Oil Gains Drove the Energy Subsector Last Week

Energy ETFs

Last week, major energy subsector ETFs’ performances were as follows:

  • The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rose 9.3%.
  • The VanEck Vectors Oil Services ETF (OIH) rose 2.7%.
  • The Alerian MLP ETF (AMLP) rose 2.7%.
  • The VanEck Vectors Oil Refiners ETF (CRAK) rose 2.5%.

Oil Gains Drove the Energy Subsector Last Week

The expansion in the Brent-WTI spread, which we discussed in the previous part, might have supported CRAK. US downstream stocks account for ~30.1% of CRAK. Natural gas prices rose 1.6% with more than a 5% rise in US crude oil last week. Stronger energy prices might have boosted upstream stocks.

US equity indexes

On February 8–15, US equity indexes rose. The S&P Mid-Cap 400 (IVOO), the Dow Jones Industrial Average (DIA), and the S&P 500 Index (SPY) rose 3.3%, 3.1%, and 2.5%, respectively. These equity indexes have an exposure of 5.1%, 5.2%, and 5.9% to energy stocks, respectively.

Oil, the broader market, and energy ETFs

Last week, US crude oil April futures rose 5.4%, while the Energy Select Sector SPDR ETF (XLE) rose 5.1%. XLE rose the most among the sector-specific SPDR ETFs under review. In addition to oil’s rise, a rise in the bullishness in the broader market indexes might have played a significant role in XLE’s rise.

Last week, the Utilities Select Sector SPDR ETF (XLU) rose 0.1%—the lowest gainer among the sector-specific SPDR ETFs. All of the sector-specific SPDR ETFs closed in the green last week.

Next, we’ll discuss the top energy gains last week.