The Struggling Natural Gas Sector and Gas-Weighted Stocks
On September 11, 2017, natural gas (UNG) (BOIL) October futures closed at $2.95 per MMBtu (million British thermal units). It was 2.1% above the previous day’s closing price, but 1.7% below the psychologically important level of $3.00. As the bearish sentiment due to Hurricane Irma eased, it could have helped natural gas prices move higher.
Between September 1 and September 11, 2017, US natural gas October futures fell 3.9%. During this period, the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA) rose 0.5% and 0.3%, respectively.
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Natural gas–weighted stocks
Our collection of natural gas–weighted stocks include upstream stocks from the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) that have a minimum 60% production mix in natural gas.
Below are the natural gas–weighted stocks that had the highest correlations with natural gas prices in the past five trading sessions:
- Southwestern Energy (SWN): 86.9%
- Gulfport Energy (GPOR): 58.3%
- EQT Corp. (EQT): 57.2%
- Range Resources (RRC): 55.8%
- Antero Resources (AR): 54.8%
Natural gas–weighted stocks that had the lowest correlations with natural gas prices during this period follow:
In the next part, we’ll analyze the correlations of these natural gas-weighted stocks with US crude oil active futures.