The Zacks Analyst Blog Highlights: Range Resources, Southwestern Energy, Cabot Oil & Gas, Comstock Resources and Ultra Petroleum

For Immediate Release

Chicago, IL – February 09, 2016 – 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 and ETFs recently featured in the blog include Range Resources Corp. (RRC), Southwestern Energy Co. (SWN), Cabot Oil & Gas Corp. (COG), Comstock Resources Inc. (CRK) and Ultra Petroleum Corp. ( UPL).

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Here are highlights from Monday’s Analyst Blog:

Natural Gas Futures Fall Sharply on Weather Worries

The U.S. Energy Department's weekly inventory release showed that the decrease in natural gas supplies were in line with expectations. However, with forecasts for milder temperatures ahead, the commodity’s price fell sharply. As it is, with production remaining plentiful and expected to outpace demand for most of 2016, natural gas is likely to stay depressed for a while.

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 152 billion cubic feet (Bcf) for the week ended Jan 29, 2016, at the upper end the guided range (of 148–152 Bcf draw) as per the analysts surveyed by Platts, the energy information arm of McGraw-Hill Financial Inc. The decrease was higher than last year’s drop of 112 Bcf for the reported week but was below the 5-year (2011–2015) average shrinkage of 165 Bcf.

The past week’s decline – the tenth successive withdrawal of the 2015-2016 winter heating season after stocks hit an all-time high in November 2015 – took the current storage level down to 2.934 trillion cubic feet (Tcf). It is still up 490 Bcf (20.0%) from last year and is 445 Bcf (17.9%) above the five-year average.

Natural Gas Futures Tank

With the decrease in storage unable to beat expectations, gas prices dived 10% for the week to close at $2.063 per MMBtu on Friday. The slide was also exacerbated by predictions of tepid demand for the heating fuel due to milder weather forecasts over the last stretch of the November-March winter heating season.

As It Is, Prices Remain Depressed

Natural gas prices are way off the heights reached some years back. From a peak of about $13.50 per MMBtu in 2008 to just over $2 now, the plummeting value of natural gas represents a decline of around 85% over eight years. In fact, it fell to its lowest point in almost 17 years in December.

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 have been held back. What’s more, industrial requirement has been lackluster over the past few years with demand barely rising.

In the past, winter weather has played a factor in boosting prices with demand for domestic natural gas exceeding available supply. But with no dearth of new supply, even this association is becoming more and more obsolete.

The price weakness translates into limited upside for natural gas-weighted companies including the likes of Range Resources Corp. (RRC), Southwestern Energy Co. (SWN), Cabot Oil & Gas Corp. (COG), Comstock Resources Inc. (CRK) and Ultra Petroleum Corp. ( UPL).

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RANGE RESOURCES (RRC): Free Stock Analysis Report
 
SOUTHWESTRN ENE (SWN): Free Stock Analysis Report
 
CABOT OIL & GAS (COG): Free Stock Analysis Report
 
COMSTOCK RESOUR (CRK): Free Stock Analysis Report
 
ULTRA PETRO CP (UPL): Free Stock Analysis Report
 
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