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%.
WAKE UP WITH BAGELS & STOX, OUR NEW EMAIL THAT ENTERTAINS AND INFORMS YOU BEFORE THE DAY STARTS. SIGN UP HERE!
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.