Energy Sector Short Interest
Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
Matthew Unterman
Director of Predictive Analytics, S3 Partners
The Energy Sector has been the best performing sector this year, with the Energy Select Sector SPDR Fund ETF (XLE) up +55.8% in 2022 and +20.7% in October, and as expected the worst performing sector for short sellers. The Energy Sector is the only unprofitable short-side sector in 2022 and is the least profitable short-side sector in October.
Short Selling in the Energy Sector (as of 10.21.22)
Sector
10/20/22 Short Interest
YTD MTM P\L
P\L %
Oct MTM P\L
P\L %
Communication Services
$62,734,947,165
$43,303,426,617
52.24%
($1,115,489,747)
-1.76%
Consumer Discretionary
$132,159,810,956
$80,281,749,715
49.79%
$3,636,325,828
2.69%
Consumer Staples
$39,340,814,228
$6,948,748,464
16.30%
($417,915,243)
-1.06%
Energy
$75,553,355,122
($18,162,571,022)
-26.30%
($8,533,264,612)
-11.90%
ETFs & Funds
$222,497,169,575
$63,300,898,314
26.15%
($3,154,901,455)
-1.41%
Financials
$106,702,890,896
$34,822,579,981
30.70%
($1,516,037,446)
-1.41%
Health Care
$118,267,296,863
$37,443,982,166
29.19%
$195,574,752
0.16%
Industrials
$85,610,800,484
$28,083,486,838
29.94%
($1,248,032,615)
-1.44%
Information Technology
$159,805,703,235
$99,135,740,861
48.13%
($396,196,882)
-0.25%
Materials
$37,288,650,642
$8,608,644,175
21.90%
($601,551,803)
-1.63%
Misc. (SPACs)
$502,025,395
$1,915,876
0.36%
($1,467,450)
-0.28%
Real Estate
$33,256,667,392
$17,509,064,538
42.87%
$908,233,055
2.63%
Utilities
$21,401,648,699
$3,203,466,440
14.81%
$819,988,956
3.73%
Grand Total
$1,095,121,780,651
$404,481,132,964
32.75%
($11,424,734,660)
-1.03%
Oil & Gas Drilling and Oil & Gas Equipment & Services were the worst performing sub-industries on the short-side in October.
Sub Industry
10/20/22 Short Interest
Oct MTM P\L
P\L %
Coal & Consumable Fuels
$2,620,162,099
$45,141,374
1.82%
Integrated Oil & Gas
$15,684,132,093
($2,108,836,284)
-14.33%
Oil & Gas Drilling
$1,262,038,446
($253,798,097)
-23.82%
Oil & Gas Equipment & Services
$4,892,135,945
($967,605,508)
-21.62%
Oil & Gas Exploration & Production
$27,327,608,993
($3,664,371,848)
-14.23%
Oil & Gas Refining & Marketing
$6,285,555,729
($795,677,377)
-13.32%
Oil & Gas Storage & Transportation
$17,481,721,817
($788,116,872)
-4.57%
Total Energy Sector
$75,553,355,122
($8,533,264,612)
-11.90%
Total short interest the Energy Sector is $75.55 billion, and the most shorted stocks are:
Name
Ticker
SI % Float
S3 SI % Float
Fee
Short Interest
OCCIDENTAL PETRO
OXY US
5.63%
5.33%
0.30%
$3,603,166,088
EXXON MOBIL CORP
XOM US
0.83%
0.83%
0.30%
$3,599,094,133
CHEVRON CORP
CVX US
0.96%
0.95%
0.30%
$3,171,180,503
ENBRIDGE INC
ENB CN
3.87%
3.72%
0.30%
$2,918,222,143
CONOCOPHILLIPS
COP US
1.41%
1.39%
0.30%
$2,186,507,041
TC ENERGY CORP
TRP US
5.28%
5.02%
0.30%
$2,177,298,549
CANADIAN NATURAL RESOURCES LTD
CNQ US
3.27%
3.17%
0.30%
$2,091,096,988
CHESAPEAKE ENERGY CORP
CHK US
19.74%
16.49%
0.30%
$1,939,220,162
MARATHON PETRO
MPC US
3.05%
2.96%
0.30%
$1,659,747,851
TC ENERGY CORP
TRP CN
3.70%
3.57%
0.30%
$1,530,007,741
PIONEER NAT RES CO
