“Supply and demand is a constant issue for all commodities including oil. The current perception is that oil demand will increase with stronger economic activity and that stability within the broader U.S. economy might be on the horizon. The other half of the perception equation is that actual supply of crude seems to be falling. Data from the American Petroleum Institute last week showed U.S. crude inventories dropped more than expected,” Ron DeLegge reports for ETFGUIDE.
“What else is boosting oil prices? Oil’s surge has coincided with corresponding weakness in the U.S. dollar. Because oil and most commodities are traded in dollars, a weak greenback means it takes more dollars to buy the commodity,” Ron DeLegge reports for ETFGUIDE.
“Despite the rapid rise in oil prices, oil stocks as a group have been lagging its performance so far this year.The Select Sector Energy SPDR (NYSEArca: XLE) is ahead by just 10.48% year-to-date, compared to around a 72 percent increase in the price of oil over the same time period. XLE contains 40 stocks which represent the energy sector of the S&P 500. Exxon Mobil, Chevron, and ConocoPhillips are among the fund’s top holdings,” Ron DeLegge reports for ETFGUIDE.
“Other ETFs tracking the energy sector like the SPDRS S&P Oil Gas Exploration (NYSEArca: XOP) and Oil Gas Equipment (NYSEArca: XES) are doing much better. So far this year, XOP is ahead by 21.22% percent and XES by 43.87%. Even with the sizzling performance of oil ETFs concentrated in small baskets of oil stocks, crude’s recent performance has beaten those returns,” Ron DeLegge reports for ETFGUIDE.
ETF DAILY NEWS TAKE: Select Sector Energy SPDR “XLE” presents a buying opportunity if oil stocks were to close the gap on crude oil’s recent surge in price.
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