Which Oil-Weighted Stocks Can Survive Oil’s Weakness?


Dec. 4 2020, Updated 10:53 a.m. ET

Last five trading sessions

Between November 6 and November 13, 2017, oil-weighted (more than 60% oil production) stocks from the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell just 0.1%. US crude oil prices lost 1% during this time period. The oil-weighted stocks that rose the most over this time period are:

  • Denbury Resources (DNR) at 22.1%
  • California Resources (CRC) at 14.7%
  • Continental Resources (CLR) at 4.3%

CLR had the least positive correlation with oil prices in the seven calendar days to November 13, 2017. We saw this in the previous part. These three oil-weighted stocks survived oil’s weakness.

The oil-weighted stocks that fell the most in the trailing week are:

  • SRC Energy (SRCI) at -7.9%
  • Callon Petroleum (CPE) at -8%
  • Whiting Petroleum (WLL) at -8.7%

WLL had the highest correlation with US crude oil active futures and it fell the most in the trailing week. However, it’s not just the correlations with oil prices that could affect movements of these oil-weighted stocks, but sentiments in the broader market as well.

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Since last year

Between February 11, 2016, and November 13, 2017, US crude oil active futures have more than doubled from their 12-year low. ETFs that could serve as proxies to US crude oil such as the ProShares Ultra Bloomberg Crude Oil ETF (UCO), the United States Oil ETF (USO), and the United States 12-Month Oil ETF (USL) rose 62.5%, 42.4%, and 40.7%, respectively. In comparison, oil-weighted stocks rose 76.6% during this period.

Oil-weighted stocks that were the top gainers between these two dates are:

  • California Resources (CRC): 165.6%
  • Oasis Petroleum (OAS): 144.5%
  • Continental Resources (CLR): 144.3%

Oil-weighted stocks that underperformed between these two dates are:

  • Hess Corporation (HES) at 24%
  • Occidental Petroleum (OXY) at 11.1%
  • Carrizo Oil & Gas (CRZO) at -15.4%

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