I’m back at work today, early… Too early.
It appears we are fulfilling the current down channel. I don’t expect it, but we may get another low today. If this happens, I’ll add to UNG again with 10%, possibly more. Need to be patient with that.
Fundamentals are still not exactly ready to support higher prices. Production is increasing again slightly while most demand factors are at their maximum. It appears we will get a cold shot across the US; this can only be of so much help to prop up prices. The market knows this and it appears fundamentals are still supporting the idea of stair stepping lower in price. If production increases to a new high, prices will reach a new low, and probably a substantial one, like $2. If production hovers here, prices will most likely swing back and forth much with the changes in the weather. All the while waiting on LNG export additions.
I have no idea when production will finally stall out for good, but I believe it will be in the coming months. With drilling rig counts falling and legacy well declines continuing, this should be evidence enough. I will stay long due to gas pricing and positioning.
I would like to see UNG get to $17 in order to add 10% of my funds to my position. I will be careful if prices fall, they could continue on past $17 quite easily. As usual, I will post to Twitter is quick is a can if I choose to add.