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In seeking to track the performance of the S&P Oil & Gas Exploration & Production Select Industry Index, the fund employs a sampling strategy. It generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index. The index represents the oil and gas exploration and production segment of the S&P Total Market Index (S&P TMI).

Apa Corp.

Matador Resources Co

Exxon Mobil Corp.

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Civitas Solutions Inc

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Hess Corp.

Valero Energy Corp.

Phillips 66

Chord Energy Corp.

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EE.UU. implementa sanciones sin precedentes contra la industria petrolera rusa, impactando exportaciones y elevando los precios del petróleo.

EE.UU. impone sanciones históricas al petróleo ruso: precios suben un 3%

Trump's first day in office brought a wave of executive orders targeting immigration, energy, social policies, and announcing the withdrawal from global agreements like the Paris Climate Accord and <a href="https://www.benzinga.com/topic/donald-trump">the World Health Organization. </a>
Trump also pledged to raise tariffs up to 25% on both Canada and Mexico starting Feb. 1, but fell short of announcing universal tariffs on all imports.
Following Monday&#8217;s market closure for Martin Luther King Jr. Day, investors began assessing how Trump's new policy measures could impact sectors across the board. 
Gold miners and defense stocks outperformed, while solar energy companies were among the hardest hit.
<h3 class="wp-block-heading">Wall Street&#8217;s Winners And Losers After Trump&#8217;s Day 1</h3>
Gold miners were among the standout performers, amid rising trade fears between the U.S. and Canada. 
The VanEck Gold Miners ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GDX#NYSE">GDX</a>) climbed 2.6% by 1:30 p.m. ET Tuesday. Leading gains were Harmony Gold Mining Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HMY#NYSE">HMY</a>), up 4.3% and Endeavour Silver Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EXK#NYSE">EXK</a>), up 3.1%.
&#8220;While President Trump's Inauguration Day policy announcements on tariffs were more benign than expected, we continue to expect the White House to increase tariff rates on autos and imports from China, and we see other tariff proposals as a risk,&#8221; Goldman Sach&#8217;s analyst Elsie Peng wrote in a note Tuesday.
Defense stocks also surged as Trump's policies emphasized national security and border protection declaring a &#8220;national emergency&#8221; at the southern border with Mexico. The iShares U.S. Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITA#NYSE">ITA</a>) rose 3.3%.
Other notable movers included the U.S. Global Jets ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JETS#NYSE">JETS</a>), up 2%, and the SPDR S&amp;P Metals &amp; Mining ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XME#NYSE">XME</a>), which rose 1.6% as investors bet on increased demand for industrial materials.
Oil and gas exploration companies saw declines despite <a href="https://www.benzinga.com/government/regulations/25/01/43097430/trumps-drill-baby-drill-era-begins-oil-prices-tumble-us-energy-stocks-edge-up">Trump's "Drill, Baby, Drill"</a> push to unleash U.S. energy resources. The SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) dropped 1.1%, signaling concerns about potential oversupply.
Clean energy and solar stocks, however, suffered from Trump's decision to halt offshore wind leasing and withdraw the U.S. from the Paris Climate Accord. 
The Invesco Solar ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TAN#NYSE">TAN</a>) fell 3.1%, with losses from Daqo New Energy Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DQ#NYSE">DQ</a>), down 6.7%, and First Solar Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FSLR#NASDAQ">FSLR</a>), which dropped 5.4%. The Invesco WilderHill Clean Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PBW#NYSE">PBW</a>) slipped 1%.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/25/01/43103527/mexican-peso-canadian-dollar-slide-as-trump-threatens-25-tariffs-expert-eyes-price-hikes-on-typical-us-breakfast">Mexican Peso, Canadian Dollar Slide As Trump Threatens 25% Tariffs, Economist Eyes Price Hikes On &#8216;Typical US Breakfast&#8217;</a></li>
</ul>
Photo: Shutterstock

Government

Large Cap

Mid Cap

Regulations

Econ #s

FSLR

Market Vectors ETF Trust Market Vectors Gold Miners

iShares Dow Jones US Aerospace & Defense Index Fund

JETS

PowerShares Exchange Traded Fund Trust WilderHill Clean Energy Portfolio

Trump's First Day Sends Gold Miners, Defense Stocks Soaring, Solar Sliding

Donald Trump wasted no time in his return to the White House, signing a flurry of executive orders, and, most notably, declaring <a href="https://www.benzinga.com/government/regulations/25/01/43086509/trump-unleashes-executive-orders-on-border-security-oil-drilling-domestic-manufacturing-in-first-acts-as-president">a national energy emergency. </a>
During his inauguration speech on Monday, he reaffirmed his commitment to fossil fuels, pledging to &#8220;drill, baby, drill&#8221; and revoke the electric vehicle mandate. 
&#8220;The inflation crisis was caused by massive overspending and escalating energy prices. And that is why today I will also declare a national energy emergency. We will drill, baby, drill,&#8221; Trump said. 
Trump also announced his intent to withdraw the U.S. from the Paris Climate Accord, calling wind turbines "ugly" and reiterating his policy against renewable energy expansion. His focus is clear: expand drilling, restore the Strategic Petroleum Reserve and flood global markets with U.S. oil and gas.
Oil markets are already reacting, but will this push for American energy dominance send crude prices soaring or lead to an oversupply crisis?
<h3 class="wp-block-heading">What Happens To Oil Prices?</h3>
The immediate impact of Trump's pro-drilling stance on oil markets has been strong, with traders already reassessing their outlooks on crude prices. 
The U.S. benchmark West Texas Intermediate crude – as tracked by the United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) – tumbled by 2.6% during morning trading on Tuesday, heading for a third straight session of losses. 
"Mr. Trump's full-throated yell for U.S. producers to: ‘Drill, baby, drill!' is not new. And it's perfectly logical that prices should fall at the prospect of increased supply. But producers are highly price-sensitive, and there comes a time/price where it's uneconomical to raise production," commented David Morrison, senior market analyst at Trade Nation.
&#8220;Day 1 executive orders in these areas are expected to be followed by further action in the coming days and weeks, with Trump set to test the limits of presidential authority to pursue an agenda that aims to unravel Biden's energy and climate policies,&#8221; wrote Energy Intelligence in a note Tuesday. 
David Goldman, head of trading at Novion said Trump's policy shift "is unlikely to have any significant impact in the short term but may have bearish repercussions in the long term."
Goldman highlighted that a sharp increase in U.S. production, particularly if global demand slows due to the ongoing transition to renewable energy, could weigh on prices. "Increased production without sufficient export infrastructure risks bottlenecks, while protectionist trade measures could stifle international cooperation and reduce market efficiency."
<h3 class="wp-block-heading">Energy Stocks See A Small Lift</h3>
Oil and gas stocks saw modest gains in premarket trading Tuesday as investors weighed the potential for increased drilling activity. 
The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>), which tracks major oil companies, was up 0.1% during premarket trading, while the SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) saw similar gains.
Among individual stocks:
<ul>
<li>Halliburton Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HAL#NYSE">HAL</a>) rose 1.67% </li>
<li>Texas Pacific Land Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TPL#NYSE">TPL</a>) gained 1.04%</li>
<li>Schlumberger Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLB#NYSE">SLB</a>) climbed 1.04% to $44.03</li>
<li>Kinder Morgan Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KMI#NYSE">KMI</a>) increased 0.96% to $30.60</li>
<li>Baker Hughes Co. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BKR#NASDAQ">BKR</a>) moved 0.90% higher to $46.96</li>
</ul>
Smaller energy players saw sharper moves, with Gulfport Energy Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GPOR#NYSE">GPOR</a>) surging 9.13% to $213.25 and Sable Offshore Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SOC#NYSE">SOC</a>) jumping 5.20% to $25.77.
Read now: 
<ul>
<li><a href="https://www.benzinga.com/markets/futures/25/01/43093520/us-stocks-set-to-open-on-a-positive-note-as-trumps-second-white-house-term-kicks-off-tesla-apple-netflix-among-stocks-in-focus">US Stocks Set To Open On A Positive Note As Trump&#8217;s Second White House Term Kicks Off: Tesla, Apple, Netflix Among Stocks In Focus</a></li>
</ul>
Photo Shutterstock

Economics

GPOR

Trump's 'Drill, Baby, Drill' Era Begins: Oil Prices Tumble, US Energy Stocks Edge Up

Oil prices are heating up, and so are the stocks of <a href="https://www.benzinga.com/topic/energy">major energy companies</a>. 
Shares of Chevron Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>), Occidental Petroleum (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OXY#NYSE">OXY</a>), and ConocoPhillips (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COP#NYSE">COP</a>) were trading in the green at the last check on Friday. The rally follows a Reuters report suggesting the U.S. is preparing its most <a href="https://www.benzinga.com/etfs/sector-etfs/25/01/42919047/oil-nears-80-as-us-prepares-new-russia-sanctions">stringent sanctions yet</a> against Russian oil.
These sanctions, expected to target 180 vessels, major <a href="https://www.benzinga.com/topic/oil?_gl=1&#x2A;1aeuuae&#x2A;_gcl_au&#x2A;MTQ3Nzg4MTMxMi4xNzM1NTczMTA3&#x2A;_ga&#x2A;R1MxLjEuMTczNjUyMjc2NC4xLjEuMTczNjUyMjg4Ni4wLjAuMA..&#x2A;_ga_V7ZK73W7N0&#x2A;MTczNjUyMDk1NC40Ni4xLjE3MzY1MjY3NDYuMC4wLjA.">oil </a>companies, and top executives, have already pushed oil prices to $80 per barrel — a level not seen since October 2024. 
Traders are responding to the anticipated disruption in global oil supply, and some ETFs with oil and energy exposure stand to reap the benefits.
<h3 class="wp-block-heading">What This Means For ETFs</h3>
<ul>
<li>The United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) was trading 3.73% higher as of 12.13 P.M. EST</li>
<li>The Invesco DB Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBO#NYSE">DBO</a>) rose about 3.84%. </li>
<li>The United States 12 Month Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USL#NYSE">USL</a>) posted a 2.21% gain.</li>
<li>The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>), with an expense ratio of 0.09% and a 91.26% exposure to the Oil, Gas &amp; Consumable Fuels make it a good bet for investors of oil-focused ETFs. The portfolio includes Exxon Mobil, Chevron and ConocoPhillips.</li>
<li>Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) has an expense ratio of 0.10% and like XOP, Exxon Mobil, Chevron and ConocoPhillips enjoys significant weightage in the fund.</li>
</ul>
<h3 class="wp-block-heading">Geopolitics and Market Dynamics</h3>
Sanctions on Russia — one of the world's largest oil producers — are expected to tighten supply. Prices are expected to go higher. Ongoing reduction in U.S. crude stockpiles, particularly at the Cushing, Oklahoma hub, as reported by Reuters, adds to the pressure.
While tighter supplies drive prices upward, concerns about demand persist. China&#8217;s fuel oil imports are likely to fall early 2025 thanks to a hike in oil import tax from Jan. 1. 
Weaker demand from China, one of the biggest crude oil importers, could weigh on prices in the longer term. 
See Next: 
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/12/42340255/opec-extends-oil-output-cuts-to-late-2026-what-it-means-for-markets">OPEC+ Extends Oil Output Cuts To Late 2026: What It Means For Markets</a></li>
</ul>
Photo: Shutterstock

