Natural gas

On November 14, natural gas December futures rose 17.9% settled at $4.837 per MMBtu (million British thermal units)—the highest closing level for active natural gas futures since February 26, 2014. The colder winter forecast and natural gas inventories at a double-digit deficit in percentage terms compared to the five-year average are behind the rise in natural gas prices.
Are Gas-Weighted Stocks Ignoring Natural Gas’s Multiyear High?

Natural gas–weighted stocks

Chesapeake Energy (CHK) has a correlation of 76.6% with natural gas prices on our list. The rest of the natural gas–weighted stocks on our list either had mild positive or negative correlations with natural gas prices in the last five trading sessions.

The natural gas–weighted stocks that might have moved inversely to natural gas prices based on their correlations in the trailing week are:

  • Antero Resources (AR) at -80.6%
  • Southwestern Energy (SWN) at -26%

Later in this series, we’ll discuss natural gas–weighted stocks’ returns. First, we’ll analyze the correlations of these natural gas–weighted stocks with US crude oil prices. Oil prices can have a significant impact on the entire energy sector, not just on oil stocks.

The natural gas–weighted stocks mentioned above are part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). They operate with production mixes of at least 60.0% in natural gas.

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