8 Apr

Here’s What Could Impact Energy ETFs This Week

WRITTEN BY Rabindra Samanta

Energy subsector ETFs

In the week ending April 5, major energy subsector ETFs had the following performances:

  • The VanEck Vectors Oil Services ETF (OIH) rose 4.4%.
  • The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rose 3.5%.
  • The VanEck Vectors Oil Refiners ETF (CRAK) rose 2%.
  • The Alerian MLP ETF (AMLP) rose 1.2%.

Here’s What Could Impact Energy ETFs This Week


What could impact energy ETFs this week?

Last week, US crude oil futures rose 4.9%. XOP and OIH rose with the gain in oil prices. However, a rise of just 0.1% in natural gas might have limited XOP’s upside. Moreover, for oilfield services stocks, the rebound in the US oil rig count might have increased investors’ confidence. Last week, the oil rig count rose by 15 to 831, the first rise in the last six weeks.

Moreover, the outage at Cheniere Energy’s Sabine Pass liquefied natural gas export terminal in Louisiana is over and the forecast for higher demand might lift natural gas prices this week, a positive development for energy stocks.

The Brent-WTI spread fell by 18 cents last week. On April 2, the Brent-WTI spread fell to its lowest level since August 21, 2018. US downstream stocks account for ~30.1% of CRAK and could be impacted by another fall in the Brent-WTI spread. But, if US refinery utilization rates fall further this week, we might see a divergence between gasoline and oil prices, a bullish factor for US downstream stocks.

Energy sector performance

Last week, US crude oil May futures rose 4.9%, while the Energy Select Sector SPDR ETF (XLE) rose 2.9%. XLE had the third smallest rise among the sector-specific SPDR ETFs under review. The weakness in natural gas prices might have pulled down XLE’s returns. But, the S&P 500 Index (SPY) rose 2.1% in the last week.

Last week, the Materials Select Sector SPDR Fund (XLB) rose 4.2%, the largest rise among the sector-specific SPDR ETFs. The Consumer Staples Select Sector SPDR Fund (XLP) fell 0.9%, the largest decline among the sector-specific SPDR ETFs.

Most of the sector-specific SPDR ETFs closed in the green last week.

Latest articles

23 Jul

Will Fortinet Beat Q2 Earnings Estimates?

WRITTEN BY Aditya Raghunath

Leading cybersecurity company Fortinet (FTNT) is scheduled to announce its second-quarter earnings results on August 1. What should we expect?

Harley-Davidson’s Q2 earnings were slightly better than estimates.

Netflix (NFLX) has long relied on international markets to drive its streaming video business growth.

23 Jul

Could Ford’s Q2 Earnings Push Its Stock Even Higher?

WRITTEN BY Mohit Oberoi, CFA

Ford's second-quarter earnings results are scheduled for release on July 24. So far, Ford stock has outperformed its legacy peers.

23 Jul

Why RBC Isn't Optimistic about BlackBerry Stock

WRITTEN BY Aditya Raghunath

Shares of BlackBerry (BB) have been volatile over the last 12 months. BlackBerry stock fell 40.5% from $12.0 in September 2018 to $6.57 in December.

According to a Wall Street Journal report, Apple (AAPL) could be interested in buying Intel’s modem chip business.