On December 20, 2017, natural gas (UNG) (BOIL) January futures fell 2%. On the same day, natural gas futures settled at $2.64 per MMBtu. Natural gas’s supply concerns could be behind the weakness in natural gas prices.
Between December 13 and December 20, 2017, natural gas January futures fell 2.9%, while US crude oil prices rose 2.7%. Over this period, both the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA) rose 0.6%.
Natural-gas-weighted stocks to watch
Between December 13 and December 20, 2017, the natural-gas-weighted stocks with the highest correlations with natural gas prices in the trailing week are:
- EQT (EQT) at 87.4%
- Southwestern Energy (SWN) at 81%
- Range Resources (RRC) at 76.6%
- Cabot (COG) at 75.6%
- Gulfport Energy (GPOR) at 75.2%
WPX’s correlation with natural gas futures over this time period was 18.4%, the least among natural-gas-weighted stocks. We have taken these natural-gas-weighted stocks from the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), and they all have production mixes of at least 60% in natural gas.