Morning Thoughts – Oldinvestor

First off, Josh Heller posted on July 2, his post will be just below this one if you’ve not read it yet. Second; I’m still trying to keep my posts short so lets hit on high points.

I’m actually not that informed this morning. I do see that production is up considerably, like 1.5+Bcf/d. That’s quite the rise in supply. I also see that the weather forecast is still predicting super hot. LNG exports are also at lows still… So Weather being the only bullish factor, it would seem there is something more technical about the market. Maybe a seasonal shift in trader mentality that I’m not aware of. I haven’t been reading this weekend, and it doesn’t appear much has changed.

I’ll stick with the drop below $1.5 was just overdone. It was time for a bounce. Fundamentals are still quite weak to support $2+ unless market makers believe we are approaching a hot summer and then winter right behind that. With production being suppressed this long and then falling off a cliff as it did, LNG may not be as bearish a factor soon.

Either way I’m sticking with the idea that there is still plenty of supply within the US and Canada. Last week’s EIA report signaled that with hot weather, there isn’t an oversupply. With current forecasts, the supply/demand factor will only “tighten” meaning the market won’t be so oversupplied, supply and demand will be closer together. I look for anything at this point. I think this run could continue a bit more, but remain cautious. I really need to be looking at the chart and making a decision to reduce back to 60% of my UNL holdings or not.

My position

UNL – 80% in with an average of $7.4

I will try to look this over and update this post and post to Twitter if I make a move. Good luck


Update: I’ve place a sell order to reduce my holding from 80% down to 60% in UNL at $7.95. I think this is reaching today, but there was 1 transaction at this price so we’ll see.