The U.S. Energy Department's latest inventory report showed a lower-than-expected increase in natural gas supplies. Despite this encouraging data, futures ended the week down, reflecting persistent concerns about soft near-term demand and record-breaking production levels.

At this time, we advise investors to focus on stocks such as Expand Energy (EXE Quick QuoteEXE - Free Report) , Excelerate Energy (EE Quick QuoteEE - Free Report) and Coterra Energy (CTRA Quick QuoteCTRA - Free Report) .

EIA Reports a Build Smaller Than Market Expectations

Stockpiles held in underground storage in the lower 48 states rose by 16 billion cubic feet (Bcf) for the week ended April 11, falling short of analysts’ guidance of a 24 Bcf addition. The increase compared with the five-year (2020-2024) average net addition of 50 Bcf and last year’s growth of 46 Bcf for the reported week.

The latest build put total natural gas stocks at 1,846 Bcf, 480 Bcf (20.6%) below the 2024 level, and 74 Bcf (3.9%) lower than the five-year average.

The total supply of natural gas averaged 112.3 Bcf per day, edging down 0.1 Bcf per day on a weekly basis due to lower shipments from Canada, offset by higher dry production.

Meanwhile, daily consumption fell to 103 Bcf from 108.6 Bcf in the previous week, reflecting lower residential/commercial usage on the back of warmer temperatures in the Midwest and West, and decreased power demand.

Natural Gas Prices Struggle

Natural gas prices have been on a rocky ride lately, slipping to multi-week lows as warmer spring temperatures sweep across much of the United States. With the heating season winding down and air conditioning demand not yet fully ramped up, the commodity is facing a seasonal lull. As a matter of fact, natural gas took a hit last week, slipping almost 8% to settle at $3.249 on the New York Mercantile Exchange, marking their lowest close since January. Even the EIA’s smaller-than-expected build report wasn’t enough to prop up prices, as output remains high and forecasts suggest low demand ahead.

Production continues to break records, with daily output in the Lower 48 states recently hitting an all-time high. Warmer-than-usual weather through late April is expected to keep heating demand soft, and the slow pickup in cooling needs has left traders cautious. On the positive side, robust LNG export demand and the potential expansion of U.S. export capacity—after the lifting of Biden’s LNG pause by President Trump—offer longer-term support.

Final Thoughts

For now, natural gas remains under pressure, caught between surging supply and lukewarm demand. As such, investors are advised to exercise caution and opt for stocks with strong fundamentals and potential to overcome the current headwinds.

3 Stocks to Focus on

Expand Energy: Expand Energy has solidified itself as the largest natural gas producer in the United States, following the Chesapeake-Southwestern merger. With key assets in the Haynesville and Marcellus basins, Zacks Rank #1 (Strong Buy) EXE is well-positioned to capitalize on the increasing demand for natural gas, driven by LNG exports, AI/data centers, EV expansion, and broader electrification trends.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Expand Energy’s 2025 earnings per share indicates a 475.9% year-over-year surge. Over the past 30 days, the Zacks Consensus Estimate for this firm’s 2025 earnings has moved up around 19.2%.

Excelerate Energy: Based in The Woodlands, TX, the company specializes in LNG infrastructure and services, focusing on Floating Storage Regasification Units (FSRUs) and related terminals. With operations across emerging and developed markets, Excelerate Energy represents 20% of the global FSRU fleet and 5% of global regasification capacity. Founded in 2003, the company aims to expand into LNG-to-power generation and gas distribution, delivering reliable and flexible energy solutions worldwide.

The Zacks Consensus Estimate for Excelerate Energy’s 2025 earnings per share indicates 15% year-over-year growth. Over the past 30 days, the Zacks Consensus Estimate for this #1 Ranked firm’s 2025 earnings has moved up around 5%.

Coterra Energy: It is an independent upstream operator primarily engaged in the exploration, development and production of natural gas. Headquartered in Houston, TX, the firm owns some 183,000 net acres in the gas-producing Marcellus Shale of the Appalachian Basin. The Zacks Rank #3 (Hold) company’s share of natural gas in its overall production is around 65%.

Coterra’s expected earnings per share growth rate for three to five years is currently 32.2%, which compares favorably with the industry's growth rate of 19.3%. Valued at around $20 billion, Coterra Energy has a trailing four-quarter earnings surprise of roughly 6.9%, on average.