How low can natural gas go?

Discussion in 'Commodity Futures' started by buttermarket, Feb 10, 2020.

  1. The price of natural gas today is same as it was in 1999
    So how can these companies make money or the companies in 1999 was must be making big profits in 2007 when it was trading at $12 now it's $2

    The problem with natural gas it's byproduct of oil sands and they cannot store it too costly to store of dump it environment cost or cannot burn the natural gas (carbon tax)..they have to dump in the open market or give it way.

    these carbon taxes or tax on carbon emissions they cannot burn natural gas into the atmosphere. anymore. they have to sell into the open market. further depressing prices for natural gas producers.
    $1 it could go or this industry or new regulatory gov't changes cause nobody is making money selling natural gas..they just shut off the wells...and stop production. further reducing jobs in the industry. natural gas is like coal,,the gov't putting tax on burning natural gas

    There is no INFLATION for this commodity. it's in deflationary if you include inflation. the price of natural gas is LESS than it was in 1997. long term buy and hold sure doesn't work for this commodity good for home heating bills but investors not so good. only traders made so money..investor in natural companies overal zero ROI. or total loss on their investment.
    Last edited: Feb 10, 2020
    murray t turtle, Nobert and themickey like this.
  2. Handle123


    Lowest been under 1.00 past 30 years, so it is a matter of buying it and hedging every trade, eventually nail the bottom, but can take handful of years till the "pop" happens, so in mean time learn how to trade spreads and short term option buys. Of course trading Nat Gas stocks and covered calls easier.
  3. some of theseweak or even big natural gas companies can go bankrupt or have to 'recapitalize' making incumbent shares worth less via share dilution etc. so i would not invest in the companies until the commodities recover because if the price is tooo low these don't make money and if they are in debt they can go bankrupt. just look at all the oil blood bath when oil sands speculation ended. and oil bull crashed. with oil sands. billions lost by investors in oil companies, can you believe that and billions lost i investors investing in pot companies too. can you believe that? these companies cannot make money selling stuff people need like oil, gas, and pot?
    billv likes this.
  4. Are you asking Henry Hub only, some basis points can conceivable go to 00.00

    dragging Henry to lows never seen before, Handle123 will know the answer tho!
    murray t turtle likes this.
  5. bone

    bone ET Sponsor

    Now you know why just about every electric utility switched over from oil-fired to natgas-fired boilers.

    The most important fundamental to know is the pipeline basis cost. And the blue state politics which help fund Putin's kleptocracy. In 2016 officials in Massachusetts and New Hampshire blocked financing for the $3 billion Access Northeast Pipeline, which would have reliably provided natural gas fuel to three New England states. So, at present, there are Russian cargo ships in Boston Harbor supplying natural gas.

    Needless to say, Northeast US citizens pay considerably more for natural gas. So the most vulnerable citizens pay completely unnecessary premiums to fund a political agenda.
  6. %%
    WOW on that list, Ha1238; good thing Carl Ichan cut a loss on gas/ CHK $8 or $9[The stock not Nat Gas contract LOL].I sure don't believe everything in WSJ, especially their promo of low PE junk; but believe it or not they had a long term chart of TX gas, went below $00.00, they were paying to get rid of the stuff LOL-true. I've wanted to buy a gas grill 4 years, but simply burn wood hickory/oak/hickory.................................................................................Hickory wood has a much better smell; they stink up pipeline gas so a leak gets reported.LOL
    bloomberg1 likes this.
  7. the leap year futures contracts for natural gas is still above $2. and nothing below $2 though probably thinly traded futures contracts. the problem is the oil sands production creates a lot byproduct or natural gas. there is no room to store it. lots of wells are shut down, they shut down oil and natural gas wells. that is capitalism.. ,losing money is same as burning money. waste of capital investing in these companies. or invest in their 'equity' there is no equity if the company goes chapter 11 and has huge debts it cannot pay interest on debt.. these companies have no positive cashflow. and funded mostly by borrowing. and lenders are no longer lending to oil and natural gas projects. either fossil fuels is not a banned or divestment from institutions from 'environmental ' immoral investing now.
  8. bone

    bone ET Sponsor

    You're not technically correct about Natural Gas storage in the United States. Chicago City Gate comes to mind - where natural gas is stored underground in salt mines. See the EIA Underground Storage figures:

  9. storage cost and limted storage.. Why store it if the price is less than cost. that is capitalism, you shut production. these companies are using cashflow to pay debt servicing cost which eventually lead to bankruptcy. the longer they stay in business the more money they lose. they think natural gas prices will recover, it won't until all these suppliers stop giving natural gas below cost. that is the efficiency of capitalism, nobody does nothing for free or lose money doing it..or it's a 'charity' or known as non-profit organization. and they should get charity status. and tax deductiable.
  10. easymon1


    lp on gas cued up here he goes
    #10     Feb 10, 2020