Natural gas–weighted stocks’ returns

On November 14–21, our list of natural gas–weighted stocks fell 10%—compared to a fall of 8% in natural gas December futures. On average, natural gas–weighted stocks underperformed natural gas futures during this period.

Has Oil Impacted Natural Gas–Weighted Stocks’ Returns?

All of the natural gas–weighted stocks ended in the red during this period. The natural gas–weighted stocks that fell the least in the past five trading sessions were:

  • Cabot Oil & Gas (COG) fell 4.5%.
  • Gulfport Energy (GPOR) fell 7.5%.
  • Chesapeake Energy (CHK) fell 10.1%.

These three stocks had higher and positive correlations with oil prices than natural gas prices. Chesapeake Energy had a negative correlation with natural gas prices, which we discussed in Part 3. US crude oil prices fell 3.2% during this period. The relatively small fall in oil prices compared to natural gas might have limited the downside in these energy stocks.

These natural gas–weighted stocks 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.

Since March 2016

Between March 3, 2016, and November 21, 2018, natural gas active futures rose 171.6% from a 17-year low. Our list of natural gas–weighted stocks fell 31.4% during the same period.

Cabot Oil & Gas has risen 18.6% since March 3, 2016—the only gainer on our list of natural gas–weighted stocks during this period. Let’s take a look at the natural gas–weighted stocks that fell the most during this period:

  • Antero Resources fell 41.9%.
  • Range Resources (RRC) fell 47.1%.
  • Gulfport Energy fell 66.1%.

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