Oil Stocks Rally On Anticipation Of Stricter Russian Sanctions: Here's How ETFs Are Reacting

The United States announced the toughest sanctions yet on <a href="https://www.benzinga.com/topic/oil">Russia's oil industry</a> on Friday.
What To Know: The news pushed global oil prices up by 3%, nearing $80 per barrel. The sanctions are part of Washington&#8217;s ongoing measures to penalize Russia for its invasion of Ukraine, aiming to disrupt oil exports to major buyers like India and China.
The measures include the blacklisting of 183 vessels involved in Russian energy exports, which could significantly disrupt the flow of oil. Previously, a Financial Times <a href="https://www.ft.com/content/7c0981bb-9b7a-4737-8f3f-65325a1d768a">analysis </a>showed that the 54 tankers sanctioned by the U.S. were forced to carry dramatically less oil due to heightened risks, hinting at potentially larger ramifications this time.
Read Also: <a href="https://www.benzinga.com/economics/macro-economic-events/25/01/42913622/dollar-soars-to-27-month-highs-30-year-yields-hit-5-stocks-tumble-jobs-report-oil-spike-darken-feds-interest-rate-cut-hopes">Dollar Soars To 27-Month Highs, 30-Year Yields Hit 5%, Stocks Tumble As Jobs Report, Oil Spike Darken Fed&#8217;s Interest Rate Cut Hopes</a>
Key targets include Russian oil giants Gazprom Neft and Surgutneftegaz, along with insurers Ingosstrakh and Alfastrakhovanie, which cover a significant portion of Russian oil shipments, Reuters reports. This move could intensify challenges for Russia, which has shifted oil exports to Asia since Western sanctions in 2022 curtailed its European markets.
The U.S. Treasury noted that the UK would coordinate and apply sanctions on Gazprom Neft and Surgutneftegaz alongside Washington, FT reports.
The sanctions also target active Russian liquefied natural gas (LNG) facilities and foreign organizations that support Russia's oil exports, further expanding the scope of penalties.
The sanctions, issued just days before President-elect Donald Trump takes office, create a challenge for his administration. Trump, who campaigned on quickly ending the war between Russia and Ukraine, has expressed skepticism about imposing additional sanctions, FT reports.
In September, he stated, &#8220;I want to use sanctions as little as possible.&#8221; Reversing these measures could put him at odds with Congress, where Republican members had been urging President Joe Biden to crack down on Russian energy revenues.
What Else: To adapt, Russia has relied on its fleet of tankers and domestic insurance providers. However, Indian refiners indicated they would avoid tankers or insurers under U.S. sanctions.
Per the Reuters report, India refining sources suggest Russia may further discount crude prices to below $60 to align with Western price caps and retain market access.
Read Also: <a href="https://www.benzinga.com/economics/macro-economic-events/25/01/42912480/us-economy-adds-256000-payrolls-in-december-as-tight-labor-market-tops-forecasts-dollar-treasury-yields-spike">US Economy Adds 256,000 Payrolls In December, Tight Labor Market Tops Forecasts: Dollar, Treasury Yields Spike</a>
Price Action From Key Oil ETFs:
<ul>
<li>Shares of United States Oil Fund (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/USO#NASDAQ">USO</a>) are up 4.8% to $80.99.</li>
<li>Shares of Energy Select Sector SPDR Fund (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NASDAQ">XLE</a>) are up 1.2% to $89.08.</li>
<li>Shares of SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NASDAQ">XOP</a>) are up 2% to $140.40.</li>
</ul>
Image created using photos from Shutterstock.

Oil Surges As US Unleashes Toughest Sanctions On Russia's Energy Sector

At least one aspect of Israel&#8217;s multifront war is expected to come to an end if the militant group Hamas comes to ceasefire terms <a href="https://www.benzinga.com/news/global">with Israel</a>.
What Happened: So far, Hamas has yielded at least two of Israel's demands for a cease-fire agreement in Gaza, according to a Thursday <a href="https://www.wsj.com/world/middle-east/israel-gaza-palestine-ceasefire-hostage-negotiations-d599e1d1">Wall Street Journal</a> report. 
The development comes after previous negotiations collapsed. And, just three months ago, certain <a href="https://www.benzinga.com/news/24/09/40955425/top-us-officials-skeptical-of-israel-hamas-cease-fire-and-hostage-deal-before-bidens-term-ends-repor">senior U.S. officials were skeptical</a> that a hostage-release deal would occur before the end of President Joe Biden‘s term.
The scenario has changed drastically. 
U.S. National Security Adviser Jake Sullivan spoke to the press in Tel Aviv Thursday after meeting with Prime Minister Benjamin Netanyahu in Israel.
&#8220;Hamas started this war,&#8221; Sullivan said, optimistic that a ceasefire and hostage release &#8220;can happen.&#8221;
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Sullivan said he is set to visit Doha, Qatar and Cairo to close a deal &#8220;this month.&#8221; 
Hamas is reportedly willing to allow Israeli forces to stay in Gaza temporarily when the fighting stops, the WSJ reported. A list of hostages, including U.S. citizens, is expected to be released as part of a ceasefire pact.
Whether the ceasefire would last or be fully enforced remains to be seen.
Israel and Hezbollah were expected to <a href="https://www.benzinga.com/news/global/24/11/42199447/netanyahu-backs-cease-fire-deal-with-hezbollah-israeli-hardliner-calls-for-security-zone-inside-lebanon">pause fighting in Lebanon</a> last month, but <a href="https://www.benzinga.com/news/global/24/12/42279102/israel-hezbollah-trade-strikes-in-latest-sign-of-crumbling-ceasefire">attacks continued into December</a>. At least five people were killed in Israeli attacks on southern Lebanon in the last 24 hours, per <a href="https://www.aljazeera.com/news/2024/12/11/israeli-strikes-kill-five-in-southern-lebanon-amid-shaky-ceasefire">Al Jazeera</a>, citing the country's Health Ministry.
Hezbollah began firing rockets toward Israel after Hamas attacked <a href="https://www.benzinga.com/news/23/10/35136071/israel-under-siege-unprecedented-hamas-attack-sparks-intense-clashes-netanyahu-says-we-are-at-war">Israel on Oct. 7, 2023</a>.
Why It Matters: The ceasefire agreement would come as the balance of power in the Middle East changes.
This week, Israel seized the buffer zone as Bashar al-Assad&#8216;s rule in Syria collapsed. Al-Assad and his family were subsequently <a href="https://www.benzinga.com/24/12/42381587/bashar-al-assad-and-his-family-granted-asylum-by-russia-kremlin-source-says-always-spoken-in-favor-of-political-settlement">granted asylum by Russia</a>.
Assad&#8217;s regime was considered a lifeline to Hezbollah.
Traders can gain exposure to oil stocks that are affected by Middle East geopolitcal news via ETFs, or exchange-traded funds. According to <a href="https://pro.benzinga.com">Benzinga Pro</a>:
<ul>
<li>ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) is up 0.27% Thursday. </li>
<li>United States Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) dropped 0.16%.</li>
<li>SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) decreased by 0.79%.</li>
<li>MicroSectorsTM Oil &amp; Gas Exploration &amp; Production 3X Leveraged ETNs (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OILU#NYSE">OILU</a>) saw a 2.39% drop.</li>
</ul>
Israeli stocks, as monitored through the VanEck Israel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ISRA#NYSE">ISRA</a>), are up 25.34% year-to-date.
Now Read:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/12/42468190/defense-stocks-face-headwinds-as-trumps-doge-targets-spending-cuts-goldman-sachs-downgrades-general-dynamics-to-sell">Defense Stocks Face Headwinds As Trump&#8217;s DOGE Targets Spending Cuts: Goldman Sachs Downgrades General Dynamics</a></li>
</ul>
Image: Shutterstock

Markets

ISRA

OILU

Hamas Relents On Israeli Troops In Gaza, Paves Way For Potential Hostage Release

Editor&#8217;s note: This story was updated to add missing detail in the introduction and further updated to reflect approval of a cease-fire deal by Israel&#8217;s cabinet and U.S. President Joe Biden&#8217;s Tuesday afternoon announcement. Stock price action in the story has been updated and exchange and ticker info for the ISRA ETF has been corrected as well. 
The governments of Israel and Lebanon have accepted a cease-fire deal, President Joe Biden said Tuesday. 
&#8220;Today I have some good news to report from the Middle East,&#8221; Biden said, adding that he spoke with the prime ministers of Israel and Lebanon. 
&#8220;I am pleased to announce that their governments have accepted the U.S. proposal to end the devastating conflict between Israel and Hezbollah,&#8221; said Biden, who made the remarks in the White House Rose Garden. 
The cease-fire is set to take effect at 4 a.m. Wednesday, Biden said.
Hezbollah has not immediately commented on the deal announcement, the New York Times reported. Lebanon&#8217;s government does not control the Hezbollah militant group. 
The deal calls for a 60-day truce, The New York Times reported, and would be overseen by the U.S., United Nations and others. Israel would withdraw forces from Lebanon and Hezbollah would move fighters to north of the Litani River.
Strikes between Israel and Hezbollah have continued during the cease-fire negotiations.
What Happened: The short-term proposal is to pause hostilities for 60 days but with the intention of a lasting truce, according to <a href="https://www.cnn.com/world/live-news/israel-hezbollah-ceasefire-deal-gaza-war-11-26-24-intl-hnk/index.html">CNN</a>, which cited an Israeli official. 
Israeli Prime Minister Benjamin Netanyahu offered three reasons for the cease fire, one being to shift focus to Iran, replenish Israeli troops and put greater pressure on Hamas to release the hostages that were captured <a href="https://www.benzinga.com/news/23/10/35136071/israel-under-siege-unprecedented-hamas-attack-sparks-intense-clashes-netanyahu-says-we-are-at-war">on Oct. 7, 2023</a>.
See Also: <a href="https://www.benzinga.com/24/11/42198266/crude-oil-moves-lower-dicks-sporting-goods-earnings-top-views">Crude Oil Moves Lower; Dick&#8217;s Sporting Goods Earnings Top Views</a>
Why It Matters: Not everyone is so confident the cease-fire will work.
Per the <a href="https://www.nytimes.com/live/2024/11/26/world/israel-hezbollah-lebanon-cease-fire">New York Times</a>, Israel&#8217;s national security minister Itamar Ben-Gvir stressed the need for a "security zone" inside Lebanon to defend against Hezbollah. Otherwise, the two countries risk another war in the future, he said. 
Ben-Gvir did not indicate that a cease-fire decision would cause him to leave Netanyahu's coalition.
<h3 class="wp-block-heading">Market Reactions</h3>
Oil prices were trading down Tuesday, with the United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) 0.65% lower at last check. 
Israeli stocks, as monitored through the VanEck Israel ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ISRA#NYSE">ISRA</a>) are up 23.5% year-to-date.
Other oil ETFs were in the red at last check Tuesday afternoon.
ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) fell by 0.93%, SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) was down 0.75% ahead of the closing bell and MicroSectorsTM Oil &amp; Gas Exploration &amp; Production 3X Leveraged ETNs (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OILU#NYSE">OILU</a>) saw a 0.45% drop, according to <a href="https://pro.benzinga.com">Benzinga Pro</a>.
Now Read:
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<li><a href="https://www.benzinga.com/24/11/42198583/will-trump-lead-us-into-trade-war-with-mexico-president-claudia-sheinbaum-rebukes-threats">Will Trump Lead US Into Trade War With Mexico? President Claudia Sheinbaum Rebukes Threats</a></li>
</ul>
Image: Shutterstock.

