Morning Thoughts – Oldinvestor

I can’t seem to think of all angles when I’m writing. As a look back. Power burn has been hanging in there, and at times, giving demand the extra boost to offset any lack of demand by the drop in LNG exports.

Daily US production as of 8/24/20, fround from HFIR latest free article.

I believe power burn growth by natural gas as a fuel has slowed this year. I remember seeing some numbers a year ago that showed new construction slowing for natgas powered electric power plants. But natural gas prices have helped the fuel continue to grow as the preferred fuel

Natgas and other fuels by % of total electricity generation found at Bluegoldtrader latest article

The above image would shows a couple of things. Natural gas has room to be the fuel of choice by a large margin, from just a few years ago. Though it is unclear how much growth has been in the electric power sector for natgas with this one image; it is clear how much potential there still is for natgas growth when the price is right.

In the bluegold artcle, they share what they are seeing in pricing of coal vs natgas. It’s worth taking a look at.

I will say it’s a bit late in the season to be talking about power burn, but it is still a factor and will be year after year. I don’t have much to add to this. Production should come back online in the Gulf of Mexico before LNG exports do at Sabine Pass and Cameron. If anything, storm surge/flooding will probably keep boats out a few more days at least.

Here is the latest article I see on this news, and it’s a good source.

Shipping agency Moran Shipping on 27 August said in a notice that pilot service on Sabine Channel remains closed due to highs and seas offshore, but forecasts showed that conditions should allow for marine traffic to resume by 29 August.


I’m guessing it is also possible to see a ramp up in pipeflows to LNG export facilities to make up for lost time. I don’t know for sure, it is just something I’m watching for since there should be more boats in line now to be loaded. Also cancellations continue to slowly disappear.

Something else that may be mentioned in the article would be construction of two more facilities in the same area will be affected. There may or may not be details of these disruptions.

Well that’s all I have this morning. I”m starting on an electrical project with another site that I have been ignoring. It has been stealing some of my time from NG trading, but I’m also comfortable with where I’m at right now. Also I really wanted this site to be for working people as I am; with that, I wanted to make slower, more long term trades that don’t have to be monitored constantly. I feel like a distraction is good for me, to keep from over managing my account. won’t be going away, but as I’ve said before, I might be a little less active.

To check out my other site progress, go to It is slow going, but it make pick up there a little as I have started to focus on wiring, my greatest strength.

My positions

UNL – 50% holding invested in my $1000 account, now at $1050 or so!

BOIL Covered puts

Covered puts P/L as of 8/27/20

I’ll continue to hold. I am still a bit nervous about the 50 strike put against BOIL, but I did set aside enough cash in the account for all three of these trades to help out with near death experiences (that’s a joke) with this trade. I want to show the progress of this trade over the last month or so. I’ll look back through my posts to get the number and update this post that data later. Good Luck


AHHHHH! geez. I just saw that I wasn’t totaling all of the profits and losses. It was only taking the P/L from the first BOIL trade and the first KOLD trade. geeeeez. I’ll fix this, but i don’t have time to go back through and update all those numbers. barf. I’ll share what I have with the 90 strike BOIL covered put


Profit/Loss maintained on 90 strike covered put as underlying value increases.

As I stated, this is on for the BOIL 90 strike covered put. Also the Profit/Loss is including a KOLD profit I took over a month ago. What this chart is showing is that I’m short on BOIL, and my account balance is holding due to the 90 strike put offsetting the loss of the BOIL short. If not for the put I’d be down roughly $1000 in this time frame, had I just shorted BOIL. This is a lesson in greeks as well. Deep ITM options have high delta, giving a strong return when the underlying value changes, keeping my account covered thus far. Now delta will fall as the underlying price approaches the strike price. Also I’m sure there’s more to be said about this, but that’s all I have in my for today. And for the other options, they do have me backward more than the 90 strike put, as shown higher up the post. I just didn’t pay attention because my other investments in this account are more than offsetting this trade. Plus I’m still confident I’ll come out the other side, next spring, with a gain. We’ll see… It’s all a matter of time and not getting delisted.

Morning Thoughts – Oldinvestor

This helps tremendously. Helps me anyway.

NGZ20 seasonality chart.

