Rise in Oil Pushed Energy ETFs Higher
US crude oil active futures have risen 8.6% in the trailing week, which might have boosted or limited the downside in OIH, XOP, XLE, and AMLP. They have returned 5.8%, 5%, 3.7%, and -0.7%, respectively.
June 21 2019, Published 7:48 a.m. ET
Correlation with US crude oil
On June 13–20, major energy ETFs had the following correlations with US crude oil active futures:
- the Energy Select Sector SPDR ETF (XLE): 78%
- the Alerian MLP ETF (AMLP): 68.6%
- the SPDR S&P Oil & Gas Exploration & Production ETF (XOP): 65.3%
- the VanEck Vectors Oil Services ETF (OIH): 54.4%
US crude oil active futures have risen 8.6% in the trailing week, which might have boosted or limited the downside in OIH, XOP, XLE, and AMLP. They have returned 5.8%, 5%, 3.7%, and -0.7%, respectively. Tension in the Middle East has boosted the energy portfolio.
Natural gas
In the trailing week, AMLP, OIH, XLE, and XOP had negative correlations with natural gas active futures of 96.2%, 85.1%, 82.7%, and 79.5%, respectively. Natural gas active futures have fallen 6.7%. Based on the correlations, these energy ETFs might have moved inversely to natural gas prices.
Equity markets
Energy ETFs had the following correlations with the S&P 500 in the last week:
- AMLP: 91.7%
- XLE: 88.1%
- OIH: 80.6%
- XOP: 79.6%
The S&P 500 (SPY) has risen 2.2% during the last week. These correlations and returns suggest that broader markets have played a significant role in these energy ETFs’ upside. In fact, these energy ETFs had a higher correlation with the S&P 500 Index than oil prices.