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R.J. Chopin
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RJ Chopin is an equities strategist with over 16 years of trading and investing experience. He developed “Advanced Trading Concepts” a propriety step-by-step trading system for private traders and investors. A relentless advocate for investor responsibility, RJ advocates researching a company’s... More
  • Natural Gas By The Numbers 1 comment
    Mar 22, 2012 3:43 PM | about stocks: BOIL
    Natural Gas Synopsis

    After 17 weeks of storage decline, today's NGSR reflected a slight increase of 0.46% (+11 bcf). Contrasted against the 17 week decline in natural gas storage, the up-tick is nominal.

    1. 17 consecutive weeks of storage decline.
    2. Producers unite to drive up prices by slashing production.
    3. Don't under estimate producer's resolve.

    DESCRIPTIONTOTALS
    Storage 11/18/113,852 bcf
    Storage 03/09/122,369 bcf
    Storage Decline 38%-1,483 bcf
    Average Weekly Decline-87 bcf
    Storage Increase 03/16/12 up+11 bcf
    Current Storage2,380 bcf
    Storage Percentage Change+0.46%

    The price of natural gas futures contracts sold off this morning before the report was made public, no doubt leaked to special interest. But going forward the sell-off just might provide the price point for longs to enter and shorts to cover. The market always over reacts.

    Disclosure: I am long BOIL.

    Themes: BHI, BOIL, CHK, COP, FCG, GAZ, LNG, STTYF.PK, UNG Stocks: BOIL
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    Dear RJ,

    Your alarming statement regarding storage levels is very misleading:
    "After 17 weeks of storage decline, today's NGSR reflected a slight increase of 0.46% (+11 bcf). Contrasted against the 17 week decline in natural gas storage, the up-tick is nominal."

    Based on your statement an unknowing reader/potential investor may think that we are "running out of gas" since we have had 17 consecutive weeks of withdrawals. But the truth is that here in North America between December and March we have a season called winter. The natural gas pipeline and storage infrastructure is designed to inject gas into storage in the summer and withdraw it for use when demand is higher (home heating) in the winter.
    The fact is that we have never exited the winter with more gas in storage, current US levels are 47% higher than last year.
    23 Mar 2012, 11:16 AM Reply Like
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