Politics

Ceasefire Deal Between Israel, Hezbollah Takes Effect Wednesday: Biden

Amid&nbsp;Donald Trump&#8216;s recent pledge to boost U.S. oil production significantly, questions arise about the necessity and impact of such a move.&nbsp;Vikas Dwivedi, a global energy strategist at&nbsp;Macquarie Group, has expressed skepticism regarding the need for an additional 3 million barrels per day.
What Happened: Dwivedi discussed the potential impact of Trump&#8217;s second term on the U.S. oil supply. Talking to&nbsp;<a href="https://www.cnbc.com/video/2024/11/25/us-oil-supply-increases-will-be-marginal-with-trump-2point0-macquarie.html">CNBC</a> &#8220;Squawk Box&#8221;&nbsp;on Monday, he said that anticipates only marginal increases in supply, despite Trump&#8217;s <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/11/42130859/as-trump-backs-drill-baby-drill-his-doge-co-lead-elon-musk-believes-all-energy-generation-will-be-solar-heres-what-ubs-recommends-after-election-dip">&#8220;Drill Baby Drill&#8221; stance.</a>
&#8220;We actually think there will be marginal supply increases from the U.S. The risks to supply will eventually be marginal but in the beginning of the administration, we think, the moves that they will make will increase supply risks,&#8221; Dwivedi said, adding the risks arising particularly through attempts to limit Iranian oil exports. He noted that the Ships Act aims to eliminate entities facilitating Iranian crude sales, but this could inadvertently reduce global oil supply.
Addressing Trump&#8217;s ambitious energy policy, Dwivedi questioned the necessity of increasing U.S. oil production.
&#8220;The real challenge is: does the world need that much oil? And if the U.S. did grow 3 million barrels a day during the Trump Administration, that&#8217;s like 750,000 a day over four years,&#8221; he explained
&#8220;I think the right question to ask energy executives is are you okay with $40 oil because I think that&#8217;s what you would end up with and are you okay with trying to figure out how to maintain production and um you know still be able to do the dividends and the share buybacks that are now not as discretionary as they used to be.&#8221;
Furthermore, Dwivedi highlighted the geopolitical risks associated with a rapid U.S. withdrawal of support for Ukraine. He warned that if Ukraine feels cornered, it might target Russian oil infrastructure, which could further impact the global oil supply.
See Also:&nbsp;<a href="https://www.benzinga.com/markets/equities/24/11/42153356/is-warren-buffett-preparing-for-a-market-downturn-with-berkshire-hathaways-325b-cash-pile-analyst-says-internet-bubble-and-2008-crash-may-have-lessons?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Is Warren Buffett Preparing For A Market Downturn With Berkshire Hathaway&#8217;s $325B Cash Pile? Analyst Says</a>
Why It Matters: Trump&#8217;s energy strategy, which includes faster permitting and weaker environmental regulations, aims to cut American energy costs significantly. However, experts have warned that these<a href="https://www.benzinga.com/news/24/09/40703958/trumps-drill-baby-drill-pledge-may-not-deliver-promised-energy-price-cuts-experts-warn"> promises may not materialize</a> due to the complexities of global and regional energy markets. Many oil drillers remain cautious about increasing production, opting instead to return cash to shareholders. This hesitancy is compounded by factors like weather patterns and global conflicts, which are not easily influenced by policy changes.
Meanwhile, Elon Musk, who has been announced to head the new Department of Government Efficiency (DOGE), continues to <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/11/42130859/as-trump-backs-drill-baby-drill-his-doge-co-lead-elon-musk-believes-all-energy-generation-will-be-solar-heres-what-ubs-recommends-after-election-dip">advocate for solar power</a> as the future of energy generation, presenting a different vision from Trump&#8217;s fossil fuel-focused approach. Analysts also see an opportunity for investment in renewables, highlighting the sector&#8217;s potential for growth even amid political shifts.
Price Action: As per <a href="https://pro.benzinga.com">Benzinga Pro</a>, oil ETFs have seen slight gains in the past one month surrounding the presidential elections. As of Monday, ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) increased 3.51%, SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) increased by 10.78%, while MicroSectorsTM Oil &amp; Gas Exploration &amp; Production 3X Leveraged ETNs (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OILU#NYSE">OILU</a>) increased by 20.99%.
Read Next:&nbsp;
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<li><a href="https://www.benzinga.com/markets/24/11/42152947/satellite-images-reveal-north-korea-reportedly-receiving-illicit-oil-from-russia?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Satellite Images Reveal North Korea Reportedly Receiving Illicit Oil from Russia</a></li>
</ul>
Image via Shutterstock

General

Amid Trump's 'Drill Baby, Drill' Pledge, Strategist Predicts US Oil Supply Will See 'Marginal' Increase: 'Does The World Need That Much Oil?'

This year&#8217;s <a href="https://www.benzinga.com/markets/esg/24/05/39012013/noaa-meteorologists-predict-aggressive-hurricane-season-what-it-means-for-home-depot-generac-other-s">hurricane season </a>is a deadly one for the eastern and Gulf Coast of the U.S. Several companies and ETFs could be affected by another tropical storm nearing the Gulf Coast.
The Storm: Tropical Storm Rafael, the 17th named storm of the 2024 season, formed in the Caribbean, <a href="https://www.nbcnews.com/weather/hurricanes/tropical-storm-rafael-forms-expected-hurricane-rcna178632">according</a> to NBC.
The storm passed by Jamaica on Tuesday. It is expected to strengthen into a hurricane on Tuesday near the Cayman Islands and pass over Western Cuba. From there, it will likely weaken into a tropical storm before making landfall near New Orleans. The path may change drastically before impacting the U.S.
The heaviest rain of up to 10 inches is expected in Jamaica.
Market Impacts: With a projected path in the Gulf of Mexico, Rafael could disrupt offshore oil and gas production, which could impact companies operating there.
Potentially affected stocks include major energy companies like Exxon Mobil Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>), Chevron Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>), and Occidental Petroleum Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OXY#NYSE">OXY</a>), and ETFs like SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) and Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>).
Storms in the Gulf of Mexico can also disrupt refining operations, which could impact refiners such as Marathon Petroleum Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MPC#NYSE">MPC</a>), Phillips 66 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PSX#NYSE">PSX</a>) and Valero Energy Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VLO#NYSE">VLO</a>).
Construction companies like Vulcan Materials Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VMC#NYSE">VMC</a>) and Martin Marietta Materials Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MLM#NYSE">MLM</a>) might benefit from increased demand for repairs and rebuilding.
Recent extreme weather activity is linked to climate change. Hurricanes, which will become even more frequent over time, may encourage homeowners to purchase home generators. Generac Holdings Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GNRC#NYSE">GNRC</a>) is the largest producer of home generators in the U.S.
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/11/41746843/bond-market-fear-gauge-soars-to-1-year-high-ahead-of-us-election-results-bond-vigil">Bond Market Fear Gauge Soars To 1-Year High Ahead Of US Election Results: &#8216;Bond Vigilantes Have Been Voting Early&#8217;</a></li>
</ul>
Photo: Tropical Storm Rafael, 11.5.2024. Courtesy NOAA/Public Domain

