Why is the Coal-to-Gas Transition a Boon for LNG, CVX & SHEL?

London stocks gained on Thursday as Russia's nuclear threat yesterday drove up global oil prices, positively impacting oil and gas majors BP (BP.L) and Shell .

The FTSE 100 index was 0.79% higher at closing.

"Intensification of the Russia-Ukraine War, and the use of non-nuclear but unconventional methods, should be expected into January," said Macquarie, noting that the nuclear threat was only meant to bully and divide the West. "But traders may eye the promise of peace in 2025 to buy any nuclear-risk dips."

In the economic corner, investors cheered the faster-than-expected improvement in manufacturing orders. The net balance of new orders in the UK manufacturing sector increased to -19% in November from -27% in October, the Confederation of British Industry's industrial trends survey showed Thursday. The CBI reading surpassed the consensus estimate of -25%.

"Output has underperformed expectations in recent months, with manufacturers pointing to uncertainty around the UK Budget, the US elections and recent political instability in Europe as among the factors leading customers to pause or cancel orders," said CBI Lead Economist Ben Jones. "Many firms still need to work through the implications of the Budget for their own plans for pay, hiring and investment, but it's an encouraging sign that output volumes are expected to return to growth in the quarter ahead."

In corporate news, shares of JD Sports Fashion (JD.L) plunged 15.50% on Thursday closing after the sneaker and sports fashion retailer said it expects fiscal 2025 profit before tax and adjusting items to be at the lower end of its guidance range of between 955 million pounds sterling and 1.04 billion pounds.

"We think that JD Sports should maintain its position as a preferred partner of major sportswear brands like Nike and adidas, given its strong retailing skills, ability to appeal to more urban/cash customers and its opportunity to drive its apparel offer with its elevated stores," said RBC Capital Markets. "We also think improvements are coming through in governance, which should reassure investors, however execution risk is probably higher than average given the company's pace of expansion."

Halma's bottomline rose year over year in the first half of fiscal 2025 to 136.2 million pounds from 118.5 million pounds on higher revenue. The September results drove the British safety equipment company's stock up 5.72% on closing.

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

European equities traded in the US as American depositary receipts were edging down on Thursday morning, declining 0.2% to 1,309.13 on the S&P Europe Select ADR Index.

From continental Europe, the gainers were led by energy company Equinor and biotech company BioNTech , which rose 1.9% and 1.3% respectively.

The decliners from continental Europe were led by pharmaceutical and chemical manufacturer Grifols and pharmaceutical giant Novo Nordisk , which dropped 4% and 3% respectively.

They were followed by telecoms and consumer electronics company Nokia , down 2.7%.

From the UK and Ireland, the gainers were led by software development firm Endava and oil and gas major Shell , which rose 5.8% and 1.3% respectively.

The decliners from the UK and Ireland were led by biotech companies Silence Therapeutics and Compass Pathways , which lost 3.1% and 2.8% respectively.