How Did Weatherford React to Crude Oil Price Changes?


Dec. 4 2020, Updated 10:52 a.m. ET

Weatherford and crude oil

The correlation coefficient between Weatherford International’s (WFT) stock price and WTI (West Texas Intermediate) crude oil prices on October 13–20, 2017, was -0.05. It shows that Weatherford International and crude oil prices have had a weak negative correlation in the past week. Weatherford International’s correlation with the Dow Jones Industrial Average (DJIA-INDEX) on October 13–20, 2017, was strongly negative.

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Weatherford’s correlation with crude oil 

Weatherford International’s negative correlation with crude oil won’t help Weatherford’s stock price even if crude oil’s current upward momentum continues. Weatherford International’s correlation with crude oil prices was very low in the trailing year to October 20, 2017—compared to the previous year ending October 20, 2016.

The VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil is lower in the trailing year to October 20, 2017—compared to the previous year to October 20, 2016. So, it’s likely that the sector as a whole has somewhat decoupled from crude oil prices lately.

Weatherford’s peers and crude oil

Oceaneering International’s (OII) correlation coefficient since October 13, 2017, was 0.49, while Core Laboratories’ (CLB) correlation coefficient since October 13, 2017, was 0.29. During the same period, Patterson-UTI Energy’s (PTEN) correlation coefficient was 0.46.

A high correlation means that the stock was impacted more by the movements in crude oil. In contrast, a negative correlation means that the stock was impacted by crude oil’s movement, but in the opposite direction.

To learn more about the OFS industry, read The Oilfield Equipment and Services Industry: A Primer. You can read about Wall Street analysts’ expectations for OFS companies, including Schlumberger (SLB) and Halliburton (HAL), in The Top and Bottom of Oilfield Service Stocks in 3Q17.


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