PXD US
2.48%
2.42%
0.30%
$1,452,033,442
VALERO ENERGY CORP
VLO US
2.63%
2.56%
0.30%
$1,283,427,246
DEVON ENERGY CORP
DVN US
2.77%
2.69%
0.30%
$1,281,886,771
SCHLUMBERGER LTD
SLB US
1.97%
1.93%
0.30%
$1,269,789,934
PHILLIPS 66
PSX US
2.58%
2.51%
0.30%
$1,208,919,866
ENBRIDGE INC
ENB US
1.60%
1.58%
0.30%
$1,204,312,275
CANADIAN NATURAL RESOURCES LTD
CNQ CN
1.85%
1.82%
0.30%
$1,190,317,496
ENERGY TRANSFER LP
ET US
3.69%
3.56%
0.30%
$1,068,358,805
BAKER HUGHES CO
BKR US
3.87%
3.72%
0.30%
$1,010,109,926
DIAMONDBACK ENERGY INC
FANG US
4.07%
3.91%
0.30%
$1,004,085,063
EQT CORP
EQT US
6.70%
6.28%
0.30%
$954,697,290
COTERRA ENERGY INC
CTRA US
4.08%
3.92%
0.30%
$944,239,829
CHENIERE ENERGY INC
LNG US
1.97%
1.93%
0.30%
$846,222,963
SUNCOR ENERGY
SU US
1.93%
1.89%
0.30%
$838,923,565
PETROLEO BRASILEIRO ADR
PBR US
1.37%
1.35%
0.30%
$785,857,338
Total Energy Sector Short Interest
-
4.61%
4.23%
0.46%
$75,553,355,124
Shorting the Energy sector has significantly underperformed the market with short sellers down $18.16 billion in year-to-date mark-to-market losses, down -26.3% on an average short interest of $69.1 billion. There were energy stocks that made money on the short side with 40% of the 1,129 shorted energy stocks profitable, 7% were flat on the year and 53% were unprofitable. Unfortunately, short sellers consolidated their exposure on the unprofitable side of sector with 79% of the dollars shorted losing money.
There were only four stocks with over $100 million of year-to-date mark-to-market profits in 2022:
Name
Ticker
Avg Fee
Avg Short Interest
YTD MTM P\L
P\L %
CANADIAN NATURAL RESOURCES LTD
CNQ US
0.30%
$1,371,163,078
$316,271,029
23.07%
TC ENERGY CORP
TRP US
0.30%
$1,172,581,234
$259,089,642
22.10%
ENBRIDGE INC
ENB CN
0.37%
$3,192,563,517
$111,501,108
3.49%
TC ENERGY CORP
TRP CN
0.32%
$1,925,060,196
$103,383,057
5.37%
And the least profitable energy stocks in 2022 are:
Name
Ticker
Avg Fee
Avg Short Interest
YTD MTM P\L
P\L %
OCCIDENTAL PETRO
OXY US
0.30%
$3,083,714,765
($1,613,962,269)
-52.34%
EXXON MOBIL CORP
XOM US
0.30%
$3,379,137,007
($1,521,802,417)
-45.04%
CHEVRON CORP
CVX US
0.30%
$3,379,354,663
($1,092,398,668)
-32.33%
CONOCOPHILLIPS
COP US
0.30%
$1,557,297,280
($761,083,852)
-48.87%
MARATHON PETRO
MPC US
0.30%
$1,419,486,490
($693,739,781)
-48.87%
CHESAPEAKE ENERGY CORP
CHK US
0.30%
$1,480,756,457
($548,103,231)
-37.02%
VALERO ENERGY CORP
VLO US
0.30%
$1,072,891,023
($518,245,159)
-48.30%
DEVON ENERGY CORP
DVN US
0.30%
$1,006,174,043
($488,193,715)
-48.52%
PIONEER NAT RES CO
PXD US
0.30%
$1,373,394,856
($464,547,109)
-33.82%
ANTERO RESOURCES
AR US
0.30%
$755,916,278
($429,458,022)
-56.81%
Results in October were also extremely negative with short sellers down $8.53 billion in month-to-date mark-to-market losses, down -11.5% on an average short interest of $73.9 billion. Winners on the short side were harder the find that losers in October with 61% of all shorted stocks in the energy sector unprofitable o the short side. Again, short-side consolidation in several stocks made 96% of every dollar shorted a losing proposition in October.
