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Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,386
Thanks Received: 10,207
@Trailer Guy to me the big risk is that somehow the Europeans go back to buying as much Russian gas as they were before the war started and US gas prices drop back to the $3-$4 range. Right now I don't see how that happens but if Germany starts experiencing shortages and/or including power rationing things could change quickly. I would think the potential damage to the European economies/industry (and Germany specifically) could be catastrophic.
The bullish scenario is a) Europe never goes back to being dependent upon Russian energy which combined with b) the number of import terminals being built all over the world (especially China) means that demand for US exports remains high.
With regards to SJT, one concern might be that if additional supply does come online in West Texas, if that supply is pipeline constrained prices could be effected. It's not that long ago that Waha prices were actually negative. (ie you could end up in a situation that US gas prices in most locations, and specifically the gulf coast, do rally but that in capacity constrained supply areas that they do not).
I will stay friendly with my post about what you have written and I could do much else about your comment.
What kind of completely insane view is this? What is wrong if we Europeans buy cheap gas from Russia and not the overpriced fraking gas from the USA?
Have you any idea how we build up our success and richness here in Europe over time in the last decades?
And now a guy like you comes and want to tell how bad it is to import Russian Gas to further use to grow our economies?
Just think about the additional transport costs if we here in Europe have to import this, absolutely not environmentally friendly fraking gas from overseas permanently, to bee then depend on the Americans again in another way.
This is from the financial point of view absolute madness and has nothing more to do with real economic policy which the small and medium-sized enterprises here in Europe urgently need again.
I and many of my friends do not in the slightest way agree with any point of view in your posting.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,386
Thanks Received: 10,207
@Symple. You need to reread my post. I never said any of things you are saying so I have no idea what you are talking about. I never expressed any opinion at all about whether buying Russian gas was right or wrong. Only opinion I expressed was what could happen if it continues. Oh and for what its worth, I was born in England and still have a British Passport!
Sorry, sarcasm does not go well in print. I think the Greens were stupid to start a war with the major supplier of low cost gas. That is stupid. USA era of Fracking is over. Those wells have a very short life and the last two major fields in the US are beyond the half way point.
What did they think that Putin is an idiot. Now they are stuck. Also Greens have been pushing hard to shut down all nuclear reactors look at the mess Japan is in. Problem is they have no magic hydrogen/solar/wind thing that works when needed.
So as a trader I see nothing but high prices for nat gas until Putin gets what he wants, then a drop, then back up as asian demand accelerates.
Also may I politely suggest you look at the energy content charts floating around. European prices have been higher that US for years. The second that Gulf Coast train went down stopping 17% of US exports Nat Gas dropped from around $9.50 to 7.50 while European prices went up an equivalent amount. Pretty sure Asian region consumers are also sharing the higher prices with US and Europe, because that is where the US cargos were mostly going before Putin cut off the gas.
1. The frackers are being held on a short leash by the money handlers. You saw the print of the New Years speech Druckenmiller made a couple of years ago in Miami, with the really great comment "I've never met a Texan who wouldn't drill a hole with someone else's money". For now those days are gone. It is more than the money guys holding them back. They have drilled all the A locations and nothing but limited less good places left. They got 90% of the gas out of the ground when prices were on the floor, now that prices are up it is the traditional long life assets that are paying. Go look at production numbers for a maturing field like the Backen (sp.).
So my point is there doesn't seem to be any known source of massive flows in Texas yet to be tapped. Of course I could easily be very wrong.
For those who are not familar with royalty trusts there are tax issues you must be comfortable with.
A. you would need to file a New Mexico non-resident tax return.
B. Royalties are ordinary income. They go on the same part of the 1040 as rent. You do get to deduct taxes paid (well head tax) administrative and depletion. But depletion is like depreciation, so when you sell it enters into the gain or loss calculation.
San Juan Trust is the only major 99% gas trust that I am aware of. There are others that have a mix of gas and crude. You must read the fine print on the monthly dividend announcement to know when the stuff was sold, there is a delay, so the dividend doesn't match current oil and gas prices.
2. FLNG is a Norwegian tanker firm following John Fredrickson's model that has made Frontline such a legend. That is the owners get paid by dividends. FLNG has about 16 modern Natural gas tankers in it's fleet. A good chunk are on long term charters. It is not (like all Tanker stocks) a desk drawer investment for widows and orphans. Because any time there is good money in shipping (just like Texans drilling wells) they order too many new builds. The Korean and Chinese yards build these for, I think, about $200 million each, but with steel and interest as high as they are and covid continuing to shut down China, I think it may be slow to overbuild. The shipping news services regularly report the size of the order book. Also, you can find photos of the ships and put them on your office wall to make you feel like a Greek Tycoon!
This is regular dividend income so longer term tax advantaged. Pays a couple of times a year. Reduces source and user location risk on world wide nat gas because they will adjust as the trade routes change. Current payout is in the same range as royalty trusts, around 12%. Short term risks is the market confuses tankers with the product they carry so prices can be irrational at times.
It is not fine to use language like "What kind of completely insane view is this?" and "now a guy like you comes and want to tell...."
I understand that you feel that @SMCJB was wrong and that you thought he had made suggestions that were disrespectful of European energy decisions, or disrespectful of Europeans compared to Americans, or that he thought that Europeans should buy their energy from the US. I read both your post and his, carefully, several times, and I did not see that he made any criticism of European energy policy, nor that he suggested the things you objected to.
But even if he had, it is not acceptable to speak this way to another member. I understand there may be a language issue, and I also understand that you feel strongly about your point of view, and that it is important to you. But you cannot let yourself get carried away by the anger of the moment.
Please remember the forum standards for civil and respectful discussion between members, and do not make a disagreement personal, nor use personal, disrespectful or rude language.
If you disagree with someone and want to say so, that is fine. But in the future, please speak with professional courtesy, even if you think the other person is completely wrong, or do not post at all.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
I just wanted to say I actually didn't take much offense to what @Symple said. I've been called a lot worse than 'insane'! They clearly misunderstood what I said.
Back on subject, NG margins going up again (2nd time in 5 days)! I think this is the highest they have been in recent history, even though prices are still $2 below recent highs.
NG Margin changes effective COB July 19th , 2022
Maintenance margin's changing as follows (Note: Non-member initial margin rates will be 110% of these)
Tier 1 / Aug22 increasing from $9350 to $10300 +$950
Tier 2-7 / Sep22-Feb23 increasing from $9100 to $10,000 +$900
Tier 8 / Mar23 increasing from $7500 to $8000 +$500
Tier 9 / Apr23 unchanged at $4800
...
Tier 15 / Oct23 unchanged at $4000
...
Tier 18 / Jan24 unchanged at $3400
It was about the forum.