Equities

GNRC

Tropical Storm Rafael Could Make US Landfall: 11 Stocks, ETFs To Watch

Oil prices kicked off the week with a notable rally, driven by OPEC+'s decision to postpone an anticipated production increase ahead of the <a href="https://www.benzinga.com/topic/2024-election">imminent U.S. presidential elections. </a>
The oil cartel and its allies, including Russia, opted to delay plans to ramp up output by another month, citing ongoing market weakness and sluggish demand.
On Monday, West Texas Intermediate (WTI) crude — as closely tracked by the United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) — surged as much as 3% to hit $71.50 per barrel, its highest since Oct. 25, while Brent crude rose 2.7% to reach $75 per barrel.
See Also: <a href="https://www.benzinga.com/news/earnings/24/11/41709016/us-stocks-likely-to-open-in-green-amid-hints-of-tentativeness-on-election-eve-expert-says-brace-for">US Stocks Likely To Open In Green Amid Hints Of Tentativeness On Election Eve: Expert Says Brace For Volatility Ahead Of Fed&#8217;s Rate Decision</a>
These gains effectively erased last week&#8217;s losses, which followed Israel's limited response to Iran — a development that experts said reduced the risk of a broader conflict in the Middle East, providing temporary relief for oil markets.
OPEC+ announced on Sunday that it would maintain its production cut of 2.2 million barrels per day (bpd) through December. 
Originally, the group had planned to increase output by 180,000 bpd in December, but it conditioned this hike on favorable price conditions. 
The next formal meeting of OPEC+ ministers is scheduled for December 1, although the group has the flexibility to convene extraordinary meetings or alter its policies at any time.
<h3 class="wp-block-heading">US Sanctions Policy Could Shape Future Of Oil</h3>
The outcome of the upcoming U.S. presidential election could be crucial for the oil market, particularly with regard to sanctions policies that affect OPEC+ producers like Russia, Iran, and Venezuela. 
&#8220;After plummeting during the first Trump administration, production in Iran and Venezuela has recovered under President Joe Biden, with the focus of sanctions moving to Russia,&#8221; wrote S&amp;P Global. 
Combined, Iran and Venezuela pumped 4.15 million bpd in September, up from 3.2 million bpd in February 2022, according to Platts' OPEC+ Survey by Commodity Insights, as both countries are exempt from quotas under the OPEC+ agreement, allowing them to pump as much as they can. 
Sanctions policy is expected to remain a key factor influencing the global oil supply, particularly amid ongoing geopolitical tensions in Ukraine and the Middle East.
The Biden-Harris administration has imposed extensive sanctions on Russia, aiming to weaken its military capabilities and hinder its economic resources that support the ongoing war in Ukraine. These sanctions, coordinated with allies like the G7 and EU, target key areas, including Russia&#8217;s defense sector, critical supply chains, and financial networks.
However, Jim Burkhard, vice president of research at S&amp;P Global Commodity Insights, suggested that a second Donald Trump administration might be more inclined to <a href="https://www.benzinga.com/news/24/10/41303548/kremlin-critic-warns-russia-could-grow-stronger-if-trump-wins-white-house-will-basically-be-handing">loosen sanctions on Russia</a>. 
Both parties are likely to maintain pressure on Iran given its ongoing conflict with Israel.
<h3 class="wp-block-heading">US Energy ETFs To Watch Amid Rising Oil Prices</h3>
The surge in oil prices could buoy U.S. energy stocks, particularly those tied to exploration, production, and refining. Here are five key U.S. energy ETFs that may see gains as crude prices continue their upward trend:
<ul>
<li>Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>), which had already risen by 1% during premarket trading in New York on Monday</li>
<li>SPDR S&amp;P Oil &amp; Gas Explor. &amp; Product ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>)</li>
<li>Invesco Oil &amp; Gas Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PXJ#NYSE">PXJ</a>)</li>
<li>VanEck Oil Refiners ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CRAK#NYSE">CRAK</a>)</li>
<li>EA Series Trust Strive U.S. Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DRLL#NYSE">DRLL</a>)</li>
</ul>
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</ul>
Image: Shutterstock

Macro Economic Events

CRAK

DRLL

PowerShares Exchange-Traded Fund Trust Dynamic Oil Services Portfolio

Oil Prices Spike By Over 3% As OPEC+ Delays Production Increases Ahead Of US Elections: 5 Energy ETFs To Watch Monday

Crude oil prices plummeted over 6% on Monday, approaching levels not seen since early October, as investors processed news of targeted <a href="https://www.benzinga.com/news/24/10/41567809/oil-etfs-plunge-premarket-after-israels-strikes-on-iran">Israeli airstrikes in Iran</a>.
U.S. energy stocks followed suit during premarket trading in New York, with sector ETFs posting sharp losses at the start of the week. 
Contracts on West Texas Intermediate (WTI) light crude, as tracked by the United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), fell over 6% to around $67 per barrel on Monday morning, marking what could be the worst one-day drop since July 2022.
The sell-off followed Israeli airstrikes over the weekend that targeted military facilities in Iran but spared the country's oil infrastructure.
According to the Israel Defense Forces, the strikes were "targeted and precise," focusing on Iranian missile production and air defense installations. 
This measured response likely averted a deeper crisis in the oil market, as analysts warned that a broader assault on Iran's energy sector could have risked up to 1.7 million barrels per day (bpd) of Iranian crude exports and led to further regional destabilization. 
U.S. President Joe Biden had cautioned Israel against actions that would directly impact Iran's oil output, warning that such moves could prompt Tehran to retaliate by targeting oil shipping routes in the Middle East.
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="503" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/28085347/image-274-1024x503.png" alt="" class="wp-image-617043" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/28085347/image-274-1024x503.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/28085347/image-274-300x147.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/28085347/image-274-768x377.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/28085347/image-274-1536x754.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/28085347/image-274.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h3 class="wp-block-heading">Analysts Expect Oil Prices To Remain Under Pressure</h3>
Goldman Sachs analysts had previously estimated that a sustained 1 million bpd disruption to Iranian oil supply could have pushed Brent prices up by $10–$20 per barrel. 
With no immediate threat to Iran's oil exports, the bank's forecast for Brent reaching the mid-$80s by late 2025 now appears overly optimistic compared to the consensus view.
The restrained nature of Israel's actions has led some analysts to predict that oil prices will remain subdued, especially in light of broader market dynamics. 
Warren Patterson, head of commodity strategy at ING Group, highlighted that Israel's focused response leaves "the door open for de-escalation," which seems to be reflected in Monday&#8217;s price action.
"If we do see some de-escalation, it would allow fundamentals to dictate price direction once again," Patterson explained, adding that a projected market surplus in 2025 &#8220;would mean that oil prices are&nbsp;likely to remain under pressure.&#8221;
Ole Hansen, head of commodity strategy at Saxo Bank, indicated that crude prices have now retraced most of the gains made in early October, which were fueled by Chinese economic stimulus and concerns over potential disruptions to Iran's supply. Hansen pointed out that "sluggish demand" and the impending reintroduction of OPEC+ barrels could further weigh on oil prices.
<h3 class="wp-block-heading">China's Declining Demand, OPEC+ Production Decisions Add To Bearish Sentiment</h3>
On the demand side, Chinese consumption—accounting for roughly 15% of global oil demand—has been trending downward since May 2024
According to Pascal Devaux, an economist at BNP Paribas, this decline is tied not only to China's economic slowdown but also to structural changes within its energy sector. "Around 45% of new car registrations in China are for electric vehicles, either battery-powered or hybrid," Devaux said, underscoring the impact of the country's low-carbon transition on oil demand.
Capital Economics forecasts that if OPEC+ follows through on its plan to unwind voluntary production cuts initiated in October, an increase in oil supply combined with weak demand growth could drive prices lower throughout the remainder of 2024 and into 2025.
<h3 class="wp-block-heading">US Energy Stocks See Sharp Losses</h3>
Sector ETFs posted notable declines in early trading:
<ul>
<li>The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>), which tracks large-cap U.S. energy companies, was down 2.3% at the start of Monday's session. APA Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/APA#NASDAQ">APA</a>), Diamondback Energy, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FANG#NASDAQ">FANG</a>), and Marathon Oil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRO#NYSE">MRO</a>) all registered losses between 3% and 4%.</li>
</ul>
<ul>
<li>SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>), a broader measure of exploration and production stocks, slid 2.8%. Kosmos Energy Ltd (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOS#NYSE">KOS</a>) and Vital Energy Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTLE#NYSE">VTLE</a>) are both down 4%.</li>
</ul>
<ul>
<li>VanEck Oil Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OIH#NYSE">OIH</a>) dropped 1.7%. Companies like ProPetro Holding Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PUMP#NYSE">PUMP</a>), Liberty Energy Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LBRT#NYSE">LBRT</a>), and Noble Corporation plc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NE#NYSE">NE</a>) were hit particularly hard, each falling by about 4%.</li>
</ul>
Read Next:
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<li><a href="https://www.benzinga.com/news/24/10/41571526/exxon-shell-warren-buffett-backed-occidental-petroleum-and-other-oil-stocks-tumble-in-premarket-afte">Exxon, Shell, Warren Buffett-Backed Occidental Petroleum And Other Oil Stocks Tumble In Premarket After Israel&#8217;s Strikes On Iran</a></li>
</ul>
Image: Shutterstock

Analyst Color

Asia

Emerging Markets

Specialty ETFs

FANG

LBRT

PUMP

VTLE

Crude Oil Faces Steepest One-Day Drop In Over Two Years, Energy Stocks Plunge: Prices 'Are Likely To Remain Under Pressure,' Analyst Says

Oil-based exchange-traded funds (ETFs) experienced a significant decline, dropping over 4%, following Israel&#8217;s recent military strikes on Iran. The strikes, which occurred over the weekend, were reported as &#8220;limited&#8221; by local media, leading analysts to downplay the potential impact on oil supplies.
What Happened: Israel&#8217;s military targeted Iranian sites in three provinces on Saturday in response to a ballistic missile attack by Tehran on October 1. According to the Iranian news agency Tasnim, the strikes resulted in the deaths of four soldiers and caused &#8220;limited damages,&#8221; sparing oil, nuclear, and civilian infrastructure. Post the strikes, oil prices saw a sharp decline of more than 4% on Monday, CNBC <a href="https://www.cnbc.com/2024/10/28/oil-slides-over-4percent-as-israels-attack-on-iran-unlikely-to-disrupt-supplies.html">reported</a> on Monday. I
See Also: <a href="https://www.benzinga.com/markets/equities/24/10/41538660/tesla-nvidia-led-market-rally-now-pressures-investment-funds-to-offload-shares-to-avoid-us-tax-l?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Tesla, Nvidia-Led Market Rally Now Pressures Investment Funds To Offload Shares To Avoid US Tax Lawsuits</a>
Following the attacks, several oil ETFs recorded notable losses.
During pre-market hours on Monday, ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) fell by 8.41%, United States Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) dropped 4.69%, SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) decreased by 1.81%, and MicroSectorsTM Oil &amp; Gas Exploration &amp; Production 3X Leveraged ETNs (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OILU#NYSE">OILU</a>) saw a 4.54% drop, according to <a href="https://pro.benzinga.com">Benzinga Pro</a>.
Despite the tensions, Iran&#8217;s oil industry remains unaffected, with operations continuing as usual. Iran is responsible for up to 4% of the global oil supply, as per the U.S. Energy Information Administration. The attack comes after an Iran-backed Hamas assault on Israel on Oct. 7 last year.
Why It Matters: The recent strikes add to the ongoing geopolitical tensions that have kept energy markets on edge. Earlier this month, oil prices had already dipped by 2% after OPEC reduced its<a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41320277/oil-prices-drop-2-as-opec-cuts-forecast-irans-output-rises-analyst-says-netanyahu-m"> global oil demand growth forecast</a> for the third consecutive month. This was due to actual consumption data and slightly lowered demand expectations.
Experts had warned that an Israeli attack on Iranian oil facilities could significantly disrupt global oil prices. John Driscoll, chief strategist at JTD Energy Services, highlighted the potential for <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41309234/israels-attack-on-iran-would-rattle-the-nerves-of-oil-market-says-expert">such actions to unsettle the market</a>, drawing parallels to past incidents like the 2019 drone attacks on Saudi oil fields.
Although Iran&#8217;s oil production is lower due to sanctions, any disruption could still lead to a price increase.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/news/24/10/41561645/trumps-rising-election-odds-sends-emerging-markets-into-tailspin-causes-biggest-stock-drop-in-10-mon?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Trump&#8217;s Rising Election Odds Sends Emerging Markets Into Tailspin, Causes Biggest Stock Drop In 10 Months</a></li>
</ul>
Disclaimer: This content was partially produced with the help of&nbsp;<a href="https://www.benzinga.com/author/benzinga-neuro" target="_blank" rel="noreferrer noopener">Benzinga Neuro</a>&nbsp;and was reviewed and published by Benzinga editors.
Photo by William Potter on Shutterstock

