Energy Sector Short March 2022 Selling Recap
Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
Matthew Unterman
Director of Predictive Analytics, S3 Partners
Crude oil prices have been rising since December 2021, and as expected, Energy Sector short sellers have not fared well since the rally started. We follow 998 shorted U.S. domestic Energy Sector stocks, with total short interest of $67.1 billion. Short selling in these stocks is highly concentrated, with the top twenty most shorted stocks totaling $30.3 billion of short interest, making up 45% of the total shorts in the market. We are looking at energy stocks trading in both the U.S. and Canadian markets as many stocks are dually listed.
Short Interest in the Energy Sector (as of 03.10.22)
#
Name
Ticker
SI % Float
S3 SI % Float
Fee
Short Interest
1
CHEVRON CORP
CVX US
1.13%
1.12%
0.30%
$3,668,125,534
2
ENBRIDGE INC
ENB CN
3.66%
3.53%
0.30%
$3,256,668,750
3
EXXON MOBIL CORP
XOM US
0.84%
0.83%
0.30%
$2,946,117,336
4
OCCIDENTAL PETRO
OXY US
3.90%
3.75%
0.30%
$2,089,362,033
5
TC ENERGY CORP
TRP CN
3.82%
3.68%
0.30%
$2,073,033,022
6
SUNCOR ENERGY
SU US
4.14%
3.97%
0.30%
$1,851,494,884
7
CHESAPEAKE ENERGY CORP
CHK US
16.37%
14.07%
0.30%
$1,376,924,622
8
PIONEER NAT RES CO
PXD US
2.46%
2.40%
0.30%
$1,333,630,310
9
CONOCOPHILLIPS
COP US
1.01%
1.00%
0.30%
$1,265,503,430
10
ENBRIDGE INC
ENB US
1.38%
1.36%
0.94%
$1,228,509,179
11
MARATHON PETRO
MPC US
2.84%
2.76%
0.30%
$1,192,342,904
12
VALERO ENERGY CORP
VLO US
2.82%
2.74%
0.30%
$1,001,275,025
13
PHILLIPS 66
PSX US
2.55%
2.48%
0.30%
$968,200,531
14
ENERGY TRANSFER LP
ET US
4.03%
3.87%
0.30%
$965,006,829
15
DEVON ENERGY CORP
DVN US
2.54%
2.48%
0.30%
$941,540,154
16
SCHLUMBERGER LTD
SLB US
1.53%
1.51%
0.30%
$920,250,621
17
TC ENERGY CORP
TRP US
1.53%
1.51%
0.30%
$832,232,884
18
BAKER HUGHES CO
BKR US
2.66%
2.59%
0.30%
$818,156,458
19
CANADIAN NATURAL RESOURCES
CNQ US
1.21%
1.20%
0.30%
$807,703,030
20
PEMBINA PIPELINE CORP
PPL CN
4.03%
3.87%
0.30%
$799,749,085
Energy Sector Short Interest
-
4.79%
4.36%
0.84%
$67,071,370,509
Short sellers had been actively shorting into this rallying market sector, but recently we have been seeing some short covering as short sellers with less conviction are getting squeezed out of their positions due to large mark-to-market losses.
For the year, total short interest in the Energy Sector has increased by $17.56 billion or +35.5%. This is made up of a $13.51 billion mark-to-market increase of the shares shorted and $4.05 billion of increased short selling. The largest increase in short selling was in the Integrated Oil & Gas sub-industry, while the only sub-industry with short covering was the Oil & Gas Equipment & Services.
Year-to-Date Short Selling by Energy Sector (as of 03.10.22)
Sector
Short Interest
Change Short Interest
Change $ Shares Shorted
Change MTM
Coal & Consumable Fuels
$2,178,550,209
$1,031,517,132
$546,373,716
$485,143,416
Integrated Oil & Gas
$15,365,038,700
$5,070,970,657
$1,692,637,141
$3,378,333,516
Oil & Gas Drilling
$985,751,620
$435,260,552
$72,214,052
$363,046,500
Oil & Gas Equipment & Services
$4,003,396,032
$772,301,043
($548,157,175)
$1,320,458,218
Oil & Gas Exploration & Production
$22,262,295,586
$6,000,080,429
$938,236,094
$5,061,844,335
Oil & Gas Refining & Marketing
$5,643,015,687
$1,104,214,556
$361,821,889
$742,392,667
Oil & Gas Storage & Transportation
$16,633,309,880
$3,149,013,404
$985,747,004
$2,163,266,400
Total Energy Sector
$67,071,357,714
$17,563,357,774
$4,048,872,720
$13,514,485,054
However, over the last thirty days we saw short covering in several sub-industries and $448 million of net short covering in the entire Energy Sector. At the same time, mark-to-market price increases of existing short positions increased by $6.11 billion. Short sellers are finally feeling the squeeze of several months of mounting mark-to-market losses and are covering some of their exposure.
