Morning Update – May 6, 2020

Don’t forget LNG is still and will continue to be a hot topic.

Loads and Volume loaded by export facility at RonHenergy.com

Above are monthly totals of number of loads and volume loaded for exports on boat leaving US LNG export facilities. I see a small decline so far at each facility except for Cameron. Cove Point may be seeing normal fluctuations.

Daily NG consumption at each US export facility at RonHenergy.com

It appears Cheniere Energy seems to be taking the brunt of the blow to LNG exports. From what little I’ve read, it appears as a company, they are doing ok. They do have “take or pay” contracts on most of their gas, but this does not require them to export. They can, in fact, buy gas from another facility, in another country, for less… Then sell it to whomever is willing to pay more, and not have to export any gas. I’m sure they are most interested in returning to normal operations at near max capacity, keeping all their imployees in jobs and making a living at exporting gas. Just keep in mind, the company will get paid for gas that goes undelivered, but this will not help natgas demand in the US. It might be more advantageous to by shares in their company than to be trading natgas, but what fun is that!?

Just when you think there is going to cause the market to break away, another factor comes in and crushes it. Haha. It is possible this slow down in LNG could cause natgas to basically be balanced, or possibly go back into an over supplied market if industrial, res/comm, and power burn down get back on track. Either way, prices are already low, I’ll remain long biased at these prices. Obviously I’m cautious right now, selling out yesterday. I believe round 2 of the pandemic is inevitable. States are rushing to get everyone back to work, because these people are going to start protesting more, or worse, start fighting. I will just continue to be thankful for my job and my health.

On a lighter note, the world will continue to turn, and consume natgas. Lack in natgas demand is being matched or outdone by lack in oil demand. The scale will continue to shift back and forth. In the mean time, I will continue to trade UNG, and possibly UGAZ again soon (we’ll see).

My positions:

USL – 13% in with an average of $11.41 – selling out at $11.55 in order to make a DBO options trade soon

I am a bit skiddish of holding USL after yesterday’s quick run up. Part of my wants to place a stop at my average of $11.41. USL is invested in 12 oil contracts… Outside of June, July, and August contracts, Oil is near $30. This is not so inviting for me to hold USL. I am going to hold though. Because it is a small position that is priced near the bottom. This is very manageable. I’m still going to sell USL, now and I applied for options trading in my webull account. So I’ll pick up 100 shares of DBO soon and sell 1 call against it. I should still have enough funds in the account to trade UNG.

Selling USL at $11.55 for a gain of all things.

I’ll make a special post for buying DBO and selling a call as soon as I can do this. Even if I am approved, I cannot trade options until normal market hours. oh, and the EIA oil report is today I think at 10:30est? good luck

Oldinvestor

well Webull just passed over my for options. haha, isn’t that cute. I cannot stand this, not the disapproval, but not calling or messaging me to discuss this… Webull does a good job at what they have to offer, but I cannot stand the lack of communication. I may be blogging about FirstTrade soon. We’ll see