Morning Thoughts – Too Soon

I took a chance and was too soon. Gas demand is getting crushed, and the forecast is not helping. I’m getting the feeling there is more Covid relate demand destruction within the US than I know. Even so, the near worst scenario for weather related demand is still using more gas than the 5 year average.

Weekly Gas storage difference vs respective 5 year average at RonH’s Tableau page

Now this would not have been possible without LNG being and staying at all time highs. As big a hole as there is in Production and jump in exports, I though surely the market would finally get a big boost. And it has in that way, but something always shows up to crush it. There is still a good chance we follow that 2016 curve of storage vs 5 year average and drop quick with any amount of winter weather.

Screenshot of my Webull example account pre-market 11/16/2020

I don’t have access to my spreadsheet today, so I will share this instead. UNL is showing a large gain that will be cut in half. SLB is making up for it currently, but the options will drop a bit at market open as well. Also, my KOLD covered put will be hurting a bit as well. So back to the low point of last Monday.

So I was thinking with the unusually bearish weather, I would catch a break in the market that would last, yet here we are… It’s the threat of bearish weather, and drops in power burn, signs of increasing production that has natgas on edge. This week’s EIA report will be for week 46, which is normally a draw. So with a storage build expected, and demand continuing to be weak, these natgas prices are warranted.

I’ll be holding my positions and not adding or reducing yet, and hoping LNG holds. Any news of LNG stopping, and prices will get crushed again. Any news of bullish weather, and prices will go for another ride higher. Waiting it out. Good Luck


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