Interview: Pritchard Capital Partne --- Dingmann, Neal---Analyst
>> crude oil jumped more than $2 per barrel after an ta tack on a saudi processing plant that handles 7% of world supply. our next guest says that the geopolitical threats are among the biggest catalysts to energy prices. neal dingmann is an analyst at pritchard capital partners. neal, welcome.
>> good afternoon.
>> let’s talk about the disparity between oil and natural gas today. you said it’s absolutely shocking to see this. can you explain why?
>> we’ve seen this in the past, but, you know, to see days such as today where you have natural gas going down as much as in this period as 5%, testing the psychological $7 mark, while at the same time you are having a pretty nice rally in crude by over 5%, it points today shows you just and really demonstrates the extreme volatility out there both on the oil and the natural gas side of the commodities right now.
>> and that volatility, how much of that is due to geo political issues that keep popping up? we’ve know about iran and nigeria, did we mistakingly overlook saudi arabia?
>> i think somewhat. i guess given the huge supply, know knowing that he are by far and away the largest supplier, any tremor we see and are going to continue to see out of them is going to continue to send these short of shock waves, so obviously that should be first and foremost on anybody’s mind, what is happening over there, and, again, it’s, you know, what happens on the geo political, obviously dominating that world crude oil price and that sort of coupled against the fund menltal domestic picture, what’s happening with natural gas in obviously right now, prices are still what mild and, you know, the two are playing aing tug of war if you will.
>> is there an issue here, in terms of calling the economy to keep on chugging along. so if demand for oil increases and we have the issues in nigeria, iran, saudi arabia, will we see sight tightening of supplies?
>> i think there is usually a definite threshold that at a certain level, we clearly saw it back in august, september, when gasoline prices reached $3. the consumer definitely had some push back, you saw prices come down rather quickly, once demand came back down. we haven’t seen that on crude oil. even when we were back in august, when crude reached its record high of over $70, g.d.p. didn’t slow down significantly, and really that’s sort of the $1 100,000 question, is it an 80-90-100 mark that will put a severe dent in crude? if i were a betting man, i think we could go another $10-15 before it has a moth moderate or more effect on the economy.
>> how much of these concerns are already built into prices?
>> i think too a large―to a large extent people are weighing this each day. obviously, people tube in, traders tune in the first part of the morning or even in the evening to see how london is trading to see whether as matt simons said earlier in shote, whether people are looking to iraq, iran, nigeria, saudi arabia. the difference between and why that’s so critical is given we only have the 2.5 million barrel spare capacity, versus five years when it was two or three times that. any half million barrel or more makes a significance deminches price.
>> i hate to be a doomsday forecaster, but say if you are a pet betting man, $10-15 on top of where we are, what do we have to prepare ourselves for?
>> i think people like i said are―have been a little more cautious this year. we haven’t seen just the overall buying of stocks of the entire group, that being the services or the e.m.p.’s like we had last year for a good part, but i think, you know, sort of two part to your question, is one, i think if we go to that level, it’s going to be interesting. will it be some of the industrials, like a dow chemical, the fertilizer plants, will we see those decide to slowdown. a lot of those in the last -- let’s call it the last two months have actually come back on line since the highs that were hit in august. and, you know, i think it would be highly unlikely you would immediately see those go back offline so soon. but if you’re at’s $80 plus, that mark where they determine their profit would be very critical.
>> neal, we appreciate your insight. thank you so much.
>> no problem. nice to talk to you.
>> once again, neal dingmann, analyst at pritchard capital partners. . gold also surged today. will it stay at these levels long term? we’ll get a long-term perspective in today’s “chart of the day.” stay with us.
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Listen Market briefing --- Lori (slow)
N.T.P.--- Peter (slow)
Nasdaq --- Robert (slow)
Energy stock --- Julie (slow)
Crude oil --- Bob (fast)
>> welcome back from world headquarters in new york city. this is “ after the bell.” a judge considering a halt in research in motion’s blackberry e-mail criticizes both sides for not settling their patent dispute. he’ll rule later on a shutdown. we’ll get an update from the virginia courthouse with where the case is being heard, coming up. the market is closing with the dow down just about seven points, 11,062. and the s&pmb rose two points, 1289. energy one the stronger industries today after the big surge in oil prices on the heels of that thwarted attack on saudi arabian oil facilities. and the nasdaq is up 2287. j.p. morgan and exxonmobil up, and energy financials, utilities all stronger industries today. blackberry will keep on working, at least for now. today, a federal judge in virginia says he needs more time to decide whether to shut down research in motion’s wireless e-mail system because it infringes privately held n.t.p. patents. peter cook covered today’s hearings and joins us live from outside the courthouse in richmond. peter.
>> blackberry users and investors will have to wait a little longer to find out if james expense lever shut down the popular e-mail system in the united states. today, he heard arc fruments both sides in this case, he criticized the companies involved for not reaching a settlement on their own. rim’s co-c.e.o. says ament is not out of hand. judge spencer says a shutdown would frustrate public interest because the widespread use of blackberries by first responders, doctors, even transplant services. they further argue a shut doub is not warranted because recent rulings by the u.s. patent office raise doubts about the walidty of n.p.p.’s pat nent this case. that’s not available to a jury that found in favor of n.t.p.’s case in 202.
