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Analyzing Energy Subsector ETFs Last Week

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Energy subsector ETFs

In the week ending June 21, major energy subsector ETFs had the following performances:

  • The VanEck Vectors Oil Services ETF (OIH) rose 9.8%.
  • The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rose 7%.
  • The VanEck Vectors Oil Refiners ETF (CRAK) rose 3.1%.
  • The Alerian MLP ETF (AMLP) rose 0.2%.
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Oil and energy ETFs

Last week, US crude oil prices rose 8.8%, while natural gas active futures fell 8.9%. The upturn in oil was more significant for energy ETFs than the fall in natural gas prices. A rise in oil prices could boost US oil drilling activities—an important factor that could be behind oilfield services stocks’ outperformance. Last week, the oil rig count was at 789—near its more than one-year low.

Last week, the Brent-WTI spread fell to the lowest level since April 16. The difference between Light Louisiana Sweet and WTI at Cushing also contracted to the lowest level since April 11. The contraction could impact midstream stocks or AMLP in the long-term. The oil spread plays an important role in developing the oil infrastructure.

Energy sector’s performance

Last week, the Energy Select Sector SPDR ETF (XLE) rose 4.2%. XLE had the highest rise among the sector-specific SPDR ETFs under review. Bullish sentiments in oil prices might have boosted XLE. The Consumer Staples Select Sector SPDR Fund (XLP) fell 0.6% and underperformed SPDR ETFs. Most of the sector-specific SPDR ETFs closed in the green last week.

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