Natural gas–weighted stocks
The natural gas–weighted stocks on our list that had the highest correlations with natural gas July futures on May 22–29 were:
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.
Except Cabot Oil & Gas (COG), all of the natural gas–weighted stocks on our list had correlations of over 34% with natural gas prices. Cabot Oil & Gas had a negative correlation of 60.5% with natural gas prices. The company had a positive correlation of 96.8% with US crude oil prices—the largest among natural gas–weighted stocks. Antero Resources had a mild negative correlation with US crude oil prices.
Oil prices can have a significant impact on the entire energy sector not just on oil-weighted stocks. US crude oil prices are important in order to understand the US natural gas supply. Oil prices are often important for the energy sector’s general sentiment, which explains the different trend in correlations among natural gas–weighted stocks with oil and natural gas prices.