How low can NG go before producers can not make profit?

J

john7722

I read some article from 2019 that says that avg price of gas should be around $2.5 if the producers wanna make any profit, depending on the type of gas they are working with .

There is also a lot of talk about the fact that weather is much warmer then they expected but I looked at the last 25 years and the price of NG in june was 17 times higher then it was in MARCH.
Every analysts says that supplies are increasing , demand is decreasing because of warm weather but at some point they are just gonna stop producing NG to bring the price up no?

I don't know much about NG trading but current price seems rather attractive, even thou based on TA the chart looks really bad. I bought and sold BOIL 1 month ago but I would like to get back in the trade, but I am still waiting .

https://www.enerdynamics.com/Energy-Insider_Blog/Are-Natural-Gas-Prices-Below-3-Sustainable.aspx
 
" but the current price seems rather attractive "

I guess you mean attractive to long NG.

The recent low was 1.50 in Apr 2020. Now it is at 2.1

And the weather is getting warmer and warmer ....
Good luck!
 
john7722 said:
How do you explain higher jun prices then march prices on numerous occasions?
More...

NG is seasonal.... makes a low early in year as demand from winter has waned. Starts to head higher in anticipation of higher demand/gas costs for next winter's heating needs. Low for the cycle is often Jan-April.
 
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so , doesn't it look it like a good long term play ? even compering MAR and JUN it looks like the price is almost always higher in JUN then it was in march for the same year
 
Are you referring to UNG? I have been watching it. The lower the better as you can buy more shares. At some point, it will bottom out. WTI is just getting set to breakout higher. I will get in when it does. European natural gas prices have not risen as much more because NATO countries were able to store a lot of natural gas. As that natural gas gets used up, they will have to buy more. It is coming from the US and will be very expensive because they have to haul it by natural gas container ships. Oil and natural gas will always have its demand because people use it. We are headed for a recession in the US and Europe but, Europe will still buy natural gas and oil. We have to be opportunistic in these kinds of markets. And there are a lot of opportunities to earn monies.
 
yes UNG and BOIL. I might just start buying in very slow increment . Maybe 1/10 every week .
But I really don't understand NG at all. I've never traded it , only BOIL one time
 
If history continues to repeat you might just have something there. Looked at that EIA daily data and starting from 2010 on those 13 cycles (end March to end June) price was higher 10 times. But I notice that of the 3 times it wasn't, 2 were in last few years (2019 & 2020). Though many of the profitable ones were damn good size so over long run a definite winner. Inversely shorting June-March works on some cycles, not on others.
! HHNG.png
 
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