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Crude Oil and Natural Gas on a Tear: Which Natural Gas Stocks are Gaining?

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Natural gas–weighted stocks

Between October 30 and November 6, 2017, our list of natural gas–weighted stocks rose 7.9%. Over this period, natural gas active futures rose 5.7%.

Gains in natural gas–producing companies’ stocks could be a positive factor for market indexes such as the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA). Over this period, SPY and DIA rose 0.7% and 0.9%, respectively.

The natural gas–weighted stocks that were the largest gainers in the trailing week are:

  • WPX Energy (WPX): 18.0%
  • Southwestern Energy Company (SWN): 15.5%
  • Chesapeake Energy (CHK): 8.9%

CHK had a higher correlation with oil prices compared to natural gas, which we discussed in the previous two parts. US crude oil futures rose 5.9% over this period.

The natural gas–weighted stocks that underperformed in the past five trading sessions follow:

Apart from natural gas prices, sentiments in the broader equity market should also be watched to understand the moves in these natural gas–weighted stocks.

We obtained our list of natural gas–weighted stocks from the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) but with at least 60% production mix in natural gas.

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17-year low

Between March 3, 2016, and November 6, 2017, natural gas active futures rose 91.2% from their 17-year low. Over this period, the ProShares Ultra Bloomberg Natural Gas ETF (BOIL) fell 8.0%, and the United States Natural Gas Fund LP (UNG) rose 10.2%. These ETFs track natural gas futures. Our list of natural gas–weighted stocks rose 29.1% over this period.

Natural gas–weighted stocks that rose the most between March 3, 2016, and November 6, 2017, follow:

  • Rice Energy (RICE): 190.5%
  • WPX Energy (WPX): 147.6%
  • Cabot Oil & Gas (COG): 30.8%

The natural gas–weighted stocks that underperformed between March 3, 2016, and November 6, 2017, are:

  • Antero Resources (AR): -15.9%
  • Range Resources (RRC): -37.3%
  • Gulfport Energy (GPOR): -43.2%

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