Just one year ago, Brent prices traded in the $30s, today, Brent prices are nearing $85 as crude oil markets continue to tighten as a result of robust demand, bullish OPEC+ output decisions, and a gas-to-oil switch that could add up to 2 million bpd in temporary demand.
But the rapid rise in crude prices is nothing compared to the rally in natural gas, which has put even cryptocurrencies to shame. The 200% year-to-date rally in U.S. natural gas prices has taken the markets by surprise, and as we approach heating season, there’s very little extra supply coming online.
U.S. natural gas producers have already seen their share price climb over the last couple of months as inventories remain below the 5-year average.
But with only a few weeks left of ‘injection season’, gas markets are set to remain tight throughout the winter, and while this is bad news for utility companies and your heating bill, it is good news for those that are investors in North American natural gas plays.
This month, our analysts have singled out two undervalued North American natural gas producers with low break-even points and substantial free cash flow. Both companies are set to increase returns to shareholders in 2022 as they capitalize on high gas prices and the increased production of natural gas liquids
