How Gas-Weighted Stocks Could Benefit from Natural Gas’s Rise
Between September 11 and September 18, 2017, natural gas–weighted stocks rose 7.9% compared to the 6.6% increase in natural gas October futures. Natural gas trading above the psychologically important level of $3 could be an important driver for the profits of these gas-weighted stocks.
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These natural gas–weighted stocks are from the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). Also, these oil-weighted stocks operate with a minimum 60% production mix in natural gas.
Natural gas–weighted stocks that outperformed in the trailing week follow:
RRC and SWN had higher correlations with natural gas compared to oil prices, which we discussed in Part 3 and Part 4 of this series. Between September 11 and September 18, 2017, US crude oil November futures rose just 3.6%. Natural gas almost doubled during the same period.
Natural gas–weighted stocks that underperformed in the trailing week follow:
These three stocks had higher correlations with oil compared to natural gas prices in the last five trading sessions.
Price performance since natural gas’s 17-year low
Between March 3, 2016, and September 18, 2017, natural gas active futures rose 91.8% compared to a 22% rise in these natural gas–weighted stocks. On March 3, 2016, natural gas active futures settled at their 17-year low.
Natural gas–weighted stocks that outperformed during this period follow:
Natural gas–weighted stocks that underperformed during this period follow:
To learn more about energy stocks, please visit our Energy and Power page.