Morning Thoughts – Oldinvestor

So production got hit, then came back then hit again. I don’t know why or where. At this point it is hard to believe production would fall much further in the short term. By this, I mean quick and sharp losses, like wells were shut in. It could be maintenance somewhere that I don’t know about. LNG has also taken a hit at Sabine Pass and Freeport, but not before total exports reached 8 Bcf for a day.

Ron H passed on to everyone on Twitter yesterday that Cameron may get power by the end of the month. That is awesome. I would imagine Entergy is having to re-wire and sink new poles in the ground. So natgas will will most likely take a bit longer to use up that extra storage. I got some UNL late last week in my account that I don’t share, but I’m in no rush to add with the current oversupply continuing and the erratic conditions with LNG exports.

As for my positions. I will remain unchanged. I could add to UNL, but there is this small chance prices could fall a little further. For someone just getting in, a good trade right now, I would think, is Long UNL/Short UNG, with a lot of weight on UNL. Also I wouldn’t short UNG unless it there was no interest fees to short it. $0.53 in contango from X to Z contract. That’s roughly 16% or $2 lost to contango in UNG.

My positions and P/L as of market close 9/18/20

I’ll be holding to see what happens. Everything has been turned upside down in natgas and it is certainly hard to sift through at the rate I do lately. No need in being in a rush; I want to see how the market does this week some before I choose to add to UNL. That may be my next move. Good Luck

Oldinvestor