Morning Thoughts – Oldinvestor

Something I totally did not think about yesterday: LNG is not a max capacity. I was thinking with the hurricanes coming in, this impact LNG exports in a substantial way. The truth is; if LNG exports are at half capacity (as they are now), then the same boats will arrive and leave and export facilities can ramp up to make up the difference. So depending on storage at these LNG facilities; exporters could continue to draw gas in and store it up and load boats quickly when storms are clear.

Production will still get interrupted in the Gulf of Mexico. I’m hearing 1.2Bcf or so. Canadian imports will ramp up some to make up for half of this. I see this every time there is a disruption in US supplies.

So I stuck my foot in my mouth yesterday. However, the market is slowing its upward trend. I was on yesterday (it is free to sign up and you gain access within a day or two to some chat rooms with good info here and there)… Enelyst had an expert in LNG on there yesterday, Ruth Liao from ICIS. ICIS has October LNG exports back to highs, and quickly achieving new highs.

There is a fine balance to all of this, and I’ve left out some categories, such as Power burn switching back to Coal since NG prices have recovered. I give credit to Josh Heller for this info. He would give credit to

I really need a paranoia needle; it would be at a high point today. Natgas will do this to a person. I still lean slightly bullish. I just want the hurricane/storms to cause a dip in pricing, and don’t think I’m going to get it. I feel I’m also going in circles this morning. Paranoia meter…

Tropical storms aside, LNG is on track to recover to near max capacity. The US has also gained some capacity with new expansions since the WhuFlu began to take over the planet.

This may paint a better picture.

Supply/Deman Vs 5 year average at the latest BlueGoldTrader article.

Follow the link below the above image to the latest free Bluegold article.

Production YoY from the latest HFIR free article.

Click the link below the above image to see the latest HFIR free article.

I should ended it there. Even with my torn emotional state this morning, I still feel like I’m positioned well for the current state of the market. Logically I still believe in shorting BOIL with deep ITM puts to give me a place to jump all in short at my choosing. I won’t argue against the idea that I’m playing this strategy way too soon. I know it. I’m still a believer in UNL here. I don’t know that it will move another dollar higher, but I think there is a chance yet. So I’ll continue to hold where I am.

I did decided to wait to add any short shares to my BOIL position yesterday. The market seems too bullish still, I shouldn’t be getting into a direct short unless the market confirms it wants to fall. I am a bit nervous about the 1 covered put against BOIL at 50 strike. I did dedicate like three times the amount of funds required to enter the trade, so I’ll be fine. Not to mention I did the same with my other covered puts, and they shouldn’t need quite the coverage as the 50 strike. Paranoia…

UNL – 50% in from $7.4 still and waiting still

BOIL covered puts

BOIL covered puts as of market close 8/24/20
Covered puts P/L as of market close 8/24/20

I’ve also got a few other positions that I don’t normally mention here much, because they are not natgas related. These are small positions, but ones I think are worth taking. I’ve split between 4 large REITs (SRC, SPG, WPC, O). I’ve also recently decided to get some Utlities (PPL, ETR, FE), careful of FE, they are dealing with an investigation, which is why they are so low now. SLB and EOG are my two equities favorites in Oil/Gas. They are big and slow and mostly stable in my opinion. EOG has a lot of cash, and SLB has always been internationally versatile. Lastly, I’m shorting LABU with covered puts, but I’m playing ATM puts vs deep ITM. Shorting LABU also requires a lot of funds to protect my account. Most of these other positions are in the green, they also keep from from taking too big of a position in NG related positions. The recovery has been good, and I’m ready to dump any of these if the market finally decides to catch up to reality soon. Good Luck