know...some people can be bullish and some people can be bearish. The key to success (I think) is that you want to be bearish in a bear market and you want to be bullish in a bull market. Seems obvious. Few are actually disciplined enough to be able to distinguish the difference...especially at the most critical times.Human psychology is such that bias is natural. Thus a bull will seek out bullish charts, indicators, and analysis to confirm his bias. A bear will do just the same. Thus being biased it is wholly possible2 people looking at the same chart can come to completely differing views...so a bull can find charts and indicators and analysis that "CONFIRM" his opinion while another the bear can find charts, indicators and analysis that "CONFIRMS" an opposite opinion. In a way it IS what makes a market. It is also why there is no perfect indicator. No perfect chart. In the end no one knows the future with certainty. We only make educated guesses. Money management is key.
Since this thread is all bulled up...I speak of caution. And beyond any indicator - the main thing in the market is PRICE (obvious) but also VOLUME. Don't ignore Volume.
Concerning is that this bull run (from March) is advancing on daily volume that is trending down. That is not what should be happening...In the early stages of bull markets volume trends up.
So while the price continues to scream upwards...I still believe it is prudent to remain weary of the advance (a monthly close above 1050 on the SP500 would be a huge first step).
I'll leave you with the following:
"One of the platitudes most constantly quoted in Wall Street is to the effect that one should never sell a dull market short. That advice is probably right oftener than it is wrong, but it is always wrong in an extended bear swing. In such a swing the tendency is to become dull on rallies and active on declines."
- William Peter Hamilton, The Stock Market Barometer (1909).
"Volume tends to expand in the main direction of the trend. In a bull market, advances accompanied by increasing volume or declines on diminishing volume are taken to be bullish. Conversly, in a bear market, declines are accompanied by increasing volume and advances show diminishing volume. Volume should always be studied as a trend (relative to what has preceded)."
- Richard Russell, The Dow Theory Today
"The bottom is preceded by a period in which the market declines on low volumes and rises on high volumes. The end of a bear market is characterised by a final slump of prices on low trading volumes. Confirmation that the bear trend is over will be rising volumes at the new higher levels after the first rebound in prices."
- Russell Napier, Anatomy of the Bear (his study of the four great stock market bottoms of 1921, 1932, 1949, and 1982).
I know. I know. It's different this time.
If you want to see a chart of the daily vol trend go to my website.
http://steelhedge.com/wordpress/
parasaurolophus
Footballguy
i use ameritrade. 9.99 per trade.
parasaurolophus
Footballguy
i am sure all of you probably know this, but incase you don't, Ameritrade has a special up til september 30 that if you open an account you get 500 free trades. They expire in 30 days, but not a bad deal. You only have to put in 2000 dollars to get this.
NYG Endzone
Footballguy
Wow thats a very tempting offer. Can buy and sell quite often in a 30day window.Buy a basket of stocks each day, sell your winners, dollar cost average your way out of others with free trades. rinse and repeat.Any catches?
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parasaurolophus
Footballguy
just be sure to mark the 30 days on a calendar. They will NOT send you notification it is over. You have to wait the three days from the buy order before the funds are available, it only applies to stock trades I think. Really no catch. I really enjoyed being able to play dips on small trades and not have to worry about commissions. You also get a free 30 day trial on the streaming news service, which is kinda nice too.
No catch. Even better, if you talk to a representative and tell him you don't trade nearly that much in a month, you might be able to get the free 500 trades in the month plus something like 20 more free trades you can use over the next six months after the month is up. And if you do trade a lot, this 9.99 number isn't set in stone.
