Dj Antero Resources Corporation, Inst Holders, 3Q 2024 (Ar)

U.S. natural gas prices are on fire this month, surging by about 50% to reach $3.40 per million British thermal units as of Nov. 21, the highest level in over a year.

November is poised to mark the strongest surge in natural gas at the Henry Hub pricing point since July 2022, fueled by heightened geopolitical tensions, unseasonably cold U.S. weather and rising export demand.

For investors, this sharp price rebound has cast a spotlight on natural gas stocks poised to benefit from the renewed momentum in the natural gas markets.

Why Are Natural Gas Prices Spiking?

The price rally has been driven by a combination of factors:

• Plunging Temperatures Across the U.S.: After a relatively warmer-than-average start to the winter, the situation has drastically changed over the past few weeks. The National Oceanic and Atmospheric Administration forecasts the first major snowfall of the season for parts of the central and northern Appalachians, with lower elevations in Pennsylvania and New York also bracing for accumulation. This colder weather has pushed demand for heating sharply higher.
• Geopolitical Tensions Between Russia and Ukraine: Russia's launch of an intercontinental ballistic missile on Thursday, combined with Ukraine’s recent use of Western-made missiles to target Russian territory, has added a geopolitical risk premium to natural gas markets.
• Supply Concerns in Europe: Austria’s OMV Group revealed earlier this month that it will stop receiving natural gas volumes from Russia’s Gazprom, reigniting fears of winter supply shortages in Europe and potentially shifting demand to the U.S. for liquefied natural gas (LNG) exports.

7 Natural Gas Stocks Benefiting From The Rally

As natural gas prices rally, several U.S. energy companies stand to gain from higher commodity prices and increased demand. Here are seven stocks to watch:

1. EQT Corporation

EQT is the largest natural gas producer in the U.S., with operations in the Appalachian Basin. The company benefits directly from higher domestic gas prices.

Shares of EQT Corp. are up 30% month-to-date, on track for their strongest performing month since March 2022.

2. ONEOK, Inc.

As a midstream operator, ONEOK processes and transports natural gas, profiting from higher pipeline volumes as demand increases.

Shares of ONEOK Inc. are up 19.6% in November, eyeing their best monthly performance since November 2020.

3. Targa Resources Corp.

Targa specializes in natural gas gathering and processing, positioning it to benefit from both domestic demand and export growth.

Targa shares have rallied 24% this month, on track to notch the 10th straight positive month and the strongest one in four years.

4. Kinder Morgan, Inc.

One of the largest pipeline operators in the U.S., Kinder Morgan’s infrastructure is critical for natural gas transportation across regions.

Kinder Morgan has seen its stock rally 16% in November, potentially positioned for the best month since November 2020.

5. Antero Resources Corporation

Focused on natural gas and liquids production, Antero Resources has significant exposure to the Appalachia region, where colder weather is driving demand.

Shares of Antero Resources have soared 32% month-to-date, following a 9.7% drop in October.

6. Cheniere Energy, Inc.

As the top exporter of liquefied natural gas from the U.S., Cheniere benefits from global demand for natural gas, particularly in Europe.

Cheniere Energy has gained 16% thus far this month.

7. Williams Companies, Inc.

Williams operates natural gas infrastructure and transmission pipelines, playing a vital role in connecting supply to end markets.

Shares are up 13.6% in November, following a 14.7% surge in October.

Chart: US Natural Gas Stocks Rallied In November