>> at the end of the day, we expect the judge to rule. he hasn’t made up his mind on injunction or not. we gave him an awful lot to think about.
>> now, for their part, n.t.p.’s attorneys argued a shutdown is appropriate, accusing rim of acting like a quarter in a nice house, intent on driving n.t.p.’s business into the ground using n.t.p.’s technology. rim won’t be hurt because it claims to have a work around solution in the event of an injunction. one patent attorney says rim is risking a lot by not settling.
>> what’s really going on here is that the parties are still negotiating, which is in my opinion playing russian roulette with the blackberry users and shareholders, but what the judge signaled again to rim management in particular today was come up with a solution.
>> and, again, judge spencer during the proceedings today did say a settlement would have been preferable. he will likely decide on damages first in this case before ruling on the question of any shutdown requests. n.t.p. would not appear on camera. in a statement, the company says they thought spencer was receptive to its arguments and they are still offering rim the chance to buy a license for its technology. back to you.
>> peter, thank you. shares of rim close a session up 6.5% today making the stock one of the best performers on the nasdaq. let’s go ahead and check in with robert gray for details on that as well as some of the other big movers today on nasdaq.
>> hi, lori, the slowest day volumewise, but you wouldn’t know it from research in motion. take a look at this chart behind me. this is research in motion today. this is when the judge’s announcement came out there would be no injunction or shutdown of the system. the stock touching the highest level since september 29 it bulginged back 9% with earnings report disappointment, and the arrive daily volume for this stock work five million shares. we saw seven million shares change hands in the 15 minutes around the announcement. volume spiking during the session. todd clark, the director at noelenburger capital, they expected it to fall if an injunction was in place, and they were short, but they had to jump out when that didn’t happen. a lot of players have been buying palm shares as a play on this as well, expecting home gain customers if research in motion was shut down. we saw the exact opposite happen to palm’s shares. they actually fell about.5%, and it went―made a down turn immediately upon the release of that news and carried over to the rest of technology. i heard from traders telling me today, and including john glassman at pacific american securities that this really helped with the sentiment in technology when this came out in the afternoon if you look at today’s charts of the nasdaq 100, you’ll see a jump up in both of those indices around 12:45 new york time. other stocks we are following, google down, a dollar, but an update, having an analyst day meeting next thursday, that’s something that investors in google will want to circle their call den lar dars for.
>> shortened week. thank you, robert. energy stocks kept the market afloat as oil surged higher. the week came to a close with julie hyman.
>> thank you, lori. we had an unsurge as well toward the end of trading. the dow in not make it by day’s end. look at the volume, about 1.4 billion shares trading hands here at the big board today. here too it was one of the lowest volume days of the year that we have seen thus far, basically what traders have been telling me today, they have been talking about all week is because of the holiday shortened week and because all of this week is off for many school areas around the country, that means also that desks were not staffed to full capacity and that accounts at least partially for the lower than normal volume. besides that, really a couple of big themes groupwise in today’s session. on one hand, we really had the oil story affecting the market today. it seemed as though equity investors shrugged off news in saudi arabia. to was evidenced in energy stocks that went higher and a lot of consumer discretionary stocks which went lower today. also compounded by news out of that group. energy stocks, let’s take a look at see how they did, exxonmobil, conocophillips, shum per gay and occidental, are all up. it’s up 7% for the year-to-date, and the gains reached a record back on january 30, what we have seen is that the energy stocks have recovered but well down the peak where we have seen them just about a month ago. lori, back to you.
>> thank you very much, julie. the news out of saudi arabia was the story today and set the tone for today’s trading session, but let’s go ahead and get more insight into what happened, what the ramifications and aftermath will be with bloomberg’s own bob bowden standing by.
>> the jump in crude oil prices was the big nest a month after the attempted suicide attack. the saudi interior ministry says two car bombs were involved in the sought, leaving four attackers dead and two security guards wounded. a spokesman at the saudi oil company says production and exports were not affected at all at the plant. saudi arabia produces 11% of the world’s oil.
>> that big of a loss would be extraordinarily difficult for the world markets to offset. it would have required a significant release of crude oil globally from the strategic reserve offset. it’s a big deal.
>> we also had this remark from abdel monan, the director for political and stroo tee jick studies. this attack bears clearly the hallmarks of al-qaeda and osama bin laden. it was the global economy that was attacked. that reminds us of september 11. the foiled attack comes as rebels in nigeria threat tony escalate attacks that have shut down some royal dutch production in that country. markets are reacting nervously to any disruption in the world’s oil supplies.
>> there is a reality that we’re out of spare capacity, that losing a half million barrels a day is a big deal. that’s what we’ve lost in nigeria over the course of the last week. losing a half million barrels a day in iraq, that’s a big deal. and anything now is a big deal.
>> crude oil for april delivery jumped to an intraday high to 92.91. floor trading not quite as high, closing at 92.91, a 4% gain.
>> we’ll talk more about the situation in saudi arabia, the terror concerns there, the impact on oil and equity markets with our next guest, neal dingmann with m.s. howell and company. don’t miss that.
