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Are Oil-Weighted Stocks Underperforming Oil?

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What happened in the last five trading sessions?

On December 6–13, 2017, our list of oil-weighted stocks fell 1.6%, while US crude oil prices rose 1.1%. So, US crude oil outperformed these oil-weighted stocks. The top three gainers on our list of oil-weighted stocks between these two dates are:

  • Diamondback Energy (FANG) at 4.9%
  • Carrizo Oil & Gas (CRZO) at 4.2%
  • RSP Permian (RSPP) at 4%

These three oil-weighted stocks also outperformed US crude oil. In fact, these three oil-weighted stocks had correlations of at least 65% with US crude oil prices in the past five trading sessions.

The top three losers on our list of oil-weighted stocks in the past five trading sessions are:

  • Denbury Resources (DNR) at -8%
  • Kosmos Energy (KOS) at -11.9%
  • Oasis Petroleum (OAS) at -16.5%

All of these oil-weighted stocks with at least 60.0% production mixes in oil have been taken from the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

From the multiyear low

Between February 11, 2016, and December 13, 2017, there has been a rise of 115.9% in US crude oil futures. On February 11, 2016, US crude oil fell to a 12-year low.

ETFs that track oil including the ProShares Ultra Bloomberg Crude Oil ETF (UCO), the United States Oil ETF (USO), and the United States 12-Month Oil ETF (USL) rose 59.8%, 41.8%, and 38.4%, respectively. Our collection of oil-weighted stocks have risen 66.1% since February 11, 2016.

The top three gainers during this period are:

  • California Resources (CRC) at 162.8%
  • Continental Resources (CLR) at 152.2%
  • RSP Permian at 90.9%

The oil-weighted stocks that underperformed during this period are:

  • Occidental Petroleum (OXY) at 15.8%
  • Whiting Petroleum (WLL) at 14.8%
  • Carrizo Oil & Gas at -15.1%

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