Oil stock prices continued heading south but one investor is betting big time on gas futures, spending about $1 Billion for just over 19 million shares.
It was a week where oil prices tumbled to their lowest close in more than 4 months but natural gas futures gained for the first time in 3 weeks. On the news front, the top story came from billionaire investor Carl Icahn’s 8.18% stake buy in natural gas exporter Cheniere Energy Inc.
Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures dived 6.9% to close at $43.87 per barrel, natural gas prices gained 3% to $2.80 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Crude Slump Batters Exxon, Chevron Profits.)
Oil prices extended their losing streak and fell for the sixth straight week, the backdrop being another increase in the number of crude-directed rigs. An upwardly moving rig count has underlined concerns about an expansion in the commodity’s global supply glut. The recent turn of events in Greece, Iran and China also created pressure. Finally, a stronger dollar has made the greenback-priced crude more valuable for investors holding foreign currency.
Meanwhile, natural gas fared much better amid predictions of strong summer cooling demand with majority of the central and southern U.S. reeling under extreme heat. The U.S. Energy Department’s weekly inventory release – showing a smaller-than-expected increase in the commodity’s supplies – also helped to push up prices.
Recap of the Week’s Most Important Stories
1. Shares of Houston-based natural gas company Cheniere Energy Inc. jumped more than 8% following the announcement that Carl Icahn has taken a 8.18% stake in the company. The activist investor spent slightly more than $1 billion to accumulate 19.4 million shares of Cheniere Energy.