At the end of last week, fund managers had built up the largest net long position in crude oil futures in nine months, according to data from the Commodity Futures Trading Commission. It is serving as a necessary inflation hedge given a growing conflict in the Middle East, and declining drilling at home.
Crude's 13% rally amid the Middle East turmoil pushed energy ETFs like OIH, XES, PXE, PSCE and XOP sharply higher last week.
Launched on 12/16/1998, the Energy Select Sector SPDR ETF (XLE) is a passively managed exchange traded fund designed to provide a broad exposure to the Energy - Broad segment of the equity market.
XLE is presenting a second compelling buying opportunity, as investor sentiment is extremely bearish, following recent price setbacks. Investor emotion, not just fundamentals, drives over half of asset prices—buying when fear is high is key to outsized returns. XLE's three-year trading range is likely ending, signaling a potential breakout supported by historical sentiment indicators.
Oil prices recorded the worst month since 2021 in April. However, the current trend shows a short-term recovery is possible.
Carter Worth, Worth Charting, joins 'Fast Money' to track what the charts are saying in the energy sector as it leads to the downside in today's trading session.
If you're interested in broad exposure to the Energy - Broad segment of the equity market, look no further than the Energy Select Sector SPDR ETF (XLE), a passively managed exchange traded fund launched on 12/16/1998.
The energy sector has significantly outperformed the broader market year-to-date in 2025. While the S&P 500 has struggled, with the SPY ETF down nearly 9% from its 52-week high and 5% YTD, the Energy Select Sector SPDR Fund NYSEARCA: XLE has surged over 9% as of the first quarter's close.
The latest oil price correction is overdone and I see several catalysts that could trigger a rebound. The leading catalysts include usually low strategic petroleum reserves, crude stocks inventory, and also the potential of more favorable policies for domestic production. XOM is better positioned to benefit in case of an oil price recovery than the sector average, represented by XLE, for several reasons.
The energy sector began its correction around inauguration day, ahead of other sectors, a potential sign of an impending recession. Geopolitical risks and supply constraints may push oil prices up long-term, but current demand slowdown, currency volatility, and tariffs present headwinds. Trump's plan to rapidly refill the Strategic Petroleum Reserve looks less likely. SPR purchases are slower under the new administration than Biden's in 2024, weakening the demand outlook.
Energy Select Sector SPDR® Fund ETF has more momentum compared to its peers, thanks to a 3.28% dividend yield, but it holds fewer stocks in its portfolio. The market is experiencing a cyclical rotation from high P/E sectors like tech to low P/E sectors like energy and real estate. A similar imbalance to the dot-com bubble, which was followed by a subsequent increase in energy stock prices.
Francisco Blanch, BofA Securities commodity snd derivative strategist, joins 'Power Lunch' to discuss the global GDP and energy consumption.