Morning Thoughts – Oldinvestor

Production is coming back online. I’m seeing a small increase for the last three days, this could be coming from Texas. We knew this was coming, it is now upon us. Permian oil producers are going to weigh in with oil and gas will come along with… I did see something about Texas may be doing something about all that flaring that has been going on the last few years. Even if natgas demand picks up and LNG goes back to 10Bcf/d, there is ample, untapped gas that can be retrieved quite quickly. Depending on the timing of everything, there could be a strong swing in NG prices.

I believe even more emphasis is now going to be put on LNG recovery. If oil producers in areas like Permian are going to start increasing output and LNG hasn’t recovered… Down we go again. Gas storage is much to high for production to increase and prices not respond immediately. Remember when natgas couldn’t possibly stay below $2? This will impact the market as a whole in a bullish way, but not until it all filters down to production numbers in a substantial way. I think the last drop in NG prices was due to a big drop in overall demand. This is a normal fluctuation in weather, which is now supportive of higher demand. I continue to be pessimistic about pricing. I’m placing a stop on my last 20% layer of UNG.

my position

UNG – 80% with an average of $11.22 – stop on 25% of my holdings (my last 20% layer) at $10.2

If you UNG falls today I’ll stop out back to 60% holdings in UNG. I’ve placed the stop at $10.2 and will keep moving it up each day just under the previous day’s low. Since my average right now is $11.22, I’ll keep this average and take a loss if I get stopped out. The closer the price of UNG gets to $11.22, the more I’ll add to my stop. For example, if UNG gets closer to $10.75, I’ll move my stop up and increase the amount from 25% holdings to 30% holdings to be reduced. If I do this, I’ll do my best to post an update here and to Twitter when I can. Good Luck