What's Driving Whiting Petroleum's Downtrend?

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What's Driving Whiting Petroleum's Downtrend? PART 1 OF 4

Catching Up with Whiting Petroleum’s Downtrend

Whiting Petroleum stock

Whiting Petroleum (WLL) stock continued to drop last week. The stock has returned -32% since the beginning of the year, or YTD (year-to-date). It has underperformed the Energy Select Sector SPDR ETF (XLE), which has returned -9% YTD, while the broader market S&P 500 ETF (SPY) has returned ~3.2% YTD.

WLL also underperformed crude oil prices (UCO) (USO) (DBO), which have risen  ~1.7% YTD.

Catching Up with Whiting Petroleum&#8217;s Downtrend

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What’s driving WLL’s stock?

WLL stock had taken a beating after crude oil prices fell to the lowest level this year at $48.49 per barrel, representing a 7% YTD fall. Oil prices had fallen due to global supply glut concerns. However, the above chart shows that crude oil prices have been increasing recently. WLL’s stock hasn’t followed suit.

We should also note that both XLE and SPY have also shown downward movements. The drop in equity stocks could be as result of geopolitical concerns.

Notably, the energy sector makes up ~7% of SPY. 

Global tensions

Tensions between US and Syria and speculations about President Trump’s fiscal policies have been weighing on global markets. Tensions over North Korea have also been keeping investors on edge. To know more about the impact on global markets, check out Market Realist’s “Geopolitical Concerns Weigh on the S&P 500, NASDAQ, and Dow.”

Whiting Petroleum stock has also seen bearish trends due to its planned ~96% increase in 2017 capital expenditures, as compared to the levels in 2016. Whiting Petroleum’s production expectation hasn’t risen with its increased capex.


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