5 Best-Performing Energy ETFs & Stocks Of September

The energy sector has been leading this month with Brent oil and U.S. crude hitting the highest level since July 2015 and since April, respectively. This is primarily true as the historic output cut deal wherein OPEC, Russia and other producers agreed to curb production by 1.8 million barrels per day until next March, is now paying off with the global oil market on its way for balancing.

The output curbs are leading to falling inventories, which will soon drop to their five-year average given a robust demand outlook and reduced supplies. Improving global growth, especially in emerging economies and Eurozone, is raising demand for energy, and the damage to U.S. shale output in the wake of Hurricane Harvey is pushing up oil prices (read: How to Trade the Oil Rally with ETFs & Stocks).

The OPEC sees signs of a tighter global market and thus raised global demand outlook for this year and the next. The International Energy Agency (IEA) also projects this year’s global demand to climb the most in two years as global glut has started to shrink due to stronger-than-expected consumption in Europe and the United States as well as production decline in OPEC and non-OPEC countries. In fact, the OPEC oil output declined in August for the first time since March.

Additionally, Turkey threatened to cut oil supplies from northern Iraq to the global market in response to its referendum on independence, which Turkey does not recognize. If the boycott becomes successful, it would lead to 500,000 fewer barrels of crude oil per day flowing into the global market and would result in higher oil prices. Further, a weak dollar is adding to the strength.

The bullish trend is likely to continue at least in the short term. Given this, investors might want to tap the space with the top-performing energy ETFs and stocks of this month. For them, we have highlighted five funds and stocks that are poised to perform well heading into the final quarter, should oil prices rise or remain above $50 per barrel.

Best ETFs

Though these energy ETFs currently have a Zacks ETF Rank #3 (Hold) or 4 (Sell), these seem excellent choices to play the trend at least in the near term.

PowerShares S&P SmallCap Energy Fund PSCE

This fund offers exposure to the small-cap segment of the energy sector by tracking the S&P Small Cap 600 Capped Energy Index (read: Here's Why Energy ETFs are Rallying).

Zacks Rank: #4
AUM: $39.9 million
Expense Ratio: 0.29%
September Return: 20.3%

SPDR S&P Oil & Gas Equipment & Services (NYSE:XES) ETF XES

This fund tracks the S&P Oil & Gas Equipment & Services Select Industry Index, which measures the performance of the companies engaged in the oil and gas equipment and services industry.

Zacks Rank: #4
AUM: $307.8 million
Expense Ratio: 0.35%
September Return: 20.3%

iShares U.S. Oil Equipment & Services ETF IEZ

This ETF offers exposure to U.S. companies that provide equipment and services for oil exploration and extraction by tracking the Dow Jones U.S. Select Oil Equipment & Services Index.

Zacks Rank: #4
AUM: $192.7 million
Expense Ratio: 0.44%
September Return: 17.5%

VanEck Vectors Oil Services ETF OIH

This fund tracks the MVIS U.S. Listed Oil Services 25 Index, which offers exposure to the companies involved in oil services to the upstream oil sector, which include oil equipment, oil services, or oil drilling.

Zacks Rank: #3
AUM: $1.2 billion
Expense Ratio: 0.35%
September Return: 16.2%

PowerShares Dynamic Oil & Gas Services Fund PXJ

This product follows the Dynamic Oil Services Intellidex Index, which thoroughly evaluates companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value (read: What Lies Ahead for Oil ETFs?).

Zacks Rank: #4
AUM: $31.4 million
Expense Ratio: 0.63%
September Return: 16%

Best Stocks

We have highlighted the best-performing stocks that currently have a Zacks Rank #1 (Strong Buy), 2 or 3.

Jones Energy Inc. (NYSE:NE)

Based in Austin, TX, Jones Energy is an independent oil and gas company engaged in the development, production and acquisition of oil and natural gas properties in the Anadarko and Arkoma basins of Texas and Oklahoma (read: Bet on Resurgent Energy Sector With Leveraged ETFs).

Zacks Rank: #3
VGM Style Score: A
Market Cap: $151.46 million
September Return: 77.8%

Willbros Group Inc. (NYSE:WG)

Based in Houston, TX, Willbros Group is an independent contractor serving the oil, gas and power industries, providing construction, engineering and specialty services to industry and government entities worldwide.

Zacks Rank: #2
VGM Style Score: B
Market Cap: $191.17 million
September Return: 37.7%

Noble Corporation plc (NYSE:NE)

Based in London, the United Kingdom, Noble Corporation is an offshore drilling contractor for the oil and gas industry that offers services for drilling and work over activities and undertakes refurbishment projects for rigs.

Zacks Rank: #3
VGM Style Score: A
Market Cap: $1.01 billion
September Return: 36.5%

TETRA Technologies Inc. (NYSE:TTI)

Based in The Woodlands, TX, TETRA Technologies is an energy services company with an integrated chemicals operation that supplies chemical products to energy markets, as well as other markets (see: all the Energy ETFs here).

Zacks Rank: #3
VGM Style Score: A
Market Cap: $305.97 million
September Return: 33.5%

Cenovus Energy Inc. (TO:CVE)

Based in Calgary, Canada, Cenovus Energy is an integrated oil company that develops, produces and markets crude oil, natural gas liquids, and natural gas in Canada.

Zacks Rank: #3
VGM Style Score: B
Market Cap: $12.63 billion
September Return: 32.1%

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ISHARS-US OIL E (IEZ): ETF Research Reports

VANECK-OIL SVC (OIH): ETF Research Reports

PWRSH-SP SC EGY (PSCE): ETF Research Reports

SPDR-SP O&G EQP (XES): ETF Research Reports

PWRSH-DYN OIL&G (PXJ): ETF Research Reports

Cenovus Energy Inc (CVE): Free Stock Analysis Report

Tetra Technologies, Inc. (TTI): Free Stock Analysis Report

Willbros Group, Inc. (WG): Free Stock Analysis Report

Noble Corporation (NE): Free Stock Analysis Report

Jones Energy, Inc. (JONE): Free Stock Analysis Report

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