US natural gas rigs
Baker Hughes, a General Electric (GE) company, released its US crude oil and natural gas rigs report on January 5, 2018. Natural gas rigs were flat at 182 between December 29, 2017, and January 5, 2018, according to Baker Hughes. US natural gas rigs rose 35% from a year ago. Oil and gas rigs increased because US crude oil (UCO) (DBO) prices were trading at three-year highs.
Natural gas rigs
US natural gas rigs rose 35% in the last 12 months, while US natural gas prices (UNG) fell 20% during this period. Meanwhile, US oil (UWT) (DWT) prices rose ~15.4% in the last 12 months.
US energy companies (XLE) (IEZ) increased their capital spending in 2017 as crude oil prices recovered to multiyear highs. Higher oil (USO) and gas (UNG) (UGAZ) prices would increase the US drilling activity. It benefits energy producers and drillers like Matador Resources (MTDR), WPX Energy (WPX), Transocean (RIG), and Schlumberger (SLB).
OPEC’s production cuts
OPEC and Russia extended the ongoing crude oil production cuts until December 2018. The production cuts would drive crude oil prices higher. It would increase US oil and gas producers (XES) capital expenditure for 2018. As a result, it would increase US drilling activity and production.
Crude oil prices and natural gas prices
US natural gas rigs rose 8% in the last ten weeks, while US oil (USL) prices were at a three-year high. Natural gas is generally an associated product of crude oil. Higher oil (SCO) prices would increase US oil rigs, which would also drive natural gas production. Higher US natural gas production would pressure natural gas (DGAZ) (UNG) prices.
Next, we’ll discuss US natural gas supply and demand.
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.
Hibbett Sports (HIBB) stock surged 22.3% as of 1:54 PM ET today as the company reported impressive results for fiscal 2019's fourth quarter, which ended on February 2.
Wall Street analysts expect a potential upside of 21.63% for Alexion Pharmaceuticals based on the stock's closing price on March 21.
Today, we got another round of dismal data points from Europe (VGK)(EZU). According to a Markit survey, Germany’s (EWG) March PMI Composite Output Index fell to a 69-month low of 51.5.
On March 21, US crude oil’s implied volatility was 24.9%, which was 6.7% below its 15-day average. Usually, lower implied volatility supports oil prices.
The overall cannabis sector took a hit today amid the broader market's declines. The volatility index (VIX) jumped 17.9%, and the cannabis sector is more sensitive than the market.
The tech-heavy NASDAQ Composite Index (QQQ) is on track to post its 12th weekly gain in 13 weeks.