Quote from PAPA ROACH:
I put that spread on at .635, at .66 I have a .025 profit, at .60 i am at a .035 loss.
I am targeting .735 for now, a dime target.
Quote from texrex2002:
Looks like you're 3 pennies in the black this morning...
What made you think spreads would widen? mild October? Harsh November? Just shitty prices in general as injection season ends and everyone's already loaded up on cheap gas? Just trying to learn...
Quote from PAPA ROACH:
Oct/Nov crosses seasons, (injection in Oct/withdrawal in Nov), and is more volatile than a intra-seasonal spread. The seasons are Injection wich is April through Oct, and withdrawal which is Nov through March. You will notice that one of the most historically volatile spreads is the March/April. If there is any chance of supplies running too low by winters end, you could see a massive price response in March as it would be the month that storage could run out.
With our over-supply, we may run out of actual storgae space before we get into withdrawal season, which would crater prices. I actually think this is a very real scenario and therefore Oct could fall ubruptly relative to Nov as excess cash has nowhere to go.
The only way of possibly avoiding this scenario is to take prices down alot, and do it now, so we price enough production off and attract enough coal to gas switching to avoid this.
Quote from PAPA ROACH:
Oct/Nov crosses seasons, (injection in Oct/withdrawal in Nov), and is more volatile than a intra-seasonal spread. The seasons are Injection wich is April through Oct, and withdrawal which is Nov through March. You will notice that one of the most historically volatile spreads is the March/April. If there is any chance of supplies running too low by winters end, you could see a massive price response in March as it would be the month that storage could run out.
With our over-supply, we may run out of actual storgae space before we get into withdrawal season, which would crater prices. I actually think this is a very real scenario and therefore Oct could fall ubruptly relative to Nov as excess cash has nowhere to go.
The only way of possibly avoiding this scenario is to take prices down alot, and do it now, so we price enough production off and attract enough coal to gas switching to avoid this.
Quote from CET:
Papa,
What is believed to be the storage capacity in the U.S.? It seems I have heard about 3.4 TCF. I know this changes because new storage capacity is added each year, and it can also increase if they increase storage pressure. TIA.
Quote from PAPA ROACH:
The only way of possibly avoiding this scenario is to take prices down alot, and do it now, so we price enough production off and attract enough coal to gas switching to avoid this.