Since the outbreak of the Russian-Ukrainian conflict, energy supply has continued to be tight, with oil prices soaring above $130 for the first time since 2008, and the price of natural gas in the United States recently hit a level of $7.5/MMBtu, a new high since 2008.
To reduce dependence on Russia for energy supplies, major European countries such as Germany are and plan to import LNG from elsewhere, including the United States. According to a rough estimate by the agency, the US natural gas export revenue in the first quarter will be close to 30 billion US dollars, which is already more than half of Russia’s natural gas export revenue in 2021.
While the price of natural gas has soared, the stock prices of related U.S. stock companies have also continued to rise.
Among them, $EQT Energy (EQT.US)$ , the largest natural gas producer in the United States, has risen by more than 95% this year, leading the natural gas sector of U.S. stocks. As natural gas prices continue to climb, the company’s free cash flow and balance sheet are expected to improve significantly, and the accompanying rising return on shareholder capital is attracting more and more investors to buy.
Company management is also optimistic about the outlook: In December, management approved a $1 billion share repurchase program that runs through December 31, 2023. At the same time, the company also announced the resumption of a regular cash dividend payment of $0.50 per share annually starting in the first quarter of fiscal 2022.
The two major oil and gas giants in the United States, Exxon Mobil (XOM.US)$ and Chevron (CVX.US)$ , also fluctuated upwards, rising 45% and 48% respectively this year.
Data show that in terms of oil reserves, Exxon Mobil currently has proven oil reserves of 9.88 billion barrels, and Chevron has 6.1 billion barrels. In terms of natural gas, the proven reserves of natural gas are about 5.32 billion barrels of oil equivalent. In terms of natural gas, in recent years, ExxonMobil’s natural gas production is about 8.5 billion cubic feet per day, and Chevron’s natural gas production is about 7.3 billion cubic feet per day. In recent years, the natural gas production of the two giants has either declined or remained flat.
Cheniere Energy (LNG.US), the top U.S. LNG exporter , has been one of the biggest beneficiaries of this wave of tight gas supplies, with its shares up nearly 38% this year.
The U.S. exported five times as much natural gas to the European Union as Russia’s pipelines in January, the U.S. Energy Information Administration (EIA) data showed, the first time in history that the U.S. surpassed Russia’s shipments. U.S. LNG exports are expected to reach 5.86 trillion cubic feet by 2033, 65% higher than current levels.
Goldman Sachs predicts that U.S. LNG exports will account for 22% of global demand this year, surpassing Australia and Qatar, the current two largest exporters, and ranking first in the world.
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