Someone Just Got Amaranth'd

Tyler Durden's picture




 

Natural Gas futures prics are exploding higher... By now everyone is quite aware of the US climatic conditions so whatever squeeze just took place has nothing to do with fundamentals, and everything to do with someone being Amaranth'd. The only question is who, and who is their counterparty (especially if it is a public company).

March Futures

 

and Feb Futures

 

The last 3 days in NG is +9.6%, -6.5%, and today +10.4% - these are 5 sigma swings!!

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Wed, 01/29/2014 - 15:38 | 4381032 Caracalla
Caracalla's picture

Natural gas = Full Retard

Wed, 01/29/2014 - 15:44 | 4381065 pandabear01
pandabear01's picture

get ur head out of the sand.   NG will fill most all tanks sooner than later

 

Wed, 01/29/2014 - 15:47 | 4381090 Colonel Klink
Colonel Klink's picture

Which tanks are you referring to?

Wed, 01/29/2014 - 15:50 | 4381110 HobbyFarmer
HobbyFarmer's picture

our propane tank was filled up 2 weeks ago (we lock our price in for 12 months--> $1.52) and we were told by the co-op that the price was going for $5 a gallon now if people hadn't locked in.  The co-op has 1 lock in date per year.

When I picked up my cow feed last night (from the co-op) I was told prices were going for 5.50 a gallon, with 100 gallon limits.  Northern wisconsin is paying over 7 dollars a gallon.

I run my woodstove pretty much nonstop right now and my propane use is minimal....but man, do I feel for people who don't plan ahead!

Wed, 01/29/2014 - 15:57 | 4381157 Atlas_shrugging
Atlas_shrugging's picture

Corzine got another firm up and running that quickly?

Wed, 01/29/2014 - 16:08 | 4381219 Levadiakos
Levadiakos's picture

Corzine is the spitting image of Boss Tweed

http://tinyurl.com/lu8hm46

Wed, 01/29/2014 - 16:12 | 4381239 Ham-bone
Ham-bone's picture

this seems to be the first "leakage" the Fed has allowed since '11...all commodities have been entirely contained and all hot money has been contained in equity, RE, CRE, bonds...

This bodes very well for those holding real stuff...the dam has cracked and watch out now for the flood

Wed, 01/29/2014 - 16:13 | 4381246 Levadiakos
Levadiakos's picture

Yup, the weather has nothing to do with it.

Wed, 01/29/2014 - 16:37 | 4381405 Ham-bone
Ham-bone's picture

the Fed's tapering seems to mean the barn door of liquidity is unlocked...just may take a few pushes before swings open

Dollar weakening on the taper seems ominous

Wed, 01/29/2014 - 16:47 | 4381463 Bearwagon
Bearwagon's picture

No change without volatility, man.  ;-)

Wed, 01/29/2014 - 16:01 | 4381179 TeamDepends
TeamDepends's picture

You should look into the bovine methane capture systems over at cowfartronics.com.  It is the future of sustainable farming.

Wed, 01/29/2014 - 16:04 | 4381191 Sudden Debt
Sudden Debt's picture

it's just temporary...

they need the gas for the ballons for Obama's "he saved the world" parade and after that gas will go down.

ps: you might also want to go long rubber.... balloons and all...

The FED is handling the confetti so that's already covered...

Wed, 01/29/2014 - 16:14 | 4381259 Levadiakos
Levadiakos's picture

You attended his State of the Coup after-party at Club Probe?

Wed, 01/29/2014 - 18:49 | 4382056 Intoxicologist
Intoxicologist's picture

People did plan ahead in Northern Wisconsin and they still can't get propane.  For example, a friend of mine's mother prebought nearly two-years worth of propane, and she can't get it delivered.  She was down to 8% left in her tank, so her kids installed a pellet stove for her last weekend.  I'll squeak by the rest of the season, but this spring I'm building a coppice stove.

Wed, 01/29/2014 - 15:50 | 4381115 pandabear01
pandabear01's picture

tanks attached to moving transportation

Wed, 01/29/2014 - 15:58 | 4381167 moonman
moonman's picture

Wed, 01/29/2014 - 16:29 | 4381357 Colonel Klink
Colonel Klink's picture

My point is you don't fill typical tanks with LNG.  It's primarily Propane.  Different product!

Wed, 01/29/2014 - 15:48 | 4381095 Headbanger
Headbanger's picture

Tanks in what?  NObody will be able to afford a car in the near future nor need one cause there won't be any jobs to go to or stores to shop in!

 

Wed, 01/29/2014 - 16:04 | 4381099 aVileRat
aVileRat's picture

Yup.

People need to drive & move due to the geography of N.America. Unleaded gasoline by REAL cost of production is nearly outside the purchasing power of the average workie. Alternative is nuclear powered cars. Good luck with that.

Model S's were stalling in the Norwegian & NYC cold snap, so the battery tech is the barrier to entry still (as GM proved).

And yes, margin monday. As a guy at Davos said, gloves are off this round.

A yellen move on the January number were expected. EUI-90 will give her clearance to taper, they will try. Leverage will collapse and they will reopen the repo-chain.