Short Selling by Energy Sector over the last 30 Days (as of 03.10.22)
Sector
Short Interest
Change Short Interest
Change $ Shares Shorted
Change MTM
Coal & Consumable Fuels
$2,178,550,209
$606,006,722
$128,680,633
$477,326,089
Integrated Oil & Gas
$15,365,038,700
$989,199,508
($487,761,504)
$1,476,961,012
Oil & Gas Drilling
$985,751,620
$242,936,229
$20,105,766
$222,830,463
Oil & Gas Equipment & Services
$4,003,396,032
$222,320,900
($381,184,671)
$603,505,571
Oil & Gas Exploration & Production
$22,262,295,586
$2,495,169,643
($113,356,352)
$2,608,525,995
Oil & Gas Refining & Marketing
$5,643,015,687
($77,616,151)
($143,547,253)
$65,931,102
Oil & Gas Storage & Transportation
$16,633,309,880
$1,184,024,998
$529,078,327
$654,946,671
Total Energy Sector
$67,071,357,714
$5,662,041,849
($447,985,054)
$6,110,026,903
Energy Stocks with the Largest Increase in Short Selling over the Last 30 days (as of 03.10.22)
#
Name
Ticker
SI % Float
S3 SI % Float
Short Interest
30D Change
Shares Shorted*
1
SUNCOR ENERGY
SU US
4.14%
3.97%
$1,851,494,884
$1,159,581,398
2
TC ENERGY CORP
TRP US
1.53%
1.51%
$832,232,884
$297,449,227
3
SHELL PLC ADR
SHEL US
0.21%
0.21%
$404,304,966
$234,030,250
4
CHESAPEAKE ENERGY CORP
CHK US
16.37%
14.07%
$1,376,924,622
$152,819,847
5
ANTERO RESOURCES
AR US
9.09%
8.33%
$659,725,513
$93,115,817
6
EQUINOR ASA ADR
EQNR US
0.29%
0.29%
$313,797,316
$80,702,987
7
OVINTIV INC
OVV US
3.24%
3.14%
$382,398,349
$77,154,594
8
ARC RESOURCES LTD
AETUF US
2.34%
2.28%
$193,090,561
$75,574,092
9
SOUTHWESTERN ENERGY
SWN US
8.75%
8.05%
$457,217,769
$70,368,893
10
PLAINS ALL AMERICAN
PAA US
7.70%
7.15%
$374,000,967
$64,709,002
11
CIVITAS RESOURCES INC
CIVI US
7.70%
7.15%
$313,459,950
$63,889,035
12
PEMBINA PIPELINE CORP
PBA US
1.63%
1.61%
$324,535,566
$61,589,628
13
MAGELLAN MIDSTREAM LP
MMP US
4.80%
4.58%
$490,031,465
$51,285,874
14
BP PLC
BPAQF US
0.23%
0.23%
$209,922,646
$51,115,857
15
ENERGY TRANSFER LP
ET US
4.03%
3.87%
$965,006,829
$50,126,767
16
PARAMOUNT RESOURCES
POU CN
6.08%
5.73%
$97,675,765
$49,088,405
17
PEABODY ENERGY CORP
BTU US
8.16%
7.55%
$227,488,089
$48,779,922
18
IMPERIAL PETROLEUM INC
IMPP US
52.40%
34.39%
$48,785,798
$47,370,218
19
CHENIERE ENERGY INC
LNG US
1.01%
1.00%
$341,728,485
$46,204,186
20
PHILLIPS 66
PSX US
2.55%
2.48%
$968,200,531
$46,102,271
* Represents dollar value of the change in shares shorted, calculated by # of shares shorted multiplied by stock price as of 03.01.22
Energy Stocks with the Largest Increase in Short Covering over the Last 30 days (as of 03.10.22)
#
Name
Ticker
SI % Float
S3 SI % Float
Short Interest
30D Change
Shares Shorted
1
EXXON MOBIL CORP
XOM US
0.84%
0.83%
$2,946,117,336
($959,495,831)
2
BAKER HUGHES CO
BKR US
2.66%
2.59%
$818,156,458
($638,549,110)
3
CONOCOPHILLIPS
COP US
1.01%
1.00%
$1,265,503,430
($255,757,285)
