VelocityShares 3x Long Natural Gas ETN

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.

ConocoPhillips stock is nearing its psychologically important price level of $40. It hasn’t been able to break above this level since January 5.

In its March report, the EIA stated that the US natural gas supply-demand gap could average 2.89 Bcf per day in 2016 and rise to 4.05 Bcf per day in 2017.

Chesapeake Energy’s (CHK) 2016 debt management efforts included a combination of debt exchanges, open market repurchases, and equity-for-debt exchanges.

The EIA estimates that US natural gas inventories will be ~4.0 trillion cubic feet by the end of October 2016, which is the start of the 2016–2017 heating season.

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.

A symmetrical triangle could swing natural gas prices in either direction. Bears could see the key support at $2.50 per MMBtu. Prices hit this mark in April.

Chesapeake Energy (CHK) stock has been choppy in the last few weeks, and its stock has been following the movements in energy prices. Since the beginning of 2017, CHK stock has fallen 28%.

Over the last ten years, whenever natural gas inventories have been higher than their five-year average, prices have fallen.

There are 21 analysts covering CNI. Of those, only five, or 24.0%, have a “buy” rating for the stock.

Unlike most energy stocks, Cabot Oil & Gas (COG) stock has increased this year. Since January, Cabot Oil & Gas stock has risen ~10%.

NSC broke its upward volume journey and reported a slight fall of 2% in its overall freight rail traffic in the week ended July 1, 2017.

SM Energy (SM) announced its 1Q16 earnings on May 3, 2016, after the Market closed. On the day of its earnings release, SM Energy’s stock price fell by 3.68% to close at $29.06 per share.

For 2Q17, Cobalt International Energy (CIE) reported revenues of ~$14.0 million, which was lower than Wall Street analysts’ consensus of ~$34.0 million.

The EIA reported that US natural gas inventories rose by 74 Bcf (billion cubic feet) to 2,189 Bcf on April 14–21. Inventories rose 3.5% week-over-week.

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

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.

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%.

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

In the week ended December 3, Union Pacific’s (UNP) overall railcars fell 2.6% to 95,000-plus units from ~98,000 units in the corresponding week of 2015.

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.

Union Pacific’s carloads In the western United States, Union Pacific (UNP) competes with BNSF Railway, which is owned by Berkshire Hathaway (BRK-B). In the week ended February 18, 2017, UNP’s overall railcar volumes grew 7.2% YoY (year-over-year) to ~96,000 units. Railcar volumes, excluding coal and coke, rose 1.8% YoY to 70,000 units, compared with 69,000 units in […]

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

Natural gas futures contracts for October delivery fell for the second day. Natural gas prices have been fluctuating within a trading range for the last two months.

On August 3, 2017, natural gas’s implied volatility was 30%—5.1% below its 15-day moving average.

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

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

Hillary Clinton’s energy proposal implementation might slow down US crude oil production activity. It would be bullish for US crude oil prices.

Natural gas April futures contracts closed near the day’s high—up by 0.99% on February 27, 2015. The total volume for the day was at 107,303 contracts.

BNSF Railway’s total railcars for the week ended July 16, 2016, fell by 1.8% to 99,000 units compared with 100,000 plus units on a year-over-year basis.

Chesapeake Energy (CHK) stock has fallen a significant ~23.0% since the beginning of 2017. For the most part, it’s mirroring natural gas prices.

As of April 13, 2017, US natural gas prices were 19% below their 15-month high. They fell due to warmer-than-normal weather for this time of year.

Natural gas prices are in a long-term downward trend, driven by estimates of a huge supply outweighing demand from mid-November 2014.

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

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

In the Western United States, Union Pacific (UNP) competes with BNSF Railway, which is owned by Berkshire Hathaway (BRK-B).

As of May 4, 2017, June natural gas futures are above their 50-day and 200-day moving averages.

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

2016 has been good for natural gas prices (UGAZ). Prices have risen ~34% year-over-year.

Uncertainty surrounding the recovery of coal prices and the enactment of environmental regulations such as the Clean Power Plan impacted coal stocks in 1Q16.

A bull-bear battle in February 2015 has caused natural gas prices to rise and fall repeatedly. The bull isn’t out of fight yet.

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

Chesapeake Energy’s (CHK) 4Q16 production is expected to be 550 Mboepd–570 Mboepd.

In the reported week, UNP’s combined coal (ARLP) and coke carloads fell 8.1% on a year-over-year basis.

Donald Trump supports increasing production of fossil fuels like coal, crude oil, and natural gas. It could support employment and benefit the economy.

Lower natural gas prices, demand from power plants, and warm weather could support natural gas prices. The next resistance is seen at $3 per MMBtu.

Colder weather conditions and gas glut led to volatility in natural gas prices in February 2015. The EIA reported the weekly gas in storage on March 6, 2015.

Chesapeake Energy (CHK) stock showed signs of improvement in the last few weeks. The stock tracked natural gas prices higher.

