Morning Thoughts – Oldinvestor

May 27, 2020

Don’t get me wrong; right now, natgas supply has dropped more than demand when compared to last year. It is the incoming threat of LNG dropping another 2-3Bcf/d that weighs on pricing. I hope I don’t come across sounding as if I know what’s going to happen with pricing. What do we know

  • LNG is still a bearish threat
  • Production has adjusted accordingly – suspect more reductions will come if prices continue this way another month (going out a limb here)
  • weather continues to help out demand – TDDs are projected to continue higher than normal

A thought occurred to me yesterday; when the news reports that July LNG shipments have been cancelled, does this mean the shipment leaves by July or arrives by July? I would imagine the intention is for July delivery. So this leads me to another idea, and I’m certain Samir Madani could answer this; how long does it take for a shipment to move from an US export facility to say… UK or Turkey.

On another note, I saw this article. I know I’m all over the place this morning. Gotta be quick about this. Turkey to open 40 wells for natgas storage! “Currently, the facility can store 600 million cubic meters (mcm) of gas and has another 600 mcm of capacity under construction with plans to reach 5.4 billion cubic meters by 2023-24.”

LNG exports and volumes, where to over the last year at

Turkey has taken 87.1 Bcf of Natural Gas from the US in the last year! This is part of the reason i quit trying to keep track of oil; too much international news to keep track of… oh well. This thing with Turkey doesn’t have much immediate effect, but it is just something that may be popular right now and could be helpful to know in the future.

Back to the amount of time it takes to deliver gas to UK or Turkey

Days En-route at

I think Ron H has all the info needed. I don’t have time to process the data right now, Looks like there are a lot of boat names starting with “British”, they go all over Europe. British Achiever took 10 days, but the location is “Null”; it’s only been 10 days, maybe it hasn’t arrived anywhere yet. British Contributor, 27 days, and…. has traveled to Spain, UK and Null on the latest trip started 4/29/20. My point here should be clear. It takes longer than 10 days to get a boat from Corpus Christi to the UK, and that gas (or lack of gas, due to no delivery in June/July) may be used at the LNG export facility even a month before the delivery date.

For example June Henry Hub futures contract will end around… now? Maybe it was yesterday. June is upon us! and gas for delivery in Turkey may take 25/30 days? I really still have no idea. Help Samir! 😉 The part that I hadn’t clued in yet until yesterday, all June delivered gas would have already affected LNG export facilities, and July gas should be affecting them now. I mean the cancellations. So unless we hear about August cancellations soon, LNG exports could be on the rise sooner rather than later. I do think there will be cancellations since there seems to be a backlog of tankers unloading in other countries. I don’t mean to sound all excited, it’s just something I hadn’t considered so much before now.

My position – 40% in UNG – I sold a 10% layer this morning at $12.13, next at $12.3

I’ll have a limit to reduce UNG further at $12.3, this would be around the equivalent of July contract price at $1.99. I’ll be happy to take some off, stay prepared for any drop in pricing and keep 30% of my funds in UNG for any possible break for $2.1. We’ll see,right now I’m focused on managed this 1 layer of 10% at $12.3. No plans to add yet of course. Good Luck