ARC Resources Ltd. (ARX), the third- largest oil and gas operator in Canada’s Montney formation, rose after analysts at BMO Capital Markets recommended investors purchase shares of natural gas producers over oil-related stocks.
Arc Resources increased 3.2 percent to C$27.44 at 10:56 a.m. in Toronto after surging 3.6 percent earlier, the most intraday in two months.
A decline in drilling activity for gas along with higher demand for the fuel have helped to reduce storage levels, wrote Randy Ollenberger, a Calgary-based analyst with BMO Capital Markets, in a note to clients today. Price for gas trading at Henry Hub may reach $4 per million cubic feet this year, he said.
“We continue to grow more bullish on gas prices,” Ollenberger in the note. “The steady drop in the gas rig count coupled with the erosion of the storage glut has provided an opportunity for gas prices to trade higher in 2013.”
Arc Resources,based in Calgary, was among five gas-weighted companies recommended by BMO.
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