Here’s Why Upstream Underperformed the Energy Space



Energy stocks

Between August 31 and September 7, upstream stock Southwestern Energy Company (SWN) fell the most on our list of energy stocks. In fact, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell 5.6%, the second-largest fall among the major energy subsector ETFs we looked at in Part Two of this series.

We created our list of energy stocks from the following energy subsector ETFs and a few integrated energy stocks:

  • SPDR S&P Oil & Gas Exploration & Production ETF (XOP)
  • Energy Select Sector SPDR ETF (XLE)
  • Alerian MLP ETF (AMLP)
  • VanEck Vectors Oil Services ETF (OIH)
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Other large losses

Other upstream stocks Gulfport Energy (GPOR), California Resources (CRC), and Range Resources (RRC) ranked second, third, and fourth on our list of the largest losses last week.

In fact, except CRC, the remaining upstream losses in our list were natural gas–weighted stocks. A fall of 4.8% in natural gas prices last week may have dragged these natural gas–weighted stocks down.

Between August 31 and September 7, oilfield services stock Transocean (RIG) ranked fifth on our list of the largest energy losses. The VanEck Vectors Oil Services ETF (OIH) fell 6.1%, the largest fall among energy subsector ETFs in this period.

On September 4, RIG announced that it had “entered into a definitive merger agreement under which Transocean will acquire Ocean Rig in a cash and stock transaction valued at approximately $2.7 billion, inclusive of Ocean Rig’s net debt.”

Energy commodities and the broader market

During the week that ended on September 7, US crude oil October futures fell 2.9%, while natural gas October futures fell 4.8%. The S&P 500 fell 1% during this period. These energy losses underperformed energy commodities and equity markets last week.

Next, we’ll discuss oil ETFs’ price performances.


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