CHICAGO , July 5, 2011 /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 (NYSE: CHK),
EnCana Corp. (NYSE: ECA), Devon Energy Corp. (NYSE:
DVN), Patterson-UTI Energy (Nasdaq: PTEN) and Helmerich
& Payne (NYSE: HP).
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Here are highlights from Friday's Analyst Blog:
Rise in Gas Supplies Decelerates
The U.S. Energy Department's weekly inventory release showed a
smaller-than-expected build-up in natural gas supplies on the back
of increased domestic gas consumption, partially offset by a light
weather load.
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, latest storage level
estimates, recent weather data and other market activity 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 like Chesapeake Energy (NYSE: CHK), EnCana
Corp. (NYSE: ECA), Devon Energy Corp. (NYSE: DVN),
Patterson-UTI Energy (Nasdaq: PTEN) and Helmerich &
Payne (NYSE: HP).
Stockpiles held in underground storage in the lower 48 states
rose by 78 billion cubic feet (Bcf) for the week ended June 24, 2011, lower than expectations (of 80–84
Bcf gain) of the analysts surveyed by Platts.
The increase – the twelfth injection in as many weeks – is
however bigger than both the last year's build-up of 63 Bcf and the
5-year (2006–2010) average build of 77 Bcf for the reported week.
The current storage level, at 2.432 trillion cubic feet (Tcf), is
down 243 Bcf (9.1%) from last year and is 63 Bcf (2.5%) below the
five-year average.
A supply glut had pressured natural gas futures for most of
2010, as production from dense rock formations (shale) – through
novel techniques of horizontal drilling and hydraulic fracturing –
remained robust, thereby overwhelming demand.
Storage amounts hit a record high of 3.840 Tcf in November,
while gas prices during the year fell 21%. As a matter of fact,
natural gas prices have dropped nearly 70% from a peak of about
$13.60 per million Btu (MMBtu) to the
current level of around $4.35, in
between sinking to a low of $2.50 in
September 2009.
However, stocks of the commodity slid approximately 2.261 Tcf
during the five-month period (November 5,
2010 to April 1, 2011) on the
back of a colder-than-normal end to this past winter, production
freeze-offs in January/February, and the steadily declining rig
count. These factors cut into the U.S. supply overhang, thereby
creating a deficit in natural gas inventories after erasing the
hefty surplus over last year's inventory level and the five-year
average level.
But with the end of winter's peak heating demand, natural gas
prices continue to be under pressure against the backdrop of
sustained strong production. Producers are now hoping that the gap
between supply and demand will further narrow in the coming months
as they bet on a hotter-than-expected summer and an active
hurricane season.
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