1- Injection into storage last week was only 29 Bcf, an incredible number.
This injection was ~22% lower than consensus estimates for the week (37 Bcf), ~70% lower than the injection in the same week last year (89 Bcf), and ~57% lower than the 5yr average injection (67 Bcf).
2- Not only that, but for the week in progress (report for which is out next Thursday), we’re anticipating a net withdrawal from storage.
That means we’re kicking off withdrawal season two weeks early this year. 🤠
5- In addition, with oil at $35 and looking like it may grind lower, we’re fast approaching shut-in economics again.
Now look. Winter’21 supply/demand is already looking quite promising for bulls. So if we turn off byproduct gas going into it...?
...Hoo boy.
6- Also, given the reports from $XOM and $CVX this week, in which massive job cuts were announced along with significant impairment charges on shale assets, it doesn’t sound like the O&G industry is jumping for joy or gearing up to spend money on drilling new wells anytime soon.
7- With all that, it should be no surprise that NatGas outperformed virtually every other asset this week (see charts).
Most notably, $NG outperformed $NDX by over 1000bps, and $AR outperformed by ~500bps.
If this marks the reversal, the party’s really just getting started...
8- And I can’t overstate just how over-extended the relative valuation of tech compared to energy is at this point in time.
It’s unprecedented, and it’s getting harder to ignore the signals that a reversal may already be underway.
At the peak of Dot Com in Mar’00, tech was outperforming energy by 100%. By yr end, energy was outperforming tech by 100% (so a 200% swing in under a yr).
When things unwind this time, it could be just as violent, if not more..
1- Let’s start by dispelling common misperceptions. Many people don’t understand MMT yet think they do.
It’s helpful to distinguish two aspects of MMT. The 1st is mainly descriptive; a plain description of how our current fiat monetary system works in reality.
2- Many people, including many classical and Austrian economists, do not appreciate this (largely correct) part of MMT.
Time for a thread about US NatGas and why it will surprise to the upside...
There’s an exceptional opportunity setting up in the energy space, in particular for US NatGas and related equities.
I’ll explain the setup in this thread and also reveal my top pick. 🤠
1- I’ve been meaning to write this thread for awhile now, but the recent M&A action in the energy space has brought this opportunity to the forefront.
Let’s start simply by charting Henry Hub continuous NatGas prices over the last 20 years:
2- It’s at a generational low.
NatGas hit an ATH of almost $16 in Dec of 2005.
Since then, it’s been a brutal grind to much lower prices, owed to the all-too-easy access to financing as well as the hypergrowth in US shale and associated gas.
Why We’re on the Precipice of Another Bitcoin Mania...
A thread.
Note: it has nothing to do with Bitcoin replacing fiat money anytime soon.
1- We can quibble all day about whether BTC is “the future of money”.
Briefly, I think not, since I fundamentally believe that any money must have “non-monetary use value” in the free market before it becomes money. (Yes, this would disqualify govt-issued paper money too.)
2- But I digress, as debating Bitcoin’s status as “money” is not the aim of this thread.
Rather, the aim here is to persuade you that *institutional buying* of Bitcoin will likely propel the third big Mania at some time in the not-so-distant future.
2- Inflation persists throughout history for a number reasons. One important reason is that the structure of democracy is conducive to it, esp. as people figure out they can ‘vote themselves money’ and the inflation tax becomes a transfer mechanism for public demands.
3- Inflation is also the political path of least resistance, especially when governments around the world are saddled with gargantuan deficits and even larger debt-piles.
Think about it. Much easier to conjure endless trillions from thin air than to default on social security...