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Proshares Natural Gas (BOIL) Stock Price Fell 5.52% on EU Cap

Simon Mugo trader
Updated 20 Dec 2022

The ProShares Ultra Bloomberg Natural Gas (NYSEARCA: BOIL) stock price fell 5.52% after European energy ministers agreed to cap natural gas prices if they exceed 180 euros ($191) per megawatt hour for three consecutive days.

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The move comes as part of the EU’s efforts to stop price gouging by Russia, as the region looks for alternative natural gas suppliers to reduce their dependence on Russian natural gas supplies. As a result, many expect natural gas prices to fall once the EU’s cap comes into effect on February 15, 2023.

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YOUR CAPITAL IS AT RISK. 68% OF RETAIL CFD ACCOUNTS LOSE MONEY

The EU cap on natural gas prices is also tied to global liquified natural gas (LNG) prices, with the agreement specifying that the cap on gas prices would come into effect if EU gas prices exceed global LNG prices by more than 35 euros for more than three days. 

Natural gas prices in the EU have been falling recently as the region got lucky and had a warm November, allowing natural gas storage levels to keep up with the demand. 

The deal between the EU member states will protect them from paying record-high gas prices as the winter continues into next year but is aimed at forcing EU countries to find other sources of natural gas apart from Russia. 

The agreement triggered a decline in global natural gas prices, as evidenced by BOIL’s stock price drop. ProShares Ultra Bloomberg Natural Gas (BOIL) ETF, which aims to generate two times the daily returns of the Bloomberg Natural Gas SubindexSM fell along with the index. 

As a leveraged ETF, BOIL is not designed to generate long-term returns like the underlying index. Instead, it is meant to be used by active traders to generate daily returns.

On the flip side, the ProShares UltraShort Bloomberg Natural Gas (NYSEARCA: KOLD) was trading up 8.9% at writing since its goal is to generate an opposite return to that of the underlying index; hence, it rallies when natural gas prices are falling. 

The KOLD stock price is up 32% in the past three months after natural gas prices stalled. However, it is down 92.74% for the year, while the BOIL stock price is up 14.6% YTD.  

*This is not investment advice. 

BOIL stock price. 

The BOIL stock price was trading down 5.52% at $28.25, falling from Monday’s closing price of $29.90.


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading