Do you believe in the price of oil at $100/bbl? If so, check out these energy ETFs
Oil prices continue to climb, recently topping $92 a barrel (CL1:COM) and reaching their highest levels since 2014. Are you bet that crude will rise above $100 a barrel? Institutions and most of Wall Street, including UBS, Goldman Sachs, JP Morgan and Morgan Stanley, believe so.
Suppose you think oil will cross $100 a barrel. In that case, a handful of energy ETFs are a good way to attack that investment thesis. These funds represent the broad-spectrum energy market, the oil and gas exploration and production segment, as well as petroleum equipment services, leveraged ETFs and equity-based funds. forward contracts.
Broad Spectrum Energy ETFs
SPDR Energy Select Sector ETF (NYSEARCA:XLE) and Vanguard Energy ETF (NYSEARCA: VDE) are two leading broad-spectrum, large-scale energy ETFs that offer investors exposure to various oil and gas sector stocks to provide a balanced approach to the sector.
YTD XLE is +22.1% and VDE is +20.6%.
Oil and Gas Exploration and Production ETFs
A subset of the energy market is oil exploration and production. If you want to focus on this sector, look to two ETFs: the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEARCA:XOP) and iShares US Oil & Gas Exploration & Production ETF (BATS:IEO).
In 2022 XOP finds itself +14.5% and IEO is +19.3%.
Petroleum Equipment Services ETF
The VanEck Vectors Oil Services ETF (NYSEARCA: OIH) tracks companies related to oilfield services and is one of the industry leaders with $2.53 billion in assets under management.
During the year, the ETF is +23.5%.
Leveraged Energy ETFs
Two funds that offer leverage to maximize returns are the 2X leveraged ProShares Ultra Oil & Gas ETF (NYSEARCA:DIG) and Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2x Equity ETF (NYSEARCA: GUSH).
DIG is +45.8%and GUSH is +32% from a performance perspective since the beginning of the year.
Futures-Based Energy ETFs
Investors Should Analyze US Oil ETF (NYSEARCA: USO) for the returns most closely correlated to the rise in the price of oil. The ETF uses futures contracts to better price the fund.
The USO is +20.2% YTD.
The future of oil prices
With the majority of Wall Street calling for $100 oil, the focus is less on the ability to reach $100 and more on the ability of crude oil prices to hold $100, an area where the street remains divided.