Morning Thoughts – Oldinvestor

Only updates I have seem important to me. Production appears to be confirming it is back to (very near) lows for the year, and LNG has confirmed it is at lows for the year. I’m not sure how the production data gets passed around. I can imagine that in the old days, when an individual read the number from a chart recorder, numbers could shift around a bit or data could get delayed one day and the same information get added to the next day….. Now everything is digital, so I’m not sure the plausible scenarios of a two day bump in production. I just now know, right now, production is confirming it’s not rising.

If you would like to look into daily data of your own, I use HFIR on seeking alpha. There is also Bluegold on seeking alpha or they have their own website. There is Pointlogic through IHS Markit. Pointlogic doesn’t normally take individual customers, but it can’t hurt to call them up and ask. Natural Gas Intel, Natural gas world, Celsius Energy, Genscape, Platts (used to be something else). Not all of these data providers will be cost effective nor will they entertain an individual trader account. These are just names that are commonly known.

My position

UNG – 60% in with an average of $11.73 – limit order to reduce to 40% at $11.73

I am getting called, but don’t really have anything to add. There has been ample support beneath $1.75 July NG prices. News of more LNG cancellations is most likely the next bigger bearish occurrence for natgas. Production increasing would be next on my list. It would seem that without one of these scenarios, storage is set to improve, or have smaller builds than the 5 year average. It would also seem to me that without more news of LNG cancellations, if production will hold here, prices should move toward $2 easily. There will probably be more LNG cancellations; it’s the severity of cancellations we need to be watching for. I have no scenario for NG prices to move above $2 for July right now. I don’t believe there is any reason. LNG cancellations are expected, and production may not fall any further for a while. I stay on the long side, because I believe gas prices could get a small boost in a very small window for me to reposition, maybe even collect some profit. We’ll see. I have a limit to reduce down to 40% of exposure in UNG at $11.73. Why not hold out for say $12? I want to protect my position in different ways, and reducing when I see break even is one of these ways. If prices continue to rise, I sill have 40% of my funds to collect profits. No plans yet to buy, If something drastic happens, I’ll most likely have all day to respond. Good Luck