Pre-Market Outlook

Oil ETFs Plunge Premarket After Israel's Strikes On Iran

Oil prices took a sharp dive on Tuesday, tumbling over 5% in morning trading in New York, as geopolitical tensions in the Middle East slightly eased after Israeli Prime Minister Benjamin Netanyahu reportedly pledged that Iran's crude oil infrastructure would be spared from <a href="https://www.benzinga.com/news/24/10/41321699/oil-prices-drop-after-netanyahu-says-israel-will-attack-military-not-oil-or-nuclear-targets-in-iran">any potential retaliatory strikes. </a>
West Texas Intermediate (WTI) crude, the U.S. benchmark, tracked by the United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), nosedived to $70 per barrel, down more than 5% as of 10 a.m. ET. This marks the steepest one-day decline in over a year.
The selloff followed a Monday report from The Washington Post that said that Netanyahu assured the Biden administration that Israel would avoid targeting Iranian oil and nuclear facilities in any retaliatory military actions.
The assurance suggested a narrower scope of potential conflict, reducing fears of widespread supply shocks in the global oil market.
Market analysts had previously warned that an Israeli strike on Iran&#8217;s oil infrastructure could send crude prices skyrocketing by $20 per barrel, highlighting concerns that Tehran would retaliate by attacking oil installations throughout the Gulf region, potentially triggering a broader energy crisis.
<h3 class="wp-block-heading">Crude Suffers Worst Drop In Over 1 Year As Middle East Supply Fears Recede</h3>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="469" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/15102337/image-118-1024x469.png" alt="" class="wp-image-596308" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/15102337/image-118-1024x469.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/15102337/image-118-300x137.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/15102337/image-118-768x351.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/15102337/image-118-1536x703.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/15102337/image-118.png 1884w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Image: <a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent101524&amp;t=be2bearmibe3na1">Benzinga Pro</a></figcaption></figure>
<h3 class="wp-block-heading">Energy Sector Tanks: US Oil Giants Lead Declines</h3>
The immediate reaction in the markets was swift: U.S. energy stocks plunged, while airlines and cruise lines — typically sensitive to fuel prices — enjoyed a sharp relief rally.
The energy sector was one of the biggest losers on the day. The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>), which tracks major U.S. energy companies, slid 2.8%, setting up for its worst day since late April. 
АРА Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/APA#NASDAQ">APA</a>), Diamondback Energy, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FANG#NASDAQ">FANG</a>) and Valero Energy Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VLO#NYSE">VLO</a>) were the worst performers within the XLE ETF, with declines of about 4%.
Companies involved in upstream exploration and production were hit even harder, with the SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) falling 3.1%. Talos Energy Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TALO#NYSE">TALO</a>), Kosmos Energy Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOS#NYSE">KOS</a>) and Crescent Energy Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CRGY#NYSE">CRGY</a>) each tumbled by over 4%. 
Downstream oil service providers also struggled, with the VanEck Oil Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OIH#NYSE">OIH</a>) dropping 3.6%. Major oilfield services companies like Schlumberger N.V. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLB#NYSE">SLB</a>) and Halliburton Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HAL#NYSE">HAL</a>) both fell about 3%, while Transocean Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RIG#NYSE">RIG</a>) underperformed, down 5%. 
<h3 class="wp-block-heading">Airlines And Cruise Lines Rally: Lower Fuel Costs, Strong Earnings Expectations Lift Sentiment</h3>
While energy stocks suffered, sectors reliant on cheaper fuel prices thrived. Airlines and cruise lines, in particular, were among the best performers within the S&amp;P 500 as the prospect of lower oil prices offered some relief.
Norwegian Cruise Line Holdings Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NCLH#NYSE">NCLH</a>) surged 4.3%, while Carnival Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CCL#NYSE">CCL</a>) jumped 5.3%. 
Goldman Sachs recently raised its price target on Royal Caribbean Cruises Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RCL#NYSE">RCL</a>) from $195 to $220, anticipating strong earnings momentum. Similarly, NCLH saw its price target lifted from $22 to $24.
In the airline space, American Airlines Group Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAL#NASDAQ">AAL</a>) rallied 3.5%, United Airlines Holdings Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/UAL#NASDAQ">UAL</a>) gained 1.2%, reaching its highest level since February 2020, and Southwest Airlines Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LUV#NYSE">LUV</a>) rose 1.3%.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41331839/financial-sector-hits-record-highs-as-goldman-sachs-bank-of-america-citi-beat-q3-ea">Financial Sector Hits Record Highs As Goldman Sachs, Bank of America, Citi Beat Q3 Earnings Expectations</a></li>
</ul>
Photo via Shutterstock.

Movers

CRGY

NCLH

TALO

Oil Prices Take Largest Plunge In Over A Year As Israel Vows To Spare Iranian Facilities: Energy Stocks Sink, Airlines, Cruise Lines Rally

Oil is trading more than 5% higher Thursday on the heels of President Joe Biden&#8216;s statement that the U.S. spoke with Israel about a possible attack on Iran's oil facilities.
"We're in discussions about that,&#8221; Biden said during an interaction with reporters. 
Biden seemingly indicated he wasn&#8217;t partial to the idea of striking at Iran&#8217;s oil facilities, before cutting himself off: &#8220;I think that would be a little&#8230; anyway.&#8221; See video below.
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"> 
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<iframe loading="lazy" title="Biden: Discussing Israeli strikes on Iran oil facilities &#x7C; AJ #shorts" width="500" height="281" src="https://www.youtube.com/embed/InF5MnsXAt0?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
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</figure>
When one reporter asked whether Biden would &#8220;allow&#8221; Israel to retaliate against Iran, Biden swiftly corrected him: &#8220;First of all, we don&#8217;t &#8216;allow&#8217; Israel. We advise Israel.&#8221;
<a href="https://www.benzinga.com/news/23/10/35136071/israel-under-siege-unprecedented-hamas-attack-sparks-intense-clashes-netanyahu-says-we-are-at-war">Since Oct. 7, 2023</a>, Israel has been fighting Hamas in Gaza as well as Hezbollah in Lebanon. Both groups are considered terrorist organizations by the U.S. 
See Also: <a href="https://www.benzinga.com/news/24/10/41134015/jd-vance-tim-walz-debate-sets-a-different-tone-candidates-discuss-israel-iran-escalation-immigration">JD Vance, Tim Walz Debate Sets A Different Tone, Candidates Discuss Israel-Iran Escalation</a>
<h3 class="wp-block-heading">Oil And The Israel-Iran Conflict</h3>
Iran is the seventh-largest oil producer in the world. The country, which backs the Hezbollah militant group, exports around half its production abroad. 
China, where <a href="https://www.benzinga.com/markets/asia/24/08/40596334/asia-markets-mixed-europe-gains-crude-oil-falls-on-chinese-demand-concerns-global-markets-today-whil">oil demand is weak</a>, is its main customer.
Since Iran's <a href="https://www.benzinga.com/news/global/24/10/41126038/iran-attacks-israel-with-missiles-middle-east-tensions-escalates-s-p-500-stocks-bitcoin-fall-as-oil">missile attack on Israel</a> on Monday, the price of barrels has fluctuated. As of Oct. 3, the price of West Texas Intermediate (WTI) crude oil is $73.83 per barrel. This reflects a 5.32% increase from the previous day&#8217;s close of $70.10.
The price of Brent crude is approximately $77.76 per barrel. It has fluctuated within a range of $74.33 to $77.58 for the day.
The U.S., which is producing more oil under Biden than any other U.S. presidential administration, has been filling its reserves. The Biden administration acquired an additional <a href="https://www.benzinga.com/markets/eurozone/24/10/41146905/geopolitical-risks-may-be-biggest-threat-to-markets-boe-says">6 million barrels of crude</a> just this week.
It&#8217;s worth noting that ongoing violence in the Middle East puts the Straits of Hormuz at risk. A third of tanker traffic and a fifth of LNG frozen gas is transported through that passageway. 
The U.S. and its allies are likely determined to keep the Strait open due to its strategic importance. Any attempt to block the Strait could provoke military intervention.
Iran controls much of the northern coastline of the Strait and has previously threatened to block the passage in response to sanctions or conflicts with Western countries. 
<h3 class="wp-block-heading">Market Reaction</h3>
So far, market reaction to the Middle East conflict is relatively mute compared to February 2022 when Russia invaded Ukraine.
At the time, the oil market reacted with significant volatility and disruption, leading to a sharp rise in global prices. 
Brent crude, the global benchmark, surged above $100 per barrel for the first time since 2014, and by March 2022, it had briefly spiked to $139 per barrel, near the all-time high.
Oil-related exchange-traded funds, or ETFs, were trending up at last check Thursday afternoon. Here&#8217;s where they stand: 
<ul>
<li>United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) is up 4.05% to $75.71</li>
<li>Invesco DB Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBO#NYSE">DBO</a>) is up 4.08% at $15.06</li>
<li>SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) is up 3.1% at $139.56</li>
<li>Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) up 1.65% at $92.22</li>
<li>ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) is up 6.59% at $28.81</li>
<li>VanEck Vectors Oil Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OIH#NYSE">OIH</a>) is up 1.89% at $297.58</li>
</ul>
Now Read: 
<ul>
<li><a href="https://www.benzinga.com/trading-ideas/previews/24/10/41170128/jobs-report-preview-could-september-labor-data-shift-feds-interest-rate-path">Jobs Report Preview: Could September Labor Data Shift Fed&#8217;s Interest Rate Path?</a></li>
</ul>
Image: Shutterstock

Oil Prices Rally: Biden Confirms US 'Discussions' With Israel About Striking Iran Facilities