This is LJ
Footballguy
EXPH has been on a tear, so we've seen what people are beginning to value this stock at. Barring Wal-Mart news, there will be a buying opportunity. If there's one thing I learned about pennies, its not to chase them. With all the market manipulation, its bound to pull back sharply at some point. I'm likely to get in myself.Thoughts on BIEL and DSCO? Added positions this week. DSCO, admittedly, I haven't done the DD on. Its strictly a technical play. Large gap that has to be filled up to $1.10, and thats a pretty good bit of upside. I haven't really seen too many gaps like this one, so this is a learning opportunity with 50+% potential. Some personal experience with gaps would be welcome; the S&P currently has a two week outstanding gap between 905 and 910. It will be an interesting opportunity to see if it indeed gets filled in a timely manner. As for BIEL, its one of those FDA trial stocks that has a decent long base and a good looking chart in the very short term. Its a biotech firm that sells equipment rather than drugs and is awaiting a loaded tuesday cc with results from a clinical trial as well as word about an FDA (equipment) approval.
parasaurolophus
Footballguy
I was in DSCO prior to the FDA decision debacle and survived the plunge because I got aggressive. I do not like this company. Basically they just resubmitted the same info to the FDA and gee whiz what a surprise FDA didnt approve. I would recommend taking any solid gains as soon as you have them. As far as BIEL, I was in them for a bit as well and sold out too early. Made a very tiny profit and ended up selling because I actually asked my girlfriend if she would ever wear that thing and she said something along the lines of "Can I wear sweatpants to work?" It also weirded me out that that Joel guy posts on the yahoo message boards and when I watched that Fox news thing he looked like kind of a dbag.All that being said, BIEL seems to have a loyal following.LJ a stock to look at instead of DSCO is NEPH. I mentioned it in this thread at 1.24 and again at 1.10 I think. I like them anywhere in the 1.20s very much(currently 1.31 it is usually quite volatile early in the day running up and then dropping sharply). I sold my position in NEPH at a loss to increase my holdings in EXPH and IFSL a bit ago (which of course I am happy about) but I am looking at ditching IFSL soon and rolling back into it.NEPH has two pending FDA device approvals. The stock ran up to above 1.50 on the first one, which was just a water filter, then quickly dipped when I think people realized the sale spotential for it was pretty small. Their blood filter however would have a nice market. 3 501 approvals in a short period of time for a stock with a small float and loyal following should work out well.ETA welcome aboard the EXPH bandwagon. Why not buy early monday, sell before CC tuesday and hop on long wednesday? Maybe even keep a tiny bit in just in case CC is very positive?
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kaa
Footballguy
I don't trade very much at all. I said a few years ago that if I could get Citibank at $1 that would be where I'd buy. I got my price and still didn't buy Why? Because I felt a double bottom was going to be put in. I'm so risk averse I didn't even buy when I got my price. I'm not a gambler. I never buy lottery tickets. I don't go to Vegas. I accumulate gold because I know that's the safe play. I'll buy a stock right now only when every single star aligns perfectly. If I'm 99% sure, like I was with C, that's not enough to get me to buy. But I absolutely watch carefully.Ya know...some people can be bullish and some people can be bearish. The key to success (I think) is that you want to be bearish in a bear market and you want to be bullish in a bull market. Seems obvious. Few are actually disciplined enough to be able to distinguish the difference...especially at the most critical times.Human psychology is such that bias is natural. Thus a bull will seek out bullish charts, indicators, and analysis to confirm his bias. A bear will do just the same. Thus being biased it is wholly possible2 people looking at the same chart can come to completely differing views...so a bull can find charts and indicators and analysis that "CONFIRM" his opinion while another the bear can find charts, indicators and analysis that "CONFIRMS" an opposite opinion. In a way it IS what makes a market. It is also why there is no perfect indicator. No perfect chart. In the end no one knows the future with certainty. We only make educated guesses. Money management is key.
Since this thread is all bulled up...I speak of caution. And beyond any indicator - the main thing in the market is PRICE (obvious) but also VOLUME. Don't ignore Volume.
Concerning is that this bull run (from March) is advancing on daily volume that is trending down. That is not what should be happening...In the early stages of bull markets volume trends up.
