To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
The technical storage or access that is used exclusively for statistical purposes.
The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
MOMENTUM ANALYSIS: Global Oil and Gas Stocks
WTI Crude has been on a steep downward trend, dropping over 75% in about 18 months. At the time of writing, WTI had recently hit a 12-year low, briefly dipping below $27 per barrel. As a result, Oil & Gas Produces, Equipment Service & Distribution companies have all seen sharp falls in their share prices. Performance like this can be particularly damaging to investor’s portfolios.
Smart Momentum analytics can spot negative trends early helping to limit downside capture and protect profits while improving risk control and portfolio performance.
This report will utilize Trendrating’s Smart Momentum analytics to explore momentum in Global Oil & Gas Stocks.
Below is the current distribution of momentum in this sector as well as the average performance of each rating:
As we can see from the diagram, nearly 73% of Oil & Gas stocks are currently exhibiting negative momentum. However, about 18% of stocks are in an established upward trend (A rated) and these have an average return (since rated) of about 20%.
The chart above displays the Momentum Ratings changes issued by Trendrating over the last three months. We find that the vast majority, over 50% of issued ratings, has been for stocks entering established bear trends (D rating). These results are consistent for a sector in a long term negative trend.
How widespread is the damage? From the chart below, we can see the average performance of Oil & Gas stocks for various countries, since individual stocks moved to a negative rating. The picture is not pretty. On average Oil & gas stocks are down 35% by this metric with Saudi Arabia, Singapore, Indonesia and Egypt leading the way down.
The Table below shows us a sample of A and D-rated Oil and Gas stocks and their current performance (since rated).
When we look at the 3-month performance of securities that have been rated for at least that period of time, we find that our best performing Oil and Gas stocks are in Emerging Markets while our worst performers are in Developed markets.
In conclusion, the performance of Oil and Gas stocks have tracked the price of oil downwards. Performance of this sector has been bad in most global markets. Despite this dislocation, Investors still seeking to invest in this sector will find that Emerging markets in Asia and Europe have the strongest positive momentum in a relatively negative momentum environment.