Spin Master

Wow. What happened overnight for such a change in the odds? Great to see if this holds!

@oldschoolenrg Don’t see the fundamental need right now to drop the front down to $2.50-ish. Doesn’t mean the market won’t try it, as it occasionally likes to get offsides, creating opportunity.

#natgas #naturalgas Good Morning, Schizo NG is struggling to decide whether it correlates to global energy or not. I find it extremely difficult to judge and with the volatility in oil, I am struggling to stay focused on it. Bottom line, to me ... Its all overvalued and at this point, even Q1 27 prices have gone too high for me and I think that they are set up to drop as well as Jan toward 5.50 shows me more risk to the downside than the upside while the front end is probably overvalued by 50c. All of that being said, being short the cheapest Hydrocarbon on the face of the earth is not without extreme risk as diesel balances look extremely tight with refiners cutting runs so "other fuels" remain an issue. Another issue to being short is that there is no hedge ... vol on call option is too expensive and if you buy call spreads, a parabolic move higher will make it hard to monetize call spreads. There is also the sticky issue of H/J staying backward in the cash and balmo and J/k still in backwardation which is positive optic and also the chances of LNG maintenance being cancelled to capitalize on $20+ LNG. The only month or period that looks expensive and worth trying to short is probably Jan27, which is the equivalent of stepping in front of a bus with the hopes that is about to run out of gas. Crude Comment below Good Morning, Prices are mixed with the correlation of WTI versus everything still quite weak at WTI prices are down marginally why Brent is up $1, Dubai is up $4 and Murban is exploding and up $20 for May and trading in the low 140s for May futures. The Dubai window actually fell marginally jnto the high 150s. Diesel remains very strong with the front HO spread up 300pts though the next few are lower and Gasoil sprrads are lower but cracks are stronger. Brent spreads are stronger while WTI spreads are mixed to weaker on April expiry. WTI/Brent is getting hit again despite assurances that there will be no export bans though MEH remains elevated with May +3.00 and DFLs are up 50c to 6.60. Overall, its MESS out here on correlation which only makes markets less liquid as traders stop trading relative value. As for NEWS, I didnt see a lot other than Chinese state refinery runs dropping signifcantly (chart below) and a report from Vortexa showing large drops of floating storage, which should be no surpise. Additionally, Axios reported that the US is considering taking Kharg Island to control Iran exports and help secure the strait, but I dont see how taking an island far away from the strait would accomplish this. Maybe Trump wants to build a sister hotel for Gaza and call it Trump Kharg Island resort and Casino? Meanwhile the IEA has found a magic bullett for demand and told people to work from home. Since my commute is about 20 feet, I have have already done that. Probably the more interesting event today will be the SPR award and how the market react as I am told that there was a lot of hedging done this week (selling spreads) to accomodate this. I will be curious on how it trades after as there is no guarantee that if you hedged, you actually get an oil. I am also waiting for more details on the effort of allies to protect the Strait of Hormuz because as of now, very little is getting through. My thoughts are still bullish Diesel and bullish prices in general. Every day we lose 10 mbd+ of stocks and I would assume every day, loading docks are looking more and more empty which means they cut runs and products get even stronger. The issues of futures with emphasis on WTI is positioning. I would argue that most people with any clue realize that Oil in the front end of the market is terrible short and have covered while many are long it and waiting for prices to rise. The larger issue for the longs is that the short is physical and not futures which makes both spreads and flat price vulnerable to price shocks. That be said, to me ... terminal value is higher until we kill demand or fix the issue with the Strait. On US balances, even with 5mbd of exports, I have seen argument that the US will not draw crude stocks heavily. Whether or not this is true just keeps me in the Diesel longs and will just stay away from long WTI spreads for now.

@tylermacro10 @DiveBomb321 And if we get big heat in the right areas (hello, Texas?), there's room for this to be interesting, also.

@Holy_Helicity @DiveBomb321 Just wait till you see gas burn this summer with low wind and no hydro…

Well, #natgas is more interesting now, at least in terms of the winter contracts.

@nghack33 Hard to rely on any shred of historical spread analysis in this new era of gas. Much wider spreads are the normal, for now.

@Holy_Helicity What about z/h or f/g even? Seem crazy rich for these underlying levels relative to 2022

V/F doing a thing, -$1.83 last trade. 👀 #natgas

@firstenercast Market more resilient? Or, opportunity? 🤔 Makes sense why HH is muted vs 2022 though.

2022 -- russian gas rerouted 2026 -- qatari gas shut-in 2026 is arguably worse, but price response more muted is the global gas market truly more resilient?

@kogasman @AlJazeera 🤦‍♂️

#natgas @AlJazeera US imports lng from Qatar?

@Oliver_Trpcic Sounds like it’s your first time. 🤷‍♂️

@Holy_Helicity no it's not? first time?

@tobyrice12345 @AgWxMan1 See @AgWxMan1’s comment above. Strong El Niño tilts the odds in the disastrously bearish direction.

@Holy_Helicity @AgWxMan1 Why?

Are these calming, soothing words for the energy markets? Anyway, it’s highly unlikely that Donald Trump has any clue what LNG even is.

@AgWxMan1 But yeah, Spring 2027 can see a massive beatdown.

@AgWxMan1 🤫

I step away a bit and this immediately happens. #natgas

And right back up, because... you guessed it. Oil is higher. #Natgas #WeAreAllOilTraders

@StevenMandrapa Definitely trying to pick my spots and not get sucked into over-trading these days. Mr. Market will always give a sufficient number of opportunities if you’re patient.

#Natgas heading down as oil also moves down. J26 now at $2.94. We've shown the ability to tighten under $3, though the chart (to my amateur-ish chart eyes) says momentum could take us to $2.80 or so.

@StevenMandrapa The Iran thing gave the front of the natty curve a ridiculous move higher, though it's always hard to stand in and fade events like that. I have some interest in this summer, but eyes much more on Spring 2027 here.

@StevenMandrapa I've been having a difficult time arguing for much higher or lower as we move through shoulder here. $2.75-$2.80 would be about as low as I think we *should* go, which isn't far away, but market often overshoots what you think.

@ctrlopenbracket A-ha, yes!