We see here December contract is in the upper range that previous December contracts have been in for the last 5 years, with the exception of 2018 breakout. Storage was around 700Bcf of a deficit to the 5 year average at that time, with a winter storm threat. Storage right now is still 400+Bcf of a surplus to the 5 year average. RRRRR, wordpress is screwing up. going to post this and then update in a moment with more…

Weekly storage vs their respective 5 year averages at

So with this in mind, LNG is going to help close the gap this winter, but how much will depend on production. To help with this, I want to look at what Oil is doing. I believe associated gas will be the biggest contributor to how much natgas production recovers in the near term. I want to focus on Texas, but not sure if I will find what I am looking for.

Frist, imports are down, so this is helpful for Oil

Weekly Oil Imports to the US at

Here is a good one to factor in, Refinery consumption.

Crude Oil demand from Refineries in the US at

Storage is of course needed

Crude Oil storage in the US excluding Special Petroleum Reservse at

And lastly, since i can’t find Premium for free and don’t really have time to dig further, Overall Production

US crude oil production at

I can only assume that associated gas production is being suppressed considerably with oil production. This last chart does not tell us how much of this production is natgas rich. I do know production of gas is down heavy in Texas, and that’s as close as I can get to proving anything without a subscription to regional data. Doesn’t that suck….

updating the post again and my follow up will come momentarily…

So I don’t have all the variables. The general idea here is, production has taken a hit and may be just starting to bounce back in Oil; rig counts were also up last week by 10 I think, that’s a pretty clear sign. Imports are still down heavily and storage is being consumed, and that is good news. These charts above point to Oil going back to increasing oil production before the end of the year.

So this, though a bit vague, should support my theory that associated gas will be increasing by the end of the year. I also know that gas coming from Appalachia has not decreased much since March 2020, but drilling has… Damnit, I forgot about EIA drilling report. It will have more data that I didn’t cover, by region.

Go here and click on the “full report”. It shows most associated gas was the bulk of the production cut for natgas, but also shows rig counts down in dry gas areas too. It always takes a incredibly long time for production to start falling after rig counts drop. Also, in the case of Appalachia, it must take that much longer for production to drop, because they either have fracing crews still running or the wells are tremendous gas producers. Appalachia hasn’t had a real decline in production in 10 years. DUCs will play into this, but I think the biggest part would be the production capability of each well is massive.

So…. If production is to recovery much in the near term, it will come from oil rich areas since most dry gas production never really decreased much, and will not have much room to increase again. Since Oil looks to be heading down a path to recovering production… Though it will take a while, associated gas production will increase some with oil production.

One that must happen is planes must return to the skies to allow demand to return to what it was before in oil. The sooner this happens, the sooner oil production races back to growth. We know this will be directly affected by coronavirus efforts.

I’m not saying that natgas will not reach $4 by this time next year. Not am I insinuating that it would be impossible for gas to reach $4 some time this winter. With storage in the surplus it is in, there would need to be quite the bullish anticipation by markets to think storage is going to run low to reach $4. Since markets have been soooo slow to react, any move higher, to me, feels like just trend following. The reason I am still long in UNL has to do with it being spread over 2021 contracts, and will stay invested further down the curve like this that I do believe in under priced for what is to come. I feel far less paranoid about being short on BOIL. about that…

UNL – 50% in still from $7.4 and holding

BOIL covered puts

Covered puts P/L as of market close 8/26/20

I remain steady with my investments as they are. EIA report today at 10:30 est time. Good luck


Morning Thoughts – Oldinvestor

So I got like 3 hours of sleep last night. It’s a bit harder to function right now. bear with me

LNG feedgas to US export facilities at

I’m guessing Sabine pass is to capacity on storage and they will not be taking any for a few days. I am interested to see if they ramp up past recent highs to make up for lost time. Cheniere Energy would have been a good buy on the dip. They look like a good buy. There are two symbols, not sure why, maybe one is a parent to the other? The symbols are LNG and CQP. CQP has a 6+% dividend yield right now. I would be interested in selling a covered call against CQP if I have room in my account for that.

