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The energy sector has been one of the most sought-after investing areas among the market participants so far in 2022. The S&P 500 Energy Sector Index has gained 13.4% in the past month and 55.7% so far in the year. The figures came against the broader S&P 500 Index declining 0.6% in the past month and 13.3% so far in 2022.
The sector has been gaining for a while on several external tailwinds. The accelerated distribution of the coronavirus vaccines is steadily providing support to contain the outbreak and leading to reopening and recovering global economies and activities. The energy space has been a large beneficiary of the oil market conditions marked with tightening supply-demand amid the Russia-Ukraine crisis.
Oil prices have been rallying amid the Russia-Ukraine geopolitical crisis. It is also worth noting here that Russia stands as the world’s second-largest oil producer. European refineries procure most of their crude oil supplies from Russia. Additionally, the country provides about two-fifths of its natural gas supply to Europe. In fact, it emerged as the largest natural gas and oil supplier to the European Union in 2021.
The European Union leaders finally agreed on an embargo to restrict 90% of the Russian crude by 2022 end. The sanctions will immediately impose a ban on 75% of the Russian oil imports. Per a CNBC article, this ban will be part of the sixth sanction package levied by the European Union in response to Russia’s attack on Ukraine.
The EU’s oil restraint can induce a sharp rally in oil prices to weigh on the already tight oil supplies. U.S. gasoline demand is also going to surge soon as the Memorial Day weekend marks the beginning of the U.S. summer driving season. According to SPI Asset Management managing partner Stephen Innes, "Oil prices are supported as gasoline markets remain tight amid solid demand heading into the peak U.S. driving season. Refineries are typically in ramp-up mode to feed U.S. drivers' unquenching thirst at the pump," as mentioned in a Reuters article.
The end of a two-month-long COVID-19 shutdown in China’s biggest financial hub, Shanghai, will also perk up oil demand only to worsen the already tight supply-demand conditions in the oil market.
Top-Performing Oil-Energy ETFs in May
Against the current bullish backdrop for the energy space, we highlighted 10 top-performing oil-energy ETFs in May:
Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) — up 21.1% in the past month
PXE is based on the Dynamic Energy Exploration & Production Intellidex Index. It charges an expense ratio of 0.63% (read: 5 Sector ETFs That Beat the Market in May).
iPath Series B Bloomberg Natural Gas Subindex Total Return ETN — up 20.9%
The iPath Bloomberg Natural Gas Subindex Total Return ETNs were designed to provide exposure to the Bloomberg Natural Gas Subindex Total Return. GAZ has an expense ratio of 0.45% (read: Natural Gas Scales New Highs: ETFs to Tap).
First Trust Natural Gas ETF (FCG - Free Report) — up 19.9%
The First Trust Natural Gas ETF seeks investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the ISE-Revere Natural Gas Index. FCG charges 0.60% in expense ratio (read: Wall Street's Best Week Since Nov 2020: 5 Best ETF Areas).
iShares U.S. Oil & Gas Exploration & Production ETF (IEO - Free Report) — up 19.4%
The iShares U.S. Oil & Gas Exploration & Production ETF seeks to track the investment results of an index composed of U.S. equities in the oil and gas exploration and production sector. IEO has an expense ratio of 0.42%.
SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report) — up 19.1%
The SPDR S&P Oil & Gas Exploration & Production ETF seeks to provide investment results that before fees and expenses, correspond generally to the total return performance of the S&P Oil & Gas Exploration & Production Select Industry Index. It has an expense ratio of 0.35%.
United States Gasoline Fund (UGA - Free Report) — up 18.9%
The United States Gasoline Fund LP is designed to track the movements of gasoline prices in percentage terms. UGA charges 0.90% as the total expense ratio.
United States Natural Gas Fund (UNG - Free Report) — up 18.3%
Invesco S&P 500 Equal Weight Energy ETF — up 18.2%
RYE isbased on the S&P 500 Equal Weight Energy Plus Index and has an expense ratio of 0.40%.
Invesco DWA Energy Momentum ETF (PXI - Free Report) — up 17.9%
PXI is based on the Dorsey Wright Energy Technical Leaders Index and charges 0.60% as fees.
The Energy Select Sector SPDR Fund (XLE - Free Report) — up 17.8%
The Energy Select Sector SPDR Fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Energy Select Sector Index. It has an expense ratio of 0.10% (read: 5 Sector ETFs to Tap on Upbeat Q2 Earnings Projections).
