When the price of oil trends downward, so do the major oil stocks. Not that surprising except that right now, the companies are putting in lower lows on the price charts while light crude oil itself is holding above a September low.
Without speculating about all of the reasons for this (the Middle East? lower interest rates? the new moon?), here’s a close look at the patterns established by the movement of price.
West Texas Intermediate Crude (continuous contract).
Starting with the price of oil itself, you can see the early April peak, how it dropped from there and how the July rally failed to regain that yearly high. I’ve red circled the spot where the 50-day moving average crossed below the 200-day moving average.
The red dotted line connects the September low with the most recent low. The most closely watched commodity in the world dropped down to $67 from $87 so far in 2024.
5 Big Oil Stocks Drop To New Lows.
BP Amoco.
The United Kingdom-based company has a market capitalization of $77.22 billion. The stock peaked in mid-April as oil itself began to turn down. In late July, its 50-day moving average signaled the possibility of more weakness by crossing below the 200-day moving average. This week’s drop to new lows is accompanied by heavy selling volume.
HF Sinclair.
The 50-day moving average crossed below the 200-day moving in June on this chart. Today’s more than 6% drop takes the stock to a new low. Note that the relative strength index (RSI, below the price chart) has entered the “overbought” zone, for what it’s worth. Market cap is $7.45 billion.
Murphy Oil.
This week’s new low follows a steady downtrend from the early April peak. It was early in July when the 50-day moving average crossed below the 200-day moving average. The stock’s price is now well below both of those averages. Market cap for Murphy is $4.76 billion.
PBF Energy.
Today’s new low arrives after a relentless downtrend from the peak of early April. On the PBF price chart, the 50-day moving average crossed below the 200-day moving average at the beginning of April. I’ve red-circled the new low along with the reddish bars indicating the heaviness of the selling volume. Market cap is $3.32 billion.
Valaris.
This one’s different: the peak price came in late July/early August and much selling arrived shortly thereafter. By early September, the 50-day moving average crossed below the 200-day moving average. Buyers are showing up today, but the stock remains below the 50-day moving average. Market capitalization is $3.67 billion.
No artificial intelligence was used in the writing of this piece.
More analysis and commentary at johnnavin.substack.com.
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