So while the price continues to scream upwards...I still believe it is prudent to remain weary of the advance (a monthly close above 1050 on the SP500 would be a huge first step).
I'll leave you with the following:
"One of the platitudes most constantly quoted in Wall Street is to the effect that one should never sell a dull market short. That advice is probably right oftener than it is wrong, but it is always wrong in an extended bear swing. In such a swing the tendency is to become dull on rallies and active on declines."
- William Peter Hamilton, The Stock Market Barometer (1909).
"Volume tends to expand in the main direction of the trend. In a bull market, advances accompanied by increasing volume or declines on diminishing volume are taken to be bullish. Conversly, in a bear market, declines are accompanied by increasing volume and advances show diminishing volume. Volume should always be studied as a trend (relative to what has preceded)."
- Richard Russell, The Dow Theory Today
"The bottom is preceded by a period in which the market declines on low volumes and rises on high volumes. The end of a bear market is characterised by a final slump of prices on low trading volumes. Confirmation that the bear trend is over will be rising volumes at the new higher levels after the first rebound in prices."
- Russell Napier, Anatomy of the Bear (his study of the four great stock market bottoms of 1921, 1932, 1949, and 1982).
I know. I know. It's different this time.
If you want to see a chart of the daily vol trend go to my website.
http://steelhedge.com/wordpress/
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This is LJ
Footballguy
I was in DSCO prior to the FDA decision debacle and survived the plunge because I got aggressive. I do not like this company. Basically they just resubmitted the same info to the FDA and gee whiz what a surprise FDA didnt approve. I would recommend taking any solid gains as soon as you have them. As far as BIEL, I was in them for a bit as well and sold out too early. Made a very tiny profit and ended up selling because I actually asked my girlfriend if she would ever wear that thing and she said something along the lines of "Can I wear sweatpants to work?" It also weirded me out that that Joel guy posts on the yahoo message boards and when I watched that Fox news thing he looked like kind of a dbag.
Thoughts on BIEL and DSCO? Added positions this week. DSCO, admittedly, I haven't done the DD on. Its strictly a technical play. Large gap that has to be filled up to $1.10, and thats a pretty good bit of upside. I haven't really seen too many gaps like this one, so this is a learning opportunity with 50+% potential. Some personal experience with gaps would be welcome; the S&P currently has a two week outstanding gap between 905 and 910. It will be an interesting opportunity to see if it indeed gets filled in a timely manner.
As for BIEL, its one of those FDA trial stocks that has a decent long base and a good looking chart in the very short term. Its a biotech firm that sells equipment rather than drugs and is awaiting a loaded tuesday cc with results from a clinical trial as well as word about an FDA (equipment) approval.
All that being said, BIEL seems to have a loyal following.
LJ a stock to look at instead of DSCO is NEPH. I mentioned it in this thread at 1.24 and again at 1.10 I think. I like them anywhere in the 1.20s very much(currently 1.31 it is usually quite volatile early in the day running up and then dropping sharply). I sold my position in NEPH at a loss to increase my holdings in EXPH and IFSL a bit ago (which of course I am happy about) but I am looking at ditching IFSL soon and rolling back into it.
NEPH has two pending FDA device approvals. The stock ran up to above 1.50 on the first one, which was just a water filter, then quickly dipped when I think people realized the sale spotential for it was pretty small. Their blood filter however would have a nice market. 3 501 approvals in a short period of time for a stock with a small float and loyal following should work out well.
ETA welcome aboard the EXPH bandwagon. Why not buy early monday, sell before CC tuesday and hop on long wednesday? Maybe even keep a tiny bit in just in case CC is very positive?
