The ProShares Ultra Bloomberg Natural Gas (NYSEARCA: BOIL) stock price plunged 23% as natural gas prices continue to fall, defying investor and analyst expectations of a price rebound as the winter season remains surprisingly warm.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
Many analysts also expected the United States to ship more liquefied natural gas (LNG) to Europe. Still, the warm weather has persisted throughout the harshest winter months reducing the demand for natural gas, whose demand typically skyrockets during the winter as people heat their homes due to low temperatures.
Top Broker Recommendation
- eToro Top stock trading platform with 0% commission – Read our Review
- Tickmill Regulated by the FCA – Read our Review
- Admirals (Admiral Markets) More than 4500 stocks & ETFs available – Read our Review
- Spreadex Spreadex has been around for a long time – Read our Review
- IG Top-tier regulation – Read our Review
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
However, the warm weather has not stopped investors from investing in the ProShares Ultra Bloomberg Natural Gas (BOIL), which saw net inflows of $517.8 million over 8 days in early February. Unfortunately, the investors have suffered losses as the BOIL stock price has fallen 13.42% over the past month.
Will natural gas prices ever recover? The short answer is nobody knows. This is the first time that most western countries are witnessing a warm winter affecting most of them, and it is unclear if this trend will be replicated in the coming years.
Still, betting on higher natural gas prices might be a smart move over the years, given that the Nord Stream pipeline will likely be out of commission for multiple years following the multiple blasts that made it inoperable.
Experts say it will take years to repair the Nord Stream pipeline, and Europe will continue to rely heavily on imports from other regions, including its big brother, the United States. Hence, we could still witness higher natural gas prices in future.
Still, given that demand for natural gas has been historically low during the peak demand months, we could see low gas prices persist for much longer than most expect. Therefore, I wouldn’t bet on higher gas prices now.
*This is not investment advice.
The ProShares Natural Gas ETF (BOIL) stock price.
The ProShares Natural Gas ETF (BOIL) stock price plunged 23.03% to trade at $6.05, from Friday’s closing price of $7.86.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.