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Natural gas investors beware: ‘price ceiling is near’ after latest gas price surge

14:21, 17 August 2022

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Natural gas flame
Natural gas investors are being warned that prices may hit a ceiling soon. – Photo: Getty Images

US consumers can expect to pay more for natural gas this winter – a lot more.

On Tuesday, natural gas futures for September 2022 delivery shot up to more than $9.33 per British Thermal Unit, or 6 percent in a single day. That is a 70% jump since the end of June.

The last time a BTU of natural gas was over $9 was in 2005, before producers flooded the market with cheap gas and after Hurricane Katrina and other natural disasters decimated the market.

“The price ceiling is near,” David Porterfiled, a commodities broker in Dallas, Texas, told Capital.com. “Ten dollars per BTu is pushing it.”

US Natural Gas spot price

Across the pond, Porterfield said, is a different story. Europe is in for a hard, cold winter after cutting its supply from Russia in protest of the country invading Ukraine in February.

“I would not want to be living in Europe right now,” he said, adding that Europe, like North America, uses natural gas to produce energy.

Europe, he noted, is battling a heat wave while trying to stockpile natural gas for winter.

AMC

7.18 Price
-0.280% 1D Chg, %
Long position overnight fee -0.0308%
Short position overnight fee -0.0137%
Overnight fee time 21:00 (UTC)
Spread 0.07

AAPL

144.65 Price
-0.050% 1D Chg, %
Long position overnight fee -0.0064%
Short position overnight fee -0.0059%
Overnight fee time 21:00 (UTC)
Spread 0.09

TSLA

238.77 Price
+0.730% 1D Chg, %
Long position overnight fee -0.0308%
Short position overnight fee -0.0137%
Overnight fee time 21:00 (UTC)
Spread 0.24

NVDA

127.33 Price
-0.610% 1D Chg, %
Long position overnight fee -0.0064%
Short position overnight fee -0.0059%
Overnight fee time 21:00 (UTC)
Spread 0.23

George Seay, Annandale Capital founder, said natural gas is in a secular market and the supply and demand dynamic is “very strong.”

“US public producers are being very disciplined in putting supply on the market,” he told CNBC on Tuesday night.

 

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Natural gas stocks heat up

Two large US natural gas companies' stocks were burning Tuesday.

Antero Resources (AR) ended the day up more than 4% to $40.60. The US’s largest producer, EQT, closed at $47.30, up nearly 2 percent.

Antero Resources (AR) stock price

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What You Need to Know

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

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