The Energy Sector Is Outperforming the S&P 500 This Week
Natural gas is leading the rise
In the week of November 6, 2017, natural gas (UNG) (BOIL) prices are leading the rise in energy commodities. Natural gas prices rose from last week’s close of $2.98 per MMBtu (million British thermal units) on November 3 to $3.17 per MMBtu on November 8, an increase of more than 6% so far this week. Natural gas prices rose sharply on Monday and moved above their 200-day moving average, which currently stands at $3.03. Another energy commodity that is following natural gas on the upside is crude oil (USO). As of November 8, 2017, crude oil prices also rose sharply by 2.1% to $56.81 per barrel from last week’s close of $55.64 per barrel.
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Even unleaded gasoline (UGA) prices are rising this week. Unleaded gas prices rose from last week’s close of $1.79 per gallon on November 3 to $1.82 per gallon on November 8, an increase of 1.6%. Heating oil also rose sharply by 1.9% so far this week. On November 8, 2017, heating oil closed at $1.92 per gallon. Gasoline and heating oil prices impact refining companies (CRAK).
With the robust performances of natural gas and crude oil, the energy sector is also rising strongly this week. As of November 8, the Energy Select Sector SPDR Fund (XLE), which represents an index of stocks across the energy sector, rose 1.7%.
Stocks that are leading the rise in XLE are Helmerich and Payne (HP), Pioneer Natural Resources (PXD), Chesapeake Energy (CHK), Schlumberger (SLB), and Baker Hughes (BHGE). These stocks are up 7.6%, 6.1%, 6.2%, 5.5%, and 5.3%, respectively, this week. The biggest loser from XLE this week is Cabot Oil & Gas (COG), which is down 1.5%. In general, for the week starting November 6, XLE is significantly outperforming the SPDR S&P 500 ETF (SPY). As of Wednesday, SPY rose 0.26% this week.
In this series
Having analyzed the performance of the broader energy sector in the current week, we’ll also look at the performance of energy subsectors. Specifically, we’ll look at the gainers and losers from the refining and marketing and integrated energy sectors. We’ll also analyze news and developments behind the moves.
Let’s start with refining and marketing gainers from this week.