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 […]

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

In the reported week, UNP’s combined coal (ARLP) and coke carloads fell 7.7% on a year-over-year basis. UNP’s coal revenues fell ~20% in 3Q16.

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

In the week ended July 23, Union Pacific’s total railcars declined by 6.3% to 94,000 units from ~100,000 units in the corresponding week of 2015.

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.

Union Pacific’s carloads In the western United States, Union Pacific (UNP) competes with BNSF Railway, which is owned by Berkshire Hathaway (BRK-B), In the week ended January 28, 2017, UNP’s overall railcar volumes contracted 0.5% to ~95,000 units, flat compared with the volumes reported in the corresponding week of 2016. Railcar volumes, excluding coal and coke, […]

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

Chesapeake Energy (CHK) stock has fallen ~26.0% since the beginning of 2017.

Whiting Petroleum (WLL) stock has been under pressure for most of this year. WLL stock has fallen ~60% since the beginning of 2017.

The EIA estimated that monthly US natural gas consumption rose by 19 Bcf per day to 91 Bcf per day in December 2016—compared to the previous month.

BNSF Railway’s (BRK-B) total railcars for the week ended December 10, 2016, fell 5.5% to ~95,000 units, compared to ~100,000 units on a year-over-year basis.

Chesapeake Energy’s (CHK) 2017 production growth guidance is -3.0%–2.0%. It plans to increase its production 5.0%–15.0% annually through 2020.

BNSF Railway’s total railcars for the week ended July 9, 2016, fell by 11% to 85,000 plus units compared with 96,000 plus units on a year-over-year basis.

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.

Natural gas April futures trading on NYMEX closed at $2.732 per MMBtu on March 10, 2015. This was the fifth up day in the past ten days.

CSX (CSX) is a major operator in the Eastern US that competes with Norfolk Southern (NSC).

Union Pacific (UNP) competes with Berkshire Hathaway owned BNSF Railway (BRK-B) in the Western US.

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

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.

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 […]

As of April 27, 2017, natural gas prices were 19.1% below their December 2016 high. Prices fell due to warmer-than-normal weather for this time of year.

In the week ended June 4, 2016, CSX’s carloads, excluding coal and coke, fell by 13.4%—somewhat higher compared with NSC’s volumes in the same category.

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.

In the week ended August 27, 2016, Union Pacific’s railcar volumes declined by 6.9%, at 98,000-plus units from 105,000-plus units in the corresponding week in 2015.

In the week ended February 25, 2017, UNP’s overall railcar volumes grew 5.4% YoY to ~95,000 units.

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

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

November natural gas futures contracts are trading in a downward trending price channel. Weather and inventory data have been driving natural gas prices.

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

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.

The slowing natural gas inventory and warm weather could support natural gas prices. The nearest resistance for natural gas is seen at $3 per MMBtu.

Capex increase in 2017 As we saw in the previous part, OPEC’s (Organization of Petroleum Exporting Countries) November announcement was a catalyst to turning around commodity prices (USO) (UCO) (UNG) (UGAZ), especially oil prices. Global investment in 2017 A Wood Mackenzie report noted that “the global investment cycle will show the first signs of growth […]

Union Pacific’s carloads Union Pacific (UNP) competes with BNSF Railway, owned by Berkshire Hathaway (BRK-B), in the western United States. In the week ended December 17, 2016, UNP’s overall railcars fell 7.5% to 89,000 units from 96,000 units in the corresponding week of 2015. Railcars, excluding coal and coke, fell 6.7% to around 67,000 units […]

The energy sector contributed to ~6.6% of the S&P 500 on March 31, 2017. Oil and gas producers’ earnings depend on crude oil and natural gas prices.

On June 30, 2017, Baker Hughes (BHI) is scheduled to release its US natural gas rig count report for the week ending June 30, 2017.

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

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

April futures contracts for natural gas prices settled at $2.697 per MMBtu (million British thermal units) on Thursday, February 26.

From March 24–31, 2017, the natural gas rig count rose by five to 160 rigs. It was its highest level since December 31, 2015.

Chesapeake Energy’s December presentation noted that it had hedged 71% of natural gas volumes and 68% of oil volumes for 2017. It’s also hedged for 2018.

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 […]

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

BNSF Railway’s total railcars for the week ended November 5, 2016, fell 2.6% to 105,000 units compared with ~107,000 plus units on a year-over-year basis.

Natural gas futures contracts for October delivery rose for the second day. Natural gas prices have been in a narrow price channel of $2.65–$2.75 per MMBtu.

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

For the fourth quarter of 2015, Dominion Resources (D) reported $2.5 billion in revenues against $2.9 billion in revenues for the fourth quarter of 2014.

The EIA released its weekly natural gas inventory report on August 25. US natural gas inventories rose by 11 Bcf to 3.35 trillion cubic feet from August 12–19.

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.

According to data from the EIA on December 8, 2016, natural gas inventories fell by 42 Bcf during the week ending December 2, 2016.

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