Oil and natural gas prices tumbled further Thursday, dragging down Club holding Coterra Energy (CTRA) and other energy stocks along the way. And that’s created a prime opportunity to do some buying, according to Jim Cramer. Shares of Coterra Energy dropped more than 3% Thursday, to around $26.30 apiece, pushing the stock’s losses over the past month to roughly 10%. Coterra — the last remaining energy holding in the Club’s portfolio — reported solid quarterly results earlier this month that prompted us to reiterate a buy-equivalent rating and $30-per-share price target. “I know people are selling [Coterra], but this is the one I want to buy,” Jim said Thursday . Our most-recent purchase of Coterra came on Oct. 26, at roughly $28 per share. In general, our recent approach to investing in exploration-and-production companies like Coterra has been to buy when sentiment turns against the group, while exercising caution when the broader market becomes bullish. And in this moment, the group is out of favor amid declining oil and natural gas prices. Both commodities matter to Coterra, whose revenues are split roughly 50-50 between oil and gas. On Thursday, U.S. oil benchmark West Texas Intermediate crude fell more than 5%, to around $72.50 a barrel, on pace for its fourth-straight weekly decline. WTI has tumbled roughly 18% over the past month. Natural gas prices dropped more than 4% Thursday, to roughly $3.044 per million British thermal units, or MMBtu. In November alone, natural gas has declined more than 14%. For both commodities, the recent price declines ultimately boil down to worries about a glut of supply relative to limited demand. On the oil side, demand concerns have been heavily influenced by economic and industrial data — including weak Chinese refining activity for October. Meanwhile, weather forecasts hold significant sway over demand for natural gas. Colder temperatures create more demand, while warmer conditions are seen as bearish for prices. Fresh inventory data published by the U.S. government has added to the negative picture for both oil and natural gas, further pressuring prices on Thursday. U.S. crude inventories rose by 3.6 million barrels last week compared with the prior week, the Energy Information Administration said Wednesday. At the same time, U.S. oil production remained at record levels of 13.2 million barrels per day. And on Thursday, the EIA said natural gas in storage rose by 60 billion cubic feet, which was more than the market expected, according to FactSet. That release comes against a backdrop of mild weather lately and strong U.S. gas production, which started to increase in October and has only continued in recent weeks, said Eli Rubin, an analyst at EBW Analytics Group, a natural gas-focused consultancy. (Jim Cramer’s Charitable Trust is long CTRA . See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Silhouette of Permian Basin pumpjacks taken at dusk, north of Midland, Texas, U.S. in late 2019.
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Oil and natural gas prices tumbled further Thursday, dragging down Club holding Coterra Energy (CTRA) and other energy stocks along the way. And that’s created a prime opportunity to do some buying, according to Jim Cramer.