While LNG is falling off a cliff, production is showing reductions of a noticeable margin now. Weather predictions are shifting to normal in the next couple weeks. Hurricane Laura has another day before completely smashing into the coast near Sabine Pass and Cameron export facilities. This will be the focus the rest of the week unless something else bigger than this comes about. I’m going to keep this short. My positions

UNL – 50% in from $7.4 I think it would be ok to reduce here, but there is a slight chance UNL won’t pull back much in the coming weeks/months. I’m going to continue to hold where I am.

BOIL Covered puts.

Covered Puts as of market close 8/25/20

I’m not going to screenshot my account until there is significant change to my BOIL position. I mainly want to show the underlying moves significantly and I have stayed fairly well protected thus far with BOIL. When something changes, it will be updated here. My paranoia has come down some since yesterday. I think I have little to consider until next week at this point. Good Luck


Morning Thoughts – Oldinvestor

Something I totally did not think about yesterday: LNG is not a max capacity. I was thinking with the hurricanes coming in, this impact LNG exports in a substantial way. The truth is; if LNG exports are at half capacity (as they are now), then the same boats will arrive and leave and export facilities can ramp up to make up the difference. So depending on storage at these LNG facilities; exporters could continue to draw gas in and store it up and load boats quickly when storms are clear.

Production will still get interrupted in the Gulf of Mexico. I’m hearing 1.2Bcf or so. Canadian imports will ramp up some to make up for half of this. I see this every time there is a disruption in US supplies.

So I stuck my foot in my mouth yesterday. However, the market is slowing its upward trend. I was on yesterday (it is free to sign up and you gain access within a day or two to some chat rooms with good info here and there)… Enelyst had an expert in LNG on there yesterday, Ruth Liao from ICIS. ICIS has October LNG exports back to highs, and quickly achieving new highs.

There is a fine balance to all of this, and I’ve left out some categories, such as Power burn switching back to Coal since NG prices have recovered. I give credit to Josh Heller for this info. He would give credit to

I really need a paranoia needle; it would be at a high point today. Natgas will do this to a person. I still lean slightly bullish. I just want the hurricane/storms to cause a dip in pricing, and don’t think I’m going to get it. I feel I’m also going in circles this morning. Paranoia meter…

Tropical storms aside, LNG is on track to recover to near max capacity. The US has also gained some capacity with new expansions since the WhuFlu began to take over the planet.

This may paint a better picture.

Supply/Deman Vs 5 year average at the latest BlueGoldTrader article.

Follow the link below the above image to the latest free Bluegold article.

Production YoY from the latest HFIR free article.

Click the link below the above image to see the latest HFIR free article.

I should ended it there. Even with my torn emotional state this morning, I still feel like I’m positioned well for the current state of the market. Logically I still believe in shorting BOIL with deep ITM puts to give me a place to jump all in short at my choosing. I won’t argue against the idea that I’m playing this strategy way too soon. I know it. I’m still a believer in UNL here. I don’t know that it will move another dollar higher, but I think there is a chance yet. So I’ll continue to hold where I am.

I did decided to wait to add any short shares to my BOIL position yesterday. The market seems too bullish still, I shouldn’t be getting into a direct short unless the market confirms it wants to fall. I am a bit nervous about the 1 covered put against BOIL at 50 strike. I did dedicate like three times the amount of funds required to enter the trade, so I’ll be fine. Not to mention I did the same with my other covered puts, and they shouldn’t need quite the coverage as the 50 strike. Paranoia…

UNL – 50% in from $7.4 still and waiting still

BOIL covered puts

BOIL covered puts as of market close 8/24/20
Covered puts P/L as of market close 8/24/20

I’ve also got a few other positions that I don’t normally mention here much, because they are not natgas related. These are small positions, but ones I think are worth taking. I’ve split between 4 large REITs (SRC, SPG, WPC, O). I’ve also recently decided to get some Utlities (PPL, ETR, FE), careful of FE, they are dealing with an investigation, which is why they are so low now. SLB and EOG are my two equities favorites in Oil/Gas. They are big and slow and mostly stable in my opinion. EOG has a lot of cash, and SLB has always been internationally versatile. Lastly, I’m shorting LABU with covered puts, but I’m playing ATM puts vs deep ITM. Shorting LABU also requires a lot of funds to protect my account. Most of these other positions are in the green, they also keep from from taking too big of a position in NG related positions. The recovery has been good, and I’m ready to dump any of these if the market finally decides to catch up to reality soon. Good Luck


Morning Thoughts – Oldinvestor

Hurricane positions at National Hurricane Center website

You should be seeing a lot of images such as the one above or the one below.

