Morning Update – March 24, 2020

I hate that Oil is “too big to fail” and Natgas seems an afterthought. I’m too light on USO. The US Government is going to get involved soon with Oil, not a word about natgas. The mere fact that $20 oil draws 100 times the attention itself than $1.5 natgas is enough to make the decision to buy more USO. So my reasons for buying more USO.

  • Most oil companies throughout the world are nationalized, and there are no laws against communication to help boost pricing.
  • These countries with nationalized oil companies are hurting and should be willing to do something soon.
  • The US government has already mentioned it will be getting involved by buying 77MMbbls of crude from american companies. They may also impose import restrictions; we’ll see
  • The price is simply too cheap to pass up.
  • US Capex of drilling, well completions will be cut back, which will have a lagging effect on US production growth down the road, causing a bigger potential price swing. This last one is a bit beyond my scope; and with global supply where it is, this last reason could be voided.

I’m buying USO at $4.93. I now have 15% of funds in USO. I’m going to publish this and move on to natgas. This is after all.

Natgas, what about natgas… It’s being pushed around by oil and the virus. Right now, without outside influence, Natgas is very close to or has already swung to an under-supplied market. And I have a call…. back later. this is not working.

I like my job.

Managed Money position for Natgas at

With both longs and short piling out of Natgas, the price seemed mostly unaffected by the large position adjustment. This should teach us something. What I’m learning here is, not any one topic should be the focus of your natgas strategy. Weather, Positioning, Production, Power Burn, LNG exports… It is all combined, all the time. Positioning changed in a huge way, but because of fear of demand destruction, the market barely moved on the change in positioning. Any one factor is not enough to move the market when other factors may be offsetting. This combination of events has left an impression on my, hopefully one that will help me make a better choice in the future.

I gotta cut it off. I added to USO above, I will be waiting today to see what else happens. No other position changes planned today. I need to be patient today. Good Luck


Side note: If my posts seem crazy and unorganized; this is due to the urgent nature of my job. Someone calls for help, I get up and go. I have to leave everything else waiting until I can get back to it. Sorry for the mess.