| Despite Healthy Draw Supply Glut Keeps Natural Gas Below $3 - Analyst Blog | |
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The U.S. Energy Department's weekly inventory release showed a larger-than-expected decrease in natural gas supplies. Importantly, the storage draw was higher than the benchmark 5-year average withdrawal for the week. However, the commodity’s stockpiles still remain plentiful, thereby pressuring prices.
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 fell by 198 billion cubic feet (Bcf) for the week ended Mar 6, 2015, above the guided range (of 188–192 Bcf draw) as per the analysts surveyed by Platts, the energy information arm of McGraw-Hill Financial Inc. The decrease was also more than the 5-year (2010–2014) average withdrawal of 116 Bcf for the reported week and also exceeded last year’s drop of 189 Bcf.
Despite past week’s healthy withdrawal, the current storage level – at 1.51 trillion cubic feet (Tcf) – is up 483 Bcf (46.9%) from last year though it is 225 Bcf (13%) below the five-year average.
Nevertheless, 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 remain in check, currently around $2.7 per million Btu (MMBtu).
Bearish Pressure on Prices
From a peak of about $13.50 per MMBtu in 2008 to $2.7 now – sinking in between to a 10-year low of under $2 in 2012 – the plummeting value of natural gas represents a decline of approximately 80% over seven years. In the absence of major production cuts, we do not expect much upside in gas prices in the near term.
Gas-Weighted Companies to Suffer
This translates into limited upside for natural gas-weighted companies. In particular, those with Zacks Rank #4 (Sell) or Zacks Rank #5 (Strong Sell) like Carrizo Oil & Gas Inc. CRZO, Penn Virginia Corp. PVA, Bonanza Creek Energy Inc. BCEI, EOG Resources Inc. EOG, Southwestern Energy Co. SWN and Devon Energy Corp. DVN look to be in the most trouble. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report DEVON ENERGY (DVN): Free Stock Analysis Report SOUTHWESTRN ENE (SWN): Free Stock Analysis Report EOG RES INC (EOG): Free Stock Analysis Report PENN VIRGINIA (PVA): Free Stock Analysis Report BONANZA CREEK (BCEI): Free Stock Analysis Report CARRIZO OIL&GAS (CRZO): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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Devon Energy Corporation
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CODE : DVN |
ISIN : US25179M1036 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Devon Energy est une société de production minière et de pétrole basée aux Etats-Unis D'Amerique. Devon Energy détient divers projets d'exploration au Canada. Son principal projet en exploration est JACKFISH OIL SANDS PROJECT au Canada. Devon Energy est cotée aux Etats-Unis D'Amerique. Sa capitalisation boursière aujourd'hui est 21,4 milliards US$ (19,2 milliards €). La valeur de son action a atteint son plus bas niveau récent le 18 août 1995 à 10,00 US$, et son plus haut niveau récent le 22 février 2008 à 99,19 US$. Devon Energy possède 525 000 000 actions en circulation. |