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Oil & Energy ETFs on 52-Week High on Venezuela Tension

Is (TDS) Outperforming Other Utilities Stocks This Year?

By now, the year 2018 can easily be attributed to the oil ascent. Tailwinds one-after-another are favoring the liquid commodity. Among the many tailwinds, concerns over Venezuela production have given a boost to oil. Brent crude spiked to about $80 per barrel lately for the first time since 2014.

Venezuela, which has the world's largest proven oil reserves, has been registering a decline in crude production in recent years. IEA warned that Venezuela’s situation is worse enough to send the oil market into deficit (read: Why to Consider Leveraged Oil ETFs Now).

The Trump administration imposed new sanctions on Monday on Venezuela as part of international condemnation against Venezuela’s socialist president Nicolas Maduro. The sanctions would keep United States companies or citizens from buying debt or accounts receivable from the Venezuelan government. The sanctions were implied for Petróleos de Venezuela too, which is that country’s government-owned oil company.

Election uncertainty has been a concern for the country. Venezuelan President Nicolas Maduro was re-elected for another six-year term on Sunday but the population refused to accept the election results. The vote took place amid “low voter turnout, allegations of vote-rigging and an opposition boycott.” The United States is now actively planning oil sanctions on Venezuela.

Added to this, President Donald Trump’s declaration of putting an end to the Iran nuclear deal and imposing sanctions raised fears of a further supply crunch and favored global oil prices. The United States recently asked Iran to discard its nuclear program and stay out of the Syrian civil war. Mitsubishi Corp’s oil risk manager in Tokyo, Tony Nunan, projected that Iran sanctions could lower Iranian oil exports by 200,000 barrels-per-day by the fourth quarter (read: 3 Country ETFs May Suffer as Oil Springs Higher).

Among the other favorable factors were chances of an extension in the Saudi-led OPEC output cut deal and geopolitical tensions as well as news of a drop in U.S. oil inventory. The Energy Information Administration reported a draw of 1.4 million barrels for the week to May 11.

Energy ETFs That Are at 52-Week High

Below we mention a few oil and energy ETFs that recently reached a 52-week high on oil strength.           

Direxion S&P Oil & Gas Expl Bull 3X GUSH – Up 121.7% in One Year

The Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 3x Shares gives 300% of the performance of the S&P Oil & Gas Exploration & Production Select Industry Index (read: 5 Leveraged ETFs That Soared More Than 20% in April).

VelocityShares 3x Long Crude Oil ETN UWT– Up 56.2% in One Year

The ETN is designed for investors who seek leveraged long exposure to the daily performance of the S&P GSCI Crude Oil Index ER.      

ProShares Ultra Oil & Gas DIG – Up 33.9% in One Year

The fund offers twice (200%) the daily performance of the Dow Jones U.S. Oil & Gas Index.

PowerShares Dynamic Energy Exploration & Production Portfolio PXEUp 31.9% in One Year

The underlying Dynamic Energy Exploration & Production Intellidex Index is composed of stocks of 30 U.S. companies involved in the exploration and production of natural resources used to produce energy.

S&P Oil & Gas Exploration & Production SPDR XOP – Up 25.5% in One Year

The fund looks to track the S&P Oil & Gas Exploration & Production Select Industry Index. No stock accounts for more than 2.81% of the 69-stock portfolio.

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SPDR-SP O&G EXP (XOP): ETF Research Reports
PWRSH-DYN ENRG (PXE): ETF Research Reports
DIRX-D SP OG BL (GUSH): ETF Research Reports
PRO-ULT OIL&GAS (DIG): ETF Research Reports
VS-3X LG CR OIL (UWT): ETF Research Reports
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Zacks Investment Research
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