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The Zacks Analyst Blog Highlights: Chesapeake Energy, Southwestern Energy, Cabot Oil & Gas, EQT and W&T Offshore
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For Immediate Release
Chicago, IL – September 26, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog includeChesapeake Energy Corp. (NYSE: (CHK - Free Report) – Free Report), Southwestern Energy Co. (NYSE: (SWN - Free Report) – Free Report), Cabot Oil & Gas Corp. (NYSE: – Free Report), EQT Corp. (NYSE:(EQT - Free Report) – Free Report) and W&T Offshore Inc. (NYSE: (WTI - Free Report) – Free Report).
Natural Gas Plunges on Big Injection, Surging Production
The U.S. Energy Department's weekly inventory release showed an above-average increase in natural gas supplies. The bearish data, together with unfavorable weather forecasts and strength in the commodity’s production, weighed on prices.
About the Weekly Natural Gas Storage Report
The Weekly Natural Gas Storage Report – brought out by the Energy Information Administration (EIA) every Thursday since 2002 – includes updates on natural gas market prices, the latest storage level estimates, recent weather data and other market activities or events.
The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of natural gas. It is an indicator of current gas prices and volatility that affect businesses of natural gas-weighted companies and related support plays.
Analysis of the Data: A Larger-than-Expected Rise in Storage
Stockpiles held in underground storage in the lower 48 states rose by 97 billion cubic feet (Bcf) for the week ended Sep 15, 2017, above the guidance (of 89 Bcf gain) as per the expectations from analysts and traders.
Worse, the increase was higher than both last year’s addition of 54 Bcf and the 5-year (2012-2016) average net injection of 73 Bcf for the reported week. This caused the current storage level – at 3.408 trillion cubic feet (Tcf) – to widen its surplus to the five-year average to 67 Bcf (2%), while stocks are still 136 Bcf (3.8%) below the year-ago figure.
Fundamentally speaking, supply edged up 1.4% to 80.2 Bcf per day, while daily natural gas consumption jumped 11.3% to 71.1 Bcf. The slight increase in supply could be attributed to growth in dry natural gas production and Canadian imports. On the demand side, the healthy improvement was triggered by hot weather in the East and sharply higher power consumption in Florida as demand returned to pre-Irma levels.
Futures End Down After Bearish EIA Data
Following EIA’s latest commentary, natural gas prices fell 2.2% last week to settle at $2.959 per MMBtu on Friday. Investors also chose to concentrate on cooler-than-normal weather predictions (translating into lower cooling gas demand) over the next few days. Prices were further dented by expanding dry gas production.
Positive Long-Term Thesis
Despite occasional hiccups, long-term fundamentals for the commodity continue to be supportive on the back of structural imbalances. While domestic natural gas production is expected to rebound this year, the growing use of liquefied natural gas (or LNG), booming LNG and Mexican exports, replacing coal-fired power plants and higher demand from industrial projects will likely take care of the increased output.
The resulting effect will ensure natural gas storage keeping pace with the five-year average in the near future, with deficits piling up later on. Over time, these secular tailwinds are likely to support natural gas sentiment and price.
The perceived price strength augurs well for natural gas-heavy upstream companies like Chesapeake Energy Corp. (NYSE: CHK– Free Report), Southwestern Energy Co. (NYSE: SWN– Free Report), Cabot Oil & Gas Corp. (NYSE: COG– Free Report) and EQT Corp. (NYSE: EQT– Free Report).
As of now, we expect the fuel to continue to be range bound around $3 with little chance of any drastic increase.
Headquartered in Houston, TX, W&T Offshore is an independent explorer and producer with primary operations in the U.S. Gulf of Mexico. W&T Offshore has an excellent earnings surprise history. With phenomenal drilling success in its high value deepwater exploration projects, the company has a 100% track of outperforming estimates over the last four quarters at an impressive average rate of 586.7%.
