Natural Gas Producer Surges as Prices Hover Near 8 Month High

July 1, 2016   |   8:15 am

Contributor: Robert Hunter, Research Driven Investing

Natural gas producers have been trending upwards as prices have rallied to near an eight-month high. The United States Natural Gas Fund, LP (NYSE ARCA: UNG) has surged approximately 32.3 percent in the past month. As of June 28th, natural gas prices have risen in 7 of the 10 previous sessions. Natural gas for July delivery recently touched $2.68 a million British thermal units on the New York Mercantile Exchange and has not traded below the $2.00 level since early March. Register with us now for your free membership and gain access to our energy reports at: www.rdinvesting.com.

Natural gas prices are forecasted to continue to rise on increased summer demand. Private weather forecasters MDA Weather Services and Commodity Weather Group LLC have called for unseasonably warm temperatures deep into June.

“For the next few weeks (the gas market is) all going to be about weather and power,” said Richard Soultanian, co-president of energy-consulting firm NUS Consulting Group in New Jersey. “We’ve started the summer season off with a bang. It’s been really hot and humid.”

Chesapeake Energy Corporation (NYSE: CHK)

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Chesapeake Energy’s shares declined 3.17 percent to close at $4.28 a share Thursday. The stock traded between $4.15 and $4.40 on volume of 35.42 million shares traded. The stock appears to be facing some resistance at $4.36 and $4.81 with some support at $3.68 and $2.86. The company reported production averaged approximately 672,400 Barrels of Oil Equivalent (boe) per day in the first quarter of 2016, an increase of 1 percent year-over-year. Chesapeake’s 2016 first quarter revenues declined by 39% year over year, primarily due to a decrease in the average realized commodity prices received for its production. Chesapeake has reiterated its target of $1.2 to $1.7 billion total gross proceeds from asset divestitures by the end of 2016. Shares of Chesapeake Energy have fallen approximately 4.9 percent year-to-date, but have rallied roughly 2.9 percent in the past month.

Devon Energy Corp. (NYSE: DVN)

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Devon Energy’s shares declined 1.20 percent to close at $36.25 a share Thursday. The stock traded between $35.82 and $36.79 on volume of 6.25 million shares traded. The stock appears to be facing some resistance at $37.91 and $38.97 with some support at $35.86 and $30.04. On June 15th, the company announced an agreement to sell its remaining non-core assets in the Midland Basin for $858 million. Devon Energy has raised its full-year 2016 production guidance from core assets to a range of 540,000 to 560,000 Boe per day, up 7,000 Boe from its previous guidance. Shares of Devon Energy have gained approximately 13.2 percent year-to-date and are up roughly 0.9 percent in the past month.

Encana Corp. (NYSE: ECA)

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Encana’s shares declined 3.83 percent to close at $7.79 a share Thursday. The stock traded between $7.72 and $8.06 on volume of 12.13 million shares traded. The stock appears to be facing some resistance at $7.84 and $8.49 with some support at $6.30 and $6.05. On June 21st, the company announced an agreement to sell its Gordondale assets, which produced an average of 25,200 BOE per day net after-royalty basis during the first quarter of 2016, to Birchcliff Energy Ltd. for CAD$625 million. Shares of Encana have gained approximately 53.1 percent year-to-date and are up roughly 2.0 percent in the past month.

Southwestern Energy Company (NYSE: SWN)

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Southwestern Energy shares fell 3.45 percent to close at $12.58 a share Thursday. The stock traded between $12.54 and $13.26 on volume of 26.66 million shares traded. The stock appears to be facing some resistance at $13.16 and $14.28 with some support at $11.26 and $9.32. On June 9th, the company announced a deal with Antero Resources Corporation to sell approximately 55,000 net acres in West Virginia for $450 million, which is expected to close in the third quarter of 2016. Shares of Southwestern Energy have gained approximately 77.1 percent year-to-date and are down roughly 3.6 percent in the past month.

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