VelocityShares 3x Long Natural Gas ETN

Decent earnings combined with low expectations are fueling rally after rally – not to mention the ever elusive promise of a China deal.

Noble Energy (NBL) plans to report its Q2 2018 earnings on August 3. The company’s Q2 revenue estimate stands at $1.13 billion.

Unlike its oil-weighted peers, Cabot Oil & Gas (COG) hasn’t risen much this year. The natural gas–weighted company’s stock has declined 4.5% YoY.

Anadarko Petroleum’s (APC) DJ Basin upstream operations are to receive $1 billion–$1.5 billion in capex this year. Per Anadarko Petroleum management, free cash flow from the region is expected to surpass $1 billion.

Key factors have been supporting CHK stock recently, including rising oil prices, strong earnings, higher production, and the company paying down its debt.

CHK fell ~18% year-over-year, while XLE rose 14.3% year-over-year.

Chesapeake Energy (CHK) stock increased 18.5% in the week ending May 15. The stock was supported by higher crude oil prices (DBO) (UCO).

Stone Energy stock has increased the most among our top five companies. Stone Energy stock has risen 60% YoY (year-over-year).

Centennial Resource Development stock has declined ~15% YoY. The Energy Select Sector SPDR ETF (XLE) has declined ~4.5% YoY.

On a YoY basis, Diamondback Energy stock has increased 8.3%. Diamondback Energy stock has outperformed the Energy Select Sector SPDR ETF (XLE).

For the week ending March 16, Southwestern Energy stock had a high correlation of ~79% with natural gas (UGAZ).

For the week ending March 9, 2018, Range Resources (RRC) stock rose more than 7% or from $14.65 to $15.74.

On March 6, 2018, the EIA said that US natural gas prices could average $2.99 per MMBtu in 2018—6.6% lower than the February 2018 estimates.

For 4Q17, Southwestern Energy (SWN) reported revenues of ~$809 million—higher than Wall Street analysts’ consensus of ~$803 million.

Range Resources’ 4Q17 revenue In 4Q17, Range Resources (RRC) reported revenue of ~$600 million, lower than Wall Street analysts’ estimate of ~$626 million. RRC’s revenue rose ~24% from its 3Q17 revenue of ~$482 million and ~2% from its 4Q16 revenue of ~$590 million. Reasons behind Range Resources’ higher revenue in 4Q17 Range Resources’ higher revenue could be attributed […]

According to PointLogic, US dry natural gas production decreased 0.1% to 78 Bcf (billion cubic feet) per day on February 15–21, 2018.

March US natural gas futures contracts fell 0.34% to $2.62 per MMBtu (million British thermal units) on February 23, 2018.

NYMEX natural gas futures contracts for March delivery fell 0.27% to $2.58 per MMBtu on February 15, 2018.

March US natural gas futures contracts fell 4.6% to $2.85 per MMBtu (million British thermal units) on February 1, 2018. Prices hit a three-week low.

As of January 26, 2018, 31.0% of the analysts have a “strong buy,” 51.7% have a “buy,” 13.8% have a “hold,” and 3.5% have a “sell” recommendation on Encana.

Pioneer Natural Resources (PXD) has recovered significantly from its low point in 2017. The stock has been on an uptrend recently, rising ~4% year-over-year.

On January 24, 2018, Reuters reported that 23 analysts had made recommendations on ConocoPhillips (COP).

In 2017, Chesapeake Energy (CHK) turned out to be the second-worst-performing energy stock of the Energy Select Sector SPDR ETF (XLE).

Whiting Petroleum (WLL) stock slowed down last week, rising just 0.50% in the week ended January 19. Year-over-year, the stock has fallen ~41%.

As we saw in the previous part of this series, Southwestern Energy’s (SWN) stock price decreased strongly by ~6.0% for the week ended January 19. Natural gas (UGAZ)(DGAZ)(UNG) prices fell marginally by ~0.5%.

