basehitz

Nibbling on Natural Gas, Concerned about Atlas Pipeline Partners

Sub $3 NG. Tough to lay off, but a lot of questions.

UNG is at 14% premium to NAV. So far, new units recently allowed by SEC have not been issued. Then there’s the potential CTFC new position limits. And finally, UNG managers are hedging potential new regulations by selling futures and buying swaps, which carries it’s own risk.

NG defies many attempts to call a bottom and continues to drift lower.

On storage capacity, I built an offline application to try to project future storage. Weekly updates from EIA are fed in, and the 3-week avg injection projected forward. It currently predicts peak storage of 3.789 Bcf as determined by EIA will be reached Oct 23rd.

Weather.com doesn’t show any Atlantic storms currently. But it will get wild if one threatens the gulf.

The contango remains ridiculous at 16% as of Friday. The roll period was complete Aug 18th, so I would have thought it would back off. Instead it ballooned from 12% the prior Friday.

If the market corrects, typically energy moves with it.

That’s a lot of moving parts.

Last week I flipped GAZ a couple trades to avoid some of the above. Then they decided to stop issuing new shares also and their premium to NAV expanded to 7%. Also too high.