Demand for U.S. natural gas going UP

[dan_s]

Demand for U.S. natural gas and the price is going WAY UP. The cold start to the winter is just the most recent spike in demand.

On November 15th Cheniere Energy, Inc. (LNG), in partnership with privately-held Bechtel, produced the first LNG from the Corpus Christi Liquefaction project (CCL Project) in Texas.

According to a 3Q 2018 presentation by Cheniere, the CCL Project is the first greenfield LNG export facility in the U.S. Lower-48. There are three trains, with 13.5 mtpa total capacity. < One metric ton per year (mtpa) equals ~50 Bcf, so when all three trains of the CCL Project are on-line they will increase demand for U.S. natural gas by approximately 1.8 Bcfpd.

Train 1 has finished construction, and has been undergoing commissioning, with completion expected Q1 2019. Feed gas was introduced in August 2018.
Train 2 is under construction with completion expected 2H 2019.
Train 3’s FID was in May 2018, with substantial completion expected 2H 2021.

[dave_n]

Dan,

I looked on forward strip for natural gas and Jan 2020 is trading at $3.02. Do you know of a way to buy the forward strip through an index? I certainly have exposure through GPOR but most of the gassers seem hedged. I would like to have direct exposure to the commodity somehow. Historically I've used UNG, but that's only front month.

Maybe I need to get an account on ICE>

Thx


Dave

[dan_s]

Dave;

Take a look at United States Natural Gas (UNG)

UNG seeks to reflect the daily changes in percentage terms of the price of natural gas delivered at the Henry Hub, Louisiana, as measured by the daily changes in the price of a specified short-term futures contract. The fund invests primarily in futures contracts for natural gas that are traded on the NYMEX, ICE Futures Europe and ICE Futures U.S. (together, “ICE Futures”) or other U.S. and foreign exchanges. The Benchmark Futures Contract is the futures contract on natural gas as traded on the New York Mercantile Exchange that is the near month contract to expire, except when the near month contract is within two weeks of expiration.

For more leverage to the price of natural gas, Calls and Puts options are also actively traded on UNG.

The weather forecast for the New England has turned extremely bullish for space heating fuels; natural gas, heating oil and propane. High temps in the teens and single digit lows.
Watch the daily update at https://www.weatherbell.com/premium/

It is my opinion that our National Weather Service is so invested in Global Warming that their models are extremely biased to warmer than normal forecasts. In mid-October their forecast for November was almost opposite of what has happened. This is going to end up being one of the coldest Novembers on record for the eastern 2/3rds of the U.S. The next two natural gas storage reports may push storage 700 Bcf below the 5-year average heading into December.

[dave_n]

Thank you Dan.

I did some research on UNG. It's offered by USCF Investments. They also have a product that is linked to 12 month strip. See link below for holdings (2019 monthly strip). It appears as though they swap front-month for back-month of strip monthly.

http://www.uscfinvestments.com/holdings/unl

[dan_s]

Check out UGAZ. It is "High Risk / High Reward". 52-week range is $49.72 to $260.23. Check out the YTD chart.