Morning Thoughts

There has been some return in production, now clearly back above 2018 levels. If there is extra gas to be brought to market, it happens in winter. Though it would seem a bit early, of the producers that have been waiting for the right moment, to bring that gas online now. Henry Hub cash prices are still closer to $2 than they are to $3… Still 3 weeks to go (this week and two more) until storage normally peaks. South Central storage is not building as fast as it normally does this time of year, thanks to lack of production and relatively strong LNG demand. I suspect thought, that since South Central is still building storage, Henry Hub will continue to be weak until draw season arrives.

I remember vaguely someone who may have traded natgas for a living, or traded energy related products for a living, mentioning that Henry Hub was no longer the defacto standard for NYMEX natgas pricing. Right now is making a strong case for this, as cash is closer to $2, and prompt natgas pricing is closer to $3. I would think to be careful of November moving closer to $2.5 this week, getting close to expiration.

UNL and SLB positions as of pre-market 10/19/20 and KOLD as of market close 10/16/20

I’ll be holding off from buying UNG for one more day. I am holding my positions because of higher production numbers and weak cash price due to storage. And I have another call…

Back again… I’m really split on wanting start a position in UNG. I’m going to wait. I’m going to hold what I have, even my terrible SLB position. My mind is also split in too many directions this morning to focus, it’s a good time to wait. Gas has gone from red to green and back to red again, I’m not so interested yet in buying UNG.

  • Storage still sucks
  • LNG isn’t that great but is showing improvement
  • Production just increased
  • Weather isn’t all that important yet
  • Winter prices are a bit high for sucky storage

Prices have room to come down some before I buy UNG. I want to wait… Again… Good luck


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