Morning Update – April 9, 2020

Well I set a stop yesterday and it did not get triggered, now I am inclined to keep holding. My decision to hold or sell is too much on the fence so i will just hold. And I’m in a damn mood. Trying to do my diligence and wash my hands and be careful to not get too close to everyone around me and I come to my work area and there is someone sitting in my chair, in my workspace that no one else needs to sit in or be at. It’s getting under my skin…

On to gas. I started this post this morning and got called of course. I do have a good job and will not complain. It is a good job, I am blessed to have it.

On to gas, take two. I wrote a little yesterday to an acquaintance on twitter. I mentioned the the focus of gas and oil production cuts. I did not warn that I feel the immediate action of these “cuts” in production are just an agreement. US companies have already been publicly announcing they will be cutting so much oil production. It is still very difficult to tell where natgas will take a hit and by how much and for how long. Also, is it not possible to let a little gas escape the well while not producing oil? Are there any producers willing to do this? I know many will want to hold on to the natgas in a well that has both oil and gas, because the gas helps lift the oil out of the well. If they bleed off the gas and sell it now, pressures could reduce and not help flow oil when demand comes back online.

I’m not trying to dampen the spirit of production cuts here, I’m am a bit skeptical the way the gas market backed up a bit yesterday. I’m sure there is a lot of anxiety over the fact that the storage report is today and “the meeting” of the year is today. Many traders may sit and wait. Also, even since I’ve started watching the natgas market heavily, since 2016 it feels like it is less forward acting. The gas market seems to wait until there is proof of anything before moving. We did just have a fairly strong move up in pricing and maybe that is the forward thinking part and I am just asking for too much. There is also the forward curve, meaning July NG contract is at $2, so the market just doesn’t think May or June contracts are worth $2, even if flows slow drastically. There is plenty of gas in storage and even if we draw on that storage for a few weeks, there is ample supply for current demand. Most 2020 contracts are down and 2021 contracts are up.

go to the following link on Barchart to see what I mean if you have never looked at many NG contracts at the same time.*0/futures-prices

The prices are delayed 10mins or so, but Barchart has some good (free) data.

It’s almost report time, I will hold what I have until next week. No questions asked. I mean if UNG makes a run for $15, I’ll sell, but aside from that, I’m holding. I’m also not interested in adding to UNG until I know more about the overall Oil/Gas picture, a clear one, not a bunch of speculation shit from every Tom, Dick, and that other guy…

As for USO, I totally forgot to put an order on to buy it yesterday morning… I will be happy to sell at $6+ The meeting is set for 4pm Vienna time. What do you know, that’s right now. Oil is bouncing all over the place. I want to see $6 and I’m out today. I’ll scratch around for the best news I can find and set a limit to sell USO for… $5.95 for now. Holding UNG for now. Good Luck