Canadian Pacific’s railcar traffic Calgary-based Canadian Pacific Railway (CP) posted a marginal gain of 0.6% in its carload traffic in the week ended January 13, 2018, from 29,000 carloads in the week ended January 14, 2017, to 29,300 units. The company’s volume growth was in tune with that of US railroads but contrasted with the decline […]

Baker Hughes, a GE company, released its weekly US natural gas rigs report on January 19, 2018. Natural gas rigs increased by two to 189 on January 12–19.

Anadarko Petroleum stock Since late 2017, Anadarko Petroleum (APC) stock has mostly followed an uptrend, like most energy stocks. Year-to-date, Anadarko Petroleum’s stock has fallen ~16.6%. In comparison, the Energy Select Sector SPDR ETF (XLE) has risen ~3%, and the S&P 500 SPDR ETF (SPY) (SPX-INDEX) has risen 24%. Anadarko Petroleum stock has been driven primarily […]

February US natural gas (UGAZ) futures contracts are above their 20-day and 50-day moving averages on January 11, 2018.

February US natural gas futures contracts rose 6.1% to $3.08 per MMBtu on January 11, 2018. It’s the highest settlement since November 29, 2017.

Hedge funds’ net long positions in US natural gas futures (UGAZ) (UNG) and options contracts were at 5,318 for the week ending January 2, 2018.

US natural gas rigs rose 35% in the last 12 months, while US natural gas prices (UNG) fell 20% during this period.

A Reuters poll estimates that US natural gas inventories could have fallen by 332 Bcf (billion cubic feet) between December 29, 2017, and January 5, 2018.

For the week starting January 1, 2018, crude oil prices have risen ~2%, from last week’s close of $60.42 per barrel to $61.63 per barrel on January 3, 2018.

For the week ending December 29, Southwestern Energy stock rose ~4.9% from $5.32 to $5.58. The stock rose in the first three trading sessions of the week.

Natural gas futures (GASL) (BOIL) rose 11.1% on December 22–29, 2017. It was the biggest weekly gain since December 2016.

Jacksonville-based Eastern US rail giant CSX (CSX) has lost volumes to rival Norfolk Southern (NSC) in 2017.

January US natural gas (UGAZ) futures contracts were below their 100-day, 50-day, and 20-day moving averages on December 21, 2017.

For 9M17 (the first nine months of 2017), Chesapeake Energy (CHK) had normalized FCF (free cash flow) of ~572%.

As we saw in part one of this series, EQT (EQT) had normalized free cash flows of ~5% in the first nine months of 2017, the fifth highest among crude oil (USO) and natural gas (UNG) (UGAZ) producers we have been tracking.

This week, unleaded gasoline (UGA) prices are leading the rise in energy commodities. Gasoline prices rose very strongly from last week’s close of $1.655 per gallon on December 15 to $1.745 per gallon on December 20, an increase of ~5.4%.

CSX’s carloads in Week 49 In 2017, among all Class I railroads, Jacksonville-headquartered CSX (CSX) has consistently reported lower YoY (year-over-year) freight volumes. The week ended December 9 was a no exception. In that week, CSX reported a 1.8% decline in carload traffic. CSX’s carload volumes fell to ~71,000 units from ~72,100 carloads in the week ended […]

Chesapeake Energy (CHK) stock continued to fall in the week ended December 15, 2017, by 4.6% from the previous week. This year, CHK stock has fallen 49%.

For the week ending December 15, Southwestern Energy stock had a very high correlation of ~92% with the natural gas (UNG) (DGAZ).

January natural gas (GASL) (UNG) futures contracts trading in NYMEX fell 1.1% to $2.68 per MMBtu (million British thermal units) on December 14, 2017.

In the last one month, Southwestern Energy stock’s median target price remained unchanged at $8.00.

Southwestern Energy (SWN) stock has fallen more than 9% in the last five trading sessions.

