Did Lower Natural Gas Prices Impact Marathon Oil Stock?



Marathon Oil’s correlations last week

Marathon Oil’s (MRO) stock price fell 3.34% last week. Crude oil and natural gas fell 0.05% and 3.61%, respectively, in the same week. The SPDR S&P 500 ETF (SPY) fell 0.09%. In this part, we’ll discuss the relationship between the daily movements of Marathon Oil’s stock price and crude oil prices. We’ll discuss Marathon Oil’s stock correlation coefficient with crude oil in the past week and the past month. We’ll look at the extent to which Marathon Oil’s stock price followed daily natural gas prices and the S&P 500 Index during these periods.

For the week ending November 17, Marathon Oil stock had the highest correlation of ~97% with natural gas (UNG). It means that movements in natural gas had a very high influence on Marathon Oil stock. The stock’s correlation with crude oil (USO) (USL) stood at ~87%, which means that movements in Marathon Oil stock were also in tandem with crude oil last week. Marathon Oil’s production mix contains ~65% liquids. So, its stock price should be influenced more by movements in crude oil prices.

In comparison to natural gas and crude oil, Marathon Oil’s stock correlation with the SPDR S&P 500 ETF (SPY) was much lower at ~21%. It means that movements in SPY had a small influence on Marathon Oil stock last week.

Marathon Oil stock has shown correlations of 92%, 61%, and 83% with crude oil (USO), natural gas (UNG), and the SPDR S&P 500 ETF (SPY) prices, respectively, in the past month.

Marathon Oil’s peers

Occidental Petroleum (OXY) had a correlation of ~91% with crude oil prices last week. It rose 0.34% due to the marginal increase in crude prices. It had a correlation of ~51% and ~52% with natural gas and SPY last week. Occidental Petroleum’s production mix contains ~69% crude oil. As a result, it has a high correlation with crude oil prices.

Read Which Energy Stocks Could Be in Danger if Oil Keeps Stalling? to learn more about the correlation of certain upstream stocks with various energy commodities.

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