The best performing energy stocks on the short side in October are:
Name
Ticker
Avg Fee
Avg Short Interest
Oct MTM P\L
P\L %
ENVIVA INC
EVA US
0.30%
$263,653,534
$42,279,952
16.04%
CAMECO CORP
CCO CN
0.30%
$329,703,071
$39,852,930
12.09%
CAMECO CORP
CCJ US
0.30%
$253,518,778
$32,375,711
12.77%
PEABODY ENERGY CORP
BTU US
0.30%
$415,623,820
$24,981,725
6.01%
GREEN PLAINS INC
GPRE US
0.30%
$251,036,135
$13,194,633
5.26%
And the worst performing energy stocks on the short side in October are:
Name
Ticker
Avg Fee
Avg Short Interest
Oct MTM P\L
P\L %
EXXON MOBIL CORP
XOM US
0.30%
$3,448,074,648
($576,986,948)
-16.73%
CHEVRON CORP
CVX US
0.30%
$3,081,164,155
($488,078,122)
-15.84%
OCCIDENTAL PETRO
OXY US
0.30%
$3,542,636,285
($385,075,058)
-10.87%
CANADIAN NATURAL RESOURCES LTD
CNQ US
0.30%
$1,996,862,244
($380,548,467)
-19.06%
CONOCOPHILLIPS
COP US
0.30%
$2,156,485,995
($365,454,906)
-16.95%
SCHLUMBERGER LTD
SLB US
0.30%
$1,185,549,109
($276,178,731)
-23.30%
PIONEER NAT RES CO
PXD US
0.30%
$1,431,724,189
($219,230,236)
-15.31%
PHILLIPS 66
PSX US
0.30%
$1,169,495,837
($217,045,546)
-18.56%
DEVON ENERGY CORP
DVN US
0.30%
$1,279,896,121
($212,802,895)
-16.63%
BAKER HUGHES CO
BKR US
0.30%
$903,042,793
($196,241,463)
-21.73%
The excessive short-side mark-to-market losses in the Energy sector has forced some short sellers to cut their exposure in the sector. Overall, we saw total short interest in the Energy sector increase by $7.66 billion, which consisted of a $8.72 billion increase in the stock prices of shares shorted partially offset by $1.06 billion of short covering.
Energy Sub Industry
10/20/22 Short Interest
Change
Change Shares Shorted
Change MTM
Coal & Consumable Fuels
$2,620,162,099
$279,586,780
$309,498,790
($29,912,010)
Integrated Oil & Gas
$15,684,132,093
$1,941,644,485
($192,799,636)
$2,134,444,121
Oil & Gas Drilling
$1,262,038,446
$392,871,185
($193,286,270)
$586,157,455
Oil & Gas Equipment & Services
$4,892,135,945
$832,318,133
($146,654,856)
$978,972,989
Oil & Gas Exploration & Production
$27,327,608,993
$3,145,486,863
($525,553,333)
$3,671,040,196
Oil & Gas Refining & Marketing
$6,285,555,729
$621,897,246
($177,285,066)
$799,182,312
Oil & Gas Storage & Transportation
$17,481,721,817
$444,007,315
($138,374,702)
$582,382,017
Total Energy Sector Short Interest
$75,553,355,122
$7,657,812,007
($1,064,455,073)
$8,722,267,080
Breaking down the largest short selling and short covering BY Energy sub-industry:
In Coal & Consumable Fuels, Comeco Corp (CCO CN) made up most of the $309 million of additional short selling in the sub-industry with Arch Resources (ARCH) coming in a distant second. Peabody Energy Corp (BTU) had the most of a small amount of short covering in the sub-industry.
Ticker
Sub Industry
10/20/22 Short Interest
Change
Change Shares Shorted
Change MTM
CCO CN
Coal & Consumable Fuels
$454,608,952
$292,259,927
$312,749,895
($20,489,968)
ARCH US
Coal & Consumable Fuels
$467,699,210
$86,073,348
$35,039,738
$51,033,610
BTU US
Coal & Consumable Fuels
$355,636,139
($54,185,074)
($25,289,542)
($28,895,532)
There was some rebalancing in several of the major Integrated Oil & Gas companies with Shell PLC (SHEL) seeing the most short selling while Chevron Corp (CVX), Exxon Mobil Corp (XOM) and Occidental Petroleum Corp (OXY) seeing short covering.
