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Did Gas-Weighted Stocks Miss Natural Gas’s 4-Month High?

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Natural gas

On May 23, natural gas July futures rose 0.6% and closed at $2.96 per MMBtu (million British thermal units)—the highest close for natural gas active futures since January 31. Bullish weather forecasts helped natural gas rise. The EIA’s (U.S. Energy Information Administration’s) inventory data scheduled for May 24 could be an important factor for natural gas prices.

Natural gas–weighted stocks

On May 16–23, all of the natural gas–weighted stocks on our list had negative correlations with natural gas July futures. The natural gas–weighted stocks that had the highest negative correlations with natural gas futures during this period were:

  • Cabot Oil & Gas (COG) at -76.1%
  • Range Resources (RRC) at -59.1%
  • Gulfport Energy (GPOR) at -45.6%
  • Southwestern Energy (SWN) at -44.8%
  • Chesapeake Energy (CHK) at -29.7%

Except for Chesapeake Energy and Range Resources, all of the remaining natural gas–weighted stocks closed in the red in the past five trading days. During this period, the natural gas July futures rose 4.8%.

Antero Resources (AR) had a correlation of -12.2% with natural gas futures in the past five trading days.

US crude oil prices could have driven natural gas–weighted stocks in the past five trading days. Next, we’ll analyze the correlations of these natural gas–weighted stocks with US crude oil prices.

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% in natural gas.

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