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Which Oil-Weighted Stocks Might Rise with Oil?

Rabindra Samanta - Author

Nov. 20 2020, Updated 1:54 p.m. ET

Oil prices

On February 27, US crude oil April futures rose 2.6% and closed at $56.94 per barrel due to the EIA’s bullish inventory data. In the last trading session, the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA) fell 0.1% and 0.3%, respectively.

On February 27, the Energy Select Sector SPDR ETF (XLE) rose 0.4%. Concerns about the earnings might have limited energy stocks’ upside.

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Oil-weighted stocks

The following oil-weighted stocks could be sensitive to oil’s price movements based on their correlations with US crude oil April futures in the past five trading sessions:

  • ConocoPhillips (COP) at 99.8%
  • Whiting Petroleum (WLL) at 68.5%
  • WPX Energy (WPX) at 60.1%

ConocoPhillips’ diversified upstream portfolio across different grades of oil makes it a better choice among upstream stocks amid rising oil prices.

In the trailing week, US crude oil April futures fell 0.4%. Whiting Petroleum had the largest decline on our list of oil-weighted stocks, while WPX Energy fell 6%. In the next part, we’ll discuss these oil-weighted stocks’ returns.

Except for the above three stocks, the remaining oil-weighted stocks on our list had low or negative correlations with US crude oil futures. Hess (HES) and Occidental Petroleum (OXY) had the largest negative correlations of 60.5% and 57.9%, respectively, with US crude oil active futures.

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.


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