The rising consumption of natural gas with the reopening of the global economy, and the supply crunch that it has spelled, should keep natural gas prices high. Therefore, Western Midstream (WES) and Tellurian (NYSE:TELL), both prominent players in this space, should benefit. But which of these stocks is a better buy now? Read more to find out.Western Midstream Partners, LP (NYSE:WES) acquires, owns, develops, and operates midstream assets primarily in the United States. The Woodlands, Tex.-based concern engages in gathering, compressing, treating, processing, and transporting natural gas. In comparison, Houston, Tex.-based Tellurian Inc. (TELL) is in the natural gas business worldwide. The company is developing a portfolio of natural gas production, liquefied natural gas marketing, and infrastructure assets.
European natural gas prices dipped Wednesday on signs that Russia may increase supplies. However, considering the severe supply and demand mismatch, prices are expected to remain high. In addition, Hurricane Ida, which knocked offline the vast majority of the Gulf of Mexico's oil and gas production, also contributed to the rise in natural gas prices. Furthermore, Bank of America (NYSE:BAC) said Brent crude oil, which drives the price of gasoline, could reach as much as $120 per barrel by the middle of next year. And according to the Energy Information Administration, U.S. households that rely on natural gas for heating will spend an average of $746 on heating their homes this winter, up 30% from last winter, which is the highest level since the winter of 2005-2006. So, both WES and TELL should benefit.
TELL’s shares have gained 10.3% in price over the past month, while WES has returned 1.1%. Also, TELL’s 78.3% gains over the past six months are significantly higher than WES’ 5.6% returns. Moreover, TELL is the clear winner with 202.3% gains versus WES’ 62% returns in terms of year-to-date performance.