Ticker
Sub Industry
10/20/22 Short Interest
Change
Change Shares Shorted
Change MTM
SHEL US
Integrated Oil & Gas
$260,369,073
$57,404,452
$48,186,204
$9,218,248
TTE US
Integrated Oil & Gas
$195,526,242
$43,936,682
$26,568,402
$17,368,280
BP US
Integrated Oil & Gas
$305,597,429
$35,027,623
$12,187,930
$22,839,693
SU US
Integrated Oil & Gas
$838,923,565
$108,961,833
$11,979,351
$96,982,482
-
-
-
-
-
-
CVX US
Integrated Oil & Gas
$3,171,180,503
$355,973,318
($139,583,094)
$495,556,412
XOM US
Integrated Oil & Gas
$3,599,094,133
$521,641,544
($64,170,643)
$585,812,187
OXY US
Integrated Oil & Gas
$3,603,166,088
$334,665,844
($58,937,115)
$393,602,959
EQNR US
Integrated Oil & Gas
$239,019,833
($14,933,966)
($24,674,870)
$9,740,904
PBR/A US
Integrated Oil & Gas
$171,022,353
$26,979,029
($11,241,853)
$38,220,882
There was not much new short selling the Oil & Gas Drilling sub-industry and Noble Corp PLC had the lions share of short covering in the sub-industry.
Ticker
Sub Industry
10/20/22 Short Interest
Change
Change Shares Shorted
Change MTM
DO US
Oil & Gas Drilling
$45,069,768
$10,519,227
$930,540
$9,588,687
-
-
-
-
-
-
NE US
Oil & Gas Drilling
$219,285,908
($101,240,606)
($137,541,267)
$36,300,661
RIG US
Oil & Gas Drilling
$329,307,116
$75,567,383
($19,970,250)
$95,537,633
VAL US
Oil & Gas Drilling
$228,592,493
$22,083,997
($17,411,703)
$39,495,700
Oil & Gas Equipment & Services saw minimal new short selling and broad, albeit smallish, short covering in a handful of companies with Schlumberger Ltd (SLB) and Haliburton Co (HAL) leading the way.
Ticker
Sub Industry
10/20/22 Short Interest
Change
Change Shares Shorted
Change MTM
SLCA US
Oil & Gas Equipment & Services
$80,250,107
$15,993,722
$3,259,808
$12,733,914
-
-
-
-
-
-
SLB US
Oil & Gas Equipment & Services
$1,269,789,934
$239,923,080
($40,923,619)
$280,846,699
HAL US
Oil & Gas Equipment & Services
$560,188,336
$102,124,964
($28,856,602)
$130,981,566
CHX US
Oil & Gas Equipment & Services
$201,930,690
$6,765,108
($25,247,233)
$32,012,341
LBRT US
Oil & Gas Equipment & Services
$97,950,229
$9,676,203
($10,512,652)
$20,188,855
The Oil & Gas Exploration & Production sub-industry had the largest amount of short covering in the Energy Sector with net short selling in Canadian Natural Resources Ltd (CND US & CNQ CN) and most of the short covering occurring in ConocoPhillips (COP), Devon Energy Corp (DVN), and EQT Corp (EQT).
Ticker
Sub Industry
10/20/22 Short Interest
Change
Change Shares Shorted
Change MTM
CNQ CN
Oil & Gas Exploration & Production
$1,190,317,496
$590,879,377
$460,509,238
$130,370,139
APA US
Oil & Gas Exploration & Production
$451,059,274
$89,080,752
$11,581,987
$77,498,765
STR US
Oil & Gas Exploration & Production
$68,213,177
$22,263,047
$11,435,360
$10,827,687
-
-
-
-
-
-
COP US
Oil & Gas Exploration & Production
$2,186,507,041
$225,050,107
($148,113,530)
$373,163,637
CNQ US
Oil & Gas Exploration & Production
$2,091,096,988
$313,896,187
($71,539,245)
$385,435,432
DVN US
Oil & Gas Exploration & Production
$1,281,886,771
$150,690,485
($66,594,017)
$217,284,502
EQT US
Oil & Gas Exploration & Production
$954,697,290
($56,809,724)
($56,561,501)
($248,223)
PXD US
Oil & Gas Exploration & Production
$1,452,033,442
$171,761,924
($49,904,261)
$221,666,185
HES US
Oil & Gas Exploration & Production
$685,546,904
$73,294,489
($45,572,023)
$118,866,512
POU CN
Oil & Gas Exploration & Production
$20,582,690
($36,411,848)
($42,586,299)
$6,174,451
There was minimal new short selling in the Oil & Gas Refining & marketing sub-industry and only three stocks with over $20 million of short covering in Phillips66 (PSX), Marathon Petroleum Corp (MPC) and Valero Energy Corp (VLO).
