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Why Marathon Oil Stock Rose Last Week

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Marathon Oil’s weekly performance

For the week ending September 15, 2017, Marathon Oil’s (MRO) stock price rose more than 6% from $11.31 to $12.00. Last week, Marathon Oil’s stock price rose during all five days. The substantial increase in Marathon Oil can be attributed to energy commodities’ strong performance last week. The key highlight of the week included Marathon Oil’s stock price crossing above its 50-week moving average. Currently, its 50-week moving average stands at $11.64. However, Marathon Oil’s 50-day moving average is still trading below its 200-day moving average—a negative technical indication. Marathon Oil’s 200-day moving average stands at $14.49. Its stock price is trading ~17% below its 200-day moving average.

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Crude oil and natural gas prices

For the week ending September 15, 2017, crude oil (USO) prices rose from $47.48 per barrel to $49.89 per barrel—a strong increase of more than 5%. On Thursday, crude oil prices successfully moved above their 200-day moving average. Crude oil also had a higher high on daily price metrics. Technically, it could be an indication of higher prices ahead for crude oil. Currently, crude oil’s 200-day and 50-day moving averages stand at $49.64 and $47.78, respectively. Natural gas (UNG) prices rose ~5% last week. Natural gas prices rose from $2.89 per MMBtu (million British thermal units) to $3.02 per MMBtu.

Peers

Marathon Oil mainly operates in US resource plays like the Oklahoma Basin, Bakken Shale, and Eagle Ford Shale. Marathon Oil also has operations in international locations like the Middle East, Africa, and Europe. Maraton Oil’s peers EOG Resources (EOG), Occidental Petroleum (OXY), and Pioneer Natural Resources (PXD) rose ~7%, ~2% and ~7%, respectively, last week. Just like Marathon Oil, EOG Resources, Occidental Petroleum, and Pioneer Natural Resources have operations in US resource plays. EOG Resources and Pioneer Natural Resources are primarily focused on the Permian Basin.

In general, the SPDR S&P Oil and Gas Exploration & Production ETF (XOP) outperformed the SPDR S&P 500 ETF (SPY). XOP rose ~7%, while SPY rose ~1.6% last week. However, Marathon Oil has underperformed XOP by a relatively small margin.

In the next part, we’ll look at Marathon Oil’s correlation coefficient with crude oil prices.

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