Stewy, pls can you give your opinion on natural gas?

[sell2rent]

There is a glut of it and it is unbelievably cheap to buy in ETC NGAS. IIRC, this is one of your areas of expertise. If so, I would appreciate your thoughts as a long term buy and hold. Thanks.

[Sackboii]

Have you considered Orange Juice or Pork Bellies ? 😅

[MerchantNavy]

16 minutes ago, sell2rent said:

There is a glut of it and it is unbelievably cheap to buy in ETC NGAS. IIRC, this is one of your areas of expertise. If so, I would appreciate your thoughts as a long term buy and hold. Thanks.

Stewy: Price plateau before a sudden drop in Q3

[sell2rent]

3 minutes ago, Sackboii said:

Have you considered Orange Juice or Pork Bellies ? 😅

I love that film!

[Sackboii]

3 minutes ago, sell2rent said:

I love that film!

Me too! An all-time classic. Will watch it again now you've reminded me... 😄

[Stewy]

Cost of carry is high if you are referring to US Henry Hub.

It's also got vastly different markets around the world.. partially coupled by LNG and pipelines ..partially uncoupled through capacity constraints.

Be careful 😉 

[sell2rent]

11 minutes ago, Stewy said:

Cost of carry is high if you are referring to US Henry Hub.

It's also got vastly different markets around the world.. partially coupled by LNG and pipelines ..partially uncoupled through capacity constraints.

Be careful 😉 

Thanks!

[fellow]

6 hours ago, sell2rent said:

Thanks!

I think I've seen it all now when someone on here is actually asking Stewy for investment advice. And his completely generic and empty response helps you how?

Edited April 18 by fellow

[Blobsy]

There is lots of gas coming from Stewy.

I do think he is an antagonist bot set up by the owners of the site to drive engagement.

[DownwardSlopingPlateau]

7 hours ago, sell2rent said:

I would appreciate your thoughts as a long term buy and hold. Thanks.

Bank of England should have slashed its price months ago. Now they will have to slash more and it will collapse. Then we can Live like Kings:

 

[Wampus Cat]

[sell2rent]

38 minutes ago, fellow said:

I think I've seen it all now when someone on here is actually asking Stewy for investment advice. And his completely generic and empty response helps you how?

His reply was concise and useful and got straight to the point. I have traded CFDs previously on gold and silver and even had the counterparty risk come home to roost on a silver ETC in the GFC. I rarely held CFDs overnight and when I did I understood the interest rate and fees. I have held ETCs for precious metals before, but it was very useful to understand that the cost of carry on natural gas is about half of the present value, which significantly erodes the value of the ETC even if the underlying commodity holds its value. This means that I'd need to trade it short term and it isn't what I'm looking for. If you have any constructive input, please advise. Thanks.

 

I might disagree with his outlook on some matters, but it is wise to take advice from all sides and come to your own conclusion. I'm not afraid to ask ChatGPT things either knowing it hallucinates, but often it gives you a terminology that provokes further investigation from referenced sources. A hallmark of maturity and flexibility in thinking is that you can change your mind, respond to new information and enjoy the input of a contrarian that takes the opposing view!

Edited April 18 by sell2rent

[fellow]

1 hour ago, sell2rent said:

His reply was concise and useful and got straight to the point. I have traded CFDs previously on gold, but rarely held them overnight and when I did I understood the interest rate and fees. I have held ETCs for precious metals before, but it was very useful to understand that the cost of carry on natural gas is about half of the present value, which significantly erodes the value of the ETC even if the underlying commodity holds its value. This means that I'd need to trade it short term and it isn't what I'm looking for. If you have any constructive input, please advise. Thanks.

We have an energy trading team at work. From what I have gathered, the price is generally lower in Summer, higher and more volatile in Winter, generally goes up when it's cold & calm and goes down when it's warm & windy. Buy the dips and watch the weather ahead like a hawk.

Also keep your eye on stock levels across Europe as this will help indicate the general direction of travel. Stock levels running low and a cold snap is approaching - buy buy buy.

I think there are minimum blocks of mWh's / therms to make a purchase and a maximum time you can hold before you have to take or sell but I'm not sure what these are. I also believe Summer and Winter are separate markets so you can't do the obvious of buying in the Summer and selling in the Winter.

I therefore wouldn't recommend trading it unless you have a large business which actually uses gWh's of gas and you can take advantage of the price fluctuations as you use it or sell back. I might be mistaken but I don't think this is something you can really speculate in and hold onto like gold.

