Natural Gas Prices
Posted: Tue Oct 25, 2016 12:19 pm
For those of you "concerned" about the recent dip in natural gas prices.
1. The price you see quoted for natural gas is the price of the front month NYMEX contract, which today is the November contract.
2. The November contract quits trading on Thursday, October 27.
3. The speculators that went long on the November contract MUST close their positions unless they want to write a big check and take physical delivery of the gas, which very few of them can afford to do.
4. This means there are more SELLERS than BUYERS of the November contract, thus pulling down the price.
On Friday, October 28 the December NYMEX contract becomes the "front month", so gas prices will magically jump back over $3.00 on Friday.
Mother Nature will soon be in charge of where gas prices go. Now go to http://www.weatherbell.com/premium/ and click on the 10/25 Daily Update.
1. The price you see quoted for natural gas is the price of the front month NYMEX contract, which today is the November contract.
2. The November contract quits trading on Thursday, October 27.
3. The speculators that went long on the November contract MUST close their positions unless they want to write a big check and take physical delivery of the gas, which very few of them can afford to do.
4. This means there are more SELLERS than BUYERS of the November contract, thus pulling down the price.
On Friday, October 28 the December NYMEX contract becomes the "front month", so gas prices will magically jump back over $3.00 on Friday.
Mother Nature will soon be in charge of where gas prices go. Now go to http://www.weatherbell.com/premium/ and click on the 10/25 Daily Update.