Oil prices rallied at the start of 2018 with WTI crude topping $66/barrel in late January. Short interest in the U.S./Canadian Oil, Gas & Consumable Fuel Sector tracked higher along with the price of crude, hitting a year-to-date high of $55.2 billion in mid-January. By the time WTI crude hit its year-to-date low of $58.98 on February 14th, short interest in the sector had just hit its year-to-date low of $43.1 billion on February 12th. Since hitting its lows, the price of WTI crude has risen 15% to $67.83 and short interest in the sector has increased by 27% to $54.8 billion. Oil & gas equity short sellers have been shorting into crude price strength and covering on price weakness.
While short interest in the Sector is up 10.4% for the year, most of the increase occurred in April with overall short interest increasing by $6.1 billion, or +12.7%. The sub-industries with the largest growth of short exposure were Integrated Oil & Gas and the Oil & Gas Exploration and Production sectors with $1.6 billion and $3.2 billion of new short interest in April.
| Oil, Gas & Cons Fuels
(Short Int in $ millions) |
12/30/16 | 3/31/17 | 6/30/17 | 9/29/17 | 12/29/17 | 3/29/18 | 4/20/18 |
| Coal & Consumable Fuels | $1,186 | $1,231 | $1,241 | $746 | $719 | $688 | $799 |
| Integrated Oil & Gas | $11,606 | $9,145 | $9,240 | $11,032 | $10,204 | $8,904 | $10,455 |
| Oil/Gas Explor/Prod | $23,224 | $23,371 | $23,036 | $24,274 | $21,039 | $22,853 | $25,923 |
| Oil/Gas Refining/Mrkting | $6,020 | $6,378 | $5,270 | $5,457 | $4,948 | $4,559 | $5,300 |
| Oil/Gas Storage/Trans | $15,896 | $14,786 | $14,087 | $14,176 | $12,571 | $11,540 | $12,151 |
| Total U.S./Can Sector | $57,932 | $54,912 | $52,873 | $55,685 | $49,481 | $48,532 | $54,629 |
| Top Shorts by Sub-Ind
(in $ millions) |
Stock | Ticker | Short
Interest |
30 Day
Change |
YTD MTM
P/L |
YTD MTM
P/L % |
| Coal & Consumable Fuels | Cameco Corp | CCO CN | $230 | +$32 | -$27.2 | -13.66% |
| Arch Coal | ARCH | $230 | +$45 | -$19.7 | -9.53% | |
| Peabody Energy | BTU | $203 | +$45 | +$3.9 | -2.44% | |
| Integrated Oil & Gas | Chevron Corp | CVX | $2,749 | -$46 | +$30.7 | +1.15% |
| Exxon Mobil | XOM | $2,569 | -$152 | +$115.0 | +4.24% | |
| Hess Corp | HES | $1,947 | +$505 | -$365.3 | -24.65% | |
| Oil/Gas Explor/Prod | ConocoPhillips | COP | $1,756 | +$809 | -$263.1 | -18.74% |
| Anadarko Petro | APC | $1,736 | +$65 | -$309.3 | -25.04% | |
| Concho Resources | CXO | $1,531 | +$773 | -$91.0 | -10.29% | |
| Oil/Gas Refining/Mrkting | Valero Energy | VLO | $1,062 | -$454 | -$177.9 | -14.42% |
| Marathon Petro | MPC | $748 | +$218 | -$132.4 | -22.00% | |
| Andeavor | ANDV | $690 | +$180 | -$63.6 | -16.06% | |
| Oil/Gas Storage/Trans | Enbridge Inc | ENB CN | $1,779 | +$191 | +$290.7 | +16.88% |
| TransCanada Corp | TRP CN | $1,097 | +$694 | +$84.1 | +7.21% | |
| Kinder Morgan Inc | KMI | $916 | -$23 | +$79.3 | +8.89% |
Want deeper insight into the above analysis?
Contact: Ihor.Dusaniwsky@S3Partners.net
Managing Director Predictive Analytics, S3 Partners, LLC
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