what happened these last few days? my guess is that fund(s) blew up in the last few days in the nat gas or crude oil market doing a natgas/crude oil reversion trade that went the other way.
IMO it is all about storage levels with NG. Add in that it appears the weather will be mild, and the real question is whether storage gets full and prices crater for a month or two. That is what I am hoping for.
Most producers already sold the production at $5+, well above its production cost. They will continue to develop new wells, just at a slower pace. There can't be more bearish than we get this year. The NGV9 should settle below $2.50. When that is off the board, the traders will attach the next one: NGX9. It is not very clear what is after the summer. If we get a normal winter, the NG may go back to $5 again.
There is always get-around with new regulation, including the NG total return swaps. Ask the energy folks, who needs gas now? The only folks who have room are the traders who wants to buy $2.20 gas to fill the storage. And they will wait....