Hurricane Laura at National Hurricane Center website

It appears Marco is just a Tropical Storm and will remain that way, but will be dumping a lot of water along the coat in the gulf. The image above is the projected path for Laura, and will become a Hurricane. It is also headed right for Sabine Pass and Cameron LNG export facilities. It appears possible the storm surge, or a lot of water may get dumped on Corpus Christi and Freeport terminals.

Depending on how much is needed for storage, LNG pipeflows may drop soon or may continue to flow slowly. The ports are already empty of any ships, but the terminal can still take and store gas for use as soon as boats can re-enter the terminal.

A number of production platforms will also shut in due to these storms. As of market open yesterday afternoon here, I would think the market thinks demand is going to be hit harder than GOM (gulf of mexico) gas production. Also weather predictions are showing cooling across the US. I generally don’t trust the weather forecast when hurricanes are entering the Gulf. Hurricanes seem to mess with prediction models and realized temperatures can vary greatly from the prediction, even 5 days out. For this reason I wouldn’t put as much emphasis on the weather prediction, but it’s still a bearish factor I can’t ignore all together.

Sabine Pass, Cameron, Freeport, and Corpus Christi LNG export facilities at Google Maps

I believe the other day I posted an image of LNG Tanker loads for the first 19 day so of the month. I think I stated it was of all facilities, and it was just Sabine Pass. Here is the corrected/updated shot of all US export facilities.

LNG exports – Number of loads exported by the 19th day of the month each month.

Above is the first 22/23 days of the month, and August is showing strong improvement. Of course we also see this improvement in pipeflows to export facilities.

My objective is still the same. I still believe UNL move high by mid winter, and BOIL will decay. My positions remain the same:

UNL – 50% of funds in from $7.4

BOIL covered puts

BOIL covered put positions as of market close 8/21/20
Covered puts P/L as of market close 8/21/20

I think I will short some extra shares of BOIL. Maybe 20 shares. If BOIL will move $5 down from here, I’ll be happy with that. I do feel NG prices could drop on the drop in LNG export demand. The numbers aren’t showing up yet in pipeflows, but they will be affected eventually with no boats at port. Good Luck


I have decided not to short more BOIL. I’m heavy enough at the current price. No need to go asking for trouble that I know BOIL could cause me very quickly. Staying conservative on this and keeping my positions unchanged.

Morning Thoughts – Oldinvestor

My education has just gone 1 step further. Yet I still don’t know exactly how to fit the data together. South Central storage is filling at possibly the worst time imaginable.

We know LNG is going to increase and we know production can increase, but what about power burn? I’m just spitballin here, but it would seem Texas alone can swing 1Bcf/d from day to day in power burn. It’s been hot lately, and South Central storage is still building. What’s going to happen if things cool off in this region? Storage is still too close for comfort for me, and now I learn power burn starts letting up this time of year. South Central is about to start building quickly again, LNG is either going to just save storage or just not. haha It’s always something.

I know I’m dwelling on this, but I’m ok with that 😛 I see south central testing its ability to reach max capacity. I did hear some news of Waha pricing spiking. I don’t know if this will deter storage facilities; I would imagine current pricing is still a deal compared to what is to be expected this time next year when production may actually be struggling to keep up. No doubt, there is a bigger swing to be on the long side soon enough, but I want there to be no doubt for myself first. I’ll stick to what I’m holding for now.

UNL – 50% of funds in from $7.4

BOIL covered puts.

BOIL covered puts as of market close 8/20/20
Covered puts P/L as of market close 8/20/20

I hope everyone has a weekend to relax. I know I’m stressed the hell out over this COVID mess. I keep reading of positive cases and have heard of a few deaths (of family members of people I know). I know people who’ve had it now. It’s the unknown that is stressful. I need to relax; I hope we all get a chance to do that. Good Luck


Morning Thoughts – Oldinvestor

Production is really stuck in a range here between 88-90Bcf/d. Today’s EIA report is expected to build storage slightly greater than the 5yr average. This would mean little to me or the market. As I’ve said in previous posts, the market seems to care little about storage, and more about LNG coming back. Pricing has been playing catch-up , and it has pretty well balanced out. I am very cautious about Oct/Nov contracts, but think winter is right were it should be. I will be watching South Central and East storage. I read in an NGI article that East was a concern to some analyst, somewhere.

