Why Short Sellers Jumped on 2 Energy Stocks

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Crude oil traded at around $61.98 a barrel early Friday. Over the past month, the price of West Texas Intermediate (WTI) crude has dipped from about $64 to around $62 a barrel. Concerns over supply now that stricter sanctions have been placed on Iran and production cuts in the Middle East and Russia were overwhelmed by concerns over a softening global economy.

Of the companies we watch, short interest fell on four of six energy stocks during the two-week reporting period ending April 30.

Chevron Corp. (NYSE: CVX) saw short interest soar by 67.3% to 28.45 million shares, which represents about 1.5% of the company’s float. Days to cover remained unchanged at two. In the two-week short interest period, the stock’s share price decreased by about 0.4%. Its 52-week range is $100.22 to $131.08, and it closed at $121.19 on Thursday, up about 3.1% for the day. Chevron’s offer to buy Anadarko sent short sellers into paroxysms of joy during the two-weeks. Likely not so much now.

Exxon Mobil Corp.’s (NYSE: XOM) short interest rose by 3.4% to 37.87 million shares, or 0.9% of the company’s float. In the two weeks to April 30, the share price decreased by about 1%. The stock’s 52-week range is $64.65 to $87.36 and it closed at $76.77 on Thursday, down less than 0.1% for the day. Days to cover slid from four to three.

BP PLC (NYSE: BP) saw a decrease of 19.3% in short interest during the period. Some 0.1% of the total float, or 4.97 million American depositary shares, were short and days to cover remained at one. The company’s shares traded down by about 1.9% over the two-week period, and they closed Thursday at $41.65, down less than 0.1% for the day, in a 52-week range of $36.28 to $47.83.

ConocoPhillips (NYSE: COP) short interest tumbled by 15.0% in the latter two weeks of April. Some 10.01 million shares were short, representing 1% of the company’s total float. Days to cover dropped from two to one, and the stock price fell by 4.5% during the period. Shares closed Thursday at $61.54, up by about 0.2% for the day, in a 52-week range of $56.75 to $80.24.

Petróleo Brasileiro S.A. (NYSE: PBR), or Petrobras, posted a rise of 6.3% in short interest during the two-week period. Some 28.27 million shares were short as of April 30, about 0.8% of the total float. The stock closed at $14.78 on Thursday, down by about 3.2% for the day, in a 52-week range of $9.02 to $17.90. Shares traded up by about 0.3% in the two-week short interest period, and days to cover rose from one to two.

Occidental Petroleum Corp.’s (NYSE: OXY) short interest jumped by 40.4% to 13.97 million shares. Days to cover slipped from two to one, and about 1.9% of the company’s shares were short. In the two weeks to April 30, the share price dropped by about 7.1%. The stock’s 52-week range is $56.12 to $87.67, and shares closed Thursday at $56.33, down by about 6.4% for the day. Oxy “won” the bidding war with Chevron over Anadarko. Short sellers were no doubt pleased.


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