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Why Rise in Oil Could Be Necessary for Energy Stock Momentum

PART:
1 2 3 4 5
Part 2
Why Rise in Oil Could Be Necessary for Energy Stock Momentum PART 2 OF 5

Which Oil-Weighted Stocks Rose despite Oil’s Fall Last Week?

Oil-weighted stocks

Between September 25 and October 2, 2017, our list of oil-weighted stocks rose 2.2% compared to a 3.1% fall in the US crude oil (DBO) November futures. Oil-weighted stocks that outperformed their peers during this time period were:

  • Carrizo Oil & Gas (CRZO): 10.5%
  • SRC Energy (SRCI): 9.1%
  • Denbury Resources (DNR): 4.4%

Which Oil-Weighted Stocks Rose despite Oil’s Fall Last Week?

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Oil-weighted stocks that fell the most in the trailing week are:

  • Occidental Petroleum (OXY) fell 0.7%.
  • Kosmos Energy (KOS) fell 1%.
  • Whiting Petroleum (WLL) fell 3.1%.

KOS and WLL were among the oil-weighted stocks that had the highest correlations with oil prices, which we discussed in part one of this series. Movement in the broader markets could also be responsible for the price performances of these oil-weighted stocks.

These oil-weighted stocks operate with a minimum 60% production mix in oil. These stocks are part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

Returns since February 11, 2016

Between February 11, 2016, and October 2, 2017, our list of oil-weighted stocks rose 57.8%. US crude oil active futures rose 93% from their 12-year low during this period. However, oil ETFs that are meant to track US crude oil futures such as the United States Oil Fund LP (USO), the United States 12 Month Oil Fund LP (USL), and the ProShares Ultra Bloomberg Crude Oil ETF (UCO) rose just 27.7%, 26.3%, and 31.6%, respectively, during this time period. The underperformance of these oil ETFs is mainly because of the negative roll-yield.

Oil-weighted stocks that rose the most during this time period are:

  • Oasis Petroleum (OAS) at 113.1%.
  • Continental Resources (CLR) at 105.7%.
  • Kosmos Energy (KOS) at 96.8%.

Oil-weighted stocks that underperformed between these two dates are:

  • Whiting Petroleum (WLL) at 9.8%.
  • Occidental Petroleum (OXY) at 4.9%.
  • Carrizo Oil & Gas (CRZO) at -24.7%.
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