Short sellers cut bets against S&P 500 energy stocks in October

Short sellers have decreased their bearish bets against S&P 500 oil and gas stocks in October, with crude futures down around 6% over the past month amid sluggish demand.

The average short interest in the S&P 500 energy sector stocks fell for the first time since July month to 2.02% at the end of October. The short bets, in which traders sell borrowed shares of companies with the aim of buying them back later at a lower price, fell to 409.88M from 446.57M in September.

Crude oil futures slid to their lowest in nearly two weeks on Monday following disappointing economic data from China, the world’s largest crude importer, and expectations for higher U.S. production when President-elect Donald Trump takes office. The IEA said in its latest report that global supply is expected to exceed consumption by more than 1 mb/d next year, primarily due to a slowdown in China’s economy.

The S&P 500 Energy sector (NYSEARCA:XLE) was down 1.35% in October, compared to a 0.06% dip in the S&P (SP500) benchmark index.

Stocks with the largest and least short positions (Ranked by short interest as a percentage of shares float)

Most shorted S&P 500 energy stocks as of Oct-end

• Valero Energy (VLO) 4.44% vs 4.22% in the prior month.
• APA Corporation (APA) 4.44% vs 4.81%.
• Occidental Petroleum (OXY) 3.68% vs 3.74%.
• Chevron (CVX) 3.27% vs 2.94%.
• EQT Corporation (EQT) 3.26% vs 4.89%.

Least shorted S&P 500 energy stocks as of Oct-end

• Exxon Mobil (XOM) 1.03% vs 0.99% in the prior month.
• The Williams Companies (WMB) 1.46% vs 1.74%.
• Phillips 66 (PSX) 1.47% vs 1.56%.
• Marathon Oil (MRO) 1.49% vs 1.47%.
• Hess (HES) 1.54% vs 1.97%.

Energy sector in detail

Oil & Gas Refining & Marketing was the most shorted industry within the sector last month, with 2.68% short interest as of October end, while Oil & Gas Integrated was the least shorted industry within the energy sector, with 1.72% short interest as of October end.

More on short interest report:

• Charter Communications most shorted S&P 500 communications stock in October; Alphabet least shorted
• Short sellers boost bets against materials stocks amid demand uncertainty
• Most and least shorted S&P 500 financial stocks in October
• NRG most shorted S&P 500 utilities stock in October, Evergy least shorted