4
CHEVRON CORP
CVX US
1.13%
1.12%
$3,668,125,534
($249,623,379)
5
PETROLEO BRASILEIRO ADR
PBR US
1.45%
1.43%
$746,926,932
($229,400,454)
6
EOG RESOURCES
EOG US
0.83%
0.83%
$553,096,951
($225,991,408)
7
CENOVUS ENERGY
CVE US
0.73%
0.73%
$168,289,943
($174,600,113)
8
SUNCOR ENERGY INC
SU CN
0.95%
0.94%
$425,522,544
($169,271,538)
9
MARATHON PETRO
MPC US
2.84%
2.76%
$1,192,342,904
($128,001,851)
10
CANADIAN NATURAL RESOURCES
CNQ CN
1.05%
1.04%
$697,245,375
($127,305,200)
11
WILLIAMS COS
WMB US
1.86%
1.83%
$732,885,400
($120,499,431)
12
VALERO ENERGY CORP
VLO US
2.82%
2.74%
$1,001,275,025
($114,784,642)
13
HALLIBURTON CO
HAL US
1.38%
1.36%
$430,643,374
($76,599,238)
14
CONTINENTAL RESOURCES INC
CLR US
6.08%
5.73%
$493,100,079
($68,847,525)
15
COTERRA ENERGY INC
CTRA US
3.58%
3.45%
$724,964,818
($65,637,767)
16
DIAMONDBACK ENERGY INC
FANG US
3.25%
3.14%
$700,221,114
($58,130,152)
17
ENTERPRISE PRODUCTS
EPD US
1.64%
1.62%
$591,169,695
($50,327,415)
18
HESS CORP
HES US
2.25%
2.20%
$606,256,105
($43,692,406)
19
PDC ENERGY
PDCE US
7.53%
7.00%
$495,001,302
($43,246,381)
20
RANGE RESOURCES CORP
RRC US
7.95%
7.37%
$540,488,563
($43,127,393)
Overall, Energy Sector short sellers are down -$14.35 billion in net of financing mark-to-market losses in 2022, which is a return of -23.80% on average short interest of $60.13 billion. The Oil & Gas Drilling and Coal & Consumable Fuels sub-industries suffered the worst percentage mark-to-market losses for the year.
Short Sellers’ Year-to-Date $P&L in the Energy Sector (as of 03.10.22)
Sector
YTD MTM P\L
P\L %
Coal & Consumable Fuels
($620,329,072)
-40.60%
Integrated Oil & Gas
($3,767,934,719)
-27.33%
Oil & Gas Drilling
($373,883,732)
-51.01%
Oil & Gas Equipment & Services
($1,257,501,413)
-32.39%
Oil & Gas Exploration & Production
($5,286,027,598)
-26.74%
Oil & Gas Refining & Marketing
($813,402,505)
-15.18%
Oil & Gas Storage & Transportation
($2,232,459,700)
-14.65%
Total Energy Sector
($14,351,538,739)
-23.80%
On a percentage basis, the Oil & Gas Drilling and Coal & Consumable Fuels sub-industries continue to be the worst performing short side sub-industries over the last thirty days.
Energy’s Worst Performing Short Sectors over the Last 30 Days (as of 03.10.22)
Name
30D MTM P\L
P\L %
Coal & Consumable Fuels
($494,001,645)
-27.89%
Integrated Oil & Gas
($1,315,217,222)
-8.94%
Oil & Gas Drilling
($226,658,737)
-27.48%
Oil & Gas Equipment & Services
($533,499,705)
-15.03%
Oil & Gas Exploration & Production
($2,600,395,790)
-12.54%
Oil & Gas Refining & Marketing
($72,328,040)
-1.32%
Oil & Gas Storage & Transportation
($697,858,969)
-4.33%
Total Energy Sector
($5,939,960,109)
-9.40%
The following are the most profitable Energy Sector shorts, in dollar terms, in 2022. As you can see, the best performers are dominated by Russian stocks.
