Oil price surged last week on potential disruptions in output in the Gulf of Mexico and growing expectations that the Organization of the Petroleum Exporting Countries (“OPEC”) and allies including Russia, collectively known as OPEC+, might resist raising output. In fact, oil logged the biggest weekly gains since June 2020, with WTI jumping more than 10% and Brent climbing above 11%.
A powerful hurricane has ploughed through the Gulf of Mexico, forcing shutdowns and evacuations of hundreds of offshore oil platforms. Notably, Gulf of Mexico offshore wells account for 17% of U.S. crude production, while more than 45% of total U.S. refining capacity lies along the Gulf Coast. Oil producers in the U.S. Gulf of Mexico have halted 91% of crude production due to Hurricane Ida, which was upgraded from a tropical storm to a Category 1 hurricane on Aug 27. Ida smashed into the coast near Louisiana’s Port Fourchon, a hub of the Gulf's offshore energy industry, on Sunday as an extremely dangerous Category 4 hurricane, per the National Hurricane Center. Energy companies had evacuated 290 offshore facilities — more than half of those in the Gulf of Mexico — and 11 drill rigs by Aug 29. Meanwhile, OPEC+ is scheduled to meet on Sep 1 to reconsider the increase in oil output agreed last month (read: Is This the Time for Crude Oil & Energy ETFs?). A weaker dollar added to the strength as it makes oil less expensive for foreign investors. However, improving supply in Mexico, looming worries over the spread of the coronavirus’ Delta variant, and mixed economic data from the United States and China continued to weigh on oil price. As such, we have highlighted five energy ETFs & stocks that led the way higher last week: Best ETFs
Most of these energy ETFs currently have a Zacks ETF Rank #2 (Buy) or 3 (Hold) and could be excellent choices to play the trend at least in the near term.
Invesco DWA Energy Momentum ETF ( PXI Quick Quote PXI - Free Report) This fund follows the Dorsey Wright Energy Technical Leaders Index, which measures the performance of the companies that are showing relative strength (momentum). Zacks Rank: #3 AUM: $70 million Expense Ratio: 0.60% Last Week: 16.9% Invesco S&P SmallCap Energy ETF ( PSCE Quick Quote PSCE - Free Report) 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: Small-Cap ETFs That More Than Doubled in a Year). Zacks Rank: #3 AUM: $110.7 million Expense Ratio: 0.29% Last Week Return: 16.3% SPDR S&P Oil & Gas Equipment & Services ETF ( XES Quick Quote XES - Free Report) 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: #3 AUM: $139.7 million Expense Ratio: 0.35% Last Week Return: 15.2% SPDR S&P Oil & Gas Exploration & Production ETF ( XOP Quick Quote XOP - Free Report) This fund provides exposure to oil and gas exploration and production companies by tracking the S&P Oil & Gas Exploration & Production Select Industry Index (read: Oil Price Slumps: What Lies Ahead for Energy ETFs?). Zacks Rank: #2 AUM: $2.9 billion Expense Ratio: 0.35% Last Week Return: 14% iShares U.S. Oil Equipment & Services ETF ( IEZ Quick Quote IEZ - Free Report) This ETF offers exposure to the U.S. companies that provide exposure to firms involved in equipment and services for oil exploration and extraction by tracking the Dow Jones U.S. Select Oil Equipment & Services Index. Zacks Rank: #3 AUM: $96.4 million Expense Ratio: 0.41% Last Week Return: 13.5% Best Stocks
We have highlighted the best-performing stocks that currently have a Zacks Rank #1 (Strong Buy), 2 or 3. You can see
. the complete list of today’s Zacks #1 Rank stocks here Laredo Petroleum Inc. ( LPI Quick Quote LPI - Free Report) It is engaged in the exploration, development and acquisition of oil and natural gas properties in the Permian and Mid-Continent regions of the United States. Zacks Rank: #3 Value Score: A Market Cap: $843.6 million Last Week Return: 38.7% Talos Energy Inc. ( TALO Quick Quote TALO - Free Report) This company is engaged in exploration, development and production of oil and natural gas properties. Zacks Rank: #3 VGM Score: A Market Cap: $1.02 billion Last Week Return: 38.1% Callon Petroleum Company ( CPE Quick Quote CPE - Free Report) It is solely focused on exploration, and production of oil and gas resources in the Permian Basin. Zacks Rank: #3 VGM Score: A Market Cap: $1.58 billion Last Week Return: 26.9% Nabors Industries Ltd. ( NBR Quick Quote NBR - Free Report) It is one of the largest land-drilling contractors in the world, conducting oil, gas and geothermal land drilling operations. Zacks Rank: #3 VGM Score: B Market Cap: $700.37 million Last Week Return: 26.3% Centennial Resource Development Inc. ( CDEV Quick Quote CDEV - Free Report) This independent oil and gas exploration and production company primarily develops unconventional hydrocarbon reserves in the Delaware Basin, part of the prolific Permian Basin (see: all the Energy ETFs here). Zacks Rank: #3 Momentum Score: B Market Cap: $1.45 billion Last Week Return: 24.8%