Share prices of Gulfport Energy Corporation (GPOR) soared by more than +10% in Monday’s trading session.
This sudden surge may have owed to GPOR’s strong third-quarter results, but the major catalyst was arguably the big uptick in natural gas prices due to colder weather forecasts.
As weather forecasters predicted a blast of cold air could hit the U.S. this week, natural gas prices surged by ~8% in Monday’s early-morning trading -- in expectation of much higher heating demand than previously expected. As a result, natural gas prices traded higher by 7.5% to $3.53 MMBtu on Monday and are now up +18% year-to-date.
Cooler temperatures across the Great Plains and Midwest are expected to bring more rain and snow in the region, which in turn is likely to fuel increased demand for natural gas to heat homes. Energy stocks broadly responded on Monday.
With natural gas accounting for nearly 89% of GPOR's production in the last quarter, this impending uptick in demand and pricing can prove to be highly beneficial for Gulfport Energy and many other such companies.
Volatility in natural gas prices may also result into volatility in some popular natural gas ETFs trading in the market. ETFs like VELOCITYSHARES 3X L (UGAZ, $107.70) and United States Natural Gas Fund, LP (UNG, $ 28.93) surged by 21.9% and 7.4%, respectively, while VELOCITYSHARES 3X INVERSE NATURA ETN (DGAZ, $10.51) was down by 22.4%.