Last week, crude oil recorded its biggest weekly price gain since October last year. This is largely due to hopes of a rebound in demand in China after its economy reopens, and a reversal of the zero Covid policy that has devastated industrial activity and put pressure on oil demand. Investors feared an upcoming economic slowdown and probably booked profits.
Brent Crude Oil ETF BNO WTI Crude Oil ETF lie Last week they were up about 7.1% and 6.4% respectively. In December, OPEC forecast oil demand for this year to rise by 2.2 million bpd from last year’s he 2.5 million bpd, according to oilprice.com. Now that China is opening up its economy, the scenario should turn around.
A slowdown in US inflation has also led to higher oil prices. His December annual US consumer price inflation rate was the lowest since October 2021. This has bolstered hopes that the Fed will slow his rate hike momentum in 2023. This should keep the US dollar subdued and favor commodity investments. There is also news that Russia may cut oil production.
Against this backdrop, here are last week’s energy ETF winners.
SPDR S&P Oil & Gas Equipment & Services ETF XES – up 8.4%
Oil & Gas Equipment & Services will take 71.55% of the fund and Oil & Gas Drilling will take approximately 28.45% of the fund. The fund holds a total of 33 shares in Kitty. No shares exceed his 5.35% of the fund. This fund is Zachs Rank #2 (Buy).
Invesco Dynamic Oil & Gas Services ETF PXJ – up 7.9%
The underlying dynamic Oil Services Intellidex Index consists of the stocks of 30 US companies that support the production, processing and distribution of oil and gas. The Zacks Rank 2 Fund has Halliburton, Schlumberger and Baker Hughes in the top three. The Fund’s net expense ratio is 63 bps in fees.
Invesco S&P Small Cap Energy ETF PSCE – up 7.8%
The underlying S&P SmallCap 600 Capped Energy Index is designed to measure the overall performance of common stocks of US energy companies. The Zacks Rank #2 fund has a 52.47% weighting in Energy Equipment and Services. Helmerich & Payne (12.72%), SM Energy (9.69%) and Patterson-UTI Energy (8.99%) make up the top three funds.
Van Eck Oil Service ETF OIH – up 7.3%
The underlying MVIS US Listed Oil Services 25 Index tracks the overall performance of US listed companies involved in oil services to the upstream oil sector, including oil equipment, oil services, or oil drilling. The Zacks Rank #2 Fund holds a total of 25 shares. Schlumberger NV (20%), Halliburton (11.74%) and Baker Hughes (8.38%) are the top three stocks in the fund. Fund fees are 35 bps.
iShares US Oil Equipment & Services ETF IEZ – up 7.1%
The 29-share fund has a Zacks rank of #2. Schlumberger (22.28%) and Halliburton (21.53%) are the top two funds. The fund’s fee is 39 bps.
Want the latest recommendations from Zacks Investment Research? Download today the 7 Best Stocks of the Next 30 Days.Click to get this free report
iShares US Oil Equipment & Services ETF (IEZ): ETF Research Report
US Brent Oil ETF (BNO): ETF Research Report
SPDR S&P Oil & Gas Equipment & Services ETF (XES): ETF Research Report
Invesco Dynamic Oil & Gas Services ETF (PXJ): ETF Research Report
Invesco S&P Small Cap Energy ETF (PSCE): ETF Research Report
Click here to read this article on Zacks.com.
Zacks Investment Research