US Crude Oil above $50: Which Oil-Weighted Stocks Could Benefit?
US crude oil
On September 18, 2017, US crude oil (USO) (OIIL) November futures closed at $50.35 per barrel, 0.2% below the previous closing price. However, between September 11 and 18, 2017, US crude oil November futures rose 3.6%.
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The revival in refinery operations after the recent hurricanes and the IEA’s (International Energy Agency) bullish demand forecast data boosted oil prices in the trailing week.
Oil-weighted stocks that could gain alongside the rise in oil prices based on the correlations in the trailing week follow. These numbers represent the correlations of each stock with crude oil in the trailing five trading sessions.
- Concho Resources (CXO): 98.3%
- Continental Resources (CLR): 97.3%
- Oasis Petroleum (OAS): 97.3%
- Diamondback Energy (FANG): 96.9%
- Denbury Resources (DNR): 95.3%
DNR outperformed our collection of oil-weighted stocks in the five trading days to September 18, 2017. These oil-weighted stocks are from the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). Also, these oil-weighted stocks operate with a minimum 60% of their production mix in oil.
Oil-weighted stocks that had the lowest correlations with oil prices during this period follow:
- Carrizo Oil & Gas (CRZO): 66.1%
- SRC Energy (SRCI): 59.2%
In the next part, we’ll discuss the returns of these oil-weighted stocks.