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Marathon Oil’s Uptrend: Should We Be Worried?

PART:
1 2 3 4
Part 4
Marathon Oil’s Uptrend: Should We Be Worried? PART 4 OF 4

Falling Short Interest in Marathon Oil Stock: What Does It Mean?

Short interest in MRO stock

As of October 31, 2017, Marathon Oil’s (MRO) total shares shorted (or short interest) was ~35.4 million, whereas its average daily volume was ~11.8 million. That means the short interest ratio for MRO stock was ~3.0x. So MRO stock’s average daily volume was calculated for the short interest reporting period from October 16, 2017, to October 31, 2017. Marathon Oil’s short interest ratio has a 52-week high of 5.00x and a 52-week low of 2.14x.

Falling Short Interest in Marathon Oil Stock: What Does It Mean?

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When seen from the metric of shares outstanding, current short interest in Marathon Oil stock as a percentage of shares outstanding is ~4.2%. Since the start of MRO’s stock rally in mid-August 2017, short interest in Marathon Oil stock as a percentage of shares outstanding has fallen from ~4.3% to ~4.2% in ten weeks. During that time, MRO stock has risen ~44%. So short sellers are reducing their short bets in MRO stock as the stock has risen, which could mean they believe the stock rally could continue and go higher. To know more about MRO stock’s recent price performance, refer to Part 1 of this series.

Putting MRO’s short interest in context

As of October 31, 2017, oil and gas exploration and production companies California Resources (CRC), Range Resources (RRC), and Southwestern Energy (SWN) have short interest as a percentage of shares outstanding of ~32.5%, ~13.9%, and ~8.3%, respectively. Short interest in ConocoPhillips stock as a percentage of shares outstanding is on the much lower side compared to other upstream stocks in the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

To read more on crude oil (USO) (USL), natural gas (UNG) (BOIL), and energy ETFs, please refer to Market Realist’s series How US Crude Oil’s Rise Could Push Energy Stocks Higher.

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