Natural Gas Drops to $2.80: Impact on Natural Gas–Weighted Stocks


Nov. 20 2020, Updated 11:31 a.m. ET

US natural gas

On October 9, 2017, natural gas (BOIL) (FCG) November futures closed at $2.83 MMBtu (million British thermal units), which was 1% less than the previous day’s closing price. The fall in natural gas prices could be due to a mild weather forecast. Also, from October 2 to October 9, 2017, natural gas futures fell 2.8%.

In the trailing week, the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA) rose 0.6% and 0.9%, respectively. US crude oil futures fell 2% over this period. Nevertheless, energy prices in the red could have a limited impact on these equity indexes.

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Natural gas–weighted stocks

Natural gas–weighted stocks that had the highest or lowest correlations with natural gas prices in the last five trading sessions follow:

  • Rice Energy (RICE): 14.6%
  • Cabot Oil & Gas (COG): 5.3%
  • EQT Corporation (EQT): -15.1%

Natural gas–weighted stocks that had the most negative correlations with natural gas prices in the trailing week follow:

  • WPX Energy (WPX): -73.2%
  • Southwestern Energy Company (SWN): -75.6%

All of the natural gas–weighted stocks discussed in this article belong to the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). These natural gas–weighted stocks operate with a minimum production mix of 60% in natural gas.

If natural gas stocks broadly ignored moves in natural gas, did crude oil affect them more? Let’s find out in the next part.


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