The U.S. Energy Department's latest inventory report showed a higher-than-expected increase in natural gas supplies. Despite the larger injection, natural gas prices ended the week flat. Traders balanced rising supply with signs of strengthening demand, as spring weather and regional constraints kept sentiment mixed.

At this time, we advise investors to focus on stocks such as Gulfport Energy (GPOR Quick QuoteGPOR - Free Report) , Coterra Energy (CTRA Quick QuoteCTRA - Free Report) and Antero Resources (AR Quick QuoteAR - Free Report) .

EIA Reports a Build Slightly Larger Than Market Expectations

Stockpiles held in underground storage in the lower 48 states rose by 120 billion cubic feet (Bcf) for the week ended May 16, just over analysts’ guidance of a 118 Bcf addition. The increase compared with the five-year (2020-2024) average net addition of 87 Bcf and last year’s growth of 78 Bcf for the reported week.

The latest build put total natural gas stocks at 2,375 Bcf, 333 Bcf (12.3%) below the 2024 level, but 90 Bcf (3.9%) higher than the five-year average.

The total supply of natural gas averaged 111.8 Bcf per day, up 1.4 Bcf per day on a weekly basis due to an uptick in dry production and higher shipments from Canada.

Meanwhile, daily natural gas consumption climbed to 98.2 Bcf from 94.2 Bcf the week before, driven by a rise in residential and commercial use and stronger power demand due to warmer spring weather in Texas and the Southeast.

Natural Gas Prices Stay Unchanged

Natural gas prices ended last week on a choppy note, ultimately finishing flat despite some volatility. Prices ended Friday at $3.334/MMBtu. With EIA reporting a larger-than-expected injection, traders remain cautious. Mild weather across key demand regions and strong production continue to weigh on sentiment, as cooling demand has yet to significantly ramp up.

While production remains robust, pipeline maintenance and negative spot prices in the Permian Basin have revealed regional constraints. LNG exports and rising electricity output offer some support, but are not growing fast enough to offset the storage build pace. Power burn is improving, yet cooler spring temperatures in the East and Midwest are limiting overall demand.

Final Thoughts

Agreed, the market is still trying to find its balance amid oversupply pressures, but the tone may shift if forecasts continue trending warmer. Early signs of rising cooling demand and a modest drop in rig counts hint at potential tightening ahead. If a sustained heat wave develops and export flows tick higher, the market could firm up. For now, a cautiously optimistic stance seems appropriate. Investors may want to focus on companies with strong fundamentals and the flexibility to navigate this period of volatility.

3 Stocks to Focus on

Gulfport Energy: Gulfport Energy is a natural gas-focused exploration and production company headquartered in Oklahoma City, OK. Operating primarily in the Utica Shale in Ohio and the SCOOP play in Oklahoma, Gulfport has emerged from bankruptcy with a stronger balance sheet and a free cash flow-oriented strategy. With more than 90% natural gas production, the Zacks Rank #3 (Hold) company prioritizes Utica development to drive free cash flow, reduce debt and align with ESG-focused investor expectations.

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

The Zacks Consensus Estimate for Gulfport Energy’s 2025 earnings per share indicates a 63.6% year-over-year surge. Valued at around $3.5 billion, GPOR has a trailing four-quarter earnings surprise of roughly 11.5%, on average.

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 #3 Ranked 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 20.3%, which compares favorably with the industry's growth rate of 17.8%. Valued at around $18.7 billion, Coterra Energy has a trailing four-quarter earnings surprise of roughly 1.5%, on average.

Antero Resources: It is one of the leading natural gas producers in the United States. Antero Resources has more than two decades of premium low-cost drilling inventory in the prolific Appalachian Basin, indicating a strong production outlook. AR churned out 306 billion cubic feet equivalent in the most recent quarter, of which more than 60% was natural gas.

The Zacks Consensus Estimate for Antero Resources’ 2025 earnings per share indicates 1,609.5% year-over-year growth. Over the past 90 days, the Zacks Consensus Estimate for this #3 Ranked firm’s 2025 earnings has moved up around 13.6%.