Crude oil in downtrend
Last week (ended June 2, 2017), crude oil (USO) prices continued their weekly declining trend, falling from $49.80 per barrel to $47.66 per barrel, which represents a decline of ~3%. In the fourth week of May, OPEC (Organization of the Petroleum Exporting Countries) decided to extend its previous production cuts. Since then, crude oil prices have gone under more pressure, falling from the high of $52.00 per barrel to the low of $46.74 per barrel.
ConocoPhillips following crude
Due to weaker crude oil prices, crude oil (USO), natural gas (UNG) and NGL (natural gas liquids) producer ConocoPhillips (COP) also sported a declining trend. However, COP managed to outperform the crude oil and the peers.
During the holiday-shortened week, COP’s stock price fell ~2%, or from $45.35 to $44.26. The stock closed lower on all trading days of the four-day week, except for on Thursday.
Due to lower crude oil prices last week, the Energy Select Sector SPDR ETF (XLE) underperformed the broader market by a wide margin. The S&P 500 ETF (SPY) rose ~1%, while XLE fell ~2%. Notably, XLE generally invests at least 95% of its total assets in oil and gas companies.
In the next part, we’ll take a look at COP’s implied volatility.