The Heller Angle – May 25th, 2020

I’m sorry I missed posting on Friday. I never want to write something if I have nothing interesting to say. I remain bullish on the market but am concerned about short term demand risk from shutdowns in the US. Even as the US opens back up county by county and state by state, there are many who will continue to self-isolate which hits demand.

Much to my surprise this weekend, it looks like natural gas supply is back above 89Bcf from a low of 87Bcf (from my preferred provider). I want to see a few more days of this production to confirm this data is true (and not something odd from modeling a 3 day weekend). If these production numbers are true, I would expect to be a little less bullish going forward. Another confirmation from a technical perspective would be to see price action drop below 1.80 on NGN20 July.

I also continue to be concerned about demand for LNG exports. Along with a surprise from the supply side, I am also watching a small bump in LNG exports back to the 6Bcf level. Just last week I was saying I was worried about demand going towards 4Bcf which I am still concerned about. One thing we know in natural gas land is that the market is always throwing us curve balls.

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