Thanks for the great info. I'll definately look at NEPH tonight. As for DSCO, its strictly a technical play for me. I have no vested interest in the intraday developments of the company and have set an exit of 50%. I know it sounds a bit over the top, but this fits the very mold of a breakaway gap to the downside. It could take some time to fill, but I feel like gambling. As for EXPH, I think I might do just that. There's going to be a squeeze at some point Monday so I'm going to try and get in on a dip and flip the quick buck.
kaa
Footballguy
Bull case: Commodities and stocks are starting to decouple. "Deficits don't matter". We're just going to forget everything and irrationally rally for weeks to months. It can happen. Its happened in the past.Bear case: Commodities and stocks are not decoupling. Any signs of that in the past week are a mirage. Commodities are, in fact, not confirming the bull move in stocks. Its a warning that its a fakeout. Right now the bull case is swaying me. I think the bull case is going to do incredible long-term damage to the US economy. The federal government is asking permission to destroy the US dollar by way of running up a $2 trillion annual debt. If investors response to that request is to pile into stocks and get out of commodities, then we've lost all semblance of discipline. In that environment, there's no reason for our government to not push the public debt much higher. This is a recovery built on a public debt bubble. I'd have to go long, but I know when that pops, the US dollar will be destroyed. It may not pop for a few years. Not until 2011 or 2012. But when it does, wow we will never forget the carnage.
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This is LJ
Footballguy
Very cool set of pics:
http://3.bp.blogspot.com/_79cfp3aq254/SmsWmA_x3TI/AAAAAAAAB9c/d24fws9l2ew/s1600-h/Picture+4.png
Retracement of previous peak to trough decline: We've only retraced ~30% of our losses. The benchmarks you see are Fibonacci retracement levels, which I'm currently trying to get a grip on.
http://dshort.com/charts/bears/four-bears-large.gif
Comparison of other bear markets (time based): Thoughts on this? I'm conflicted in seeing bull/bearish sentiment.
http://3.bp.blogspot.com/_79cfp3aq254/SmsWmA_x3TI/AAAAAAAAB9c/d24fws9l2ew/s1600-h/Picture+4.png
Retracement of previous peak to trough decline: We've only retraced ~30% of our losses. The benchmarks you see are Fibonacci retracement levels, which I'm currently trying to get a grip on.
http://dshort.com/charts/bears/four-bears-large.gif
Comparison of other bear markets (time based): Thoughts on this? I'm conflicted in seeing bull/bearish sentiment.
NYG Endzone
Footballguy
Anyone have experience with automatic/free dividend reinvestment with TD Ameritrade? Their website is very vague and says "is available at no cost on some common and preferred stocks and closed-end mutual funds."
Norman Einstein
Footballguy
no more than 4 round trip day trades in a 5 business day period...which is no purchasing and selling (or selling and purchasing) of the same security on the same day in a margin accountmargin account may be the key here...if it's not then you might be fine.
parasaurolophus
Footballguy
i feel like this is common for many sites if you have a margin account. If you have a cash account you dont have to worry about this, your only obstacle on a cash account is the 3 day rule on the buy.
gigantor
Footballguy
when this happens we'll have a lot more to worry about..
David Dodds
Administrator
Baltic Indexes are mostly higher
Baltic Supramax 2,090 (-0.05%)
Baltic Handysize 881 (+0.23%)
Baltic Dry 3,407 (+1.85%)
Baltic Capesize 5,339 (+3.27%)
Baltic Panamax 3,509 (-0.43%)
Baltic Supramax 2,090 (-0.05%)
Baltic Handysize 881 (+0.23%)
Baltic Dry 3,407 (+1.85%)
Baltic Capesize 5,339 (+3.27%)
Baltic Panamax 3,509 (-0.43%)
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The Ref
Footballguy
Might be time to bank some profit here - My buddy told me on the way into work that Frontline (FRO) just came out and said that gas prices are going to really hurt the bottom line over the second half of the year.Anyone see anything over the wire - I'm going to look now....Foreign markets with nice gains overnight, and we're looking to start up as well.PRGN Pre-market: 4.46 +0.16 (3.72%)
The Ref
Footballguy
Interesting, seems like they kept the headline but pulled the story?http://www.bloomberg.com/apps/news?pid=206...id=as0cCLrEiyLMMight be time to bank some profit here - My buddy told me on the way into work that Frontline (FRO) just came out and said that gas prices are going to really hurt the bottom line over the second half of the year.Anyone see anything over the wire - I'm going to look now....Foreign markets with nice gains overnight, and we're looking to start up as well.
