Unlike oil, they can burn natural gas if they cannot sell. However, I also heard some U.S. states or countries ban burning natural gas for environment. I don't think it's possible but do you think /NG contracts can fall below zero like /CL? I bet on calendar spread on /NG and to be honest I am somewhat scared watching /CL today.
Low oil price > oil drillers bankruptcy > reduced NG production (NG is a by-product of oil) > good for NG price. I am talking about if it's technically possible in the future. /CLK fell below zero because they cannot not easily burn or dump oil. However, I guess natural gas disposal is easier than oil and therefore this joke hardly can happen in /NG. Make sense?
We don't import NG. I reckon most NG is for electricity & home use which we're locked in for and not transportation. You can pump methane into old mines just like CO2 unlike crude. We flare millions of tons of methane already.
SO ! now we know, the exchange allows for negative commodity value!!! Who knows, stock price can go negative ?!?!?!
TBH this is why I having been telling clients for years now to liquidate prompt physically settled contracts well before expiry. No measure of modeling or OI or COT data is going to predict a delivery or roll squeeze - that I’ve seen or am aware of at least. I have been telling clients about the May 2011 Cotton expiry prior to today. Now I have two really good examples.
Sure and they may resolve with a reverse split as it approaches zero value. The assumption needs to be underlying is still solvent and the negative is a short term market aberration.