Gulfport Energy (GPOR) Stock: Here’s Why It’s Climbing

Gulfport Energy Corporation GPOR Stock News

Gulfport Energy Corporation (NASDAQ: GPOR) had a strong day in the market yesterday and is following up those gains with further dramatic growth this morning. However, the company hasn’t issued any news or filed anything with the SEC. So, what’s the deal?

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Natural Gas Prices Are Exciting Investors

As mentioned above, Gulfport Energy is seeing dramatic gains for the second day in a row, but with no news from the company, there’s no clear catalyst. Nonetheless, there is very good reason for the move and it all has to do with the price of natural gas.

GPOR is a natural gas producer. So naturally, it will ebb and flow with the value of natural gas. When prices are high, the company earns more money from the product it produces. When prices are low, the company has to accept less money for its final product.

Well, there’s a strong argument brewing that natural gas will continue to see strength ahead. Essentially, there are two big factors at play here, and they’re both good news for GPOR:

  • COVID-19 Production Cuts. COVID-19 has led to massive production cuts in the United States shale and global oil industry as a whole. Many of the companies involved in the production of oil also produce natural gas. At the moment, analysts believe that COVID-19-related production cuts and the oil price collapse will lead to production cuts in natural gas, cutting into the glut and supporting price growth.
  • A Cold Winter Is Expected. We’re also expected to have an incredibly cold winter, and winter is getting near. When there’s an exceptionally cold winter, demand for natural gas gains as consumers and business owners look to warm their environments.

Between the two, there’s a strong argument that natural gas is headed up ahead. Considering that GPOR is a natural gas producer, this bodes well for the company and its investors.

But why is the stock up so dramatically?

Well, the belief that natural gas will continue to climb in value was the catalyst, but not all natural gas companies saw nearly 20% gains yesterday and more than 20% gains in the premarket today. There’s more to Gulport Energy.

Recently, GPOR has seen quite a bit of short interest. With excitement surrounding natural gas, and investors beginning to flood into the stock, it looks like short sellers are beginning to cover their positions. As a result, there we may be seeing the beginning of a short squeeze.

The Bottom Line

The bottom line here is that all signs seem to be pointing to gains in the value of natural gas. That bodes well for any natural gas producer. This combined with recent dramatic declines in the value of the stock seems to be creating a short squeeze and may outline an opportunity ahead in GPOR stock.

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