The Federal Reserve is set to sprinkle some interest rate fairy dust, and small-cap sectors are lining up to see who'll soar or stumble. While the Russell 2000 is stealing the spotlight with its 5% surge ahead of the rate cut, not all small caps will feel the same love from <a href="https://www.benzinga.com/trading-ideas/small-cap-analysis">lower borrowing costs</a>. 
So, what sectors should investors be eyeing, and where do the best ETFs come into play?
<h2 class="wp-block-heading">Financials: Money Talks, But Who's Listening?</h2>
Small-cap financials, often living and breathing on rate-sensitive margins, are gearing up for a potential win. 
As borrowing costs fall, these lenders, insurers, and regional banks get a shot in the arm. For those looking to ride the wave, the iShares Russell 2000 Financials ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWFN#NYSE">IWFN</a>) offers concentrated exposure to this potentially booming sector.
<h2 class="wp-block-heading">Real Estate: Open House For Gains?</h2>
Real estate stocks also stand to benefit as mortgage rates and financing costs drop. With rate cuts loosening the borrowing purse strings, real estate could experience a boost in demand and valuation. 
Investors eyeing the space might find the Vanguard Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VNQ#NYSE">VNQ</a>) or iShares U.S. Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYR#NYSE">IYR</a>) perfect for capturing the sector's expected rise.
Don&#8217;t miss out on this unparalleled opportunity:
<ul>
<li><a href="https://www.benzinga.com/events/small-cap/global-small-cap-conference-2024/" target="_blank" rel="noreferrer noopener">Register now to secure your spot at Benzinga&#8217;s Largest SmallCap Conference ever in Chicago!</a></li>
</ul>
<h2 class="wp-block-heading">Consumer Discretionary: Retail Therapy Ahead?</h2>
Lower interest rates also often mean more cash for consumers to splurge on non-essentials, giving a lift to small-cap retail, travel, and leisure names.
The SPDR S&amp;P 600 Small Cap Consumer Discretionary ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PSCD#NYSE">PSCD</a>) is one way to jump on this sector's shopping spree.
<h2 class="wp-block-heading">Energy: A Wildcard In The Small-Cap Mix</h2>
Energy stocks are notorious for being tied to oil prices, but lower rates can still offer some breathing room for these debt-heavy companies. 
For those ready to hedge their bets, the SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) could be the small-cap energy ETF to watch.
Read Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40749609/this-small-cap-top-pick-is-positioned-for-strong-gains-jpmorgan-sees-over-50-upside">This Small Cap &#8216;Top Pick&#8217; Is Positioned For Strong Gains, JPMorgan Sees Over 50% Upside</a>
<h2 class="wp-block-heading">Technology, Healthcare: Resilient But&#8230; Rate-Resistant?</h2>
While technology and healthcare sectors aren't as rate-sensitive as financials or real estate, they remain staples in small-cap ETFs like the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) and Vanguard Small-Cap ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VB#NYSE">VB</a>). 
Both funds are solid all-around plays for investors who want diversified exposure to the small-cap space, especially as uncertainty lingers.
As the Fed moves its rate-cutting wand, small-cap sectors will each feel the ripples differently. 
Whether you're banking on financials, betting on real estate, or shopping for consumer discretionary, there's a sector—and ETF—for every investor's playbook.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/trading-ideas/long-ideas/24/09/40777734/exclusive-small-caps-at-most-attractive-relative-valuations-since-1990s-says-russell-inv" target="_blank" rel="noreferrer noopener">EXCLUSIVE: Small Caps At &#8216;Most Attractive Relative Valuations&#8217; Since 1990s, Says Russell Investments&#8217; Paul Eitelman</a></li>
</ul>
Don&#8217;t miss the opportunity to dominate in a volatile market at the&nbsp;<a href="https://www.benzinga.com/events/small-cap/global-small-cap-conference-2024/" target="_blank" rel="noreferrer noopener">Benzinga SmallCAP Conference on Oct. 9-10, 2024</a>,&nbsp;at the Chicago Marriott Downtown Magnificent Mile.
Get exclusive access to CEO presentations, 1:1 meetings with investors, and valuable insights from top financial experts. Whether you&#8217;re a trader, entrepreneur, or investor, this event offers unparalleled opportunities to grow your portfolio and network with industry leaders.
<a href="https://www.benzinga.com/events/small-cap/global-small-cap-conference-2024/" target="_blank" rel="noreferrer noopener">Secure your spot and get your tickets today!</a>
Image created using artificial intelligence via Midjourney.

Broad U.S. Equity ETFs

Small Cap Analysis

Small Cap

Trading Ideas

IWFN

iShares Trust Dow Jones US Real Estate Fund Index

PSCD

Small-Cap Sectors Brace For Fed Rate Cut: Financials, Real Estate ETFs Offer Compelling Plays For Investors

After falling to the lowest level since December 2021, on Tuesday, oil recorded its first weekly gain in a month, buoyed by Hurricane Francine, which disrupted production in the Gulf of Mexico. Brent crude rose above $72 per barrel, pushing its weekly climb to about 2%, while West Texas Intermediate traded below $70 per barrel.
However, higher oil prices failed to fuel the rally in the energy space with many ETFs still in red. The popular ETFs &mdash; Energy Select Sector SPDR (ARCA:XLE), Vanguard Energy ETF (ARCA:VDE), SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (ARCA:XOP), Fidelity MSCI Energy Index ETF (ARCA:FENY) and VanEck Vectors Oil Services ETF (ARCA:OIH) &mdash; were down more than 2% each. All these ETFs have a Zacks Rank #1 (Strong Buy) or #2 (Buy).
The storm had prompted a production shutdown of around 730,000 barrels a day (bpd) in the Gulf of Mexico (about 42% of Gulf production), according to the US Bureau of Safety and Environmental Enforcement. The US Bureau of Safety and Environmental Enforcement stated that about 24% of crude production and 26% of natural gas output in the US Gulf of Mexico were offline due to the storm.
<h3>Energy ETFs in Focus</h3>
Energy Select Sector SPDR: It is the largest and the most popular ETF in the energy space, with an AUM of $34.1 billion. It offers exposure to the broad energy space and follows the Energy Select Sector Index. Energy Select Sector SPDR holds 22 securities in its basket and charges 9 bps in annual fees.
Vanguard Energy ETF: It provides exposure to a basket of 113 energy stocks by tracking the MSCI US Investable Market Energy 25/50 Index. Vanguard Energy ETF has amassed $7.6 billion in its asset base and charges 10 bps in annual fees.
SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF: It provides exposure to 53 oil and gas exploration and production companies by tracking the S&amp;P Oil &amp; Gas Exploration &amp; Production Select Industry Index. It has an AUM of $2.6 billion and charges 35 bps in fees per year.
Fidelity MSCI Energy Index ETF: It follows the MSCI USA IMI Energy Index, holding 112 stocks in its basket. FENY charges 8 bps in annual fees and has accumulated $1.5 billion in its asset base.
VanEck Vectors Oil Services ETF: It tracks the MVIS U.S. Listed Oil Services 25 Index, which offers exposure to companies involved in oil services to the upstream oil sector, including oil equipment, oil services or oil drilling. VanEck Vectors Oil Services ETF holds 26 stocks in its basket. With an AUM of $1.5 billion, it charges 35 bps in annual fees.
<h2>Concerns</h2>
<h2>Weak Demand/Supply Trends</h2>
Despite the positive momentum, oil prices are still trading close to three-year lows amid persistent concerns over slowing demand.
International Energy Agency (IEA) lowered the oil demand outlook by 70,000 bpd to 900,000 bpd for this year, citing weak China demand and feeble growth in other regions. The Organisation of Petroleum Exporting Countries (OPEC) also slashed the 2024 oil demand growth forecast for the second time. It expects world oil demand to rise by 2.03 million bpd in 2024, down from last month&#39;s forecast of growth of 2.11 million bpd.
Last week, OPEC and its allies extended the oil production cuts of 2.2 million bpd through November and planned to phase out those beginning in December until November 2025. However, it will increase production in 2025 for the first time since 2022. The first addition to supply, of 180,000 bpd, is now expected in December. Additionally, growing output from the United States, Guyana, Brazil and Canada will continue to take a toll on oil prices.
<h2>Geopolitical Tensions</h2>
Geopolitical risks in the Middle East will continue to provide some support to oil prices. The ongoing conflict in Gaza and the potential for a broader regional escalation, involving Iran, Hamas and Hezbollah are contributing to market uncertainty.
<h2>Analysts Go Bearish</h2>
Analysts in a Reuters poll reduced their oil price forecasts for 2024 for the fourth consecutive month. The poll shows Brent prices to average $82.86 per barrel this year, down from $83.66 a barrel expected in the July forecast. West Texas Intermediate is projected to average $78.82 per barrel in 2024, down from $79.22 a barrel expected in last month&#39;s poll.
Analysts believe the bullish drivers of the ongoing OPEC+ cuts and geopolitical flare-ups in the Middle East will be offset by the bearish demand trends and oil imports in China and Europe.
<h2>Will the Fed Provide Some Respite?</h2>
The Fed is expected to cut interest rates at its meeting scheduled to take place on Sept 17 and 18. Lower interest rates tend to lower the expenses of purchasing goods and services, potentially stimulating economic expansion and driving oil demand.
<a href="https://www.zacks.com/stock/news/2335964/rise-in-oil-price-fails-to-lift-energy-etfs-what-s-ahead?cid=CS-BENZ-FT-etf_news_and_commentary-2335964">To read this article on Zacks.com click here.</a>

Analyst Ratings

FENY

Rise in Oil Price Fails to Lift Energy ETFs: What's Ahead?

