Why Did Natural Gas Prices Finish Down Nearly 8% Last Week?

Industry Overview - The U.S. Energy Department reported a higher-than-expected increase in natural gas supplies, with stockpiles rising by 82 billion cubic feet (Bcf) for the week ended Oct. 4, surpassing analysts' expectations of a 72 Bcf addition [3] - Total natural gas stocks reached 3,629 Bcf, which is 124 Bcf (3.5%) above the 2023 level and 176 Bcf (5.1%) higher than the five-year average [4] - Natural gas prices fell by 7.8% to close at $2.632 on the New York Mercantile Exchange, marking the second consecutive weekly loss [5] Company Analysis - Coterra Energy is an independent upstream operator focused on natural gas exploration and production, with significant assets in the Marcellus Shale, producing an average of 2,779.8 million cubic feet daily [8] - Coterra has a market valuation of approximately $18.4 billion and has experienced a 14.8% decline in stock price over the past year [9] - EQT Corporation is the largest natural gas producer in the U.S., with over 90% of its production coming from natural gas, primarily in the Appalachian Basin [10] - EQT has consistently beaten earnings estimates, with a trailing four-quarter earnings surprise of about 108.5%, although its shares have also decreased by 14% in the past year [11] Investment Recommendations - Investors are advised to focus on resilient stocks like Coterra Energy and EQT Corporation due to the ongoing volatility in the natural gas market [2][7] - Higher-risk options such as Comstock Resources should be approached with caution, as the company has seen downward revisions in earnings estimates [12]