On November 14, US crude oil December futures rose 1% and closed at $56.25 per barrel. News of OPEC’s rescue plan might have helped US crude oil prices end the three-day losing streak.
Oil steering oil-weighted stocks
Most of the oil-weighted stocks on our list had higher correlations with the US crude oil than the S&P 500 Index in the seven calendar days to November 14. With US crude oil prices moving below the psychologically important level of $60, the correlation of oil-weighted upstream stocks with oil prices rose significantly.
The following oil-weighted stocks could be sensitive to US crude oil movements based on their correlations with US crude oil December futures in the past five trading sessions:
- Carrizo Oil & Gas (CRZO) at 91.4%
- Whiting Petroleum (WLL) at 81.9%
- Callon Petroleum (CPE) at 78.1%
- Denbury Resources (DNR) at 72.2%
- WPX Energy (WPX) at 69.3%
In the seven calendar days to November 14, oil-weighted stocks EOG Resources (EOG) and Concho Resources (CXO) had correlations of 28.8% and 15.4% with US crude oil prices, respectively—the lowest on our list of oil-weighted stocks.
In the trailing week, US crude oil December futures fell 8.8%. During this period, Carrizo Oil & Gas had the third-largest decline, while Denbury Resources had the fourth-largest decline.
All of these oil-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 liquids based on their latest quarterly production data. Liquids include crude oil, condensates, and natural gas liquids.
Next, we’ll discuss these oil-weighted stocks’ returns.