Oil futures surged significantly on Monday morning, with West Texas Intermediate (WTI) light crude rising 3% to over $77 per barrel as of 9:00 a.m. ET, amid escalating geopolitical tensions in the Middle East and<a href="https://www.benzinga.com/markets/commodities"> fresh supply disruptions in Libya.</a>
This marks the third consecutive day of oil price gains after hitting their lowest levels since January on Wednesday, Aug. 21. With Monday&#8217;s increase, WTI has climbed more than 7% over the past three sessions, setting the stage for the strongest three-day rally since late March 2023.
What Happened: On Saturday, Aug. 24, the Iran-backed Lebanese militant group Hezbollah launched a large-scale assault against Israel, using rockets and drones in retaliation for the killing of senior Hezbollah commander Fuad Shukr by Israeli forces. The attack involved hundreds of rockets and at least 20 drones targeting various locations in northern Israel.
In response, Israel carried out airstrikes on multiple Hezbollah positions in southern Lebanon, hitting at least 17 sites in an effort to thwart further large-scale attacks. Israeli officials described these strikes as preemptive measures aimed at neutralizing Hezbollah&#8217;s capabilities.
The situation remained volatile on Sunday, with ongoing exchanges of fire, fueling concerns about a broader regional conflict. Israeli Prime Minister Benjamin Netanyahu warned that the strikes against Hezbollah are not &#8220;the end of the story.&#8221;
In Libya, the political and security environment has deteriorated sharply. The eastern government, a rival to the Tripoli-based administration, announced a halt to oil production and exports following a dispute over the leadership of the Central Bank, exacerbating the global supply concerns.
According to Reuters, Waha Oil Company, a subsidiary of the National Oil Corp and operator of a joint venture with ConocoPhillips (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COP#NYSE">COP</a>), announced plans to cut crude production and warned that output could come to a complete stop due to protests and pressures.
Also Read: <a href="https://www.benzinga.com/news/earnings/24/08/40548945/temu-parent-pdd-posts-86-q2-topline-growth-stock-drops-after-ceo-flags-upcoming-challenges">Temu Parent PDD Posts 86% Q2 Topline Growth, Stock Drops After CEO Flags Upcoming Challenges</a>
Why It Matters: The recent rebound in equity markets after the early August selloff was largely driven by fading fears of a U.S. recession. 
Investors also responded positively to central bankers&#8217; signals of potential interest rate cuts, as confidence grew that inflation is moving closer to the 2% target. 
However, the sudden spike in crude oil prices, driven by supply concerns, could dampen the positive investor sentiment toward risk asset and curb further disinflationary gains in the economy. 
Market Reactions: Energy-related companies saw gains in Monday&#8217;s premarket trading. 
The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) rose over 1%. Companies in the oil services sector also benefited, with the VanEck Oil Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OIH#NYSE">OIH</a>) up 1.8%. Firms in the upstream market, tracked by the SPDR S&amp;P Oil &amp; Gas Exploration and Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>), were 1.3% higher.
Top premarket movers included: 
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Name</td>
<td>Chg %</td>
</tr>
<tr>
<td>Sitio Royalties Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/STR#NYSE">STR</a>)</td>
<td>3.8%</td>
</tr>
<tr>
<td>Talos Energy Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TALO#NYSE">TALO</a>)</td>
<td>2.9%</td>
</tr>
<tr>
<td>Transocean Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RIG#NYSE">RIG</a>)</td>
<td>2.7%</td>
</tr>
<tr>
<td>Petroleo Brasileiro SA (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PBR#NYSE">PBR</a>)</td>
<td>2.2%</td>
</tr>
<tr>
<td>Helix Energy Solutions Group Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HLX#NYSE">HLX</a>)</td>
<td>2.1%</td>
</tr>
<tr>
<td>Murphy Oil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MUR#NYSE">MUR</a>)</td>
<td>1.8%</td>
</tr>
<tr>
<td>Noble Corporation plc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NE#NYSE">NE</a>)</td>
<td>1.7%</td>
</tr>
<tr>
<td>EOG Resources, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OEG#NYSE">OEG</a>)</td>
<td>1.7%</td>
</tr>
<tr>
<td>Marathon Oil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRO#NYSE">MRO</a>)</td>
<td>1.5%</td>
</tr>
<tr>
<td>Devon Energy Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DVN#NYSE">DVN</a>)</td>
<td>1.5%</td>
</tr>
<tr>
<td>ConocoPhillips </td>
<td>1.4%</td>
</tr>
</tbody>
</table>
</figure>
Read Next:
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<li><a href="https://www.benzinga.com/markets/equities/24/08/40535770/feds-powell-hints-at-policy-shifts-dollar-plunges-gold-rallies-as-investors-flock-to-rate-cut-wi">Fed&#8217;s Powell Hints At Policy Shifts, Dollar Plunges, Gold Rallies As Investors Flock To Rate-Cut Winners: This Week In The Markets</a></li>
</ul>
Photo: Shutterstock

Tech

GPRE

Oil Prices Rally As Middle East Tensions Rise, Libya Warns Of Potential Production Halt: 10 Energy Stocks On The Move Monday

Tesla, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) CEO Elon Musk, who is running a company that aims to move humanity toward a sustainable energy future and away from internal combustion engine (ICE) vehicles, batted for the oil and gas industry in an <a href="https://www.benzinga.com/news/24/08/40328821/trump-and-musk-interview-covers-everything-from-failed-assassination-attempt-to-kamala-harriss-no-ta">X interview with Republican presidential candidate</a> Donald Trump late Monday.
What Happened: Toward the end of a long-winding interview with Trump on X, a social-media platform Musk owns, the billionaire said, &#8220;I don't think we should vilify the oil and gas industry and the people that have worked very hard in those industries to provide the necessary energy to support the economy.&#8221; 
He described his views toward the industry as &#8220;pretty moderate.&#8221;
The billionaire suggested there is leeway for the oil and gas industry to co-exist with new-energy ventures as the planet Earth slowly and steadily transitions to sustainable energy. He said the planet can transition to a sustainable energy economy in 50 or 100 years despite the scientific community&#8217;s warning that humanity has reached a tipping point as far as climate is concerned. Trump, meanwhile, said he sees a 500-1000-year timeframe to move toward that.
&#8220;So it's not like the house is on fire immediately,&#8221; the Tesla CEO said, adding &#8220;It's probably better to move there faster than slower. But like without vilifying the oil and gas industry and without causing hardship in the short term."
Musk soon did a turncoat by stating that continued use of fossil fuel will make air harder to breathe, potentially causing headaches and nausea. That said, he said, &#8220;We still have quite a bit of time&#8230;We don't need to rush.&#8221;
Trump, for his part, pointed out that it was fossil fuel-powered energy generation that is powering Tesla vehicles. &#8220;Can't get away from it at this moment,&#8221; he said.
The presidential candidate flagged another threat that is more menacing than climate change. &#8220;People talk about global warming, or they talk about climate change, but they never talk about nuclear warming,&#8221; he said, flagging it as &#8220;an immediate problem.&#8221;
See Also: <a href="https://www.benzinga.com/money/best-commodities-to-buy">Best Commodities To Buy</a>
Why It&#8217;s Important: <a href="https://www.benzinga.com/news/24/08/40145805/elon-musk-says-his-endorsement-of-trump-doesnt-mean-he-agrees-with-everything-ex-president-is-saying">Musk endorsed Trump</a> immediately after an unsuccessful assassination attempt at the former president at a Pennsylvania rally. In early May, <a href="https://www.benzinga.com/news/24/05/38751446/trump-reportedly-seeks-1b-in-campaign-funds-from-exxon-mobil-chevron-other-big-oil-execs-expert-call">Trump reportedly sought $1 billion</a> from oil executives, promising a quid-pro-quo of reversing dozens of President Joe Biden's environmental rules and policies and stopping new ones from being enacted.
After hinting at removing federal tax subsidy for electric vehicles on his first day in office, Trump has softened his stance toward them, especially after Musk threw his weight behind him. In a Michigan rally in late July, <a href="https://www.benzinga.com/news/24/08/40154264/trump-says-electric-cars-are-fantastic-after-tesla-ceo-elon-musks-endorsement-i-have-to-be-you-know">he praised EVs</a>, stating that he finds them impressive. However, he noted that EVs might not be suitable for everyone, particularly those who need to drive long distances, likely referencing concerns about range and charging infrastructure.
In the past, Musk has echoed a similar sentiment as the one he expressed in the Trump interview. In an ONS conference held in Stavanger, Norway in late 2022, the billionaire clarified that <a href="https://www.benzinga.com/news/22/09/28748663/elon-musk-speaks-unexplored-areas-of-disruption-risk-taking-energy-sources-what-keeps-him-up-at-nigh">he is not someone who would &#8220;demonize&#8221; oil and gas </a>because, in his opinion, they are now required for civilization to function.
&#8220;I think we actually need more oil and gas, and not less, but simultaneously [should] move as fast as we can to a sustainable energy economy,&#8221; he said then.
Backers of the oil and gas industry often point to the risk of the U.S. losing its energy independence if we pivot away from fossil fuels abruptly. The argument could be credible given China&#8217;s dominance in alternative energy vehicles. The Energy Information Administration data said in an April report that the U.S. had produced more crude oil than any nation at any time, citing International Energy Statistics.
Stock Reaction: Energy stocks haven&#8217;t reacted much to the views expressed by Musk or Trump. Among the exchange-traded funds, in <a href="https://benzinga.grsm.io/register174">premarket trading:</a>
<ul>
<li>United States Oil Fund, LP (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/USO#NASDAQ">USO</a>) rose 0.37% to $78.92&nbsp;even as the index futures traded solidly higher.</li>
<li>The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) was little changed at $89.85.</li>
<li>SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) edged down 0.10% to $138.15.</li>
<li>Exxon Mobil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) edged down 0.06% to $118.93.</li>
<li>Chevron Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>) gained 0.32% to $145.49.</li>
<li>ConocoPhillips (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COP#NYSE">COP</a>) edged up 0.23% to $110.28.</li>
</ul>
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<li><a href="https://www.benzinga.com/news/24/08/40329662/donald-trump-calls-tesla-ceo-elon-musk-greatest-cutter-for-terminating-workers-who-want-to-unionize">Donald Trump Calls Tesla CEO Elon Musk &#8216;Greatest Cutter&#8217; For Terminating Workers Who Want To Unionize</a></li>
</ul>
Photos courtesy: Shutterstock

Media

TSLA

Tesla's Elon Musk Warns Against Vilifying Oil And Gas Industry In Trump Interview, Cautions Against Rushing With Sustainable Energy Transition: 'It's Not Like The House Is On Fire Immediately'

