Has Oil Impacted Oil-Weighted Stocks’ Returns?

Oil-weighted stocks’ returns

On December 19–26, our list of oil-weighted stocks fell 2.2%—compared to the 4% fall in US crude oil February futures. On average, our list of oil-weighted stocks outperformed US crude oil prices. The sharp fall in US equity indexes in the past might have made oil’s fall sharper.

Has Oil Impacted Oil-Weighted Stocks’ Returns?

Outperformers

Below are the oil-weighted stocks that rose the most in the trailing week:

  • WPX Energy (WPX) rose 3%.
  • Oasis Petroleum (OAS) rose 1.9%.
  • Diamondback Energy (FANG) rose 1.5%.

Since US crude oil’s 12-year low, WPX Energy rose the second highest on our list of oil-weighted stocks. On December 21, Citigroup reduced its target price on WPX Energy from $22 to $19.

Underperformers

Below is the list of the oil-weighted stocks that fell the most in the seven calendar days to December 26:

  • Apache (APA) fell 5.9%.
  • Whiting Petroleum (WLL) fell 6.2%.
  • Hess (HES) fell 12.1%.

These three oil-weighted stocks had over 90% correlations with US crude oil prices in the trailing week.

All of these oil-weighted stocks are part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). They have 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.