The Most Profitable Energy Shorts in 2022 in $ terms (as of 03.10.22)
#
Name
Ticker
Avg Fee
Avg Short Interest
MTM P\L
P\L %
1
LUKOIL PJSC ADR
LUKOY US
0.33%
$20,780,589
$52,689,077
253.55%
2
GAZPROM PJSC ADR
OGZPY US
1.17%
$20,254,568
$49,077,843
242.31%
3
EQUITRANS MIDSTREAM CORP
ETRN US
0.30%
$92,189,577
$30,633,298
33.23%
4
NESTE OYJ
NTOIF US
0.35%
$120,073,257
$29,419,789
24.50%
5
TATNEFT PJSC ADR
OAOFY US
0.53%
$8,542,090
$19,647,491
230.01%
6
GREEN PLAINS INC
GPRE US
0.30%
$283,258,357
$16,951,958
5.98%
7
NOVATEK PJSC GDR
NOVKY US
0.49%
$8,766,801
$13,299,448
151.70%
8
ASPEN AEROGELS INC
ASPN US
0.30%
$37,845,711
$13,181,241
34.83%
9
ROSNEFT OIL CO PJSC GDR
OJSCY US
0.36%
$8,283,491
$12,578,664
151.85%
10
TOTAL SA ADR
TOT US
0.30%
$295,509,334
$12,405,887
4.20%
The Least Profitable Energy Shorts in 2022 in $ terms (as of 03.10.22)
#
Name
Ticker
Avg Fee
Avg Short Interest
MTM P\L
P\L %
1
CHEVRON CORP
CVX US
0.30%
$3,033,631,506
($1,052,007,923)
-34.68%
2
OCCIDENTAL PETRO
OXY US
0.30%
$1,395,135,923
($1,001,207,252)
-71.76%
3
EXXON MOBIL CORP
XOM US
0.30%
$3,230,570,377
($854,079,074)
-26.44%
4
ENBRIDGE INC
ENB CN
0.51%
$3,115,664,596
($389,136,262)
-12.49%
5
TC ENERGY CORP
TRP CN
0.30%
$1,967,220,997
($359,622,105)
-18.28%
6
CONOCOPHILLIPS
COP US
0.30%
$1,317,370,076
($354,841,835)
-26.94%
7
PIONEER NAT RES CO
PXD US
0.30%
$1,356,043,880
($317,189,117)
-23.39%
8
SCHLUMBERGER LTD
SLB US
0.30%
$891,874,828
($299,852,167)
-33.62%
9
BAKER HUGHES CO
BKR US
0.30%
$1,073,327,787
($295,550,254)
-27.54%
10
ARCH RESOURCES INC
ARCH US
0.30%
$551,810,870
($264,963,324)
-48.02%
High Short Interest as a % of Float is a factor in the “crowdedness” of a shorted stock. Higher numbers can have negative effects on stock loan liquidity as well as trading liquidity. The following are Energy Sector stocks with highest SI % Float and short interest over $50 million. The average domestic SI % of Float is 5.01% versus the Energy Sector at 4.79%. The average S3 SI % Float, which includes the synthetic longs created by every short sale in the Float denominator, is 4.52% for all domestic stocks versus 4.36% for the Energy Sector. The Energy Sector, on average, is less crowded that the overall market when comparing SI % Float.
