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ConocoPhillips Stock Outperforms Crude Oil


Dec. 4 2020, Updated 10:53 a.m. ET

Crude oil and natural gas prices

During the week ended September 1, 2017, crude oil (USO) prices retreated from $47.87 per barrel to $47.29 per barrel, a fall of more than one percentage point. Currently, crude oil prices are trading below their 200-day moving average, which stands at $49.55. ConocoPhillips’s production volume mix contains ~38% crude oil, ~14% bitumen, and ~8% natural gas liquids. More than ~72% of COP’s operating revenue comes from liquid (crude oil, bitumen, and natural gas liquid) sales.

The price of natural gas (UNG) rose ~5% last week. It rose from $2.92 per mmBtu (million British thermal units) to $3.07 per mmBtu. ConocoPhillips’s production volume mix contains ~40% natural gas.

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ConocoPhillips’s stock performance

Despite falling crude oil (USO) prices last week, ConocoPhillips’s (COP) stock price gained. COP’s price rose ~2% from $43.58 to $44.24. Despite falling on the first two days of the week, COP’s price managed to close the week positively. COP’s stock price rose strongly on Wednesday, Thursday, and Friday.

ConocoPhillips announced its 2Q17 earnings in July 2017. COP beat analysts’ EPS (earnings per share) estimate by $0.16, reporting EPS of $0.14. Wall Street had forecast EPS of -$0.02.

Peer comparison

The Energy Select Sector SPDR ETF (XLE) also performed positively despite falling crude oil prices last week. However, XLE underperformed the SPDR S&P 500 ETF (SPY). XLE rose ~1%, while SPY rose 1.3%. COP peers Pioneer Natural Resources (PXD) and EOG Resources (EOG) both rose ~1% last week. Like ConocoPhillips, Pioneer Natural Resources and EOG Resources have operations in the Permian Basin.

XLE invests at least 95% of its total assets in oil and gas companies. According to SPY’s prospectus, “The Trust seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the S&P 500 Index.” In the next part, we’ll look at COP’s implied volatility.


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