We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
U.S. Natural Gas: Weekly Analysis of the EIA Inventory Data
Read MoreHide Full Article
The U.S. Energy Department's weekly inventory release showed a surprise increase in natural gas supplies. Despite this shock injection, the U.S. benchmark gained 4% last week on favorable weather conditions and the growing appetite for liquefied natural gas (“LNG”).
Let us see how the natural gas situation looks like after the U.S. Energy Department's latest weekly inventory release:
EIA Reports a Surprise Buildup in Inventories
Stockpiles held in underground storage in the lower 48 states rose by 8 billion cubic feet (Bcf) for the week ended Nov 9, contrary to the guidance (of a 4 Bcf decline). However, the increase was below the five-year (2015-2019) average net addition of 33 Bcf and last year’s build of 12 Bcf for the reported week.
The latest uptick puts total natural gas stocks at 3.927 trillion cubic feet (Tcf) — 196 Bcf (5.3%) above the 2019 levels at this time and 176 Bcf (4.7%) higher than the five-year average.
Total supply of natural gas averaged 91.9 Bcf per day, down 2.4% on a weekly basis due to a decrease in dry production and lower shipments from Canada.
Daily consumption fell too — by 11.3% to 84.4 Bcf — primarily due to weaker demand from the residential/commercial, industrial and power sectors.
Natural Gas Still Registers a Weekly Advance
Natural gas prices rose last week despite the unexpected inventory build. Futures for December delivery ended Friday at $2.995 per MMBtu on the New York Mercantile Exchange, up around 4% from the same time previous week. Prices received a lift on news of the steady onset of winter and expectations of cold weather. This resulted in greater consumption of natural gas for heating homes. Strong LNG feedgas demand in the export facilities boosted the price further.
Is There Any Opportunity to Invest?
While the raging coronavirus pandemic continues to impact economic activity and, by extension, natural gas usage, there are stocks that could offer attractive returns.
We suggest adding Antero Resources (AR - Free Report) to your portfolio. The company, carrying a Zacks Rank #2 (Buy), has a strong footing in the prolific Appalachian Basin. About 68% of Antero Resources’ total output is natural gas.
One of the fast-growing natural gas producers in the United States, the company has seen the Zacks Consensus Estimate for 2020 improve 29.3% over 30 days.
Meanwhile, there are Zacks Rank #3 (Hold) natural gas stocks like EQT Corporation (EQT - Free Report) , Cabot Oil & Gas , SilverBow Resources (SBOW - Free Report) and CNX Resources (CNX - Free Report) that investors may currently retain in their portfolio.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
U.S. Natural Gas: Weekly Analysis of the EIA Inventory Data
The U.S. Energy Department's weekly inventory release showed a surprise increase in natural gas supplies. Despite this shock injection, the U.S. benchmark gained 4% last week on favorable weather conditions and the growing appetite for liquefied natural gas (“LNG”).
Let us see how the natural gas situation looks like after the U.S. Energy Department's latest weekly inventory release:
EIA Reports a Surprise Buildup in Inventories
Stockpiles held in underground storage in the lower 48 states rose by 8 billion cubic feet (Bcf) for the week ended Nov 9, contrary to the guidance (of a 4 Bcf decline). However, the increase was below the five-year (2015-2019) average net addition of 33 Bcf and last year’s build of 12 Bcf for the reported week.
The latest uptick puts total natural gas stocks at 3.927 trillion cubic feet (Tcf) — 196 Bcf (5.3%) above the 2019 levels at this time and 176 Bcf (4.7%) higher than the five-year average.
Total supply of natural gas averaged 91.9 Bcf per day, down 2.4% on a weekly basis due to a decrease in dry production and lower shipments from Canada.
Daily consumption fell too — by 11.3% to 84.4 Bcf — primarily due to weaker demand from the residential/commercial, industrial and power sectors.
Natural Gas Still Registers a Weekly Advance
Natural gas prices rose last week despite the unexpected inventory build. Futures for December delivery ended Friday at $2.995 per MMBtu on the New York Mercantile Exchange, up around 4% from the same time previous week. Prices received a lift on news of the steady onset of winter and expectations of cold weather. This resulted in greater consumption of natural gas for heating homes. Strong LNG feedgas demand in the export facilities boosted the price further.
Is There Any Opportunity to Invest?
While the raging coronavirus pandemic continues to impact economic activity and, by extension, natural gas usage, there are stocks that could offer attractive returns.
We suggest adding Antero Resources (AR - Free Report) to your portfolio. The company, carrying a Zacks Rank #2 (Buy), has a strong footing in the prolific Appalachian Basin. About 68% of Antero Resources’ total output is natural gas.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
One of the fast-growing natural gas producers in the United States, the company has seen the Zacks Consensus Estimate for 2020 improve 29.3% over 30 days.
Meanwhile, there are Zacks Rank #3 (Hold) natural gas stocks like EQT Corporation (EQT - Free Report) , Cabot Oil & Gas , SilverBow Resources (SBOW - Free Report) and CNX Resources (CNX - Free Report) that investors may currently retain in their portfolio.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>