Bears Pressured the Energy Sector in the First Half of 2017
The energy sector showed a poor performance in the first half of 2017. The Energy Select Sector SPDR Fund (XLE) fell nearly 14.8% in 1H17. The ETF fell nearly 17.7% on a year-to-date basis as of August 28, 2017.
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The weaker performance in the energy sector is mainly due to falls in crude oil (USO) (UCO) and natural gas (UNG). The WTI crude oil active futures and natural gas active futures were down 13.3% and 21.5%, respectively, on a year-to-date basis, as of August 28, 2017.
The performance of crude oil depends a great deal on OPEC (Organization of Petroleum Exporting Countries) decisions, the demand outlook, and the environment in the Middle East economies. If these factors are supportive, then we might see an upside in the crude oil market, which could help the energy sector in the near term.
Major holdings of the energy sector
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