For Immediate Release
Chicago, IL - November 17, 2015 - 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 the Chesapeake Energy Corp. ( CHK ), Range Resources Corp. ( RRC ), Cabot Oil & Gas Corp. ( COG ), Rice Energy Inc. ( RICE ) and Eclipse Resources Corp. ( ECR ).
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Here are highlights from Monday's Analyst Blog:
Natural Gas Inventories at All-Time Highs
The U.S. Energy Department's weekly inventory release showed an increase in natural gas supplies that matched forecasts. Following the in-line inventory news, natural gas prices rallied.
On the flip side though, the commodity in storage reached a new all-time high. As a result, natural gas prices are still averaging less than half of what it did some five to six years back. With production remaining plentiful and expected to outpace demand for most of 2015, the fuel is likely to stay depressed for a while.
About the Weekly Natural Gas Storage Report
The Weekly Natural Gas Storage Report - brought out by the Energy Information Administration (EIA) every Thursday since 2002 - includes updates on natural gas market prices, the latest storage level estimates, recent weather data and other market activities or events.
The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of natural gas. It is an indicator of current gas prices and volatility that affect businesses of natural gas-weighted companies and related support plays.
Analysis of the Data
Stockpiles held in underground storage in the lower 48 states rose by 49 billion cubic feet (Bcf) for the week ended Nov 6, 2015, within the guided range (of 49-53 Bcf gain) as per the analysts surveyed by Platts, the energy information arm of McGraw-Hill Financial Inc.
However, the increase - the 32nd successive weekly injection - was more than both last year's build of 47 Bcf and the 5-year (2010-2014) average addition of 23 Bcf for the reported week.
Following the past week's climb, the current storage level - at 3.978 trillion cubic feet (Tcf) - is up 373 Bcf (10.3%) from last year and is 173 Bcf (4.5%) above the five-year average. Moreover, with this addition, natural gas inventories are now in record territory, getting past the previous highest level of 3.929 Tcf set in 2012 and matched last week.
Natural Gas Spikes After Supply Data
Gas prices jumped 4.5% to $2.36 per MMBtu Friday in buying spurred by the 'as expected' injection into storage. The commodity was still down 0.4% for the week.
Still, Prices Remain Depressed
Expected to top 4 Tcf by the end of the year, natural gas prices are way off the heights reached some years back. From a peak of about $13.50 per MMBtu in 2008 to below $3 now - sinking in between to a 10-year low of under $2 in 2012 - the plummeting value of natural gas represents a decline of around 80% over seven years.
With production from the major shale plays remaining strong and the commodity's demand failing to keep pace with this supply surge, natural gas prices have been held back.
The price weakness translates into limited upside for natural gas-weighted companies including the likes of Chesapeake Energy Corp. ( CHK ), Range Resources Corp. ( RRC ), Cabot Oil & Gas Corp.( COG ), Rice Energy Inc. ( RICE ), and Eclipse Resources Corp. ( ECR ).
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About Zacks Equity Research
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CHESAPEAKE ENGY (CHK): Free Stock Analysis Report
RANGE RESOURCES (RRC): Free Stock Analysis Report
CABOT OIL & GAS (COG): Free Stock Analysis Report
RICE ENERGY INC (RICE): Free Stock Analysis Report
ECLIPSE RESRCS (ECR): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
