Does the Record Gas Draw Support a Bullish Case for Investors?

Core Insights - Natural gas markets experienced significant volatility due to cold weather effects and changing forecasts, raising questions about the impact of historic storage draws on natural gas exposure for investors [1][5] Price Action - Natural gas prices were volatile, peaking at $7.460 per MMBtu on January 28 due to extreme heating demand from Winter Storm Fern, but fell to $3.422 per MMBtu by the end of the week as forecasts turned milder [2][8] Storage and Inventory - The Energy Information Administration (EIA) reported a record withdrawal of 360 billion cubic feet (Bcf) from U.S. natural gas storage for the week ending January 30, flipping inventories from surplus to a slight deficit compared to seasonal norms [3][8] - Current working gas stocks are below the five-year average, indicating less margin for error if colder weather returns [3] Production and Supply - Natural gas production has largely recovered from freeze-offs, with output nearing record levels and rising gas rig counts indicating continued production growth [4] - Despite positive storage data, increased supply may limit price gains unless demand rises [4] Market Outlook - Natural gas prices are expected to remain volatile, influenced by weather changes and daily balances, but the record storage draw has improved the medium-term outlook for the market [5][6] - Strong demand for power generation, steady LNG exports, and tighter inventories support a more constructive view for natural gas fundamentals [6] Company Focus - Expand Energy: The largest natural gas producer in the U.S. post-merger, well-positioned to benefit from rising demand due to LNG exports and electrification trends. The 2026 earnings per share estimate indicates a 29.5% year-over-year improvement [9][10] - Antero Resources: Focused on natural gas and liquids in the Appalachian Basin, with a strong production mix and low debt profile. The 2026 earnings per share estimate suggests a 78.3% year-over-year surge [11][12] - Excelerate Energy: Specializes in LNG infrastructure and services, accounting for about 20% of the global Floating Storage Regasification Units (FSRUs) fleet. The 2026 earnings per share estimate indicates 32.2% year-over-year growth [13][14]