Which Oil-Weighted Stocks Could Fall If Oil Falls?



US crude oil

On April 25, US crude oil June futures rose 0.5% and closed at $68.05 per barrel, despite a bearish inventory report. However, between April 18 and April 25, US crude oil June futures fell 0.6%. The prices are just ~0.9% off their more-than-three-year closing high of $68.64 per barrel.

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Bearish inventory data

In the week ended April 20, US crude oil inventories rose 2.2 MMbbls (million barrels), a surprise increase against the market’s expected fall of 1.6 MMbbls. The EIA (U.S. Energy Information Administration) reported inventory data on April 25.

Oil-weighted stocks

The following oil-weighted stocks could be the most sensitive to oil’s moves based on the past five trading sessions’ correlations with US crude oil June futures:

These oil-weighted stocks are part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). They operate with a production mix of at least 60% in liquids based on their latest quarterly production data. Liquids include crude oil, condensates, and natural gas liquids.

Between April 18 and April 25, Whiting Petroleum (WLL) and Denbury Resources (DNR) had negative correlations of 28.1% and 33.3%, respectively, with US crude oil June futures.


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