ConocoPhillips’s stock performance
As we saw in the previous part of this series, ConocoPhillips’s (COP) stock price decreased marginally, by ~0.2%, last week. However, crude oil (UWT) rose moderately, by less than one percentage point. So it’s clear that COP’s stock price followed the narrow movement in crude oil prices to produce the lackluster performance. In this part of our series, we’ll try to quantify this correlation between COP’s stock and crude oil prices.
ConocoPhillips’s stock price correlations
For the week ended March 16, ConocoPhillips’s stock price had a correlation of ~87% with crude oil prices. In other words, the movement in crude oil prices impacted COP’s stock price on most days last week. This correlation was especially visible on Friday, when crude oil and COP’s stock price both rose sharply.
ConocoPhillips’s 2017 production mix contained ~44% crude oil, ~9% bitumen, and ~8% natural gas liquids. COP’s production is tilted toward more liquids production. Also, COP’s current operational strategy is geared toward lowering natural gas production in North America.
For the week ended March 16, ConocoPhillips’s correlation with natural gas was around -13%, which means movements in COP’s stock price weren’t in sync with natural gas prices.
ConocoPhillips’s correlations over the last month
ConocoPhillips’s stock has shown correlations of around 81% and -29% with crude oil and natural gas prices, respectively, over the last month. For more on energy stocks and their correlations with crude oil prices, see Market Realist’s series Why Oil’s Fall Could Erode Energy Stocks’ Gains.