Edited April 18 by fellow

[Pebbles]

2 hours ago, fellow said:

I think I've seen it all now when someone on here is actually asking Stewy for investment advice. And his completely generic and empty response helps you how?

Lol that's like saying you shouldn't seek advice from people on here about house prices a site that has got it so wrong for so long!

[sell2rent]

1 hour ago, fellow said:

We have an energy trading team at work. From what I have gathered, the price is generally lower in Summer, higher and more volatile in Winter, generally goes up when it's cold & calm and goes down when it's warm & windy. Buy the dips and watch the weather ahead like a hawk.

Also keep your eye on stock levels across Europe as this will help indicate the general direction of travel. Stock levels running low and a cold snap is approaching - buy buy buy.

I think there are minimum blocks of mWh's / therms to make a purchase and a maximum time you can hold before you have to take or sell but I'm not sure what these are. I also believe Summer and Winter are separate markets so you can't do the obvious of buying in the Summer and selling in the Winter.

I therefore wouldn't recommend trading it unless you have a large business which actually uses gWh's of gas and you can take advantage of the price fluctuations as you use it or sell back. I might be mistaken but I don't think this is something you can really speculate in and hold onto like gold.

Thanks. The ETC is NGAS. The futures contracts are continually rolled over. The nominal natural gas price is near 30 year lows and much lower inflation adjusted, but the nature of the costs of the instrument make it difficult to profit from or it wouldn't be so cheap I presume.

I did make a little bit simply by holding it for a few days but decided to sell it and take profits as I realised the long term issues.

[fellow]

3 minutes ago, Pebbles said:

Lol that's like saying you shouldn't seek advice from people on here about house prices a site that has got it so wrong for so long!

"The site" hasn't got anything right or wrong. Yes, most of us have a VI in falling prices but the forum is a collection of individuals with differing views, not one mono opinion i.e. it's a place to debate economic affairs as they unfold.

It's entirely up to you whether you choose to believe the uber bears or the uber bulls or take points from both sides of the debate. You can mock the site all you want but there must be a reason you keep coming back here.

[The Angry Capitalist]

3 hours ago, fellow said:

We have an energy trading team at work. From what I have gathered, the price is generally lower in Summer, higher and more volatile in Winter, generally goes up when it's cold & calm and goes down when it's warm & windy. Buy the dips and watch the weather ahead like a hawk.

Also keep your eye on stock levels across Europe as this will help indicate the general direction of travel. Stock levels running low and a cold snap is approaching - buy buy buy.

I think there are minimum blocks of mWh's / therms to make a purchase and a maximum time you can hold before you have to take or sell but I'm not sure what these are. I also believe Summer and Winter are separate markets so you can't do the obvious of buying in the Summer and selling in the Winter.

I therefore wouldn't recommend trading it unless you have a large business which actually uses gWh's of gas and you can take advantage of the price fluctuations as you use it or sell back. I might be mistaken but I don't think this is something you can really speculate in and hold onto like gold.

Yes.

It's way too volatile.

The fracking industry is very complex too as many were formed from free money and you need to drill like crazy to generate that cash flow.

You can't just stop drilling when the price goes down etc.

There is a glut at the moment but that can change quickly.

Many gas companies have huge amounts of debt.

Servicing that with higher rates now is going to be interesting with prices very low.

[The Angry Capitalist]

11 hours ago, Sackboii said:

Me too! An all-time classic. Will watch it again now you've reminded me... 😄

Yes.

Fun movie.

Can't beat an 80s Eddie Murphy comedy.

More of a 48 hrs guy but Trading Places a close second.

[Stewy]

7 hours ago, sell2rent said:

Thanks. The ETC is NGAS. The futures contracts are continually rolled over. The nominal natural gas price is near 30 year lows and much lower inflation adjusted, but the nature of the costs of the instrument make it difficult to profit from or it wouldn't be so cheap I presume.

This is definitely Henry Hub 😇

It's a much tougher fuel to model than oil. Local, regional and global factors all matter...one may dominate and the next day a different one may do, based on break-points in capacity constraints. 

@fellow mentioned heating demand... cooling demand is also relevant where a hot country has lots of gas-fired power stations. What if Germany has a heatwave and coal barges can't get down the dried-up Rhine to their power stations...maybe our gas-fired units will turn on and export power...

Avoiding is the right decision ✓