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Energy and resource stocks have zigged while the market has zagged.
OPEC+ has decided to keep its oil production policy unchanged for October, signaling a cautious approach as the ongoing Iran conflict disrupts crude exports through the Strait of Hormuz and limits the producer group's ability to influence physical oil supplies.
XLE eyes fresh highs as oil rises, while XLF consolidates and XLV tests key support after breaking below a major trendline.
Could oil hit $120? Goldman Sachs says prolonged supply disruptions could drive crude higher, creating opportunities for energy ETFs.
Energy Select Sector SPDR and SPDR S&P Oil & Gas E&P ETF are rated strong buys, with valuations reflecting long-term oil prices near $67.50/bbl—well below current spot prices. Year-to-date, XLE and XOP have shown their weakest correlation to oil prices since 2007, decoupling from short-term geopolitical headline risk and speculative futures positioning. Recent trading history demonstrates energy stocks are not simply proxies for oil; they have not fully priced in oil's rally and have shown resilience during oil's sharp declines.
Global diesel supply will remain tight due to a lack of spare refining capacity, Russia's ban on exports and the approach of peak winter demand, senior industry executives said on Tuesday.
European gasoline refinery profit margins passed $62 a barrel on Wednesday, according to trade data reviewed by Reuters, driven higher as conflicts in the Middle East and Ukraine tighten fuel supplies globally.
The State Street Energy Select Sector SPDR ETF (XLE) gained 7.4% in August, according to State Street. That was the best performance among the 11 Select Sector SPDR funds that track the S&P 500.