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Chart in Focus: Comparing Oil Stocks and Oil Prices

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Oil-weighted stocks

Between October 30 and November 6, 2017, our list of oil-weighted stocks rose 14.1%. During this period, US crude oil active futures rose 5.9%. Such large gains in oil stocks could be a bullish factor for market indexes such as the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA).

We gathered our list of oil-weighted stocks from the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) with at least a 60% production mix in oil.

The oil-weighted stocks that led the rally in the trailing week are:

  • California Resources (CRC): 35.2%
  • Denbury Resources (DNR): 32.8%
  • Oasis Petroleum (OAS): 20.3%

As we discussed in the previous part, CRC and DNR were among the oil-weighted stocks that had the highest correlations with oil prices. The oil-weighted stocks that underperformed in the past five trading sessions follow:

  • Diamondback Energy (FANG): 7.1%
  • Occidental Petroleum (OXY): 5.9%
  • SRC Energy (SRCI): -0.3%

OXY had the most negative correlation with oil prices in the seven calendar days ended November 6, 2017. Apart from oil prices, sentiments in the broader equity market could also impact these oil-weighted stocks.

12-year low

Between February 11, 2016, and November 6, 2017, US crude oil active futures rose 118.8% from their 12-year low. Over this period, the ProShares Ultra Bloomberg Crude Oil ETF (UCO), the United States Oil ETF (USO), and the United States 12-Month Oil ETF (USL)which track US crude oil futures, rose 66.2%, 44%, and 40.9%, respectively. Our list of oil-weighted stocks rose 76.4% during this period.

The oil-weighted stocks that rose the most between February 11, 2016, and November 6, 2017, are:

  • Oasis Petroleum (OAS): 158.5%
  • Continental Resources (CLR): 134.2%
  • California Resources (CRC): 131.5%

The oil-weighted stocks that underperformed between February 11, 2016, and November 6, 2017, are:

  • Hess Corporation (HES): 28.3%
  • Occidental Petroleum (OXY): -12.6%
  • Carrizo Oil & Gas (CRZO): -13.3%

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