What Drove Whiting Petroleum Stock Lower Last Week



Whiting Petroleum stock performance

Whiting Petroleum (WLL) stock fell ~11% in the week ended November 17. The stock seems to have seen extended losses from the week before, when it finalized a one-for-four reverse stock split. On November 8, Whiting Petroleum announced the stock split. WLL’s stock fell ~5.6% on November 9.

Other factors that likely caused WLL stock to fall last week may have been crude oil prices (USO) falling earlier in the week due to a higher oil rig count and the International Energy Agency’s outlook for slower growth in crude oil demand.

However, towards the end of the week, an oil spill on the Keystone pipeline in South Dakota pushed crude oil prices higher. Positive speculations regarding the extension of production cuts by OPEC (Organization of the Petroleum Exporting Countries) when it meets on November 30 also nudged crude prices higher.

As a result of the higher crude oil prices towards the end of the week, previous losses were partially offset, and prices fell marginally on a weekly basis. However, WLL stock fell more, as we saw above, likely due to the added pessimism concerning the stock split.

Performance this year: WLL, XLE, and SPY

Whiting Petroleum stock has fallen ~54.5% since the beginning of this year. WLL has also fared poorly compared with the broader energy fund, the Energy Select Sector SPDR ETF (XLE), which has fallen ~11.5%. Both WLL and XLE have performed poorly compared with the broader market (SPY) (SPX-INDEX), which has risen ~14.5% since the beginning of the year.

Views on WLL’s reverse stock split

Whiting Petroleum management announced its reverse stock split decision in September, hoping that it “may improve marketability and facilitate its trading.” The stock fell 6.5% on September 7, after the announcement. It fell 5.6% on November 9, when the reverse stock split was finalized and became effective.

Therefore, investors will likely keep watching to see whether Whiting management announces further changes in its structure or strategy, and how crude oil prices could affect the stock in the coming weeks.

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