Energy ETF Driver: Spike in Natural Gas or Oil’s 3-Year Peak?

Energy ETF correlations

Between January 4 and January 11, 2018, the Alerian MLP ETF (AMLP) had a positive correlation of 41.2% with US crude oil February 2018 futures. However, other energy subsector ETFs—the VanEck Vectors Oil Services ETF (OIH), the Energy Select Sector SPDR ETF (XLE), and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP)—had negative correlations of 33.7%, 21%, and 1.2%, respectively, with US crude oil futures in that period.

Energy ETF Driver: Spike in Natural Gas or Oil’s 3-Year Peak?

However, in the trailing week, OIH rose 4.2%. XLE, AMLP, and XOP rose 2.2%, 1.7%, and 1.6%, respectively, in that period. US crude oil futures rose 2.9%.

Natural gas

AMLP, XOP, XLE, and OIH had correlations of 86.8%, 85.8%, 72.8%, and 50.6%, respectively, with natural gas February futures between January 4 and January 11, 2018. In fact, natural gas February futures rose 7.1% over that period.

Broader market

XLE, XOP, OIH, and AMLP had correlations of 55.7%, 46.8%, 38.9%, and -4.4%, respectively, with the S&P 500 Index (SPY) in the seven calendar days to January 11, 2018. SPY rose 1.6% during that period.