Morning Thoughts – Demand is Driving

LNG demand is now back to high growth mode. What I mean by this, is the amount of gas (near 9Bcf/d) being flowed to LNG facilities is greater year over year. This increase in demand has never been seen prior to a year ago, which would indicate growth. We know that gas demand from LNG has been greater than 9Bcf/d, but not by much and that record may be broken soon. It would seem Sabine Pass and Corpus Christi are near max capacity. Cameron appears to be going strong, nearing their max capacity. Freeport, I believe, completed an expansion. This would put max LNG demand near 10Bcf/d. Granted. Now that there are something like 13 large “trains” of LNG liquefaction and the small ones at Elba Island, there are bound to be some random unplanned maintenance events occur.

Either way, it appears draw season is about to get an early start. I’m seeing a draw overall, right now! Sometimes these numbers get revised, but either Celsius Energy or Natural Gas Intel posted something similar on Twitter yesterday (that there will be a draw yesterday or today or the next day, something like that).

I’m rambling. Natgas is starting to draw on storage, causing some days to be a draw overall. We are in week 44. It normally isn’t cold enough to cause a draw for an entire week until week 46. So don’t get too excited, this may only last a day or so.

My positions as of 10/26/20

I don’t feel very useful this morning. Maybe because it is Monday… As of right now, the market will be lending strength to the bulls. The charge is lead by LNG and a lack of production. Weather is helping at the moment, but is expected to turn more mild from here. I plan to continue holding my positions. Looking at everything, I may be interested in exiting my short put against KOLD and just shorting the shares directly. I’ll be keeping an eye on this. SLB is just blowing in the wind right now; if the underlying price will get close to $17, I’ll roll this forward. UNL will be held until 2021 as far as I can tell. Good luck


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