This column was originally published on RealMoney on July 31 at 3:09 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.Earnings from energy companies will continue to come in at a frenetic pace this week, and with natural gas trading up nearly 40% from recent lows, there is all of a sudden significantly more interest in what energy companies have to say. Although my message has been consistent over the past several months -- don't get too worked up about short-term weakness in natural gas, because we are just one positive weather event away from higher prices -- the recent acceleration in gas prices is still surprising. It shows just how fragile the natural gas market is likely to be in the coming months. Just one heat wave, moving west to east, was enough to move natural gas with the force once reserved for major hurricanes and bone-chilling cold. Combined with the outage of a major nuclear plant in Michigan, triple-digit temperatures have pushed natural gas prices close to $8 per million BTU from the mid-$5 range less than two weeks ago. Among bulls, there is hope a sustained heat wave (some forecasts are calling for up to three weeks of sweltering weather) will reduce the natural gas storage surplus and help stabilize what could be an otherwise volatile gas market until winter. While there is plenty of summer ahead, higher natural gas prices have repiqued interest in energy stocks. Many readers have asked for a road map to a busy week of earnings reports in the sector, and I'm happy to oblige. Here is a daily guide to numbers to watch:
While a smaller player in its core businesses, the report bodes well for Superior Energy ( SPN), a larger lift-boat player, as well as companies like Rowan ( RDC) that own jack-up rigs in the Gulf of Mexico. Hercules also noted what I have said for months -- a number of jack-up rigs are likely to leave the Gulf of Mexico for bluer waters (the nautical version of greener pastures), and that will tighten supply even further, suggesting at least another year of higher jack-up day rates in the Gulf of Mexico. Even without a major hurricane season in 2006, the damage from Katrina and Rita last year still has every available boat at work repairing and assessing damage. A storm or two in the Gulf this year would only extend the workload and support higher pricing for lift boats into the future.
Watch Valero ( VLO), whose forecasts are also likely too low. Jim Cramer did an exceptional job dissecting this story after the ConocoPhillips' ( COP) call last week and I believe he was spot on. Numbers will likely have to come up after the call as the outlook will remain the same -- gasoline demand is strong and we haven't built a new refinery in the U.S. for 30 years. As a result, those who own refineries should make plenty of money. Finally, NS Group ( NSS) reports. Although there is pressure on the oilfield tubular markets from imports, NS Group's product mix is likely to save it from the fate of Lone Star Technologies ( LSS), which suffered a nasty blowup.