Are Natural Gas–Weighted Stocks Following Oil?


Nov. 20 2020, Updated 2:29 p.m. ET

Correlation with oil prices

Range Resources (RRC) had the highest correlation of 77.4% with US crude (USO) (DBO) oil active futures in the last five trading sessions among natural gas–weighted stocks. These stocks operate with a minimum production mix of 60% in natural gas. They’re part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

Below are the natural gas–weighted stocks that had the highest correlations with crude oil futures during the last five trading days.

  • WPX Energy (WPX) – 75.5%
  • Southwestern Energy (SWN) – 62.1%
  • Cabot Oil & Gas (COG) – 55.9%
  • Gulfport Energy (GPOR) – 38.1%

Below are the natural gas–weighted stocks that had the lowest correlations with oil prices in the seven calendar days to July 31, 2017.

Article continues below advertisement

Why is oil vital?

Oil prices are important for the entire energy sector. Therefore, gas-weighted stocks could also be impacted by oil prices. Oil prices could influence natural gas prices. In the long term, natural gas could be important for these natural gas–weighted stocks’ profitability.

In the next part, we’ll analyze the returns of these natural gas–weighted stocks. We’ll discuss the importance of natural gas and crude oil’s impact on these stocks’ returns.


More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.