Producers have hedged at $7. They will get $7/mcf no matter what. Producers don't care what the spot price of NG is. They will supply NG until storage is full. After that, NG will be dumped on the street for $7.
The most important question is: who has taken the opposite trade of the NG hedge? Who is loosing money each day being forced to buy NG at $7 (and sell for $3)?
How Low Can Natural Gas Prices Go? [View article]
The most important question is: who has taken the opposite trade of the NG hedge? Who is loosing money each day being forced to buy NG at $7 (and sell for $3)?