Ticker
Sub Industry
10/20/22 Short Interest
Change
Change Shares Shorted
Change MTM
AMTX US
Oil & Gas Refining & Marketing
$41,766,432
$7,956,468
$1,658,532
$6,297,936
-
-
-
-
-
-
PSX US
Oil & Gas Refining & Marketing
$1,208,919,866
$175,833,341
($41,995,359)
$217,828,700
MPC US
Oil & Gas Refining & Marketing
$1,659,747,851
$120,059,247
($35,103,170)
$155,162,417
VLO US
Oil & Gas Refining & Marketing
$1,283,427,246
$160,181,366
($24,731,081)
$184,912,447
VTNR US
Oil & Gas Refining & Marketing
$138,332,772
$6,587,174
($17,731,837)
$24,319,011
PBF US
Oil & Gas Refining & Marketing
$511,131,445
$86,706,119
($17,710,236)
$104,416,355
The Oil & Gas Storage & Transportation sub-industry had internal rebalancing on the short side with short sellers moving around some of their exposure. Magellan Midstream Partners LP (MMP) and Enbridge Inc (ENB) saw increased short selling while TC Energy Corp (TRP) saw short covering.
Ticker
Sub Industry
10/20/22 Short Interest
Change
Change Shares Shorted
Change MTM
MMP US
Oil & Gas Storage & Trans
$542,237,739
$146,552,224
$128,646,018
$17,906,206
ENB US
Oil & Gas Storage & Trans
$1,204,312,275
$130,104,517
$128,077,710
$2,026,807
TRP CN
Oil & Gas Storage & Trans
$1,530,007,741
$106,734,142
$48,045,601
$58,688,541
ET US
Oil & Gas Storage & Trans
$1,068,358,805
$113,622,896
$39,182,924
$74,439,972
ENB CN
Oil & Gas Storage & Trans
$2,918,222,143
$32,168,689
$27,598,460
$4,570,229
PBA US
Oil & Gas Storage & Trans
$274,010,247
$33,473,226
$22,543,326
$10,929,900
-
-
-
-
-
-
TRP US
Oil & Gas Storage & Trans
$2,177,298,549
($354,545,639)
($460,117,698)
$105,572,059
CEQP US
Oil & Gas Storage & Trans
$61,138,562
($41,420,713)
($50,210,453)
$8,789,740
WMB US
Oil & Gas Storage & Trans
$598,539,427
$16,614,550
($29,524,796)
$46,139,346
FRO US
Oil & Gas Storage & Trans
$134,213,483
($6,530,728)
($22,369,281)
$15,838,553
Because of their larger market caps, large amount of cheap stock borrows and larger than average trading volumes there are not any truly Crowded Energy sector shorts, but there are a few that are moderately Crowded.
Name
Ticker
S3 Crowded Score
VERTEX ENERGY
VTNR US
77.50
EARTHSTONE ENERGY INC
ESTE US
75.00
CHESAPEAKE ENERGY CORP
CHK US
75.00
SITIO ROYALTIES CORP
STR US
70.00
But due to the large mark-to-market losses Energy sector shorts have incurred recently, there are a handful of stocks that have higher Squeeze scores. Squeeze scores in the 80’s & 90’s are squeezable stocks while score is the 70’s are on the cusp of squeezability.
Name
Ticker
Squeeze Score
VERTEX ENERGY
VTNR US
97.50
SITIO ROYALTIES CORP
STR US
90.00
EARTHSTONE ENERGY INC
ESTE US
85.00
CHESAPEAKE ENERGY CORP
CHK US
75.00
TRANSOCEAN LTD
RIG US
75.00
PERMIAN RESOURCES CORP
PR US
72.50
PBF ENERGY INC
PBF US
72.50
ARCHAEA ENERGY INC
LFG US
72.50
ENERGY FUELS INC
UUUU US
70.00
The Energy sector continues to show price strength as oil and gas prices remain high. If we continue to see stock prices rise in the sector we can expect much more short covering as mark-to-market losses mount. Short sellers have already trimmed exposure in some of the biggest shorts in the sector (CNQ, SU, CVX, OXY, and XOM) in October and we should see increased short covering in a few of the other most shorted Energy stocks such as MPC, FANG, VLO, and COP.
Some of the largest amount of new short selling over the last thirty days occurred in the Oil & Gas Storage & Transportation sub-industry. If the trend continues, we should see some of the short capital from the recent short covering in the Integrated Oil & Gas sub-industry go into shorting stocks like TRIP, ENB, and LNG of the Oil & Gas Storage & Transportation sub-industry.