Oil’s Impact on Gas-Weighted Stocks despite Natural Gas’s Rise

Natural gas–weighted stocks

The list below highlights the natural gas–weighted stocks that had the highest correlations with US crude oil (UCO) active futures in the seven calendar days ended November 6, 2017:

  • EQT Corporation (EQT): 86%
  • Rice Energy (RICE): 77.3%
  • Chesapeake Energy (CHK): 72.7%
  • Gulfport Energy (GPOR): 71.7%
  • Range Resources (RRC): 68.7%

Oil’s Impact on Gas-Weighted Stocks despite Natural Gas’s Rise

These five natural gas–weighted stocks had the highest correlations with natural gas prices, as we discussed in the previous part of this series.

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

Natural gas–weighted stocks that had the least positive or most negative correlations with US crude oil futures in the last five trading sessions follow:

  • Cabot Oil & Gas (COG): 7.8%
  • WPX Energy (WPX): -7.2%

COG had also the least correlation with natural gas prices over this period.

Oil’s influence

Natural gas can follow oil prices, which could also be true for the energy sector as a whole. As a result, these natural gas–weighted stocks may have shown higher correlations with oil prices compared to natural gas above the $3.00 mark.