Total storage isn’t a concern, as prices would be below $2 still if it were. There is no rush, but I’m still spotlighting South Central storage.

Weekly South Central Storage thus for (8/7/2020) this year and 5yr average South Central at

I don’t have a lot to spray today. I suppose I could also include LNG loads. Below is the number of load for each month by the 19th day of the month. LNG exports are slowly improving already and of course, are expected to continue doing so.

LNG exports – Number of loads exported by the 19th day of the month each month.

My positions

UNL – 50% of funds in at $7.4 – this position has made roughly $105 on my $1000 account, and not has my account balance back to a high point of almost 5% ahead.

My covered puts haven’t changed, and I haven’t made time to consider any options spreads in BOIL or anything else.

BOIL covered puts as of market close 8/19/20
Covered puts P/L as of market close 8/19/20

I mentioned a butterfly or something in BOIL. I’m really content right now with what I’m holding. Good Luck


Morning Thoughts – Oldinvestor

This week makes me feel the market is ignoring fundamentals again. With this DGAZF mentality, maybe so. However, I am prepared for this. UNL is doing excpetional, and BOIL covered puts are hanging in there. Josh Heller and I discussed some the market and storage, as if the market doesn’t care about storage figures.

My thought on this subject is that LNG has stolen the spotlight once again. There is talk of LNG exports now returning to max capacity by Oct/Nov, and production has stalled out. This is why I like UNL, if this scenario actually plays out where LNG goes back to 9Bcf/d and growing, UNL will move higher, no doubt. Production has to stay where it is, and it may actually come down to the oil market and Texas… Barf. Oil… There are 3500 DUCs in the Permian and still building more… Appalachia who? There are frac crews that will work for food right now I’m sure…

For all we know, some producers are just waiting for LNG to pick back up in the next month and we’ll see production increase once again. “There is so much gas” said that jackass N5whatever is handle is on twitter. He’s right. No doubt, I’m long UNL and will stay that way until the market changes its mind. This may come a a surprise some day soon enough.

I will be patient. Storage won’t matter until it does; until then, it’s the LNG show. Speaking of which, there was a slight pull back in LNG feed gas yesterday. LNG facility storage was low coming into August, and I think some facility will have wanted to get ready to go back to higher output.

In the end I would argue to market has proven it isn’t worried about storage until it’s dire. Josh pointed out in 2018, the market was complacent about storage. Then in November, the market was shocked. Josh was right then and the same may be about to happen now, in and almost opposite scenario. It’s already close. The difference is, the market has already reacted pretty extreme to storage, and you might argue that speculators are just sorting the chips out. Big players that made money on the short side may be done for a bit. I don’t know.

I do know I like holding UNL for a long and shorting BOIL for a long term short. I’ll go back to the idea that as long as BOIL doesn’t get de-listed, I’ll be in great shape in 6 months. Position wise, I can survive about anything, even a 2018 like spike in pricing.

My positions

UNL – 50% of funds invested from $7.4 and waiting

BOIL covered puts

BOIL covered puts as of close 8/18/20
Covered puts Profit/Loss as of market close 8/18/20

This step backward in BOIL for me hasn’t brought on any more pain for my account. So far. The 50 strike could start hurting a lot more if BOIL moves much higher. I’m ready for this though. And the more volatile BOIL gets, the faster it decays. Ok I’ve got to go

Still waiting out this week. I have considered a butterfly or something in BOIL to take advantage of mostly likely volatility coming in the next few weeks. I”ll have to think some more about this. Good Luck


Morning Thoughts – Oldinvestor

Sometimes you just do something else while you wait for a something more obvious. Like sell covered calls against WMT and USL. Or maybe even research connectors for a wiring harness modification.

Just saw this article, it explains the DGAZF chaos. It sounds quite accurate.