EM's tried to force her hand and now it's the game of chicken for who has the most reserves. If you look at Turkey's reserves, it's a classic Poundbreaker scenario, but now extrapolate it to most of the OPEC chain. So here we are, see where the support ends at the EOD and Check to PBOC.

 

 

 

Wed, 01/29/2014 - 16:56 | 4381500 Lore
Lore's picture

Re: "Unleaded gasoline by REAL cost of production is nearly outside the purchasing power of the average workie."

Maircans don't have carbon, transit and other taxes slapped on their gasoline, so for Canadians travelling across the border, a fill-up is always a pleasant surprise!

Wed, 01/29/2014 - 20:13 | 4382477 doctor10
doctor10's picture

Here's a thorium powered Caddy for ya...

 

https://www.youtube.com/watch?v=GCHhjrYOMh8

Wed, 01/29/2014 - 15:49 | 4381106 Bearwagon
Wed, 01/29/2014 - 15:51 | 4381113 Debtonation
Debtonation's picture

The windchill was -40 F the other day in southern MN.  Icecicles were forming in my nose when I breathe.

Wed, 01/29/2014 - 16:01 | 4381184 Dr. Richard Head
Dr. Richard Head's picture

Better not try and pee outside...

Wed, 01/29/2014 - 16:12 | 4381253 Woodhippie
Woodhippie's picture

More importantly, don't pee outside in the wind.

 

Flying ice cubes can pummel the balls.

Wed, 01/29/2014 - 16:25 | 4381341 Levadiakos
Levadiakos's picture

Yes but if you point downwind you can destroy your enemies

Wed, 01/29/2014 - 16:14 | 4381258 swmnguy
swmnguy's picture

They've changed the windchill calculations since I grew up near Marshall.  I wonder what the chill would have been for you calculated the old way?

Wed, 01/29/2014 - 20:06 | 4382443 U4 eee aaa
U4 eee aaa's picture

Hedonic windchill calculations now?

Wed, 01/29/2014 - 17:44 | 4381773 Leonardo Fibonacci2
Leonardo Fibonacci2's picture

Colonel, the Zyclon B tanks

Wed, 01/29/2014 - 15:49 | 4381096 whatsinaname
whatsinaname's picture

Wasnt me (for a change on the winning side).

On the other hand NG was to power our SOTU recovery. It does not bode well for that.

Wed, 01/29/2014 - 16:02 | 4381180 SAT 800
SAT 800's picture

It's temporary; it's just a game for some banksters; they'll bring the price back down again.

Wed, 01/29/2014 - 15:52 | 4381123 SAT 800
SAT 800's picture

You see that chart right there at the top of hte page; that's manipulation. That's the same as the $145/barrel oil we had a few years ago. You can short this bitch now on the Futures market and make money on it; that's why it was done, so the Perps. could go short now and take all the little enthusiasts with them who trend followed on the way up. ok? there's a two minute course in how to make money in the futures market; you look for things like this. that exponential chart, (they are never parabolic), is unstable. anything over forty five degrees up angle is non systainable and when it transitions like that to vertical; it's done; you can stick a fork in it. or better yet, short it and make some money.

Wed, 01/29/2014 - 16:32 | 4381378 walküre
walküre's picture

Yup. Could stall out near $7 Feb and March contracts. Not sustainable and all the NG related oil production will shut down. Nobody will reopen capped NG wells for this short term. Neither the demand nor the capital is there. Tons of exploration and small producers are sinking and scraping the bottom of the barrel.

Big guys need low commodity prices so they can buy the small guys on the cheap.

This is a blip and a good shorting opportunity. Reminds me of gold but I was too emotionally invested and attached to $1900 gold.

NG goes back down to $3 soon enough.

Wed, 01/29/2014 - 17:04 | 4381542 Lore
Lore's picture

...Unless it really is different this time.  Big shale gas producers allegedly lied through their teeth about reserves.  Cold winter might have expedited the first big tremor as cumulative Peak Production begins its downward inflection.  It doesn't seem like coincidence that countries targeted for Liberation also happen to be making big gas discoveries.  Regardless, I don't trade these contracts, and you could be bang on for the very near term. Rgds

Wed, 01/29/2014 - 17:41 | 4381759 Augustus
Augustus's picture

The NG producers are delivering more gas every month.

The cold winter problem is just demonstrating how stupid the Obama policies are.  Coal burning generators are closed and not delivering anything to the grid.  NG has been the preferred substitute.  Except that the pipes have not been built to many areas.  The NG is available, just not in the right places.  And the NIMBYs are doing everything to prevent the construction.  Bloomberg had a good article about the price differentials between NY and Boston.  Limited capacity to NY but extreme shortage to Boston.  Upper New England is in an even worse situation related to pipe availability and the PSCs are arguing over it to increase the delay.  Of course pipe capacity will be unneeded if Obama can outlaw fracking.  The idiot Cuomo has shutdown fracking so there is no supply or taxes from the NY reserves.  Put that bastard out in the cold sleeping with three dogs for a couple of weeks and he will have a different opinion.

