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Energy Sector ETFs: Who Leads and Who Lags?

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Price performance of energy sector ETFs

The Alerian MLP ETF (AMLP) outperformed other energy sector ETFs on a weekly basis as of May 5, 2016. The other ETFs include the Energy Select Sector SPDR ETF (XLE), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), and the VanEck Vectors Oil Services ETF (OIH). Below are their performances:

  • AMLP: fell 0.9%
  • XLE: fell 3.1%
  • XOP: fell 5.5%
  • OIH: fell 8%

The fall in OIH could be attributed to the fall in Baker Hughes (BHI) after Halliburton (HAL) withdrew its plans to acquire it on April 30, 2016. BHI has a weight of 6.9% in OIH. Overall, crude oil has fallen 3.4% in the same period.

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XOP tracks crude oil closer than XLE because it has more upstream companies. Upstream energy companies such as Bill Barrett (BBG), Continental Resources (CLR), Triangle Petroleum (TPLM), and Denbury Resources (DNR) have weights of 1.2%, 1.4%, 1.3%, and 1.4%, respectively, in XOP. So XOP fell more than XLE.

Energy commodity–tracking ETFs

The United States Natural Gas ETF (UNG) and the United States Oil ETF (USO) are the largest commodity tracking ETFs traded on US exchanges for natural gas futures and crude oil futures. On a weekly basis, UNG fell about 0.15%, whereas USO fell about 3.6% as of May 5, 2016. The fall in USO corresponds to the fall in US crude oil.

Next, let’s see why the energy sector got battered the most this week.

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