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The Zacks Analyst Blog Highlights: Gulfport, Antero, Cabot, QEP and SilverBow

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For Immediate Release

Chicago, IL –December 3, 2018 – 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 Corporation (GPOR - Free Report) , Antero Resources (AR - Free Report) , Cabot Oil & Gas Corp. (COG - Free Report) , QEP Resources Inc. (QEP - Free Report) and SilverBow Resources, Inc. (SBOW - Free Report) .

Here are highlights from Friday’s Analyst Blog:

Natural Gas Prices to Stay Hot Amid Cold Weather Forecasts

The U.S. Energy Department's weekly inventory release showed a smaller-than-expected decrease in natural gas supplies. While prices fell slightly following the lower inventory drawdown, the fuel remains buoyed with forecasts of colder-than-normal weather in the face of relative deficit in inventories for this time of year. Having hit a a four-year high of $4.837 per MMBtu recently, there is potential for further price gains with bulk of the winter heating season still to come.

Analysis of the Data: Smaller-than-Expected Decline in Storage

Stockpiles held in underground storage in the lower 48 states fell by 59 billion cubic feet (Bcf) for the week ended Nov 23, below the guidance (of 73 Bcf decline) as per the analysts surveyed by S&P Global Platts. However, the decrease was higher than both the five-year (2013-2017) net shrinkage of 49 Bcf and last year’s drop of 35 Bcf for the reported week.

Following past week’s supply decline, the current storage remains well below benchmarks. At 3.054 trillion cubic feet (Tcf), natural gas inventories are 720 Bcf (19.1%) under the five-year average and 644 Bcf (17.4%) below the year-ago figure.

Fundamentally speaking, total supply of natural gas averaged around 92.9 Bcf per day, up slightly on a weekly basis as production and Canadian imports edged up. Meanwhile, daily consumption remained essentially unchanged at 84.2 Bcf.

Natural Gas Up More than 50% So Far This Year

As a result of the headline miss, natural gas prices lost 1.1% yesterday to settle at $4.646 per MMBtu. Despite the temporary blip, the fuel’s demand-supply situation remains favorable. In fact, prices are up around 55% year-to-date on cold weather demand and slumping supplies, in the process hitting their highest levels since November 2014.

Natural gas recently broke the $4 per MMBtu mark for the first time in four years with cooler weather conditions resulting in strong demand for the heating fuel. Despite skyrocketing production, natural gas entered the winter season with stockpiles at their lowest in 15 years. If the current (2018-2019) winter turns out to be colder than normal, the surge in expected demand — in the face of relative deficit of natural gas inventory — could trigger a bigger rally in the commodity's price.

Positive Long-Term Thesis

The fundamentals of natural gas continue to be favorable in the long run, considering the secular shift to the cleaner burning fuel for power generation globally and in the Asia-Pacific region in particular.

The EIA predicts global demand for the commodity to grow 43% from 2015 to 2040. Countries in Asia and in the Middle East – led by China’s transition away from coal – will account for most of this increase. The replacement of coal-fired power plants and higher consumption from industrial projects have also contributed to the strength in natural gas demand.

Want to Own Natural Gas Stocks Now?

The secular tailwinds mentioned above could see natural gas eventually settle above the $5 per MMBtu mark before the end of the winter. This augurs well for natural gas-heavy upstream companies like Gulfport Energy Corporation, Antero Resources, Cabot Oil & Gas Corp., QEP Resources Inc. and SilverBow Resources, Inc. Moreover, each of these firms has a Zacks Rank #2 (Buy), which means that they expected to offer substantial upside potential from the current price levels

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

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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.



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