Analyzing Recent Trends in Carrizo Oil & Gas Stock



Stock drivers

In this article, we’ll compare Carrizo Oil & Gas’s (CRZO) recent stock price movements to movements in the broader market, the broader energy sector, crude oil prices, and natural gas prices.

CRZO’s stock has fallen almost 60% YTD (year-to-date). In comparison, its peers Continental Resources (CLR) and Newfield Exploration (NFX) have fallen ~41% and 38%, respectively, YTD.

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Recent trends in CRZO stock

In the graph above, we can see that Carrizo has mostly been mirroring crude oil’s price movements. As we’ve learned, CRZO’s production mix is more weighted toward crude oil, so crude prices could have huge implications on its stock price.

The EIA’s (U.S. Energy Information Administration) June 2017 Short-Term Energy Outlook noted that the continued rise in US drilling activity had resulted in a production increase. Accordingly, US crude oil production is expected to average 9.3 million barrels per day (or bpd) in 2017 and 10.0 million bpd in 2018. The EIA expects WTI (West Texas Intermediate) crude oil to average $51 in 2017 and $54 in 2018.

CRZO stock has produced lower returns than WTI since the beginning of 2017. Compared to the energy sector ETF, the Energy Select Sector SPDR ETF (XLE), CRZO has also underperformed. XLE has returned -16% since the beginning of the year.

Because the overall energy sector has underperformed the broader market, or the S&P 500 SPDR ETF (SPY), it follows that CRZO stock has also underperformed SPY. SPY has returned ~7% since the beginning of 2017. The energy sector makes up ~7% of SPY.

In the next article, we’ll explore analysts’ opinions on Carrizo Oil & Gas.


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