Philip Davis

Options Trader: Tuesday Outlook

Oh sorry Mmarrkk, as to storage, I mean for this time of year (see chart) not compared to the 3Tn+ level we usually get to by the year's end. What I said was right next to the picture I was talking about, the green dot of 2008 storage is above the midpoint of the 5-year average. 350 out of 2,903 lower than last year's extremely high August storage level.

Options Trader: Tuesday Outlook

Mmarrkk, you are right, I linked to him through the wonder of GOOG and he had links to lots of crap about LNG that I gave a quick look at so I should have vetted his arguements more thoroughly. I will note to SA if they can remove link.

That doesn't change the fact that I think LNG is a scam. If as you say, there is no point shipping gas here when we pay less, then why build the terminals? I really believe that the whole thing is to find a way to shove nat gas into the ground, kind of like the SPR. Let's say we build terminals that can hold 10% of the nations' annual demand. Filling it would cause other inventories to dip and prices to go up. Once they are filled, then our best case scenario is the same case we have now - gas is sent to market as it's produced.

Of course, having LNG terminals does allow our Nat gas producers to SEND gas to other countries,taking it out of the American market and driving up the prices at home. If I were to tell you I was making a warehouse and intended to fill it with 10% of the world's annual gold production - in what scenario do you think that would cause prices to come down?


Al - as you asked, the XLF longs dropped back to $4.85 so we're up just 2.7% now, not including the callers we took out for huge profits of course. FRE was well covered and we took out the callers and actually added down at $4 so we'll see how that goes.

Nat gas did have a good day, making back 3.5% of the 25% drop. I was pleased that it didn't break back over last week's high yet and oil had trouble at $115 so inventories will be critical tomorrow.