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Which Upstream Stocks Underperformed Last Week?

Robert Scott
Which Upstream Stocks Underperformed Last Week?

Upstream Review for the Week Ending January 11(Continued from Prior Part)## Upstream stocksOn January 4–11, Denbury Resources (DNR) fell the most on our list of upstream energy stocks from the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). However, XOP rose 6.2%—the second-largest rise among the major energy ETFs that we discussed in Part 1 of this series. On January 7, UBS reduced its target price on Denbury Resources by 25 cents to $2.4.## Other underperformersEP Energy (EPE), Carrizo Oil & Gas (CRZO), Laredo Petroleum (LPI), and Pioneer Natural Resources (PXD) were the second, third, fourth, and fifth-largest underperformers, respectively, last week.## What might be behind the fall?On January 9, Morgan Stanley reduced its target price on Pioneer Natural Resources by 36 cents to $182. EP Energy derives ~55% of its oil production from the Eagle Ford Shale, while Carrizo Oil & Gas derives 73.5% of its oil production from the same region. LLS (Louisiana Light Sweet) crude oil versus WTI at Cushing, or the LLS-WTC spread, was under pressure last month, which we discussed in the previous part. The factors might have dragged these two upstream stocks despite the bullishness in oil prices. The recovery in the spread last week might support these stocks going forward.LLS is the benchmark for most light sweet crude produced in the Eagle Ford region in Texas.Browse this series on Market Realist: * Part 1 - Upstream Sector Rose Last Week * Part 2 - Analyzing the Top Upstream Gainers Last Week