Wed, 01/29/2014 - 18:03 | 4381863 walküre
walküre's picture

Buffet made a big investment late last year in Phillips66 PSX. He's close to Obama and will get his pipelines built after he benefited early on from the rail roads carrying oil. Remember the deal he made early 2009 with BNS. Not sure but I'd think he cashed out of that by now and is going long pipelines.

Wed, 01/29/2014 - 20:08 | 4382457 U4 eee aaa
U4 eee aaa's picture

Plus Buffett bought into Canadian oil sands. He needs to get that northern product shipped

Wed, 01/29/2014 - 15:57 | 4381161 Lux Fiat
Lux Fiat's picture

Between rememberances of Amaranth, and cows trying to self-immolate, I could help but remember this little gem...

http://www.youtube.com/watch?v=td4VEGiIQmk

Wed, 01/29/2014 - 16:23 | 4381325 Levadiakos
Levadiakos's picture

BERLIN (Reuters) - Methane gas from 90 flatulent cows exploded in a German farm shed on Monday, damaging the roof and injuring one of the animals, police said.

High levels of the gas had built up in the structure in the central German town of Rasdorf, then "a static electric charge caused the gas to explode with flashes of flames," the force said in a statement.

One cow was treated for burns, a police spokesman added.

Wed, 01/29/2014 - 16:34 | 4381395 Lux Fiat
Lux Fiat's picture

Years ago, stayed at a Dutch farmer's place while traveling for a couple of days.  The living quarters were upstairs, the barn was the downstairs (dairy cattle, sheep).  Fortunately, it doesn't appear this was the case with the German farm "shed".

http://www.youtube.com/watch?v=LaiJ0mPbbdk

Wed, 01/29/2014 - 16:38 | 4381413 Bearwagon
Bearwagon's picture

Yes, indeed. I read it in the papers today, it was a sidenote.

Wed, 01/29/2014 - 20:10 | 4382460 U4 eee aaa
U4 eee aaa's picture

This is what happens when you allow cows to smoke. They can't even handle the electric lighters properly.

Stupid cows!

Wed, 01/29/2014 - 16:23 | 4381311 Canadian Dirtlump
Canadian Dirtlump's picture

like a top that slows down wobbles like a motherfucker, we're seeing and will see more bucking bronco style moves in everything as the wheels fall off this fetid pool of excrement that is called "the system."

 

And we know who makes money on volatility. The bitch ass punks who cause it that's who.

Wed, 01/29/2014 - 16:37 | 4381339 firstdivision
firstdivision's picture

$NG becoming a great short.  With the bitter cold that just went through, no reports of ng capacity shortages, so I would be selling this retard rally for the report tomorrow. 

The manipulation that is going on smells like suppliers to me.

Wed, 01/29/2014 - 18:40 | 4382005 chistletoe
chistletoe's picture

My amateurish guess as to why it shot up today is that people just like you have been doing exactly that, every time the temperature has been a little cold, since the first of January.  Every time that the futures have shot up because of the cold, someone or ones have come in the very next day and sold, sold, sold, exactly the same way that silver and gold are sold sold sold with abandon.

 

And if I am not mistaken, there were a few cold folks today who demanded delivery from all those smart people like you who have been selling.

 

If you aint got the gas, unless you have the power to enforce "force majeur" you might just want to think about staying out.  Winter is not over, not by a long shot ... but if the inventory numbers published by the EIA are anything close to accurate, there are going to be major major shortages before the current production starts to come close to the current demand as the weather warms up ... in fact, a few isolated places, like NY and Boston, may experience major power outages ... which could be very, very amusing ....

Wed, 01/29/2014 - 23:03 | 4382937 firstdivision
firstdivision's picture

The fundamentals do not support this price level.  No, too many suppliers were trying to sell fwds when then that cold snap came in.  The suppliers just do a few 'gas curtailment s' and blam, the price shoots up to ridiculous levels.  The beauty were the curtailments to the NG generators, which jammed PJM/NYSO prices.  We were wondering if the frequency was getting down to 59.5 hz RTO wide.  Margin calls have been huge for the LSE's in PJM, and I expect smaller LSEs to fold.  Also POLR auctions didn't quite get the draw PA and OH were hoping for as some LSEs didn't show up to bid.  Couple that with NEXTERA announcement of underperformance as year guidance and we have some good times coming.  I expect FERC to announce some sort of investigation into the shenanigans of a few weeks ago.  Expect coal plants to get an extension on the EPA rules.

Wed, 01/29/2014 - 15:38 | 4381037 NOTW777
NOTW777's picture

its got a good shot at 6ish - $UNG

Wed, 01/29/2014 - 15:39 | 4381048 NOTW777
NOTW777's picture

jan 2010 - 6.10

Wed, 01/29/2014 - 15:53 | 4381137 SAT 800
SAT 800's picture

Big even numbers; they're like sunlight to a vampire. this manipulation is done now; just allow yourself some room and give it a week if possible to prove itself; and then ride it all the way down; never have a profit target; wait and see what it'll give you; markets usually overshoot in the other direction.

Wed, 01/29/2014 - 18:42 | 4382025 chistletoe
chistletoe's picture

Do you also sell gold short when you don't have any physical yourself?

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