Energy Stocks with the Largest SI % Float and S3 SI Float (with over $50 million of short interest) (as of 03.10.22)
#
Name
Ticker
SI % Float
S3 SI % Float
Short Interest
1
ARCH RESOURCES INC
ARCH US
34.27%
25.52%
$736,562,984
2
VERTEX ENERGY
VTNR US
29.79%
22.95%
$110,817,022
3
RING ENERGY INC
REI US
25.23%
20.15%
$64,193,209
4
GEVO INC
GEVO US
21.98%
18.02%
$193,948,865
5
AEMETIS INC
AMTX US
20.14%
16.76%
$78,927,402
6
COMSTOCK RESOURCES INC
CRK US
19.22%
16.12%
$153,189,436
7
PBF ENERGY INC
PBF US
18.52%
15.63%
$409,925,711
8
GREEN PLAINS INC
GPRE US
18.23%
15.42%
$304,633,047
9
CALLON PETROLEUM CO
CPE US
18.00%
15.26%
$425,682,533
10
TELLURIAN INC
TELL US
17.61%
14.97%
$300,175,568
11
CENTENNIAL RESOURCE DEVELOPMENT
CDEV US
17.26%
14.72%
$290,575,600
12
CHESAPEAKE ENERGY CORP
CHK US
16.37%
14.07%
$1,376,924,622
13
NORTHERN OIL AND GAS INC
NOG US
14.86%
12.94%
$243,507,045
14
CNX RESOURCES CORP
CNX US
13.66%
12.02%
$495,615,688
15
URANIUM ENERGY CORP
UEC US
13.62%
11.99%
$181,022,920
16
LAREDO PETROLEUM INC
LPI US
13.24%
11.69%
$146,799,582
17
ALTO INGREDIENTS INC
ALTO US
13.14%
11.62%
$53,821,171
18
ENERGY FUELS INC
UUUU US
13.00%
11.50%
$191,889,956
19
PHILLIPS 66 PARTNERS LP
PSXP US
12.69%
11.26%
$287,366,884
20
MAGNOLIA OIL & GAS CORP
MGY US
11.92%
10.65%
$436,658,957
The definition of a “crowded” short trade varies from investor to investor but there are several themes that remain constant. A short can be considered “crowded” if some or all of the following occur: there are large amount of dollars at risk on the short side, a large proportion of a stock’s float is being shorted, there is illiquidity in the stock loan market and\or there is illiquidity in the trading market.
There are only four Energy Sector stocks, with over $50 million of short interest, that are considered very crowded.
The Most Crowded Shorts in the Energy Sector (as of 03.10.22)*
#
Name
Ticker
Short Interest
S3 Crowded Score
S3 Squeeze Score
1
ARCH RESOURCES INC
ARCH US
$736,562,984
82.50
100.00
2
VERTEX ENERGY
VTNR US
$110,817,022
72.50
100.00
3
RING ENERGY INC
REI US
$64,193,209
72.50
100.00
4
CHESAPEAKE ENERGY CORP
CHK US
$1,376,924,622
70.00
80.00
*With over $50 million of short interest
Not every Crowded stock is a Squeeze candidate. By overlaying our Squeeze algorithm over our Crowded Score, we can determine which U.S. traded stocks have the highest potential for a Squeeze, and which do not.
The following Energy Sector stocks have earned our highest Squeeze Scores, which does not mean a Squeeze will definitely occur, but means that if the present trends continue, there is a good chance for a Squeeze.
Energy Stocks Most at Risk of a Short Squeeze (as of 03.10.22)
#
Name
Ticker
Short Interest
S3 Crowded Score
S3 Squeeze Score
1
ARCH RESOURCES INC
ARCH US
$736,562,984
82.50
100.00
2
PBF ENERGY INC
PBF US
$409,925,711
60.00
100.00
3
GEVO INC
GEVO US
$193,948,865
60.00
100.00
4
VERTEX ENERGY
VTNR US
$110,817,022
72.50
100.00
5
AEMETIS INC
AMTX US
$78,927,402
60.00
100.00
6
RING ENERGY INC
REI US
$64,193,209
72.50
100.00
7
URANIUM ENERGY CORP
UEC US
$181,022,920
40.00
90.00
8
TRANSOCEAN LTD
RIG US
$319,143,869
37.50
87.50
9
ENERGY FUELS INC
UUUU US
$191,889,956
47.50
87.50
10
TELLURIAN INC
TELL US
$300,175,568
52.50
82.50
11
CHESAPEAKE ENERGY CORP
CHK US
$1,376,924,622
70.00
80.00
12
COMSTOCK RESOURCES INC
CRK US
$153,189,436
50.00
80.00
13
ATHABASCA OIL CORP
ATH CN
$64,482,469
40.00
80.00