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Analyzing Natural Gas–Weighted Stocks’ Returns

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Returns

On April 25–May 2, our list of natural gas–weighted stocks fell 0.2%—1.7 percentage points less than natural gas June futures’ decline during this period.

The natural gas–weighted stocks with the largest increases during this period were:

  • Cabot Oil & Gas (COG) rose 2.8%.
  • Gulfport Energy (GPOR) rose 2.2%.
  • Range Resources (RRC) rose 1.7%.

The natural gas–weighted stocks with the largest fall in the past five trading sessions were:

  • Antero Resources (AR) fell 0.7%.
  • Chesapeake Energy (CHK) fell 1.7%.
  • Southwestern Energy (SWN) fell 5.6%.

Antero Resources, Chesapeake Energy, and Southwestern Energy had the highest positive correlations with natural gas futures during this period, which we discussed in Part 3. These three stocks had the highest negative correlations with US crude oil June futures, as we discussed in the previous part. US crude oil June futures fell 0.2% in the past five trading days.

These natural gas–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% natural gas.

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Natural gas active futures have risen

Between March 3, 2016, and May 2, 2018, natural gas active futures rose 68% from their 17-year low. Our list of natural gas–weighted stocks fell 34% during this period. Cabot Oil & Gas (COG) was the only natural gas–weighted stock that closed in the green during this period. Since March 3, 2016, Cabot Oil & Gas has risen 8.6%.

Below are the natural gas–weighted stocks with the largest declines during this period:

  • Southwestern Energy (SWN) fell 42.6%.
  • Range Resources (RRC) fell 54.9%.
  • Gulfport Energy (GPOR) fell 63.5%.
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