These Factors Have Affected the Energy Sector
The energy sector has given a poor performance so far in 2017. The Energy Select Sector SPDR Fund (XLE), which tracks the performance of the energy sector, fell nearly 10% on a year-to-date basis, as of September 28, 2017. However, since August 18, 2017, it has recovered gradually.
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Between August 18, 2017, and September 28, 2017, the ETF rose nearly 10.6%. The recovery in the energy sector was mainly supported by the recovery in crude oil (USO) (UCO) and natural gas (UNG) prices. Both the WTI crude oil active futures and natural gas active futures rose 9.3% and 3.8%, respectively, between August 18 and September 28, 2017.
On September 28, 2017, crude oil was trading at $51.50, which is gradually moving towards its 2017 high of $54.45. Many market participants and strategists expect that crude oil might cross over its 2017 highs in the near future.
However, the performance of crude oil mainly depends on OPEC (Organization of Petroleum Exporting Countries) production decisions, demand outlook, and the situation in Middle East economies. If these factors are favorable, 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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