Strange but true: natural gas stocks are way up.
Fortune: Despite the fact that gas prices are dirt-cheap and energy demand has fallen off a cliff, shares of gas producers Chesapeake Energy, Anadarko Petroleum, and Southwestern Energy have climbed an average of 37% so far this year, compared with the S&P 500’s 10% gain.
The upswing in stocks seems illogical given the state of the natural gas market. Prices are the lowest they’ve been in years, in large part because the supply of gas — unlike that of oil — is visibly growing. The Energy Information Administration (EIA) estimates that working gas in storage had climbed to 3,152 billion cubic feet as of August 7, a 2% increase over the previous week. The five-year average is 2,635 Bcf.
Why? Prospectors have found big reserves in states like Louisiana and Pennsylvania, and natural gas stocks often move with oil prices, which have increased substantially this year.
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