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Oil and Gas Mix: Energy Stocks in Mid-April

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Oil and Gas Mix: Energy Stocks in Mid-April PART 1 OF 4

Oil’s Falling: Stocks That Could Get Wet

US crude oil

On April 17, 2017, WTI (West Texas Intermediate) crude oil (USO) (OIIL) (USL) (DBO) May futures closed at $52.65 per barrel, which was ~1% lower than the previous closing price. Oil prices fell on worries of rising US oil production and subdued demand for crude oil.

Oil&#8217;s Falling: Stocks That Could Get Wet

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Crude oil is an important driver for global equities. In the trailing week, the Energy Select Sector SPDR ETF (XLE) fell 1.5%, while the S&P 500 Index (SPY) (VFINX) (SPX-INDEX) fell 1.1%. The S&P Mid Cap 400 Index (IVOO) (MID-INDEX) fell 0.6% during that period.

The Dow Jones Industrial Average Index (DIA) (DJIA-INDEX) fell 1% between April 10 and April 17. During the same period, the FTSE 100 Index (UKX-INDEX) (EWU) fell 0.3%, while the CAC 40 Index (PX1-INDEX) (EWQ) fell 0.7%.

In this series

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. But first, we’ll look at a few key upstream oil companies’ correlations with crude.

Oil-weighted stocks

The companies below are part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and operate with production mixes of at least 60.0% in crude oil. The following oil-weighted companies had the highest correlations with WTI crude from March 17, 2017, to April 17, 2017:

The oil-weighted stocks in XOP that had the lowest correlations with crude oil during the period included the following:

  • Carrizo Oil & Gas (CRZO): 27.2%
  • Kosmos Energy (KOS): 22.4%

In the next part of this series, we’ll compare the returns of crude oil-weighted stocks with that of crude oil.

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