Chesapeake Energy, Encana Corp., Devon Energy Corp., Nabors Industries and
Helmerich & Payne highlighted in Zacks Analyst Blog:
CHICAGO, Jan. 16, 2013
CHICAGO, Jan. 16, 2013 /PRNewswire/ --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 Chesapeake Energy (CHK), Encana
Corp. (ECA), Devon Energy Corp. (DVN), Nabors Industries (NBR) and Helmerich &
Today, Zacks is promoting Four daily picks are offered free.
Here are highlights from Wednesday's Analyst Blog:
Natural Gas Supplies Tumble
The U.S. Energy Department's weekly inventory release showed a
larger-than-expected decrease in natural gas supplies. Despite this drawdown,
gas stocks continue to remain bloated, reflecting low demand amid robust
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
It is an indicator of current gas prices and volatility that affect businesses
of natural gas-weighted companies and related support plays like Chesapeake
Energy (CHK), Encana Corp. (ECA), Devon Energy Corp. (DVN), Nabors Industries
(NBR) and Helmerich & Payne (HP).
Analysis of the Data
Stockpiles held in underground storage in the lower 48 states fell by 201
billion cubic feet (Bcf) for the week ended January 4, 2013, higher than the
guided range (of 183–187 Bcf drawdown) as per the analysts surveyed by Platts.
The decrease represents the seventh withdrawal of the 2012-2013 winter heating
season after stocks hit an all-time high in early November. Moreover, the draw
was significantly higher than both the last year's withdrawal of 90 Bcf and
the five-year (2008–2012) average reduction of 132 Bcf for the reported
week.As a result of the 'better-than-expected' draw during the past week, the
current storage level – at 3.316 trillion cubic feet (Tcf) – is down 88 Bcf
(2.6%) from the last year though it is still 320 Bcf (10.7%) above the
In fact, natural gas inventories in underground storage have persistently
exceeded the five-year average since late September 2011 and ended the usual
summer stock-building season of April through October at a record 3.923 Tcf
(as of October 31, 2012).
A supply glut kept the natural gas prices under pressure during the couple of
years or so, as production from dense rock formations (shale) – through novel
techniques of horizontal drilling and hydraulic fracturing – remain robust,
thereby overwhelming demand.
However, with the U.S. winter set to be colder than the unusually warm last
one, we might expect some balancing of the commodity's supply/demand disparity
on the back of its more normalized use for space heating by
This, in turn, could improve the prices and buoy natural gas producers like
Encana and Chesapeake.
Among the natural gas-associated companies mentioned above, Anadarko
Petroleum, Chesapeake Energy, Ultra Petroleum, Encana, Nabors, Devon Energy,
Patterson-UTI Energy and Halliburton are all Rank #3 (Hold) stocks, implying
that these are expected to perform in line with the broader U.S. equity market
over the next one to three months.
However, Talisman retains a Rank #5 (Strong Sell), while Helmerich & Payne's
Rank #2 (Buy) implies that the company is likely to outperform the broader
U.S. equity market over the next one to three months.
Today, Zacks is promoting Four daily picks are offered free.
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