X
<

Energy Stocks: Key Quantitative Insights for Investors

PART:
1 2 3 4
Energy Stocks: Key Quantitative Insights for Investors PART 1 OF 4

Crude Oil Makes New 2016 Highs: Following Oil-Weighted Stocks

Crude oil is trending higher

On December 12, 2016, WTI (West Texas Intermediate) crude oil (UWTI) (USO) (OIIL) (USL) (SCO) (DWTI) January contracts closed at $52.83 per barrel. It was ~2.6% higher than the previous closing price and the highest level for 2016. Optimism around OPEC (Organization of the Petroleum Exporting Countries) and non-OPEC producers agreeing to cut production fueled the bullish sentiment among traders. It helped oil prices continue their upturn.

Crude Oil Makes New 2016 Highs: Following Oil-Weighted Stocks

Interested in CXO? Don't miss the next report.

Receive e-mail alerts for new research on CXO

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

In this series, we’ll take a look at the correlations between crude oil–weighted stocks and crude oil. We’ll also look at the correlations between natural gas–weighted stocks and natural gas.

Oil-weighted stocks

Let’s look at some of the upstream companies that are part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and operate with a production mix of at least 60.0% in crude oil.

Below are the correlations of these oil-weighted companies with WTI crude oil from November 12 to December 12, 2016.

  • Occidental Petroleum (OXY) – 77.5%
  • Concho Resources (CXO) – 77.2%
  • California Resources (CRC) – 77.2%
  • Kosmos Energy (KOS) – 75.1%
  • Hess (HES) – 74.5%
  • Denbury Resources (DNR) – 74.3%
  • Whiting Petroleum (WLL) – 74.1%

Oil-weighted stocks in XOP that had the lowest correlation with crude oil include the following:

  • Callon Petroleum (CPE) – 66.8%
  • Synergy Resources (SYRG) – 58.1%

If you’re bullish on crude oil, particularly after OPEC and non-OPEC producers’ crucial deal, you might be interested in some of the stocks that have a high correlation with crude oil to realign your portfolio.

In the next part of this series, we’ll look at the returns of crude oil–weighted stocks compared to crude oil.

X

Please select a profession that best describes you: