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Energy ETF & Stock Winners of Last Week

Sweta Killa

Oil price surged last week on rising U.S.-Iranian tensions and hopes of rate cuts, which may stimulate global demand. Notably, Brent rose about 5% last week - its first weekly gain in five weeks - while crude jumped about 10% - its biggest weekly percentage gain since December 2016.

Tensions in the Middle East escalated after Iran shot down a U.S. drone over the vital oil shipping lane, the Strait of Hormuz. This can disrupt supplies from the Middle East, which provides more than a fifth of the world’s oil output. The tanker attacks in the Gulf of Oman, which feeds into the Strait of Hormuz,  earlier this month also threatened oil supply (read: Iran Downs U.S. Drone: Sector ETFs & Stocks to Gain).

Overall, supply conditions remained tight, given declines in Venezuela, Iran, potentially Libya and temporary outages in Russia. The Organization of the Petroleum Exporting Countries (OPEC) production also fell to its lowest level in five years. The OPEC and some non-OPEC producers including Russia have been withholding oil supply since the start of the year to tackle global supply glut and rebalance the oil market. They are set to discuss whether to extend oil supply cuts beyond June later this month or early next month.

However, the ongoing trade worries coupled with bouts of weak data across the globe and an inverted yield curve, which suggests a recession, make the oil outlook gloomy. This is because factory activity contracted in the United States, Europe and Asia last month due to deepening trade dispute between Washington and Beijing, which will weigh on demand. The International Energy Agency (IEA) recently reduced oil demand forecast by 100,000 barrels per day to 1.2 million barrels per day for this year.

The OPEC last week also reduced its forecast for global oil demand growth and warned of further potential cuts amid fears of U.S.-China trade dispute and an economic slowdown. The cartel expects world oil demand to rise 1.14 million barrels per day this year, 70,000 barrels per day less than previously expected.

Give the spike in oil price, the energy sector enjoyed a strong surge last week. As such, we have highlighted the five top-performing energy ETFs and stocks of last week that are poised to perform well, should oil price rise.

Best ETFs

SPDR S&P Oil & Gas Equipment & Services ETF XES

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 (read: Energy ETFs Jump on Tanker Attacks: What Lies in Store?).

Zacks Rank: #5 (Strong Sell)
AUM: $186 million
Expense Ratio: 0.35%
Last Week Return: 10.9%

VanEck Vectors Oil Services ETF OIH

This fund tracks the MVIS U.S. Listed Oil Services 25 Index, which offers exposure to the companies involved in oil services to the upstream oil sector, including oil equipment, oil services or oil drilling.

Zacks Rank: #5
AUM: $779.9 million
Expense Ratio: 0.35%
Last Week Return: 9.8%

Invesco S&P SmallCap Energy ETF PSCE

This fund offers exposure to the small-cap segment of the energy sector by tracking the S&P Small Cap 600 Capped Energy Index.

Zacks Rank: #5
AUM: $23.1 million
Expense Ratio: 0.29%
Last Week Return: 9.3%

Invesco Dynamic Oil & Gas Services ETF PXJ

This product follows the Dynamic Oil Services Intellidex Index, which thoroughly evaluates companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value.

Zacks Rank: #5
AUM: $15.3 million
Expense Ratio: 0.63%
Last Week Return: 9.3%

iShares U.S. Oil Equipment & Services ETF IEZ

This ETF offers exposure to U.S. companies that provide equipment and services for oil exploration and extraction by tracking the Dow Jones U.S. Select Oil Equipment & Services Index (see: all the Energy ETFs here).

Zacks Rank: #5
AUM: $126.5 million
Expense Ratio: 0.43%
Last Week Return: 8.9%

Best Stocks

Approach Resources Inc. AREX

This independent energy company is engaged in the exploration, development, exploitation, production and acquisition of unconventional natural gas and oil properties onshore in the United States and Western Canada. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Rank: #2 (Buy)
VGM Score: F
Market Cap: $31.6 million
Last Week Return: 48%

Roan Resources Inc. ROAN

This oil and natural gas company is focused on the development, exploration and acquisition of unconventional oil and natural gas reserves in the Merge, SCOOP and STACK plays of the Anadarko Basin in Oklahoma.

Zacks Rank: #3
VGM Score: A
Market Cap: $254.7 million
Last Week Return: 44%

NCS Multistage Holdings Inc. NCSM

This company provides engineered products and support services for oil and natural gas well completions and field development strategies internationally, primarily the United States.

Zacks Rank: #3
VGM Score: D
Market Cap: $181.5 million
Last Week Return: 38.9%

Lonestar Resources US Inc. LONE

This oil and gas company is involved in exploration, production and acquisition of unconventional oil and gas reserves (read: ETFs & Stocks From Top-Ranked Sector to Buy).

Zacks Rank: #3
VGM Score: D
Market Cap: $68.6 million
Last Week Return: 29.7%

Chaparral Energy Inc. CHAP

This oil and natural gas exploration and production company is focused on deposits of Stack, Meramec and Osage, Oswego, and Woodford located in Oklahoma and the Texas Panhandle.

Zacks Rank: #3
VGM Score: D
Market Cap: $178.4 million
Last Week Return: 25.9%

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