So this ung/goldman roll should begin Wednesday, according to a few of the posts in this thread. What do y'all expect to happen, are we gonna see Q/U go out to -.20? Do they always roll right into the next month? Does anyone have an update on the V/X? I saw people selling that around -.62. It's widened a bit, but what is the objective level on this trade? As ET goes, this is a great thread. Thanks board...
Bumping this great thread. I did enter the Q/U spread last monday at -0,122 Im hoping to see this at -0,170 before this friday, the low today was -0,153. btw, the Q/X spread has been moving wild the last 2 days.
The surplus is still slowly getting reduced. It will be interesting to see if the trend continues with cooler weather coming to most of the country this weekend, although the west coast will be above normal.
This is the fourth week in a row that the storage # was at the lower end of expectations, which to me signifies that production decline is slowly starting to come into the market. It is not a one or two week anomaly, but now a four week trend. While on the surface this might be construed as bullish, I would still focus all my attention on the producing region storage levels as that will be the key as to what NYMEX futures do. Producing region had a +19 this week and is now sitting at 1,032, which is quite scary for this time of year. So in my opinion, we are still very likely to have a price crash with the October futures contract. This is one of my main drivers for being -V/+X, that spread can and has blown out as wide as $-2.25 (in 2006). I am not putting my targets there, but once we fill prod region, that spread can collapse at break-neck speed.
Also to note about new trends, we are finally seeing UK gas trading at a discount to US gas as UK storage fills. This will start pointing more LNG overe here, right on cue to make up for the slack in production declines. However I try to find a bullish fundamental, I keep turning up offsetting bearish data as well. Hello October sub $2 (my crazy prediction)
I agree $2/mmbtu is coming. Canaport (LNG) is now pushing gas south into the TGP system. TGP has issued OFO warning about excess storage and will start cutting non-firm customers from injection soon. We have a major gas glut and to top it off little electric power demand in the Northeast due to the absence of summer. Load is running at 2/3rds of normal for this time of year! All oil and many gas units and now coal units sit idle.
PAPA ROACH: Thanks for your insights on Nat Spreads. I'm trying to understand what happened in 2006 when spreads blew out so much. In one of your posts you mentioned to keep an eye on "producing region" numbers yet those numbers were somewhat flat during the August 06 -V/+X blowout. Also what caused the subsequent crash in the spreads? Could you perhaps shed some light on this for me, a newbie to NG spreads? Thanks in advance.