Oil is on course to secure its fourth <a href="https://www.benzinga.com/markets/commodities">consecutive session of gains.</a>
What Happened: Oil prices climbed by more than 1% at the start of the week. West Texas Intermediate (WTI) light crude futures, tracked by the United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), surpassed $77 per barrel by 8:00 a.m. EST.
This rise comes despite the Organization of the Petroleum Exporting Countries (OPEC) cutting its global oil demand growth forecast. OPEC has revised its global oil demand growth estimate for 2024 to 1.78 million barrels per day (mb/d). That&#8217;s down from the previous projection of 1.85 mb/d. The oil cartel expects global oil demand in 2024 to average 104.32 mb/d.
For 2025, oil demand growth globally has also been lowered to 2.11 mb/d. That&#8217;s a reduction from the prior estimate of 2.25 mb/d.
&#8220;This slight revision reflects actual data received for the first quarter of 2024 and, in some cases, the second quarter, as well as reduced expectations for China&#8217;s oil demand growth in 2024,&#8221; OPEC stated in its latest monthly report.
See Also: <a href="https://www.benzinga.com/markets/asia/24/08/40309103/asia-and-europe-markets-mixed-crude-advances-and-gold-near-all-time-high-global-markets-today-while">Asia And Europe Markets Mixed; Crude Advances And Gold Near All-Time High &#8211; Global Markets Today While US Slept</a>
Why It Matters: The recent surge in oil prices is largely attributed to escalating supply risks, fueled by increasing geopolitical tensions in the Middle East, including a surprise <a href="https://www.aljazeera.com/news/2024/8/12/has-ukraines-incursion-into-russias-kursk-changed-dynamics-of-the-war">incursion</a> by Ukrainian forces into Russia.
On Monday, Russia began evacuating civilians from parts of a second region near Ukraine following a spike in military activity by Kyiv, as reported by Reuters. This comes just days after Ukraine&#8217;s most significant incursion into Russian territory since the war began in 2022. Last Tuesday, Ukrainian forces breached the Russian border and advanced through parts of the Kursk region, a move that could be aimed at gaining leverage in potential ceasefire talks post-U.S. elections in November.
Meanwhile, Ukraine and Russia exchanged accusations over an incident at the Zaporizhzhia nuclear power plant on Sunday. The International Atomic Energy Agency (IAEA) reported witnessing thick smoke from the northwestern area of the plant after hearing multiple explosions throughout the evening. 
The IAEA confirmed that an alleged drone attack targeted one of the plant&#8217;s cooling towers but assured there was no impact on nuclear safety. &#8220;These reckless attacks endanger nuclear safety at the plant and increase the risk of a nuclear accident. They must stop now,&#8221; said IAEA director general Rafael Mariano Grossi.
Additionally, tensions in the Middle East continue to rise. 
On Saturday, an Israeli airstrike on a Gaza City school compound, which had been converted into a shelter. The Gaza Civil Emergency Service reported that approximately 100 people were killed in the strike, while Israel claimed that around 20 militants were operating within the compound.
The White House expressed deep concern over the incident, joining several Arab states, Turkey, Britain, and the European Union&#8217;s foreign policy chief in condemning the attack. 
In response to changing demand dynamics, Saudi Arabia is expected to reduce its crude oil exports to China next month. The Kingdom, the world&#8217;s largest crude oil exporter, is set to ship 43 million barrels to China in September. That&#8217;s down from an estimated 46 million barrels in August, according to trade sources quoted by Reuters.
<h3 class="wp-block-heading">Stock Market Reactions</h3>
<ul>
<li>The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) was up 0.5% by 8:00 a.m. in New York. </li>
<li>Top premarket performers: Halliburton Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HAL#NYSE">HAL</a>) and Baker Hughes Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BKR#NYSE">BKR</a>), both rising 1.4%.</li>
<li>The SPDR S&amp;P Oil &amp; Gas Exploration and Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>), which tracks companies in the upstream segment, also saw a 0.6% increase.</li>
<li>Vitesse Energy Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTS#NYSE">VTS</a>) is up more than 3%.</li>
</ul>
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<li><a href="https://www.benzinga.com/news/earnings/24/08/40310004/nasdaq-s-p-500-futures-climb-after-volatile-week-as-traders-eye-inflation-data-and-retail-earnings-">Nasdaq, S&amp;P 500 Futures Climb After Volatile Week As Traders Eye Inflation Data and Retail Earnings: Strategist Says Not CPI But This Data Can Give People Lot Of Conviction</a></li>
</ul>

Oil Prices Eye Fourth Straight Day Of Gains As Geopolitical Risks Overshadow OPEC's Cooler Demand Forecast

A 2024 election victory for ex-President Donald Trump could unleash a new wave of deregulation, <a href="https://www.benzinga.com/real-estate/reit/24/02/36933312/the-2024-showdown-trumps-deregulation-vs-bidens-healthcare-expansion-what-it-means-for-investors">according to Goldman Sachs</a>.
This would help companies in industries subject to strict rules and regulatory oversight, the firm&#8217;s analysts, Ronnie Walker and Alec Phillips, explained in a research note. Those sectors include energy (oil and gas), utilities, financials, healthcare, industrials, materials, and telecom. Conversely, consumer discretionary, consumer staples, technology, and real estate have less exposure.
Recall Trump&#8217;s recently proposed deal with leading oil and gas companies, where he offered to roll back environmental regulations in return for <a href="https://www.benzinga.com/news/24/05/38997165/trumps-policies-for-money-transaction-with-big-oil-under-investigation-by-senate-democrats-cronyism">$1 billion in campaign contributions</a>.
It&#8217;s worth noting, however, that the Biden administration presided over a record boom in oil and gas. Politico <a href="https://www.eenews.net/articles/what-bidens-oil-record-means-for-the-industrys-future/">reports</a> that Biden&#8217;s Interior Department, which oversees the federal oil program, outpaced Trump in approving new drilling permits.
But according to the Wall Street investment bank, &#8220;equity market sectors that might benefit from an easier regulatory environment generally saw relative strength alongside the changing presidential probabilities.&#8221;
<h3 class="wp-block-heading">ETFs To Watch </h3>
<ul>
<li>SPDR Oil &amp; Gas Exploration And Production (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>)</li>
<li>iShares U.S. Aerospace And Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITA#NYSE">ITA</a>)</li>
<li>SPDR S&amp;P Regional Banking ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KRE#NYSE">KRE</a>)</li>
<li>Invesco S&amp;P Smallcap Industrials ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PSCI#NYSE">PSCI</a>)</li>
<li>SPDR S&amp;P Telecom ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XTL#NYSE">XTL</a>)</li>
<li>Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>)</li>
<li>Health Care Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLV#NYSE">XLV</a>) </li>
</ul>
<h3 class="wp-block-heading">Focus Areas For Deregulation</h3>
During Trump&#8217;s previous administration, significant deregulatory actions targeted environmental and energy regulations, including lowering fuel efficiency standards and reducing environmental permitting requirements.
Energy companies even <a href="https://www.npr.org/2020/08/13/901863874/trumps-methane-rollback-that-big-oil-doesn-t-want">criticized</a> Trump who, in 2020, rolled back rules meant to reduce climate-warming methane emissions — far more potent than carbon dioxide. Shell, BP and the Exxon Mobil Corp disapproved of his decision.
Biden <a href="https://degette.house.gov/media-center/press-releases/biden-signs-legislation-invalidate-trump-administrations-methane-rule">reinstated</a> the methane emissions standards the following year. 
Should Trump win in November, he will likely roll back the Biden-era methane emission rules, Goldman&#8217;s analysts said.
Another apparent change, the firm notes, would likely be the resumption of LNG export permit approvals, which were paused under Biden.
Goldman Sachs expects a Trump administration to expand LNG exports, and reverse restrictions on greenhouse gas emissions. Additionally, there would likely be an expansion of oil leases on federal land and offshore energy development, and eased regulations on refineries.
In the utilities sector, a Trump administration would likely seek to modify recently finalized rules restricting CO2, mercury, and other pollutants from fossil-fuel-fired power generation. 
Regarding auto emissions, the administration would probably aim to relax limits set by the Biden administration, which automakers might meet by increasing the proportion of electric vehicles sold. Goldman Sachs also anticipates a tightening of domestic content requirements for electric vehicle subsidies and loosened criteria for energy credits to make it easier for less climate-friendly energy sources to qualify.
While antitrust enforcement officials in a potential Trump administration might continue pursuing some cases in the internet/tech sector, merger enforcement could ease compared to the current regime.
<h3 class="wp-block-heading">Financial Regulations</h3>
Financial regulation might also shift, with more rapid changes in consumer finance and more gradual adjustments in capital and liquidity requirements. 
A key area for potential changes is the "Basel III Endgame," which would raise capital requirements for large banks. However, the Federal Reserve and the Federal Deposit Insurance Corporation are independent of the White House, and their leadership terms do not automatically turn over with a new administration. 
For instance, Fed Vice Chair for Supervision Michael Barr's term runs through July 2026, and Chair Powell's term runs through May 2026, complicating the outlook and timing.
In contrast, leadership of the Consumer Financial Protection Bureau (CFPB) would likely change quickly under a Trump administration, benefiting consumer finance stocks.
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New ETFs

Topics

Federal Reserve

PSCI

Trump's Deregulation Agenda: Oil & Gas, Defense, And Finance Stocks May Benefit From Loose Rules, Goldman Sachs Says

If you&#39;re interested in broad exposure to the Energy - Exploration segment of the equity market, look no further than the iShares U.S. Oil &amp; Gas Exploration &amp; Production ETF (BATS: <a class="ticker" href="https://www.benzinga.com/stock/ieo#BATS">IEO</a>), a passively managed exchange traded fund launched on 05/01/2006.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Exploration is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 15, placing it in bottom 6%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $731.59 million, making it one of the larger ETFs attempting to match the performance of the Energy - Exploration segment of the equity market. IEO seeks to match the performance of the Dow Jones U.S. Select Oil Exploration &amp; Production Index before fees and expenses.
The Dow Jones U.S. Select Oil Exploration &amp; Production Index is a free-float adjusted market capitalization-weighted index. The Index includes companies that are engaged in the exploration for and extraction, production, refining, and supply of oil and gas products.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF&#39;s expense ratio.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.61%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector--about 100% of the portfolio.
Looking at individual holdings, Conocophillips&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cop#NYSE">COP</a>) accounts for about 18.30% of total assets, followed by EOG Resources Inc&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/eog#NYSE">EOG</a>) and Marathon Petroleum Corp&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mpc#NYSE">MPC</a>).
The top 10 holdings account for about 70.58% of total assets under management.
Performance and Risk
So far this year, IEO has gained about 6.79%, and was up about 19.10% in the last one year (as of 07/08/2024). During this past 52-week period, the fund has traded between $85.58 and $111.94.
The ETF has a beta of 1.44 and standard deviation of 31.75% for the trailing three-year period, making it a high risk choice in the space. With about 49 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Oil &amp; Gas Exploration &amp; Production ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IEO is an excellent option for investors seeking exposure to the Energy ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Invesco Energy Exploration &amp; Production ETF (ARCA:PXE) tracks Dynamic Energy Exploration &amp; Production Intellidex Index and the SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (ARCA:XOP) tracks S&amp;P Oil &amp; Gas Exploration &amp; Production Select Industry Index. Invesco Energy Exploration &amp; Production ETF has $133.33 million in assets, SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF has $3.43 billion. PXE has an expense ratio of 0.60% and XOP charges 0.35%.
<a href="https://www.zacks.com/stock/news/2297706/should-you-invest-in-the-ishares-u-s-oil-gas-exploration-production-etf-ieo?cid=CS-BENZ-FT-sector_etf-2297706">To read this article on Zacks.com click here.</a>

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Natural gas on the Nymex had a negative week before closing 10% lower than the previous one at $3.07. EIA reported on Thursday a bullish, nonetheless, draw of 321 Bcf in working underground stocks for the week ended January 24.

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