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Are Oil-Weighted Stocks Outperforming WTI Crude Oil Prices?

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Returns

On May 30–June 6, our list of oil-weighted stocks fell 3.8%. US crude oil July futures fell 5.1% during this period. However, some oil stocks bucked the trend. Below are the oil-weighted stocks with the biggest increases in the trailing week.

  • California Resources (CRC) rose 7.1%.
  • Occidental Petroleum (OXY) rose 2.8%
  • Hess (HES) rose 1%.

California Resources and Hess had correlations of less than 14% with US crude oil July futures, while Occidental Petroleum had the most negative correlation with US crude oil prices, as we discussed in the previous part.

Below are the oil-weighted stocks that fell the most in the past five trading sessions:

  • RSP Permian (RSPP) fell 9.7%.
  • Concho Resources (CXO) fell 9.9%.
  • Callon Petroleum (CPE) fell 16.5%.

The sharp sell-off in oil prices during this period could have dragged these oil-weighted stocks. These three oil-weighted stocks had more than 47% correlations with US crude oil July futures in the trailing week.

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.

Since February 2016

Between February 11, 2016, and June 6, 2018, US crude oil active futures rose 147% from their 12-year low. Our list of oil-weighted stocks rose 159% during this period. Below are the oil-weighted stocks that rose the most.

  • California Resources rose 518.9%.
  • Denbury Resources (DNR) rose 316.5%.
  • WPX Energy rose 307.7%.

The oil-weighted stocks that have risen the least since February 2016 were:

  • Concho Resources rose 49.7%.
  • Occidental Petroleum rose 44.8%.
  • Carrizo Oil & Gas (CRZO) rose 7.6%.

In the trailing week and since February 11, 2016, our list of oil-weighted stocks has outperformed US crude oil futures.

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