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EQT's CEO Warns of Gas Price Surge Amid Storage Shortage
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EQT Corporation’s (EQT - Free Report) CEO Toby Rice cautioned about the looming threat of dramatic fluctuations in natural gas price due to an inadequate infrastructure, particularly in terms of pipelines and storage facilities, in a recent interview with Bloomberg. He highlighted the critical shortage of pipelines and storage facilities, stating that this imbalance could lead to price surges of up to 350%.
Speaking at the CERAWeek by S&P Global energy conference in Houston, Rice emphasized that while gas demand in the United States has surged 50% since 2010, infrastructure expansion has failed to keep pace.
Pipeline capacity has only increased 25%, with storage facilities seeing a mere 10% improvement during the same period. This glaring disparity between demand and infrastructure, according to Rice, sets the stage for volatile price swings in the natural gas market.
Rice painted a concerning picture, indicating that current prices hovering around $1.75 per million British thermal units (MMBtu) could skyrocket to as high as $8 if corrective measures are not taken. He highlighted the urgent need for substantial investment in infrastructure to mitigate the risk of severe price fluctuations.
The CEO's warnings came in the wake of EQT's recent acquisition of Equitrans Midstream Corporation, the developer of the Mountain Valley Pipeline. This move reflects EQT's commitment to addressing infrastructure challenges within the industry.
The current U.S. gas price, plunging to its lowestlevel in four years, has prompted several producers, including EQT, to curtail production. However, Rice cautioned that the closure of dozens of coal plants in recent years, traditionally serving as a check on gas prices, has removed a significant buffer. With coal plants no longer constraining gas prices, Rice anticipates a scenario where industrial demand destruction could drive prices closer to a staggering $8 MMBtu.
Sunoco is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. By distributing more than 10 fuel brands via 10,000 convenience stores under long-term distribution contracts, the partnership will continue to generate stable cash flow.
The Zacks Consensus Estimate for SUN’s 2024 earnings per share (EPS) is pegged at $4.89. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Murphy USA is a leading independent retailer of motor fuel and convenience merchandise in the United States.
The Zacks Consensus Estimate for MUSA’s 2024 EPS is pegged at $25.58. The company has a Zacks Style Score of B for Growth and B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Energy Transfer is a publicly traded limited partnership, focused on diverse energy assets in the United States. The company’s core operations involve natural gas midstream services, transportation, storage, crude oil facilities and marketing assets.
The Zacks Consensus Estimate for ET’s 2024 earnings per unit is pegged at $1.44. The company has witnessed upward earnings estimate revisions for 2024 in the past 30 days. ET’s 2024 earnings are expected to rise 32.1% year over year.
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EQT's CEO Warns of Gas Price Surge Amid Storage Shortage
EQT Corporation’s (EQT - Free Report) CEO Toby Rice cautioned about the looming threat of dramatic fluctuations in natural gas price due to an inadequate infrastructure, particularly in terms of pipelines and storage facilities, in a recent interview with Bloomberg. He highlighted the critical shortage of pipelines and storage facilities, stating that this imbalance could lead to price surges of up to 350%.
Speaking at the CERAWeek by S&P Global energy conference in Houston, Rice emphasized that while gas demand in the United States has surged 50% since 2010, infrastructure expansion has failed to keep pace.
Pipeline capacity has only increased 25%, with storage facilities seeing a mere 10% improvement during the same period. This glaring disparity between demand and infrastructure, according to Rice, sets the stage for volatile price swings in the natural gas market.
Rice painted a concerning picture, indicating that current prices hovering around $1.75 per million British thermal units (MMBtu) could skyrocket to as high as $8 if corrective measures are not taken. He highlighted the urgent need for substantial investment in infrastructure to mitigate the risk of severe price fluctuations.
The CEO's warnings came in the wake of EQT's recent acquisition of Equitrans Midstream Corporation, the developer of the Mountain Valley Pipeline. This move reflects EQT's commitment to addressing infrastructure challenges within the industry.
The current U.S. gas price, plunging to its lowestlevel in four years, has prompted several producers, including EQT, to curtail production. However, Rice cautioned that the closure of dozens of coal plants in recent years, traditionally serving as a check on gas prices, has removed a significant buffer. With coal plants no longer constraining gas prices, Rice anticipates a scenario where industrial demand destruction could drive prices closer to a staggering $8 MMBtu.
Zacks Rank & Key Picks
Currently, EQT carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the energy sector are Sunoco LP (SUN - Free Report) , Murphy USA Inc. (MUSA - Free Report) and Energy Transfer LP (ET - Free Report) . While both Sunoco and Murphy USA sport a Zacks Rank #1 (Strong Buy) at present, Energy Transfer carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. By distributing more than 10 fuel brands via 10,000 convenience stores under long-term distribution contracts, the partnership will continue to generate stable cash flow.
The Zacks Consensus Estimate for SUN’s 2024 earnings per share (EPS) is pegged at $4.89. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Murphy USA is a leading independent retailer of motor fuel and convenience merchandise in the United States.
The Zacks Consensus Estimate for MUSA’s 2024 EPS is pegged at $25.58. The company has a Zacks Style Score of B for Growth and B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Energy Transfer is a publicly traded limited partnership, focused on diverse energy assets in the United States. The company’s core operations involve natural gas midstream services, transportation, storage, crude oil facilities and marketing assets.
The Zacks Consensus Estimate for ET’s 2024 earnings per unit is pegged at $1.44. The company has witnessed upward earnings estimate revisions for 2024 in the past 30 days. ET’s 2024 earnings are expected to rise 32.1% year over year.