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The Zacks Analyst Blog Highlights: Gulfport Energy, Montage Resources, Cabot Oil & Gas, SilverBow Resources and Southwestern Energy
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For Immediate Release
Chicago, IL – August 16, 2019 – 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 include: Gulfport Energy Corp. (GPOR - Free Report) , Montage Resources Corp. , Cabot Oil & Gas Corp. , SilverBow Resources, Inc. (SBOW - Free Report) and Southwestern Energy Company (SWN - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Natural Gas: Here’s Why Prices Could Tumble Below $2 Shortly
Over the past few weeks, natural gas prices have fallen to levels not seen in more than three years, reflecting a steady, albeit slow, descent. Market participants are worried that even a spike in heating demand might not be enough to stop the commodity's collapse below the psychologically important $2 per MMBtu level shortly.
Here are at least three reasons why they think so:
Narrowing Deficit to the 5-Year Average:While inventories are still under the five-year average, rapidly replenishing stocks mean that supplies have climbed swiftly over the past few months. The latest EIA report puts total natural gas stocks at 2.689 trillion cubic feet (Tcf) - 343 Bcf (14.6%) above 2018 levels at this time and just 111 Bcf (4%) under the five-year average. Assuming the current pace of storage build, supply deficit to the five-year average could narrow substantially by the end of August.
Overwhelming Production: The demand for cleaner fuels and the commodity’s relatively lower price has catapulted natural gas' share of domestic electricity generation to 35%, from 25% in 2011. Moreover, new pipelines to Mexico, together with large-scale liquefied gas export facilities have meant that exports out of the U.S. are set for a quantum leap. Finally, higher consumption from industrial projects will likely ensure strong natural gas demand. However, record high production in the United States and expectations for healthy growth through 2020 means that supply will keep pace with demand.
Significant Flaring:While oil production in shale basins like the Permian, Eagle Ford and North Dakota have seen a rapid rise since 2016, it is accompanied by structural challenges like natural gas flaring. Operators are experiencing some growing pains as natural gas output – a largely unwanted derivative that emerges alongside oil production in the region – outpaces gathering and processing capacity, leading to increased flaring. The flaring, leads to greenhouse gas emissions like methane. Therefore, the operators can either ‘self-restrict’ oil production until more natural gas infrastructure is built or pay others with space on existing pipelines to transport the unwanted gas. As companies are reluctant to stop drilling for oil, they continue to ‘flare’ natural gas unabated. Some estimates indicate that operators burn off around 1 billion cubic feet of the commodity each day in the Permian. The huge amount of associated gas production is a prime reason to drag down prices.
Conclusion
Natural gas prices might experience short-lived surge based on positive weather forecasts and potential storm-induced supply disruptions but any powerful turnaround looks unlikely at the moment.
The bearish natural gas fundamentals and its seasonal nature is responsible for the understandable reluctance on investors’ part to dip their feet into stocks like Gulfport Energy Corp., Montage Resources Corp., Cabot Oil & Gas Corp., SilverBow Resources, Inc., Southwestern Energy Company, etc.
Only time will tell whether prices will break below the $2 threshold for the first time since 2016 but as of now it might be prudent for investors to maintain caution — either withdraw for a while or look for fundamentally sound stocks.
Breakout Biotech Stocks with Triple-Digit Profit Potential
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Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Gulfport Energy, Montage Resources, Cabot Oil & Gas, SilverBow Resources and Southwestern Energy
For Immediate Release
Chicago, IL – August 16, 2019 – 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 include: Gulfport Energy Corp. (GPOR - Free Report) , Montage Resources Corp. , Cabot Oil & Gas Corp. , SilverBow Resources, Inc. (SBOW - Free Report) and Southwestern Energy Company (SWN - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Natural Gas: Here’s Why Prices Could Tumble Below $2 Shortly
Over the past few weeks, natural gas prices have fallen to levels not seen in more than three years, reflecting a steady, albeit slow, descent. Market participants are worried that even a spike in heating demand might not be enough to stop the commodity's collapse below the psychologically important $2 per MMBtu level shortly.
Here are at least three reasons why they think so:
Narrowing Deficit to the 5-Year Average:While inventories are still under the five-year average, rapidly replenishing stocks mean that supplies have climbed swiftly over the past few months. The latest EIA report puts total natural gas stocks at 2.689 trillion cubic feet (Tcf) - 343 Bcf (14.6%) above 2018 levels at this time and just 111 Bcf (4%) under the five-year average. Assuming the current pace of storage build, supply deficit to the five-year average could narrow substantially by the end of August.
Overwhelming Production: The demand for cleaner fuels and the commodity’s relatively lower price has catapulted natural gas' share of domestic electricity generation to 35%, from 25% in 2011. Moreover, new pipelines to Mexico, together with large-scale liquefied gas export facilities have meant that exports out of the U.S. are set for a quantum leap. Finally, higher consumption from industrial projects will likely ensure strong natural gas demand. However, record high production in the United States and expectations for healthy growth through 2020 means that supply will keep pace with demand.
Significant Flaring:While oil production in shale basins like the Permian, Eagle Ford and North Dakota have seen a rapid rise since 2016, it is accompanied by structural challenges like natural gas flaring. Operators are experiencing some growing pains as natural gas output – a largely unwanted derivative that emerges alongside oil production in the region – outpaces gathering and processing capacity, leading to increased flaring. The flaring, leads to greenhouse gas emissions like methane. Therefore, the operators can either ‘self-restrict’ oil production until more natural gas infrastructure is built or pay others with space on existing pipelines to transport the unwanted gas. As companies are reluctant to stop drilling for oil, they continue to ‘flare’ natural gas unabated. Some estimates indicate that operators burn off around 1 billion cubic feet of the commodity each day in the Permian. The huge amount of associated gas production is a prime reason to drag down prices.
Conclusion
Natural gas prices might experience short-lived surge based on positive weather forecasts and potential storm-induced supply disruptions but any powerful turnaround looks unlikely at the moment.
The bearish natural gas fundamentals and its seasonal nature is responsible for the understandable reluctance on investors’ part to dip their feet into stocks like Gulfport Energy Corp., Montage Resources Corp., Cabot Oil & Gas Corp., SilverBow Resources, Inc., Southwestern Energy Company, etc.
Only time will tell whether prices will break below the $2 threshold for the first time since 2016 but as of now it might be prudent for investors to maintain caution — either withdraw for a while or look for fundamentally sound stocks.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
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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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.