RE: Obly a 0.76% declared Short position21 Feb 2023 10:44
SP is inextricably linked to demand. So the two drivers are US macro and the weather! A hawkish Fed is back on the agenda following positive Non Farm jobs report and stubborn inflation. That means rate rises again = not got for growth and stockpiles of gas!
“ US natural gas futures extended losses to below $2.3/MMBtu, the lowest since September 2020 as forecasts pointed to near-normal temperatures through March 3, except for some cold days. Natural gas prices declined almost 10% last week, and are down more than 45% since the beginning of the year, as mild weather kept heating demand weak and stockpiles above usual levels. The latest EIA data showed US stockpiles were at 2.266 bcf as of February 10, 328 bcf higher than last year and 183 bcf above the five-year average. Meanwhile, the amount of gas flowing to US LNG export plants rose to a 10-month high due to a rapid increase in flows to Freeport LNG's export plant as the facility prepared to exit an 8-month outage caused by a fire in June 2022.”
Fortunately we now have Freeport opening up which will give a double shuffle of gas to Europe. That could be a saving grace as Freeport is potentially a massive outlet following Russia and improved EU LNG capacity. It’s unlikely following sanctions that Russian can supply all Chinas needs so another gas shuffle. So the outlook is improving. It’s why I and others have gone on about Freeport.
“ Natural gas is expected to trade at 2.42 USD/MMBtu by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 2.95 in 12 months time”
Re the placing it is accretive and the hedging is better but for sure the market has punished the dilution even though it’s a bigger pie!.
I have sold and bought back numerous times. Each time expecting it to bounce and it hasn’t. Now concerned if I sell again we could see a rebound of several pence. Also no idea how the SP will react to the xd. Could be folk have sold already or could be more selling after.
It really doesn’t matter how much you research the SP here as with many other companies atm it seems to be disconnected from data, driven more by sentiment than facts!
It needs a reason to bounce and then I think there will be a bit of a relief rally as historically the company has proven it can throw off 54% cash with a lower gas price than now.
The divi looks as solid as can be but it just got cheaper than 105 following 163m backed DD!
Usual caveats
Trek
The out
Sign In
Follow the stocks
