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Cattle on Feed Report last Friday was bearish, and I expect LC prices open lower.
Still I expect LC to move higher in the long run. LCV should expire at a price significantly above $100, my current expectation is in the area of $110.
I intend to sell the LCV P90-P80 some time next week.
Currently you get approx. $200 for the NGU C2.5 . I would sleep better selling the C2.7 or C2.8 - in case it will be hot in summer, air conditions will run again. And, as you know, weather in the long run is not predictalbe in the long run.
My thought is more along the lines of getting $2700 for ATM straddle in Aug but of course BEs are tighter and might need to adjust if sudden moves happen
I revised my plans and entered the short NGU P1.5 / C2.5.
Current weather forecasts do not see severe heat for the next couple of weeks, and I doubt that China will buy a lot of NG in the near future. Thus, a strangle seems to be better suited.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
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Massive storage injection announced today for last week. Believe the 120 BCF was not only a record for this week but also the largest in any week June thru October in the last 10 years. Storage at 3,012 bcf is already 711 bcf above last year and 430 bcf above the 5-year average.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
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Thanks Given: 4,410
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re: Natgas. Somebody forwarded this to me I believe it's the most recent Goldman Sachs research outlook but can not be sure of its accuracy.
GS on GAS "last shoe to drop"By the end of this summer we believe US LNG export cancellations will have added more than 760 Bcf to US gas storage, which is 50% larger than what we would expect a 1-standard-deviation colder-than-average winter to remove from storage. Specifically, the low and sustained levels of feedgas this month lead us to lower our Bal-summer feedgas expectations by another 1.7 Bcf/d to 4.2 Bcf/d, helping take our expected end-Oct20 storage levels under current forward prices to 4330 Bcf, above its 4261 Bcf capacity. Incremental C2G substitution from current levels is likely limited by an already wide gas price discount to coal and by reduced spare capacity at gas-fired plants during peak summer. As a result, we see US gas production shut-ins, which we had been discussing as a risk, as now part of our base case for this summer. Accordingly, we lower our Oct20 NYMEX gas forecast to $1.40/mmBtu from $1.75 previously, implying Dom South at $0.90/mmBtu, below its estimated $1.10/mmBtu cash costs, to incentivize Appalachia production shut-ins. This is effectively the last shoe to drop in a global gas rebalancing process that started with Asia pricing its LNG lower to push excess cargoes towards Europe, followed by Europe sorting its resulting gas market overhang out by pricing high-cost gas supply - US LNG - out of the market n Admittedly, this transition from full storage into a tight forward balance will likely weigh on the November 2020 contract and keep it below our $3.50/mmBtu 2020/21 winter NYMEX gas price forecast, and we lower our Nov20 forecast to $2.75/mmBtu from $3.50 to reflect that transition. Nevertheless, we maintain our view that as we move into withdrawal season and associated gas production declines become increasingly more visible, gas prices will have to move higher to start incentivizing higher supply and lower demand to manage 2021 storage. Accordingly, we maintain our Dec20-Mar21 and Apr-Oct 2021 NYMEX gas price forecasts at $3.50/mmBtu and $3.25/mmBtu, respectively.