Wow, that is worth reading. 130,000 shares were still being shorted in DGAZF at the time it was delisted. Mostly hedge funds, I’m sure. So the spike in price was low liquidity and the short squeeze of the century. I don’t believe this would have been possible had the ETN stayed listed on the exchange. The article states, “DGAZF’s issuer, Credit Suisse, decided in mid-July to pull several of its ETNs from the stock exchanges on which they traded.” I continue to question why. UGAZ/DGAZ had seen some of the most wild moves in the last 4 years. It has been since late 2018 the ETNs saw one of these wild moves. Credit Suisse had to of been making loads of money with little problem in the last 6 months. Why delist now?

Another article I read that was speaking of DGAZF and then went on to say it is costly to do a reverse split and sometimes low volume ETNs aren’t worth the trouble, bla bla bla. TVIX, UGAZ/DGAZ, and others issued by Credit Suisse were not low liquidity. They were all pulled from the exchange all at once. And someone at Credit Suisse finally grew a conscience? WHAT? NO! My money is on someone within a regulatory position advised Credit Suisse to get out of leveraged ETNs. Whether the SEC, the exchange, or even internal litigation control within Credit Suisse; I will never get to find out, but I want to know the real reason they delisted.

Anyway, the market is higher again today. Not much has changed fundamentally in natgas. It’s all trend trading and DGAZF theories at this point. I’m sitting tight to see how this week ends.

My positions

UNL – 50% of holding in with average of $7.4

BOIL Covered puts

BOIL covered puts as of market close 8/17/20
Covered puts Profit/Loss as of market close 8/17/20

Looks like my BOIL puts are about to take another step against me. This is what I wanted.

2hr chart for BOIL using Webull

So BOIL is near 90% up from the most recent low of $22.5. I’m feeling like I’m risking more by shorting BOIL during a time that leveraged ETNs are being delisted, than any pain I will incur from my position going backwards. In other words, I’m not worried about the positions themselves. My main concern is to continue to hold the puts to at least help protect against getting called in or surprise news of BOIL delisting.

UNL should be ok, they would be more at risk of delisting due to low liquidity. Since the market is on the up side and UNL hasn’t really seen decay, they should be fine for quite a while. It would be nice to see more traders switch to UNL. More options activity and better bid/ask spreads would be awesome.

Ok, I have real work calling my name. Good Luck


Morning Thoughts – Oldinvestor

Well it’s still hot out, LNG is climbing ever so slightly, and Production is holding thus far. South Central Storage is still building at a inconvenient time. So I’ll still be holding my ground. I believe the market as a whole will continue to grind higher along the curve ( so I continue to hold UNL, though it may slow it’s upward trend). I think prompt NG is still at potential risk of plummeting, so I’ll continue to hold my BOIL covered puts and no UNG yet.

I will not argue against the potential of another bull run higher, even from here; especially with LNG yet to move higher and this complacent market making last minute decisions. I haven’t mentioned this much in the past, but even from 2016 to now, there seems to be more followers than trend setters in the natgas market. It’s not so much that traders aren’t anticipating changes, as I believe it is the number of trend followers has grown. So trend traders, technical traders, and “quants” may not be so interested in fundamentals and anticipating anything; they are only interested in catching a wave. So right now the market is riding the wave, and the number of people who don’t care about what’s going on with South Central or Eastern storage figures, far outweighs those that do.

I want to believe this would explain why the market seems to take too long to change direction and why it seems to go too long in one direction. It does seem “the trend is your friend” is much more common than “swing freely” or whatever…

My positions

UNL – 50% of my max comfort is still in with an average of $7.4 and waiting forever

BOIL covered puts

BOIL Covered puts as of market close 8/14/20
Covered puts Profit/Loss as of market close 8/14/20

There is a lot of controversy surrounding DGAZF, in that is may also be influencing the market to move higher when it normally wouldn’t be cause of the number of short contracts VelocityShares would need to cover in October contract. I think the whole thing is more mental than physical. This is hard for me to swallow; that even 1000 October contracts being bought back would move 12 consecutive contracts by 2-3% in a single day.

I’m going to wait this week out with what I’m holding. If the market keeps moving up sharply, I might increase my short by covering a put and holding the shares short. The market will have to move pretty high, as in October contract getting very close to $3. Let’s see what happens. Good Luck