Saturday, July 1, 2017

Bits and Pieces

US natural gas prices to fall

  • due to increased production (link 1) (link 2)
  • associated with oil production, and new pipelines from Marcellus/Utica around 2017/18.
I like TimeOnTarget's comments on SA for following the US Natural gas market.  A good place to start for anyone looking to learn about it.  Have to look at demand, supply and pipelines.  US gas prices are cheap due past discoveries in the Marcellus/Utica, which was already served by pipelines.  At some point it may reach the stage where every producer is losing money, and things can only get better. COG seems the cheapest producer, but pipelines are the key.  Prices vary greatly across the country depending on that.  Not sure if I'll ever make a bet on this industry, but its useful to have a view on US Natural gas for anything related, such as chemicals, fertilizers, solar/nuclear, and so on.


North Korea

Has been out of the news for a while.  GeopoliticalFutures thinks that:
I don't know how a war would affect the markets:
  • The war would be very bad for South Korea, due to Seoul being within range of North Korean artillery, which cannot be easily neutralized
  • I believe the markets are not expecting a war now, but I think the war would be short, maybe 1-6 months.  No telling what the markets would do if they expect that.  They may even go up a few days after the war starts.
  • Long term, reunification would be costly - in economic terms - worse than the German reunification in 1989.
  • I don't know any way for retail investors to buy Korean stocks anyway.



Although ZH is unreliable, its worth keeping in mind the risks to the market if Trump changes back to his old election self again. USD up if it happens.

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