PRGN Pre-market: 4.46 +0.16 (3.72%)
The Ref
Footballguy
July 27 (Bloomberg) -- Fuel oil, the waste left after making gasoline and diesel, is becoming as valuable as crude for the first time in six years.
Prices have doubled this year to the equivalent of $66.47 a barrel in Singapore, approaching the $70.30 of Arab Light crude, which has been more expensive since July 2003. Fuel oil output at refineries in the developed world fell 18 percent in April from a year earlier, the International Energy Agency estimates. China’s imports climbed 46 percent in June from a year earlier, Barclays Capital said in a July 22 report.
The increase is squeezing Hamilton, Bermuda-based Frontline Ltd. and A.P. Moeller-Maersk A/S, the world’s biggest shipping companies, while rewarding Exxon Mobil Corp. and Reliance Industries Ltd., owners of the largest refineries in the U.S. and Asia. The shortage is growing as the oil industry builds new plants that obtain more gasoline and diesel from each barrel.
“I don’t expect the situation to change any time soon” in fuel oil, said Christian Laurenborg, a Copenhagen-based trader for Maersk, the operator of more than 500 container ships. “We are suffering a bit.”
Frontline, the world’s biggest operator of oil tankers, has ordered captains to slow their ships to conserve fuel, said Chief Executive Officer Jens Martin Jensen. The average vessel consumes about $40,000 of the fuel, known as bunker, a day.
“With bunker prices going up, it has a strain on the bottom line,” Jensen said in a telephone interview. “We are slow steaming, it makes sense to slow down.” Refinery Leftovers
Fuel oil is what remains after propane, jet fuel, gasoline and diesel are distilled from crude. Refiners can build plants that take that residue and process it again to strip out more fuels for cars, trucks, trains and airplanes.
Every 42-gallon barrel of Arab Light crude yields 19 gallons of fuel oil when run through a typical refinery, according to New York-based Energy Intelligence Group. Plants equipped with so-called cokers and hydrocracking units produce almost no fuel oil.
Fuel oil cost $10.15 a barrel less on average than crude during the past five years. The discount to Persian Gulf benchmark Dubai oil narrowed to $1.56 a barrel July 24 from $30.46 in June 2008, according to data compiled by Bloomberg.
The price in Singapore may exceed crude within three months, said Harry Tchilinguirian, a senior oil markets analyst at BNP Paribas SA, France’s largest bank.
Fuel oil may surpass crude “for quite some time, six months is possible,” JPMorgan Chase & Co. vice president of energy strategy Vima Jayabalan said in a phone interview from Singapore.
World War II
Refineries are limiting production as the first global recession since World War II curbs oil consumption by 2.8 percent this year, the fastest decline since the early 1980s, according to the IEA. Crude oil dropped 78 percent to a low of $32.40 a barrel on Dec. 19 in New York from a record $147.27 on July 11, 2008.
The Organization for Petroleum Exporting Countries agreed since October to reduce output by 4.2 million barrels a day, or 14 percent, to support prices. Members cut sales of the lowest- quality crudes, which cost the least and yield the most fuel oil, Asian refinery officials said.
Saudi Arabian Oil Co., OPEC’s biggest producer, will supply 20 percent less than contracted volumes to Asian refiners in August, with the deepest cuts in heavy and medium crudes, according to a survey of refinery officials on July 9.