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Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Chesapeake Energy, Southwestern Energy, Cabot Oil & Gas, EQT and W&T Offshore
For Immediate Release
Chicago, IL – September 26, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog includeChesapeake Energy Corp. (NYSE: (CHK - Free Report) – Free Report), Southwestern Energy Co. (NYSE: (SWN - Free Report) – Free Report), Cabot Oil & Gas Corp. (NYSE: – Free Report), EQT Corp. (NYSE:(EQT - Free Report) – Free Report) and W&T Offshore Inc. (NYSE: (WTI - Free Report) – Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday’s Analyst Blog:
Natural Gas Plunges on Big Injection, Surging Production
The U.S. Energy Department's weekly inventory release showed an above-average increase in natural gas supplies. The bearish data, together with unfavorable weather forecasts and strength in the commodity’s production, weighed on prices.
About the Weekly Natural Gas Storage Report
The Weekly Natural Gas Storage Report – brought out by the Energy Information Administration (EIA) every Thursday since 2002 – includes updates on natural gas market prices, the latest storage level estimates, recent weather data and other market activities or events.
The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of natural gas. It is an indicator of current gas prices and volatility that affect businesses of natural gas-weighted companies and related support plays.
Analysis of the Data: A Larger-than-Expected Rise in Storage
Stockpiles held in underground storage in the lower 48 states rose by 97 billion cubic feet (Bcf) for the week ended Sep 15, 2017, above the guidance (of 89 Bcf gain) as per the expectations from analysts and traders.
Worse, the increase was higher than both last year’s addition of 54 Bcf and the 5-year (2012-2016) average net injection of 73 Bcf for the reported week. This caused the current storage level – at 3.408 trillion cubic feet (Tcf) – to widen its surplus to the five-year average to 67 Bcf (2%), while stocks are still 136 Bcf (3.8%) below the year-ago figure.
Fundamentally speaking, supply edged up 1.4% to 80.2 Bcf per day, while daily natural gas consumption jumped 11.3% to 71.1 Bcf. The slight increase in supply could be attributed to growth in dry natural gas production and Canadian imports. On the demand side, the healthy improvement was triggered by hot weather in the East and sharply higher power consumption in Florida as demand returned to pre-Irma levels.
Futures End Down After Bearish EIA Data
Following EIA’s latest commentary, natural gas prices fell 2.2% last week to settle at $2.959 per MMBtu on Friday. Investors also chose to concentrate on cooler-than-normal weather predictions (translating into lower cooling gas demand) over the next few days. Prices were further dented by expanding dry gas production.
Positive Long-Term Thesis
Despite occasional hiccups, long-term fundamentals for the commodity continue to be supportive on the back of structural imbalances. While domestic natural gas production is expected to rebound this year, the growing use of liquefied natural gas (or LNG), booming LNG and Mexican exports, replacing coal-fired power plants and higher demand from industrial projects will likely take care of the increased output.
The resulting effect will ensure natural gas storage keeping pace with the five-year average in the near future, with deficits piling up later on. Over time, these secular tailwinds are likely to support natural gas sentiment and price.
The perceived price strength augurs well for natural gas-heavy upstream companies like Chesapeake Energy Corp. (NYSE: CHK– Free Report), Southwestern Energy Co. (NYSE: SWN– Free Report), Cabot Oil & Gas Corp. (NYSE: COG– Free Report) and EQT Corp. (NYSE: EQT– Free Report).
As of now, we expect the fuel to continue to be range bound around $3 with little chance of any drastic increase.
Want to Own a Natural Gas Stock Now?
If you are looking for a near term natural gas play, W&T Offshore Inc. (NYSE: WTI– Free Report) may be a good selection. This company actually has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Headquartered in Houston, TX, W&T Offshore is an independent explorer and producer with primary operations in the U.S. Gulf of Mexico. W&T Offshore has an excellent earnings surprise history. With phenomenal drilling success in its high value deepwater exploration projects, the company has a 100% track of outperforming estimates over the last four quarters at an impressive average rate of 586.7%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.