4 Mar

Oil Dragged Energy Subsectors Last Week

WRITTEN BY Rabindra Samanta

Energy sub-sector ETFs

Last week, major energy subsector ETFs had the following performances:

  • The VanEck Vectors Oil Services ETF (OIH) rose 0.7%.
  • The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell 0.7%.
  • The Alerian MLP ETF (AMLP) fell 0.9%.
  • The VanEck Vectors Oil Refiners ETF (CRAK) fell 1.6%.

Oil Dragged Energy Subsectors Last Week

A fall in the Brent-WTI spread, which we discussed in the previous part, might have dragged CRAK. US downstream stocks account for ~30.1% of CRAK. A 2.5% fall in US crude oil might have either limited the upside or dragged most of these energy ETFs. However, natural gas prices rose 4.4% in the week ending March 1.

On February 22–March 1, US equity indexes had mixed performances. The S&P Mid-Cap 400 (IVOO) and the S&P 500 Index (SPY) returned -0.4% and 0.4%, respectively, while the Dow Jones Industrial Average (DIA) was unchanged. These equity indexes have an exposure of 5.1%, 5.9%, and 5.2% to energy stocks, respectively.

Oil, the broader market, and energy ETFs

Last week, US crude oil April futures fell more than 2%, while the Energy Select Sector SPDR ETF (XLE) rose 1%. XLE rose the most among the sector-specific SPDR ETFs under review, despite oil’s fall and the mixed sentiments in the broader market indexes. A 2% and 2.2% rise in ExxonMobil (XOM) and Chevron (CVX), respectively, might have supported XLE’s rise. Together, the two stocks account for ~41.9% of XLE.

Last week, the Materials Select Sector SPDR ETF (XLB) fell 1.4%—the largest decline among the sector-specific SPDR ETFs. Most of the sector-specific SPDR ETFs closed in the green last week.

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

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