Vital Trend for Energy Subsectors Last Week

Energy ETFs

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

  • The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell 7.6%.
  • The VanEck Vectors Oil Services ETF (OIH) fell 4.2%.
  • The Alerian MLP ETF (AMLP) fell 2.9%.
  • The VanEck Vectors Oil Refiners ETF (CRAK) fell 1.3%.

The expansion in the Brent-WTI spread, which we discussed in the previous part, might have limited CRAK’s downside. US downstream stocks account for ~30.1% of CRAK. The events, which we’ll discuss in Part 5, might impact the Brent-WTI spread this week. Natural gas prices fell 5.5% with more than a 4% decline in US crude oil last week. Weaker energy prices might have dragged upstream stocks.

Vital Trend for Energy Subsectors Last Week

US equity indexes

On February 1–8, US equity indexes had mixed performances. The S&P Mid-Cap 400 (IVOO) and the Dow Jones Industrial Average (DIA) rose 0.6% and 0.2%, respectively, while the S&P 500 Index (SPY) was unchanged during this period. 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 March futures fell 4.6%, while the Energy Select Sector SPDR ETF (XLE) fell 3%. XLE fell the most among the sector-specific SPDR ETFs under review. In addition to oil’s fall, a decline in the bullishness in the broader market indexes might have played a significant role in XLE’s fall.

Last week, the Utilities Select Sector SPDR ETF (XLU) rose 2.1%—the largest gainer among the sector-specific SPDR ETFs. Most of the sector-specific SPDR ETFs closed in the red last week.

In the next part, we’ll discuss the top energy gainers last week.