U.S. natural gas prices are near their highest levels in two years, as the commodity has run more than 60% higher since the end of October. Cold weather temperatures in the U.S. are one driver, along with bets that Europe will look to U.S. liquefied natural gas, or LNG, as a Russia-EU gas agreement comes to an end. A handful of natural gas stocks have also rallied, and are in interesting chart positions.
Natural gas futures traded below $3.90 per British thermal unit on Thursday. In the last three months, U.S. gas prices have surged more than 50%, rebounding 67% since late October. Forecasts of a January cold front in the U.S. have pushed the industry to hike commodity demand expectations. Recent Energy Information Administration (EIA) data also shows gas storage fell by more than 100 billion cubic feet for a second straight week.
U.S. natural gas consumption grew by 1% to reach a high of 89.4 billion cubic feet per day in 2023 and continued growing in the first nine months of 2024, according to the latest EIA report.
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The increase in natural gas consumption in 2023 was driven by a 6.7% jump in consumption in the electric power sector, the largest natural gas consuming sector, according to the report.
Meanwhile, Ukraine said earlier this week it will not be renewing a five-year deal that has allowed Russia to pipe natural gas to Europe. The Ukraine pipeline accounts for about half of Russia’s total gas exports to Europe — with Slovakia, Italy, Austria and Czech Republic taking most of the gas. The deal expires at the end of 2024. Russia is negotiating with individual European countries.
Stored EU gas supplies currently sit at 75% entering January, according to Aggregated Gas Storage Inventory, which tracks the commodity.
President-elect Donald Trump has pledged to issue more LNG export permits, ending a Biden-era pause and opening the door to more profitable exports vs. domestic gas sales. A new wave of North American liquefied natural gas supply is expected to hit the market in 2025. Forecasts call for a weakening of global LNG prices, but a boost to U.S. gas prices, according to S&P Global Commodity Insights 2025 energy outlook, released on Dec. 11.
“We expect the Trump administration to grant export approvals to all pending LNG export projects which could support final investment decisions in the second half of 2025,” The S&P Global Commodity Insights report states.
Commodity Stocks Show Signs Of Life
Gas producer PrimeEnergy Resources (PNRG) jumped 2.7% during pre stock market action on Thursday after soaring 15.3% to 201.20 on Tuesday.
PNRG climbed 82% following an August breakout, before pulling back to test its 10-week moving average. The thinly-traded stock punched back above its 10-week line with a 17% gain last week.
Fellow gas producer Comstock Resources (CRK) is holding near highs, up 36% from an early November breakout.
DTM Midstream (DTM) is in buy range, rebounding from 10-week support after a three-week pullback. The stock has a year-to-date gain of 89%.
Another midstream outfit, Targa Resources (TRGP), ran up 143% for the year to late November. After five weeks of consolidation the stock turned higher last week. Breaks of resistance or downtrends could present early entries.
Antero Resources (AR), which operates both production and midstream segments, is in a flat base with a traditional 34.65 buy point. AR shares traded below that entry early Thursday.
Meanwhile, new Issue LandBridge (LB) went public in June and quickly sprinted more than 300% higher. The stock ended a four-week pullback with a gain last week, but trade was weak.
Please follow Kit Norton on X @KitNorton for more coverage.
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