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10 Top-Performing Oil-Energy ETFs of May
The energy sector has been one of the most sought-after investing areas among the market participants so far in 2022. The S&P 500 Energy Sector Index has gained 13.4% in the past month and 55.7% so far in the year. The figures came against the broader S&P 500 Index declining 0.6% in the past month and 13.3% so far in 2022.
The sector has been gaining for a while on several external tailwinds. The accelerated distribution of the coronavirus vaccines is steadily providing support to contain the outbreak and leading to reopening and recovering global economies and activities. The energy space has been a large beneficiary of the oil market conditions marked with tightening supply-demand amid the Russia-Ukraine crisis.
Oil prices have been rallying amid the Russia-Ukraine geopolitical crisis. It is also worth noting here that Russia stands as the world’s second-largest oil producer. European refineries procure most of their crude oil supplies from Russia. Additionally, the country provides about two-fifths of its natural gas supply to Europe. In fact, it emerged as the largest natural gas and oil supplier to the European Union in 2021.
The European Union leaders finally agreed on an embargo to restrict 90% of the Russian crude by 2022 end. The sanctions will immediately impose a ban on 75% of the Russian oil imports. Per a CNBC article, this ban will be part of the sixth sanction package levied by the European Union in response to Russia’s attack on Ukraine.
The EU’s oil restraint can induce a sharp rally in oil prices to weigh on the already tight oil supplies. U.S. gasoline demand is also going to surge soon as the Memorial Day weekend marks the beginning of the U.S. summer driving season. According to SPI Asset Management managing partner Stephen Innes, "Oil prices are supported as gasoline markets remain tight amid solid demand heading into the peak U.S. driving season. Refineries are typically in ramp-up mode to feed U.S. drivers' unquenching thirst at the pump," as mentioned in a Reuters article.
The end of a two-month-long COVID-19 shutdown in China’s biggest financial hub, Shanghai, will also perk up oil demand only to worsen the already tight supply-demand conditions in the oil market.
Top-Performing Oil-Energy ETFs in May
Against the current bullish backdrop for the energy space, we highlighted 10 top-performing oil-energy ETFs in May:
Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) — up 21.1% in the past month
PXE is based on the Dynamic Energy Exploration & Production Intellidex Index. It charges an expense ratio of 0.63% (read: 5 Sector ETFs That Beat the Market in May).
iPath Series B Bloomberg Natural Gas Subindex Total Return ETN — up 20.9%
The iPath Bloomberg Natural Gas Subindex Total Return ETNs were designed to provide exposure to the Bloomberg Natural Gas Subindex Total Return. GAZ has an expense ratio of 0.45% (read: Natural Gas Scales New Highs: ETFs to Tap).
First Trust Natural Gas ETF (FCG - Free Report) — up 19.9%
The First Trust Natural Gas ETF seeks investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the ISE-Revere Natural Gas Index. FCG charges 0.60% in expense ratio (read: Wall Street's Best Week Since Nov 2020: 5 Best ETF Areas).
iShares U.S. Oil & Gas Exploration & Production ETF (IEO - Free Report) — up 19.4%
The iShares U.S. Oil & Gas Exploration & Production ETF seeks to track the investment results of an index composed of U.S. equities in the oil and gas exploration and production sector. IEO has an expense ratio of 0.42%.
SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report) — up 19.1%
The SPDR S&P Oil & Gas Exploration & Production ETF seeks to provide investment results that before fees and expenses, correspond generally to the total return performance of the S&P Oil & Gas Exploration & Production Select Industry Index. It has an expense ratio of 0.35%.
United States Gasoline Fund (UGA - Free Report) — up 18.9%
The United States Gasoline Fund LP is designed to track the movements of gasoline prices in percentage terms. UGA charges 0.90% as the total expense ratio.
United States Natural Gas Fund (UNG - Free Report) — up 18.3%
The United States Natural Gas Fund LP is designed to track in percentage terms the movements of natural gas prices. Its expense ratio is 1.11% (read: ETFs Standing Tall While Market Nears Worst 100 Days Since 1970).
Invesco S&P 500 Equal Weight Energy ETF — up 18.2%
RYE isbased on the S&P 500 Equal Weight Energy Plus Index and has an expense ratio of 0.40%.
Invesco DWA Energy Momentum ETF (PXI - Free Report) — up 17.9%
PXI is based on the Dorsey Wright Energy Technical Leaders Index and charges 0.60% as fees.
The Energy Select Sector SPDR Fund (XLE - Free Report) — up 17.8%
The Energy Select Sector SPDR Fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Energy Select Sector Index. It has an expense ratio of 0.10% (read: 5 Sector ETFs to Tap on Upbeat Q2 Earnings Projections).