For Immediate Release
Chicago, IL – March 15, 2010 – 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: XTO Energy (XTO), EOG Resources (EOG), Anadarko Petroleum Corp. (APC), Chesapeake Energy (CHK) and Devon Energy Corp. (DVN).
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Here are highlights from Friday’s Analyst Blog:
Gas Prices Drop on Supply, Weather
The specter of a continued glut in domestic gas supplies (storage levels remain 1.2% above their five-year average) still exists, and inventories are likely to exit the current heating season very near (or even above) the five-year average.
With winter cold subsiding (cold-weather-demand period ends this month), demand for natural gas for heating and power-plant fuel will reduce. Already, warmer spring weather appears to have arrived in the U.S. Northeast.
Further pressurizing the commodity is the rapid rise in the number of drilling rigs working in the U.S. (natural gas rig count has climbed 39% from a seven-year low reached last July) that signals a production increase later this year in the face of sluggish industrial demand. Meanwhile, supplies from dense rock formations (shale) remain robust.
Given the depressed state of the commodity, the in-line drop in reserves pulled down natural gas prices. In particular, during the last few days, prices have fallen to their lowest levels since late Nov. (currently trading in the range of $4.40 – $4.50 per MMBtu), pressured by milder-than-normal weather at the end of the heating season.
There are concerns among traders that the market will be oversupplied as winter draws to a close, with rig counts going up and industrial demand still struggling due to the weak economy. These factors translate into limited upside for natural gas-weighted companies and related support plays.
Therefore, we maintain our cautious stance on natural gas-focused E&P players such as XTO Energy (XTO), EOG Resources (EOG), Anadarko Petroleum Corp. (APC), Chesapeake Energy (CHK) and Devon Energy Corp. (DVN).
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