Post on 21-Apr-2017
Natural Gas Stocks Were on Fire This Week
With the price of crude oil seeming to find a bottom earlier this week, it sent energy stocks off to the races.
However, natural gas stocks, in particular, were strong this week with five of the top movers, according to S&P Capital IQ data, being gas drillers Gulfport
Energy (NASDAQ: GPOR), Range Resources (NYSE: RRC), Cabot Oil & Gas (NYSE: COG), Southwestern
Energy (NYSE: SWN), and Eclipse Resources (NYSE: ECR).
What:Gulfport Energy (NASDAQ: GPOR) rebounded more than 10% this week.
So What: Key driver: Investors flocked
to natural gas drillers Investors started to see
natural gas drillers as a safe haven trade
It also didn’t hurt that cold weather finally set in, with a huge winter storm bearing down on the East Coast
Now What: Analysts also are starting to
see the potential for a second half ease in the natural gas supply glut, which could push gas prices higher
Key takeaway: Investors are just trying to find a way to make money on energy stocks
What:Range Resources (NYSE: RRC) popped 14% this week.
So What: Key driver: The natural
gas stock rally Like Gulfport Energy,
Range Resources rallied along with the natural gas drilling sector after investors turned bullish
Now What: Investors are also starting
to realize that most gas drillers don’t produce much, if any, oil
Key takeaway: Investors are buying gas drillers in hopes of catching a big rally later this year
What:Cabot Oil & Gas (NYSE: COG) jumped 17% this week.
So What: Key driver: Same story,
different name Like the rest of its gas
drilling peers, Cabot Oil & Gas surged this week after investors changed their mind on the sector
Now What: One thing investors like
about gas stocks is the fact that they’ve already reduced their costs significantly
Key takeaway: Investors are focusing on the positives for once, instead of the negatives
What:Southwestern Energy (NYSE: SWN) surged more than 30% this week.
So What: Key driver: Layoffs Southwestern Energy
disclosed that it will lay off 1,100 of its employees, or about 40% of its workforce
This move will save the company up to $175 million per year
Now What: One of the big reasons why
Southwestern is laying off so many workers is because it currently isn’t running any drilling rigs
Key takeaway: Investors see this not only as a sign that the company is growing more financially disciplined, but that natural gas supply growth could be very muted, which is bullish for its price
What:Eclipse Resources (NYSE: DNR) jumped more than 37% this week.
So What: Key driver: The natural gas
stock rally In addition to moving with
the sector, Eclipse Resources also unveiled that it expects to take an impairment charge of up to $850 million in the fourth quarter
Now What: Investors shrugged off that news,
and instead are focused on the fact that the company is only aiming to keep its production flat this year, which when combined with the moves its peers are making, should lead to improved natural gas prices later this year
Key takeaway: Investors see signs on the horizon that the natural gas market is going back into balance.
This could be the next billion-dollar iSecret