As of 3Q17, Pioneer Natural Resources’ (PXD) net debt-to-EBITDA is on the lower side when compared with the trailing four quarters.

CSX registered a 0.6% gain in intermodal volumes in week 48 of 2017.

BNSF Railway saw a double-digit rise in its intermodal volumes in the 48th week of 2017.

US dry natural gas production fell by 0.5 Bcf per day or 0.7% to 76.2 Bcf per day on November 30–December 6, 2017, according to PointLogic.

An unexpected increase in US natural gas inventories during the withdrawal season pressured natural gas (FCG) (GASL) prices on December 7, 2017.

Year-to-date, EPE has fallen sharply from its 2016 close of $6.55 to $1.80 on December 1, 2017—a sizeable decrease of ~73.0%.

Baker Hughes, a GE company, is scheduled to release its US crude oil and natural gas rig count report on December 1, 2017.

Kansas City Southern’s carloads Over the past few weeks, US-Mexico railroad Kansas City Southern (KSU) has seen higher freight volumes year-over-year. In the week ended November 18, 2017, KSU’s carload traffic stood at 26,600 units, up 5.7% from the 25,200 units it reported in the week ended November 19, 2016. Whereas many US railroads reported volume losses, Kansas City […]

The EIA estimated that US natural gas inventories fell by 46 Bcf (billion cubic feet) or 1.2% to 3,726 Bcf on November 10–17, 2017.

US natural gas futures contracts for December delivery fell 1.6% to $2.96 per MMBtu on November 22, 2017. It was the lowest settlement since November 2.

December natural gas (GASL) (BOIL) futures were below their 50-day and 100-day moving averages of $3.12 per MMBtu and $3.16 per MMBtu on November 16, 2017.

December US natural gas (UNG) (UGAZ) futures contracts trading in NYMEX rose 0.97% and settled at $3.05 per MMBtu on November 16, 2017.

In week 44, which ended November 4, 2017, Norfolk Southern’s (NSC) railcar volumes rose slightly by 0.2%. However, intermodal shipments rose 7.9%.

BNSF’s Coal revenues in 3Q17 were $1 billion, a 5.9% rise from $953 million in the corresponding quarter last year.

Baker Hughes is scheduled to release its US crude oil and natural gas rig count report on November 11, 2017.

NYMEX natural gas (GASL) (FCG) futures contracts for December delivery rose 0.6% to $3.21 per MMBtu in electronic trading at 1:10 AM EST on November 10.

This week, natural gas (UNG) prices are leading the rise in energy commodities. Natural gas prices rose from last week’s close of $2.98 per mmBtu (million British thermal units) on November 3 to $3.15 per mmBtu on November 7.

World Bank expects that US natural gas prices could average $3.1 per MMBtu in 2018, which would be 4% higher than the average level in 2017.

December natural gas (UNG) (BOIL) futures contracts rose 2.4% to $3.05 per MMBtu in electronic exchange at 1:07 AM EST on November 6, 2017.

After Chesapeake Energy’s (CHK) 3Q17 earnings release on November 2, 2017, its stock fell ~7.6%.

For 3Q17, Wall Street analysts expect Occidental Petroleum (OXY) to report revenues of ~$3.1 billion.

PointLogic estimates that weekly US dry natural gas production rose by 0.9 Bcf (billion cubic feet) per day to 74.6 Bcf per day between October 19 and October 25, 2017.

Wall Street analysts expect Marathon Oil (MRO) to report a higher cash flow of ~$490 million YoY (year-over-year) in 3Q17 from ~$366 million in 3Q16.

In the week ended October 14, 2017, Jacksonville-based CSX’s (CSX) carloads remained nearly unchanged compared with the volumes in the week ended October 15, 2016.

In the week ended October 14, US railroads’ overall freight volumes rose 3% compared with the same week in 2016. US railroads carried ~10.6 million carloads, up 3.7% for the first 41 weeks of 2017.

