VelocityShares 3x Long Natural Gas ETN

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.

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%.

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%.

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 […]

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.

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.

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.

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

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.

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

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.

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.

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, […]

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.

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.

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.

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

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 […]

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.

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.

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.

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.

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.

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.

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

The EIA estimates that US natural gas inventories will be at 1,940 Bcf by the end of March 2017—20.0% higher than the five-year average.

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.

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

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.

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

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

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.

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

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.

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.

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

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.

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

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.

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.

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.

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.

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.

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

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.

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

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

Following Noble Energy’s (NBL) 2Q17 earnings release on August 3, Noble Energy stock fell 8%. Since the beginning of this year, NBL’s stock has fallen 33.54%.

The EIA estimates that US natural gas consumption will average 72.86 Bcf per day in 2017 and 75.6 Bcf per day in 2018.

GE proved analysts wrong by surpassing their 2Q17 revenue estimates of $28.9 billion. However, the most vivid aspect of its results was the 12% fall in its quarterly revenue.

Apache Corp. (APA), like many energy stocks, has been on a downtrend for most of the year. APA’s stock has fallen ~23% since the beginning of this year.

EQT Corporation (EQT) stock has been one of the better-performing stocks this year, although the stock has seen a bit of downward momentum.

The EIA reported that US natural gas inventories rose by 57 Bcf (billion cubic feet) to 2,945 Bcf on June 30–July 7, 2017.

August natural gas (UNG) (DGAZ) (UGAZ) futures contracts trading in NYMEX fell 0.67% to $2.96 per MMBtu (million British thermal units) on July 13, 2017.

After a disappointing 1Q17 GDP figure in Colombia, economic activity was expected to gradually gain strength in 2017.

After falling to $4.74, its lowest this year, on June 8, 2017, Chesapeake Energy (CHK) stock now seems to be slowly inching upwards.

BNSF Railway operates in the Western United States and competes primarily with Union Pacific (UNP). Its total railcars for the week ended May 13, 2017, rose 11.6% year-over-year.

BNSF Railway’s total railcars for the week ended May 6, 2017, rose 11.3% year-over-year to 88,600 units, compared with ~80,000 units in the corresponding week of 2016.

Following Anadarko Petroleum’s (APC) 1Q17 earnings release on May 2, 2017, APC stock fell ~0.70% and continued to fall in after-market trading.

The EIA reported that US natural gas inventories rose by 10.0 Bcf (billion cubic feet) to 2,061 Bcf between March 31, 2017, and April 7, 2017.