I wrote about the exceptional opportunity in US NatGas about a week ago, and things are moving quickly...
Let’s do an update and go through some exciting developments. In short, the picture for NatGas continues to improve from all angles.
A thread.
Let’s do an update and go through some exciting developments. In short, the picture for NatGas continues to improve from all angles.
A thread.
https://twitter.com/bvddycorleone/status/1319388061520809985
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).
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. 🤠
hellenicshippingnews.com/us-working-nat…
That means we’re kicking off withdrawal season two weeks early this year. 🤠
hellenicshippingnews.com/us-working-nat…
3- LNG feedgas demand has also rebounded very nicely since the CV19 slump, now comping positive YoY.
Take a look at these excellent charts from @CelsiusEnergyFM:
Take a look at these excellent charts from @CelsiusEnergyFM:
https://twitter.com/celsiusenergyfm/status/1322141589242814469
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.
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...
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.
Chart via @HFI_Research:
It’s unprecedented, and it’s getting harder to ignore the signals that a reversal may already be underway.
Chart via @HFI_Research:
https://twitter.com/hfi_research/status/1322248709799780352
9- Finally, as @contrarian8888 likes to remind us:
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..
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..
https://twitter.com/contrarian8888/status/1322878158773825538
10- Buckle up friends. All I can say is, this winter’s gonna be real fun...
HT @CelsiusEnergyFM @Grainjones @HFI_Research @contrarian8888 @hkuppy @pineconemacro @EthanHBellamy @WarrenPies @ericnuttall @trader_ferg @jam_croissant @coloradotravis.
Always appreciate thoughts/comments/criticisms.
Always appreciate thoughts/comments/criticisms.
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