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BOIL Lift Is Not Finished

Oleum Research profile picture
Oleum Research


  • Natural gas stockpile further dips, following increasing demand and steady supply.
  • Net speculative length dip decelerates due to robust long accumulation.
  • With cooling demand turning far above average and the storage natural gas picture tightening, BOIL uptick will triumph.


Welcome to my ProShares Ultra Bloomberg Natural Gas (NYSEARCA:BOIL) report. As you may know, BOIL is a U.S incorporated ETF that replicates 2x the daily return of an index that measures the price performance of natural gas futures. This ETF is not recommended for long-term holding, since its rollover costs and expense ratio of 1.31% slowly erodes its value.

In this report, I wish to discuss (based on the Energy Information Administration (EIA) estimate), recent changes in natural gas inventories and speculative positioning (released by the Commodity Futures Trading Commission (CFTC)) to assess the impacts on natural gas futures and BOIL. Then, based on the recent macro developments, I highlight the triggers, which will likely impact BOIL share price.

Natural gas stocks

According to the latest EIA report, U.S. natural gas stockpile climb further slowed on the July 13 – 20 period, up only 1.07% or 24 Bcf to 2 273 Bcf. With this mediocre injection rate, natural gas stockpile is now close to reaching 2014 inventory level, when one of the biggest snowstorm in recent U.S history occurred. Current natural gas stocks are 16.3% or 441 Bcf below the 5-year level and 23.7% or 707 Bcf below last year’s stockpile, bringing strong tailwinds to natural gas futures and BOIL price.

Source : EIA

During the July 19–25 period, total U.S natural gas daily supply increased marginally, up 0.3% (w/w) to 86.9 Bcf/d, following improving U.S output. Indeed, marketed and dry production (w/w) rose by respectively 0.8% to 91.9 Bcf/d and 0.7% to 81 Bcf/d, whereas net imports from Canada slightly offset the production boost, down 4.9% to 5.8 Bcf.

In the meantime, U.S natural gas demand dipped, down 1.5% (w/w) to 78.8 Bcf/d, following declining power generation demand, down 5.9% to 36.7 Bcf/d, which was partly offset by surging residential and commercial demand, up respectively 13.4% to 7.6

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Oleum Research profile picture
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Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in BOIL over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (2)

takeoff500 profile picture
seems like a Lock.
random_clown profile picture
Why only 2X with BOIL?
I use 3X UGAZ/DGAZ for nat gas trading ... much better liquidity to compared to BOIL: over 20 times more daily volume
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