Energy Emerges Best Sector of the Week: 5 ETFs That Topped

Oil price surged last week on rally in reopening trades. United States Oil Fund (NYSE:USO) LP USO added 4.2% last week while the S&P 500 advanced 2.2%. Meanwhile, brent crude United States Brent Oil Fund LP BNO gained 3.9% last week. In fact, this was the biggest weekly gain for oil since late August.

The rally was spurred by bets that the new COVID-19 variant Omicron may cause milder illness than previously feared, fears over further lockdowns have been eased and the economic-reopening-friendly investments jumped along with the broader market. Overall, last week was upbeat for Wall Street with the S&P 500, the Dow Jones, the Nasdaq composite and the Russell 2000 gaining about 3.82%, 4.0%, 3.6% and 2.4%, respectively.

Oil prices staged a rally in most part of 2021. Global benchmark Brent has risen 38% this year, supported by output curbs led by the OPEC+ group of producers, though it has dropped from a three-year high above $86 in October.

The Omicron fear had dented the rally on demand worries few weeks back only to reignite the rebound all over again. “All the headlines are bullish today,” said Phil Flynn, senior analyst at Price Futures Group. “The momentum seems to be jumping back in,” as quoted on CNBC.

Apart from the easing concerns about the impact of the Omicron variant on global fuel demand, the fact that Iran nuclear talks hit a snag, deferring the return of Iranian crude supplies, boosted oil prices. Against this backdrop, below we highlight a few top-performing energy ETFs/ETNs of the last week.

ETFs in Focus

Credit Suisse (SIX:CSGN) S&P MLP Index ETN MLPO – Up 13.24%

The underlying S&P MLP Index includes both master limited partnerships and publicly traded limited liability companies which have a similar legal structure to MLPs and share the same tax benefits as MLPs. The ETN MLPO charges 95 bps in fees.

S&P Oil & Gas Eqpt & Services SPDR XES – Up 10.42%

The energy ETF puts 82.62% weight in Oil & Gas Equipment & Services, followed by 17.38% in Oil & Gas Drilling. Halliburton Company (NYSE:HAL) (5.26%), Schlumberger NV (NYSE:SLB) (5.0%) and Nabors Industries Ltd (NYSE:NBR). (4.79%) are the top three holdings of the XES.

Dynamic Oil & Gas Services Invesco ETF PXJ – Up 9.97%

The Dynamic Oil Services Intellidex Index is composed of stocks of 30 U.S. companies that assist in the production, processing and distribution of oil and gas. Nov (8.43%), Baker Hughes (8.28%) and Halliburton (7.94%) round out the top three spots of the ETF PXJ. Dynamic Oil & Gas Services Invesco ETF charges 63 bps in fees.

US Gasoline UGA – Up 9.96%

The United States Gasoline ETF seeks to track in percentage terms the movements of gasoline prices. The expense ratio of US Gasoline is 1.02%.

S&P Small-Cap Energy Invesco ETF PSCE – Up 9.58%

The underlying S&P SmallCap 600 Capped Energy Index is designed to measure the overall performance of common stocks of US energy companies. PDC Energy (NASDAQ:PDCE) (10.01%), Range Resources (NYSE:RRC) (9.71%) and Matador Resources (NYSE:MTDR) (8.75%) are the top three holdings of S&P Small-Cap Energy Invesco ETF.

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