Morning Thoughts – Weak Production and Cash has returned

So I can say a lot with ease these days, and may not get the right point across or even miss something entirely. One thing I missed, was that November contract didn’t come down in price like I thought it would. In fact, Cash came up in price to match November contract. It’s not surprising, it just happened unlike I was thinking. Something else that comes to mind, is my mentioning of production. I had posted something along the lines of production increasing due to winter. I don’t have time to go back and read over, and in my old age, I’m thinking I didn’t emphasize that most of the recent jump in production could be due to a return of GOM (Gulf of Mexico) gas.

I still believe production will increase some this winter. I don’t think it will be enough to crush my hope of seeing UNL at $10/share or possibly higher. It’s just something to keep in mind. Production is so weak, it is barely ahead of 2018.

Daily production from 2016 to now as per the latest free HFIR article

You can click the link to go to the latest free HFIR article on Seeking Alpha.

Storage surplus projection by Bluegold in their latest free article.

Click the link above to visit the latest free Bluegold Research article. This is pretty much it. Production is weak and LNG is still going strong. This will send prices higher.

Pricing vs Storage Surplus/Deficit at EIA.gov

The image or link above will take you to the EIA Natural gas storage dashboard. As current storage moves closer to matching the 5 year average, we can expect pricing to continue to have strength. I know I’m preaching the same thing, but this is the direction the market is headed right now and should continue without disruption in LNG.

Of course I should have pulled the trigger multiple times on UNG, but here we are. Being that everything got out of sync for me, it takes a while to get back in line. Also, I don’t want to take on too much at once; that is generally the point at which I get overrun and wind up in the hole. So I’m still holding the same boring positions, though KOLD is looking spectacular. I suspect I could not exit my KOLD covered put right now for the current price, as the spread is wide on the put and I would have to sacrifice maybe $0.50 at least to exit the put. Even at that, I’m still happy with the trade.

My positions as of 10/22/20

I’ll continue to hold here. My SLB call has two more week before expiration. And I did add 30 shares yesterday, and SLB did go down. geez. Another down day like that and I’ll have to dump the 30 shares I just got. Hang in there SLB. EIA report is today at 10:30 eastern time. Good luck

Oldinvestor

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