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Things are looking up for Canada's natural gas market.

Analysts are turning more positive given crushed equity valuations, though an uphill battle remains. "Robust winter demand and record exports pulled off a huge win and materially improved the situation," a Tudor Pickering Holt & Co. analyst said following a recent marketing trip. However, the firm remains cautious on second-quarter pricing as TransCanada's NGTL natural gas system maintenance and regional storage dynamics may "wreak havoc" on the spot market.

Scotiabank sees "good reasons to be bullish" on the market, with fundamentals appearing to be better than the strip pricing implies. However, a key risk that exists is the possibility of declining exports.

Bottom-performing stocks in Canada's TSX energy index, or the STENRS, include Peyto and Advantage, with both down about 26 per cent year-to-date. Birchcliff, which has dropped about 16 per cent this year, received an upgrade by TD Securities earlier today.

National Bank of Canada Financial is positive, if not picky, on tighter supply and demand dynamics. "We are not calling for a macro recovery in natural gas prices this year, but rather believe that select names provide compelling value and upside," the bank said in a note to clients. Its top natural gas ideas, given valuations, are Advantage, Birchcliff, Peyto and Tourmaline Oil Corp.

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