2 Natural Gas Stocks Worth a Closer Look Amid Price Volatility

Industry Overview - The U.S. Energy Department reported a larger-than-expected increase in natural gas supplies, with stockpiles rising by 58 billion cubic feet (Bcf) for the week ended Sept. 13, slightly above the analysts' guidance of 57 Bcf [3] - Total natural gas stocks reached 3,445 Bcf, which is 194 Bcf (6%) above the 2023 level and 274 Bcf (8.6%) higher than the five-year average [4] - Natural gas prices increased by 5.4% to $2.434 per million British thermal units (MMBtu) despite the bearish inventory data, marking the fourth consecutive weekly rise [6] Demand and Supply Dynamics - Daily natural gas consumption decreased to 95.4 Bcf from 96.6 Bcf in the previous week, primarily due to weak residential/commercial usage and reduced deliveries to U.S. LNG export facilities [5] - Strong production and high stockpiles continue to pressure natural gas prices, with companies like APA Corporation and EQT Corporation scaling back drilling activities due to low price realizations [7] - U.S. LNG exports remain robust, supported by environmental policies and Europe's efforts to reduce reliance on Russian gas, indicating strong demand as winter approaches [9] Company Analysis - Range Resources (RRC) is highlighted as a resilient stock, with a large contiguous acreage position providing over 30 years of low-breakeven, high-return inventory, producing an average of 2,152.9 million cubic feet equivalent daily in Q2 2024 [13][14] - Coterra Energy (CTRA) is also noted for its stability, producing an average of 2,779.8 million cubic feet daily from its assets in the Marcellus Shale, with a market valuation of around $17.5 billion [15][16] - Comstock Resources (CRK) is considered a higher-risk option, with downward revisions in EPS estimates by 30% for the current quarter and 12% for the fiscal year, reflecting negative sentiment around natural gas [16][17]