SK Energy, Nippon
SK Energy Corp., South Korea’s biggest refiner, ran its refineries at 72 percent of capacity in the second quarter, and the country’s fuel oil production in May was down 46 percent from a year ago, according to the Joint Oil Data Initiative, a data collection agency for international groups including OPEC and the IEA. Nippon Oil Corp., Japan’s largest processor, planned to cut output 24 percent this month from July 2008 levels, Director Masahito Nakamura said on June 29.
Across Asia, 3 million barrels of daily refinery capacity has been idled, said John Vautrain, a senior vice president at Purvin & Gertz Inc., a consulting firm in Singapore. “When that kind of capacity cuts back, it has an outsized impact on fuel oil supply,” he said.
Bunker inventories in Singapore, Asia’s biggest trading center and fueling port, fell last week to 14.1 million barrels, 19 percent below the two-year average, according to International Enterprise, a government agency. In the Amsterdam, Rotterdam and Antwerp region, Europe’s oil-trading hub, inventories dropped 24 percent in the past year to 567,000 metric tons, according to PJK International BV in Oosterhout, the Netherlands.
Hydrocrackers, Cokers
Exxon and Reliance can increase production of gasoline and diesel by putting fuel oil through hydrocrackers, catalytic crackers and cokers. A refinery with these units can make $1.38 from each barrel of Dubai crude, compared with the 91 cent-a- barrel profit from a plant without them, data compiled by Bloomberg show.
BNP Paribas estimates that refinery units capable of breaking down an extra 1.4 million barrels of fuel oil are being built in Asia that will come on line by the end of 2011.
Refiners “think fuel oil is low so they are cracking more,” said Simon Neo, a deputy managing director at Singapore- based Equatorial Marine Fuels. “This means higher costs for the marine industry.”
The fuel expense of running the biggest oil tankers is $40,280 a day, based on the $424 a metric ton costs in Singapore. That’s more than three times the $12,270 that London-based Drewry Shipping Consultants Ltd. estimates for paying crew, insurance, repairs and related operating expenses. ‘Really Hurting’
“It’s really hurting” ship owners, said Parul Bhambri, a Singapore-based analyst at Drewry.
Maersk said May 12 that falling demand for freight hobbled its ability to pass on fuel costs to customers in the first quarter, when its shipping line lost $559 million after taxes, compared with an $80 million profit a year earlier. The shares are down 40 percent in the past year in Copenhagen trading.
Unlike most shipping lines, Maersk owns bunker-fuel storage facilities and trades cargoes, protecting the company’s profits as prices rise, Laurenborg said. It is also has crude oil production, which acts as a further hedge.
Frontline shares fell 59 percent in Oslo during the past 12 months. The company said in May it canceled one of every three new ships on order and that net income in the first quarter plunged 65 percent to $76.6 million.
Output Incentive As fuel oil prices climb, the incentive to boost production increases, said Vautrain at Purvin & Gertz.
“If fuel oil rose above crude, then that implies you start getting some decent profitability for simple refining,” he said. “There are too many of those units sitting on the sidelines and they can come back at any time.”
Fuel oil production is also falling as Saudi Arabia and the rest of OPEC cut output of the lowest-quality crudes. Saudi Arabia’s Arab Heavy yields 22 gallons of fuel oil per barrel, three more than what comes from Arab Light.
Saudi Arabia has reduced production this year by about 400,000 barrels a day, or 4.5 percent, to about 8 million barrels a day, according to data compiled by Bloomberg.
“There are availability issues with fuel oil,” said Amrita Sen, an analyst at Barclays Capital in London. “The Chinese are switching to products with a higher margin like diesel and gasoline. Products like fuel oil are suffering.”
China’s bunker output dropped 10 percent to 375,000 barrels a day in May from a year ago, according to the Joint Oil Data Initiative.
Asia’s appetite will increase over the next five years, according to the IEA. Supplies in the region are expected to be 1.2 million barrels a day below demand by 2014, the group said.
