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Is Oil Influencing Natural Gas–Weighted Stocks?

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Jan. 4 2018, Published 10:04 a.m. ET

Correlations

The natural gas–weighted stocks that might be impacted the most by higher oil (USO) prices, based on their correlations with US crude oil futures between December 27, 2017, and January 3, 2018, are:

  • Cabot Oil & Gas (COG) at 92.9%
  • WPX Energy (WPX) at 90.5%
  • Gulfport Energy (GPOR) at 83.7%
  • EQT (EQT) at 82.8%
  • Southwestern Energy (SWN) at 74%

On January 3, 2018, US crude oil futures closed at a three-year high.

Our collection of these natural gas–weighted stocks is from the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). The energy stocks have at least 60% production mixes in natural gas.

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Oil’s role

Oil prices are important for natural gas supplies. Oil can impact the market sentiment across other markets like gas and equities as well. Oil can impact natural gas prices. In the short term, it could be why natural gas–weighted stocks had higher correlations with US crude oil compared to natural gas prices.

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