It appears that low prices may be encouraging natural gas producers to pump as fast as they can – according to DailyWealth’s Tom Dyson.
Tom says that it’s a matter of survival for these companies – even with prices low, they can’t afford to shut down and wait for a price rebound, because they may not survive until that rebound happens.
He quotes Chesapeake Energy’s CEO, who says they ramped up production last quarter because they “didn’t see any reason to take it on the chin for the team.”
Spoke like a true capitalist!
With natural gas prices so low, it’s probably tough to justify a short position here, though. Perhaps staying away is the wise move.
Recommended further reading: So is Natural Gas Cheap, or Not?