“You have to consider fuel oil up until now a byproduct,” said BNP’s Tchilinguirian. “With the additions that we see to existing refineries of conversion capacity, and the new refineries coming on, refiners are aiming to reduce that.”
To contact the reporters on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net; Alaric Nightingale in London at anightingale1@bloomberg.net
Last Updated: July 27, 2009 02:17 EDT
Prices have doubled this year to the equivalent of $66.47 a barrel in Singapore, approaching the $70.30 of Arab Light crude, which has been more expensive since July 2003. Fuel oil output at refineries in the developed world fell 18 percent in April from a year earlier, the International Energy Agency estimates. China’s imports climbed 46 percent in June from a year earlier, Barclays Capital said in a July 22 report.
The increase is squeezing Hamilton, Bermuda-based Frontline Ltd. and A.P. Moeller-Maersk A/S, the world’s biggest shipping companies, while rewarding Exxon Mobil Corp. and Reliance Industries Ltd., owners of the largest refineries in the U.S. and Asia. The shortage is growing as the oil industry builds new plants that obtain more gasoline and diesel from each barrel.
“I don’t expect the situation to change any time soon” in fuel oil, said Christian Laurenborg, a Copenhagen-based trader for Maersk, the operator of more than 500 container ships. “We are suffering a bit.”
Frontline, the world’s biggest operator of oil tankers, has ordered captains to slow their ships to conserve fuel, said Chief Executive Officer Jens Martin Jensen. The average vessel consumes about $40,000 of the fuel, known as bunker, a day.
“With bunker prices going up, it has a strain on the bottom line,” Jensen said in a telephone interview. “We are slow steaming, it makes sense to slow down.” Refinery Leftovers
Fuel oil is what remains after propane, jet fuel, gasoline and diesel are distilled from crude. Refiners can build plants that take that residue and process it again to strip out more fuels for cars, trucks, trains and airplanes.
Every 42-gallon barrel of Arab Light crude yields 19 gallons of fuel oil when run through a typical refinery, according to New York-based Energy Intelligence Group. Plants equipped with so-called cokers and hydrocracking units produce almost no fuel oil.
Fuel oil cost $10.15 a barrel less on average than crude during the past five years. The discount to Persian Gulf benchmark Dubai oil narrowed to $1.56 a barrel July 24 from $30.46 in June 2008, according to data compiled by Bloomberg.
The price in Singapore may exceed crude within three months, said Harry Tchilinguirian, a senior oil markets analyst at BNP Paribas SA, France’s largest bank.
Fuel oil may surpass crude “for quite some time, six months is possible,” JPMorgan Chase & Co. vice president of energy strategy Vima Jayabalan said in a phone interview from Singapore.
World War II
Refineries are limiting production as the first global recession since World War II curbs oil consumption by 2.8 percent this year, the fastest decline since the early 1980s, according to the IEA. Crude oil dropped 78 percent to a low of $32.40 a barrel on Dec. 19 in New York from a record $147.27 on July 11, 2008.
The Organization for Petroleum Exporting Countries agreed since October to reduce output by 4.2 million barrels a day, or 14 percent, to support prices. Members cut sales of the lowest- quality crudes, which cost the least and yield the most fuel oil, Asian refinery officials said.
Saudi Arabian Oil Co., OPEC’s biggest producer, will supply 20 percent less than contracted volumes to Asian refiners in August, with the deepest cuts in heavy and medium crudes, according to a survey of refinery officials on July 9.
SK Energy, Nippon
SK Energy Corp., South Korea’s biggest refiner, ran its refineries at 72 percent of capacity in the second quarter, and the country’s fuel oil production in May was down 46 percent from a year ago, according to the Joint Oil Data Initiative, a data collection agency for international groups including OPEC and the IEA. Nippon Oil Corp., Japan’s largest processor, planned to cut output 24 percent this month from July 2008 levels, Director Masahito Nakamura said on June 29.
