Freedom sees upside potential in shares of U.S. natural gas producers

Freedom analysts expect natural gas demand to increase during the summer period. A growth driver will be the seasonal rise in electricity consumption for cooling premises during hot weather. Freedom notes that higher consumption will support the share prices of gas-producing companies, whose financial results depend directly on natural gas market dynamics.

According to experts’ estimates, in the coming months the price of natural gas in the U.S. may exceed $3.5 per MMBtu, which is about 8.3% above current quotes.

According to the U.S. Department of Energy’s forecast, demand for natural gas in June will increase by 7.2% compared to the previous month, and in July the growth rate may accelerate to 11%. Traditionally, peak seasonal gas demand in the U.S. is observed in late July — early August.

Additional support for the sector could come from relatively low fuel inventories in underground storage facilities and limited production growth rates among producers.

This is not an individual investment recommendation.