Energy Prospectus

Aug Ng expires this week. The one day closing price is used for settlements on hedges.
It always seems to climb into the close then fall sharply the week after the close

Firms that have to settle their crap hedges at 9 has to earn 9 the following month on daily spot sales to break even on the settlement price. Obviously some of these dopes hedged at 2.50. They get 2.50 the counter party gets 6.50!!

These Ep companies need to hire a full time professional to fine tune these adjustments

I try to avoid the heavy hedgers. Oxy is completely unhedged for crude and ng and will have stunning results

Short squeeze underway

Aug ng up 10 per cent. 9.61!!!!

Yes you read that right

Heavy hedgers are getting a margin call!!!

One other consideration to keep in mind is the cash gap. Hedgers have to pay today for the settlement of August hedges. They dont get paid until Sept at best for their August sales. Therefore, there is a minimum 45 cash gap. You see that in working capital balances, AR balances climb.

Any tiny heavy hedger better have a good line of credit or they risk a margin call. That happened with nickel producers earlier in the year