The lowest price that WTI Crude Oil hit this year was US$26.61

The lowest price that WTI Crude Oil hit this year was US$26.61 per barrel and it did so on 11 February, according to data from Bloomberg. From there, this measure of oil prices has doubled to US$53.53 today.

Given this fierce rebound in WTI Crude Oil in the space of merely 10 months, it would be easy to imagine that 11 February 2016 would have been a fantastic time to buy oil & gas stocks in Singapore’s stock market. I certainly thought so – that is, until I looked at the data.

I have information on 50 Singapore-listed oil & gas stocks. It may not be a complete list of all the oil & gas stocks here, but I think it covers nearly the entire specturm given that:

1. there were only 54 oil & gas companies listed in Singapore back in November 2014, according to data from stock market operator Singapore Exchange Limited (SGX: S68); and
2. my list includes some of the big-wigs, such as Keppel Corporation Limited (SGX: BN4) and Sembcorp Marine Ltd (SGX: S51), and the smaller players, such as KS Energy Limited (SGX: 578).

So, coming back to the performance of the aforementioned 50 oil & gas stocks, I found that they have seen their stock prices decline by 11.9% on average from 11 February 2016 to today. Moreover, 34 of the 50 have delivered a negative return over the same time frame.

This huge discrepancy between the change in the price of oil and the movement of stock prices of Singapore’s oil & gas stocks illustrates a critically important point about investing: An economic trend (in this specific case, changes in oil prices) and the performance of stocks can be miles apart. Please bear this in mind when you invest.

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