24 Jul

How Is Schlumberger Reacting to Crude Oil Prices?

WRITTEN BY Alex Chamberlin

Correlation between Schlumberger and crude oil

Schlumberger’s (SLB) correlation with crude oil’s price from July 13 to July 20 was 0.38. SLB announced its second-quarter earnings on July 20, and its correlation with crude oil was moderately strong during the week. Since April 20, the date that SLB released its first-quarter results, its correlation with crude oil has been marginally lower.

Last week, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil was 0.44—lower than the last three months. This shows a moderately strong sensitivity of the sector as a whole to crude oil prices. Lower or falling correlations with oil could indicate the lower or decreasing influence of oil prices on the stock’s movement on a daily basis and vice versa.How Is Schlumberger Reacting to Crude Oil Prices?

Correlation between oilfield services companies and crude oil

Last week, Weatherford International’s (WFT) correlation with crude oil was 0.74—the highest in the oilfield equipment and services (or OFS) industry. In comparison, Flotek Industries’ (FTK) correlation with crude oil was -0.09—the lowest in the last week. A negative correlation implies that the stock’s price has moved inversely to crude oil prices on a daily basis.

U.S. Silica Holdings’ (SLCA) correlation with crude oil was close to zero (-0.03) in the last week. This near-zero correlation indicates that SLCA’s stock price movement was relatively unrelated to crude oil’s changes in the last week.

In the final part of this series, we’ll discuss Wall Street analysts’ targets for Schlumberger.

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