Returns for oil-weighted stocks

Based on average returns, oil-weighted stocks fell 6.3% between July 3 and July 10, 2017. US crude oil (USL) (DBO) August futures fell 5.7% during that same period.

Which Oil-Weighted Stocks Were Impacted Less by Oil’s Fall?

Below are the oil-weighted stocks from the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) that fell the least in the week ended July 10, 2017:

  • SRC Energy (SRCI): fell 1.1%
  • Callon Petroleum (CPE): fell 1.7%
  • RSP Permian (RSPP): fell 2.0%

On the other hand, Whiting Petroleum (WLL), California Resources (CRC), and Carrizo Oil & Gas (CRZO) fell 10.8%, 14.7%, and 15.1%, respectively, during this time period. These three stocks underperformed among our list of oil-weighted stocks.

As we saw in Part 1 of this series, WLL has one of the highest correlations with US crude oil active futures­. Notably, CRC had a mild but positive correlation with US crude oil active futures in the week ended July 10, 2017. The bearishness in the broader markets would also have impacted the performance of these oil-weighted stocks.

Analyzing returns since February 11, 2016

Between February 11, 2016, and July 10, 2017, US crude oil August futures rose 69.4%, while oil-weighted stocks rose only 37.1% during that period. On February 11, 2016, US crude oil active futures fell to their 12-year low.

Oil-weighted stocks such as Oasis Petroleum (OAS), Callon Petroleum (CPE), and RSP Permian (RSPP) rose 77.9%, 75.2%, and 67.9%, respectively. These three stocks were the outperformers among oil-weighted stocks.

During this time period, Whiting Petroleum (WLL) rose 6.3%, but Occidental Petroleum (OXY) and Carrizo Oil & Gas (CRZO) fell 5.1% and 32.2%, respectively. These three stocks were the underperformers in that period.

So US crude oil active futures have outperformed oil-weighted stocks in the trailing week and also since February 11, 2016.

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