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Which Oil-Weighted Stocks Are Sensitive to Oil Prices?

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Jun. 20 2019, Updated 7:37 a.m. ET

Oil-weighted stocks are sensitive to oil

The following oil-weighted stocks could be sensitive to oil’s price movements based on their correlations with US crude oil August futures on June 12–19:

  • California Resources (CRC) at 81.3%
  • ConocoPhillips (COP) at 79.9%
  • EOG Resources (EOG) at 76.6%
  • Whiting Petroleum (WLL) at 70.3%
  • Oasis Petroleum (OAS) at 67%

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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Correlation and movements

In the trailing week, US crude oil August futures rose 5.1%. All of the oil-weighted stocks discussed above ended in the green. The magnitude of the correlation shows oil’s significance for these energy stocks. If US crude oil rises more, it might please investors in the stocks discussed above based on the correlations.

Apart from the oil-weighted stocks discussed above, California Resources and Oasis Petroleum were the outperformers among oil-weighted stocks. California Resources had the second-highest correlation with US crude oil prices in the last three months among these energy stocks.

In the current quarter, California Resources is expected to report a sequential decline of 46% in its EPS based on analysts’ consensus estimates. On average, oil prices have risen 9.4% during this period. California Resources operates with a production mix of ~74.4% in oil.

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