Which Oil-Weighted Stocks Were the Ouperformers?



Oil-weighted stocks’ returns

On June 19–25, our list of oil-weighted stocks rose 4.3%—compared to the 10% rise in US crude oil August futures. On average, our list of oil-weighted stocks underperformed US crude oil prices.

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Let’s take a look at the oil-weighted stocks that rose the most in the last five trading sessions:

  • Whiting Petroleum (WLL) rose 11.3%.
  • Hess (HES) rose 11%.
  • California Resources (CRC) rose 9.9%.

These three stocks had over a 76% correlation with US crude oil prices. Whiting Petroleum might report positive earnings this quarter compared to an adjusted net loss of $0.16 per share last quarter. On June 24, Suntrust Robinson reduced its target price on Whiting Petroleum by $5 to $35. Oasis Petroleum operates with a production mix of 72% in oil. On June 13, Moody’s upgraded Oasis Petroleum rating to “B1.” Since that day, the stock has risen 17%. Management’s clear visibility is an advantage for Hess’s stock prices.

Underperformers among oil-weighted stocks

Now, we’ll discuss the oil-weighted stocks that underperformed their peers and US crude oil prices in the last five trading sessions:

  • Occidental Petroleum (OXY) rose 0.2%.
  • Concho Resources (CXO) unchanged
  • Denbury Resources (DNR) fell 0.8%.

On June 26, in response to Carl Icahn’s filing, Occidental Petroleum said, “We maintain an open dialogue with all our shareholders and welcome constructive input toward our shared goal of maximizing long-term value. Our Board is committed to acting in the best interests of Occidental shareholders and will continue to take actions to drive value on their behalf.” Occidental Petroleum will likely complete the Anadarko Petroleum (APC) acquisition by the second half of 2019.

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% in liquids based on the latest quarterly production data.


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