The rising prices of natural gas in Europe have impacted the prices of everyday items. Countries in Europe are looking to secure LNG cargoes before the winter begins to restore some balance to supply and demand. With the world turning to alternatives for oil, we may find ourselves using more natural gas. Natural gas is the cleanest fossil fuel, which makes it a good bridge to renewable energy since a full conversion to solar or wind energy sources isn’t readily available at the moment. The average P/E ratio of the utilities – regulated gas industry is 17.18x. Methanex is the world’s largest producer and supplier of methanol.
Meanwhile, China is selling its excess LNG supply at sky-high prices to Europeans waiting for American LNG. In this article, we start by discussing the short- and long-term bull case for liquid natural gas based on macro and geopolitical developments. Cheniere has a predictable cash flow because it sells most of its LNG under long-term, fixed-rate contracts.
Williams Companies’ GAAP net income for the first half of 2021 was $757 million against a loss of $255 million in the previous year. Earlier, the company paid dividends in the amount of $+0.41, which is more than 6.5% in annual terms. The company is trading at 7.2x 2023E EBITDA of $9.2 billion using its $41.8 billion market cap, $21.6 billion in expected net debt, and $2.4 billion in minority interest. I believe that is a very fair valuation, providing the company with at least 30% more upside. Also, note that the net debt load is quickly coming down as free cash flow is accelerating.
ExxonMobil began as a regional kerosene production company and has since scaled its operation up to include both excavating and exporting natural gas and oil. Investors who missed out on the massive move in oil and gas stocks this year are probably kicking themselves right about now. EQT gets a unanimous vote from the Wall Street analysts, with all 13 of the recent reviews agreeing that it’s a stock to buy, naturally culminating in a Strong Buy consensus rating.
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The stock is currently trading for $37.88 and has an average price target of $62.77, giving it a potential one-year gain of 66%. Just four analysts watch the stock, but they rate it a 1.6, which is a “strong buy,” and predict a target price of $24.17 fixed exchange rate system advantages and disadvantages — 31% above its closing price of $18.42 on Oct. 18. Southwestern Energy Co. is a natural gas exploration and production company. The company focuses on developing natural gas and natural gas liquids in Pennsylvania, Ohio, West Virginia and Louisiana.
- The strategic positioning in the core of the southwest Appalachians, along with horizontal drilling, will benefit the company.
- The oil cartel, which including Russia is known as OPEC+, decided in early August to lift its planned incremental monthly production increases by 100,000 barrels per day for September.
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- Moreover, on a long-term basis, the LNG bull case remains very strong.
You can choose from companies in different parts of the process — upstream, midstream or downstream. Or you can choose based on the type of stock — value, growth or momentum. Energy stocks have their ups and downs, just like every other sector. It’s a complicated business with a lot of different players, but there’s certainly money to be made.
So the in-app function analyzes and highlights customized information depending on personal goals, interests, and risk profile. Then it recommends suitable categories, stocks, ETFs or cryptocurrencies to invest in. We know that traders always need information, so we created a blog, knowledge base and FAQ. Our infinox leverages blog contains the latest market updates and information all traders worldwide can be interested in. The Knowledge Base gives guidance filled with relevant knowledge that is always in demand. The FAQ section lets users get brief details on the market and stocks; any “How to” & “What if” questions are here.
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Trading in natural gas futures is generally heaviest on Thursdays, when the US Department of Energy releases its weekly natural gas storage report. “It also casts longer-term uncertainty on market prospects for natural gas, especially in developing markets where it was to play a central role in energy transitions,” the IEA continues. 2020 seemed to prove the latter camp correct — natural gas prices remained at historic lows, with the COVID-19 pandemic wreaking havoc on energy commodities across the board.
Natural gas has long been a staple resource used in heating, cooking, and electricity production. More recently, it has begun to figure more prominently in industrial applications and even as a fuel source for automobiles. The U.S. Department of Energy estimates that about 23 million vehicles worldwide are powered by natural gas. Download Q.ai today for access to AI-powered investment strategies.
The International Energy Agency sees natural gas demand rising 31% by 2040, outperforming an expected 21% increase in oil demand. Traditionally, to short natural gas stocks you’d have to borrow the security from a third party, sell it at the current market price and buy it back later. You’d be hoping that the share price would fall in value, and you can buy it back for less. So, when you return it to its owner, you can pocket the difference.
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Meanwhile, natural gas needs to become a liquid for transportation overseas. In addition to natural gas, Kinder Morgan is also the largest independent transporter of refined petroleum products, independent terminal operator, and carbon dioxide transporter. The current geopolitical situation with the Russian invasion of Ukraine has impacted crude oil prices. With Russia cutting back supplies to the European countries that have sided with Ukraine, the demand and supply for crude oil has been severely disrupted. As a result of all these issues, natural gas is currently one of the most important commodities.
At the end of 2020, the company reported proven reserves of 17.6 trillion cubic feet of natural gas equivalent resources. Production averaged approximately 3,578 million cubic feet of equivalent a day in 2020 at a ratio of 33% liquids and 67% natural gas. “While this company’s basically a toll road operator for energy, they’ve also got a number of irons in the fire for liquefied natural gas,” Cramer said. Just over a month ago, Enbridge announced a partnership with Pacific Energy to build an LNG export terminal in British Columbia.
The stock is currently at $37.72 with a one-year target of $44.17. The stock is currently at $43.53 with a one-year target of $63.26. The LNG stock is currently at $171.67 with a one-year target of $193.68. Receive full access to our market insights, commentary, newsletters, breaking news alerts, and more.
As oil prices feel for a new trading range, rig activity in the U.S. posted its first three-week decline since July 2020, according to weekly data from Baker Hughes . While the number of rigs drilling for oil have held steady, rigs drilling for natural gas have dropped by one per week for the past two weeks. LNG cargoes have gone to Europe, compared with 34% in 2021, according to federal data.
Get Started Learn how you can make more money with IBD’s investing tools, top-performing stock lists, and educational content. IBD’s MarketDiem newsletter can help guide them in their journey! Boost your investing and personal finance knowledge with bite-size educational videos. “New LNG export projects will create future freight demand, further underpinning the very sound long-term fundamentals of our industry,” Kalleklev added. Flex LNG missed on earnings estimates early Wednesday but announced it expects above-forecast results in the second half of 2022.
In its natural gaseous state, it can’t go on ships to be exported to global markets. Instead, specialized facilities supercool the gas to turn it into a liquid, which can then go on gas-carrying ships and be exported to global markets. Cheniere sells the bulk of its LNG under long-term, fixed-rate contracts. It expects to produce a cumulative lexatrade $10 billion in distributable cash flow through 2024. If you want to invest in cleaner sources of energy with more diversification built into a single investment, you may want to look into Q.ai’s Clean Tech Kit. Our artificial intelligence scours the markets for the best investments for all manner of risk tolerances and economic situations.