Across Asia, 3 million barrels of daily refinery capacity has been idled, said John Vautrain, a senior vice president at Purvin & Gertz Inc., a consulting firm in Singapore. “When that kind of capacity cuts back, it has an outsized impact on fuel oil supply,” he said.
Bunker inventories in Singapore, Asia’s biggest trading center and fueling port, fell last week to 14.1 million barrels, 19 percent below the two-year average, according to International Enterprise, a government agency. In the Amsterdam, Rotterdam and Antwerp region, Europe’s oil-trading hub, inventories dropped 24 percent in the past year to 567,000 metric tons, according to PJK International BV in Oosterhout, the Netherlands.
Hydrocrackers, Cokers
Exxon and Reliance can increase production of gasoline and diesel by putting fuel oil through hydrocrackers, catalytic crackers and cokers. A refinery with these units can make $1.38 from each barrel of Dubai crude, compared with the 91 cent-a- barrel profit from a plant without them, data compiled by Bloomberg show.
BNP Paribas estimates that refinery units capable of breaking down an extra 1.4 million barrels of fuel oil are being built in Asia that will come on line by the end of 2011.
Refiners “think fuel oil is low so they are cracking more,” said Simon Neo, a deputy managing director at Singapore- based Equatorial Marine Fuels. “This means higher costs for the marine industry.”
The fuel expense of running the biggest oil tankers is $40,280 a day, based on the $424 a metric ton costs in Singapore. That’s more than three times the $12,270 that London-based Drewry Shipping Consultants Ltd. estimates for paying crew, insurance, repairs and related operating expenses. ‘Really Hurting’
“It’s really hurting” ship owners, said Parul Bhambri, a Singapore-based analyst at Drewry.
Maersk said May 12 that falling demand for freight hobbled its ability to pass on fuel costs to customers in the first quarter, when its shipping line lost $559 million after taxes, compared with an $80 million profit a year earlier. The shares are down 40 percent in the past year in Copenhagen trading.
Unlike most shipping lines, Maersk owns bunker-fuel storage facilities and trades cargoes, protecting the company’s profits as prices rise, Laurenborg said. It is also has crude oil production, which acts as a further hedge.
Frontline shares fell 59 percent in Oslo during the past 12 months. The company said in May it canceled one of every three new ships on order and that net income in the first quarter plunged 65 percent to $76.6 million.
Output Incentive As fuel oil prices climb, the incentive to boost production increases, said Vautrain at Purvin & Gertz.
“If fuel oil rose above crude, then that implies you start getting some decent profitability for simple refining,” he said. “There are too many of those units sitting on the sidelines and they can come back at any time.”
Fuel oil production is also falling as Saudi Arabia and the rest of OPEC cut output of the lowest-quality crudes. Saudi Arabia’s Arab Heavy yields 22 gallons of fuel oil per barrel, three more than what comes from Arab Light.
Saudi Arabia has reduced production this year by about 400,000 barrels a day, or 4.5 percent, to about 8 million barrels a day, according to data compiled by Bloomberg.
“There are availability issues with fuel oil,” said Amrita Sen, an analyst at Barclays Capital in London. “The Chinese are switching to products with a higher margin like diesel and gasoline. Products like fuel oil are suffering.”
China’s bunker output dropped 10 percent to 375,000 barrels a day in May from a year ago, according to the Joint Oil Data Initiative.
Asia’s appetite will increase over the next five years, according to the IEA. Supplies in the region are expected to be 1.2 million barrels a day below demand by 2014, the group said.
“You have to consider fuel oil up until now a byproduct,” said BNP’s Tchilinguirian. “With the additions that we see to existing refineries of conversion capacity, and the new refineries coming on, refiners are aiming to reduce that.”
To contact the reporters on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net; Alaric Nightingale in London at anightingale1@bloomberg.net
Last Updated: July 27, 2009 02:17 EDT
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