In this KE Report daily editorial, we welcome back Dan Steffens, President of the Energy Prospectus Group, to break down the latest developments across the oil and natural gas markets. With crude prices recently dipping below $57/bbl and natural gas showing relative strength, Dan shares his insights on market fundamentals, storage levels, and the outlook for key producers and income plays.
Key Discussion Points:
- Oil Market Outlook – Despite headlines of oversupply, U.S. crude and product inventories remain below seasonal averages, with Cushing storage levels near record lows. Dan believes strong support around $57 and possible SPR refilling could stabilize prices.
- Natural Gas Demand Drivers – U.S. LNG exports are expanding rapidly, projected to reach ~20 Bcf/day in Q1 2026. Rising AI data center power needs are emerging as a major new demand source, with multiple gas-fired plants being developed to support this growth.
- Top Natural Gas Producers – Companies positioned to benefit from rising demand include EQT Corp (EQT), Antero Resources (AR), and Range Resources (RRC).
- Balanced Oil-Gas Plays – For diversified exposure, Dan highlights Ovintiv (OVV), Devon Energy (DVN), and Coterra Energy (CTRA), each with substantial natural gas and NGL production alongside oil output.
- High-Yield Midstream & Income Ideas – The safest dividends lie in midstream operators such as Plains All American (PAA) (≈9% yield, tax-advantaged) and Enbridge (ENB) – all benefiting from steady volume-based cash flows. Dan also notes Black Stone Minerals (BSM) and Kimbell Royalty Partners (KRP) as strong royalty-income opportunities.
- Hedging & Cash Flow Stability – Many of these firms are well-hedged, ensuring consistent dividends even amid commodity price swings. With gas futures near $4, Dan expects renewed investor rotation into gas-weighted producers through year-end.
Click here to visit the Energy Prospectus Group website for more energy market and stock analysis.
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Investment disclaimer:
This content is for informational and educational purposes only and does not constitute investment advice, an offer, or a solicitation to buy or sell any security. Investing in equities and commodities involves risk, including the possible loss of principal. Do your own research and consult a licensed financial advisor before making any investment decisions. Guests and hosts may own shares in companies mentioned.