US dry natural gas production will likely average ~73.6 Bcf/d in 2017. It will likely rise by 4.9 Bcf/d or 6.6% to 78.5 Bcf/d in 2018.

In this article, we’ll look at CSX’s Merchandise segment’s revenue in the third quarter of 2017. The vertical’s revenue fell by $53.0 million or 3% to $1.68 billion in 3Q17 from $1.74 billion on a YoY (year-over-year) basis.

US natural gas consumption rose by 7.3 Bcf (billion cubic feet) per to 70.37 Bcf per day in July 2017 compared to August 2017.

November natural gas (UGAZ)(DGAZ) futures contracts fell 1.13% to $2.96 per MMBtu (million British thermal units) in NYMEX electronic trading at 2:05 AM EST on October 16.

CHK stock has fallen ~20.4% since the beginning of 2017, mirroring natural gas prices (UNG)(UGAZ) for the most part.

For 3Q17, Wall Street analysts expect Southwestern Energy (SWN) to report revenues of ~$759 million.

Recovery in crude oil prices (DBO) (UCO) has been driving CHK stock higher. In the week ended September 29, 2017, crude oil rose 2%.

On September 29, the CFTC (U.S. Commodity Futures Trading Commission) is slated to release its weekly “Commitment of Traders” report.

Kansas City Southern’s (KSU) railcar traffic increased 4.5% in the week ended September 16, 2017.

CSX posted a double-digit 11.0% fall in railcar volumes in the week ended September 16, 2017.

Merger and acquisition (or M&A) activity in the oil and gas sector has been in high gear in 2017.

October US natural gas futures contracts rose 0.4% to $2.96 per MMBtu (million British thermal units) in electronic trading at 2:05 AM EST on September 22.

In the week ended September 9, 2017, CSX registered a 4.2% fall in railcar volumes.

Market data provider PointLogic estimates that weekly US dry natural gas production rose by 0.2 Bcf (billion cubic feet) per day to 73.9 Bcf per day from September 7 to 13.

Since 1Q16, crude oil (USO)(SCO) prices have risen from lows of $26.05 per barrel to $49.30 per barrel as of September 13.

The above graph shows that the smallest Class I US railroad, Kansas City Southern (KSU), posted the highest rise in 2Q17 revenues.

The EIA estimates that US natural gas prices could average $3.06 per MMBtu in 2017—1.4% lower than previous estimates.

The EIA estimates that monthly US natural gas consumption rose by 0.11 Bcf per day or 0.2% to 62.77 Bcf per day in June 2017—compared to May 2017.

Hurricane Harvey hit the Gulf Coast region on August 26, 2017. It’s estimated to be one of the biggest hurricanes to hit the US in the last 50 years.

EQT’s (EQT) July presentation noted that it had hedged 261.0 Bcf, or 72.0% of its forecast natural gas volumes, for the second half of 2017.

Whiting Petroleum (WLL) stock has fallen 65% since the beginning of this year.

Hedge funds reduced their net bullish positions on US natural gas futures and options contracts by 2,511 contracts to 81,683 on August 15–22, 2017.

The EIA reported that US natural gas inventories rose by 43 Bcf (billion cubic feet) or 1.4% to 3,125 Bcf on August 11–18, 2017.

Chesapeake Energy (CHK) has hedged 74.0% of its remaining forecast natural gas (UGAZ) volumes at $3.09 per Mcf.

In July 2017, Genesee and Wyoming recorded a slight decline in its North American traffic YoY (year-over-year).

US natural gas active futures hit $1.68 per MMBtu on March 4, 2016—the lowest level in 17 years. Prices hit $3.99 per MMBtu on December 28, 2016.

The EIA (Energy Information Administration) estimates that monthly US dry natural gas production hit a ten-month high.

On August 10, 2017, the EIA (U.S. Energy Information Administration) released its weekly US natural gas inventory report.