Morning Thoughts – Oldinvestor

Production is down with Gulf of Mexico production shutting in for Hurricane Delta. Cameron is still flowing gas into their facility, but no boats. Freeport is the only facility with a boat docked. Go to ronhenergy.com to see the marine traffic maps for each LNG export facility right on his homepage. I would imagine as long as the boats can get to port, Freeport and Corpus Christi will continue as usual. Sabine Pass will most likely shut in for a few days and those poor folks in Cameron are about to get hammered again.

So LNG demand (when reading the pipeflows to LNG facilities), has reached a near term high. We know this will get hit, at least by 2Bcf/d – 4Bcf/d. But most likely not for long. Again, the further west Hurricane Delta shifts, the more bearish; the further East, the more bullish. I’m staying out to see if prices drop hard again and I’m going in for some UNG this time.

This is one of those moments where winter demand is kinda being hidden by all this other chaos. Yes, storage is at a 400Bcf surplus to the 5 year average, but that means little once winter is upon us. Once we start actually using 5Bcf/d more than the 5 year average. $3.25 for January contract is not a steal, but it’s priced right. I find myself not wanting to take real chances these days, but it’s getting about that time.

Positions and P/L as of pre-market 10/8/20

I’m going to buy a little UNG now. It’s time to dip my toe back into those waters. UNG is about to roll out of Nov, into Dec contract. A very small amount. Storage is still an issue, and if it becomes a problem for me, I’ll work my way out this winter. It’s time to start working this back and forth. Look out world, I’m about to fall on my face… Wait, that came out wrong. Nevermind. How about 4% of funds in UNG now. At $11.52. Great!

Updated positions

Good luck everyone

Oldinvestor