3 Stocks Benefiting From Oil's Sudden Boom

Oasis Petroleum Inc. (NYSE:OAS), Whiting Petroleum Corp (NYSE:WLL), and ConocoPhillips (NYSE:COP) are all gaining after a sudden turnaround in the energy sector

by Josh Selway

Published on Aug 31, 2015 at 2:41 PM
Updated on Jun 24, 2020 at 10:16 AM

After leading the market sell-off this morning, the energy sector has suddenly snapped back -- reminiscent of the turnaround we saw last week. Bolstering the sector is crude's rise, after a U.S. government report revealed a sharp drop in monthly production, on top of additional concerns raised by the Organization of the Petroleum Exporting Countries (OPEC). Several oil-and-gas stocks have since taken off, including Oasis Petroleum Inc. (NYSE:OAS)Whiting Petroleum Corp (NYSE:WLL), and ConocoPhillips (NYSE:COP)

OAS has benefited from crude's turnaround by adding 10.9% to trade at $11.07. Like many of its peers, the stock has been a long-term laggard, dropping nearly 77% in the past year. In fact, the shares fell to an all-time low of $8.04 last Wednesday. 

In Oasis Petroleum Inc.'s options pits, short-term speculators have shown a strong interest in calls. According to the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.42, call open interest more than doubles put open interest among options that expire within three months. Plus, this reading is only 9 percentage points from an annual low, meaning traders are far more call-skewed than normal. 

Elsewhere, WLL is enjoying a double-digit percentage lead, too, adding 13.1% to hit $19.91. The stock's long-term decline is right in line with OAS' (off roughly 81% year-over-year before today), but analysts have remained loyal; 21 out of 24 brokerage firms covering the shares say they're a "buy" or better, with not a single "sell" to be found. 

Options traders are apparently bullish, too. Call buying has picked up recently, as evidenced by Whiting Petroleum Corp's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 3.98 -- only 4 percentage points from an annual high. This means calls have been bought to open over puts at a much faster-than-usual pace during the past two weeks. 

Finally, COP's gains aren't as impressive -- 4.8% higher at $49.07 -- as OAS' and WLL's, relatively speaking. Then again, its technical track record isn't as bad, either. The stock was down 42.4% over the past 52 weeks entering today. 

Unlike OAS, though, ConocoPhillips' near-term options traders are more put-skewed than usual. COP's SOIR comes in at 1.14, and stands only 11 percentage points from an annual high. 

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