Vanguard Energy ETF (ARCA:VDE), Quote.Headers.trade-ideas

Vanguard Energy ETF

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The fund employs an indexing investment approach designed to track the performance of the MSCI US Investable Market Index (IMI)/Energy 25/50, an index made up of stocks of large, mid-size, and small U.S. companies within the energy sector, as classified under the Global Industry Classification Standard (GICS). The Advisor attempts to replicate the target index by seeking to invest all, or substantially all, of its assets in the stocks that make up the index, in order to hold each stock in approximately the same proportion as its weighting in the index. The fund is non-diversified.

Exxon Mobil Corp.

Chevron Corp.

Conocophillips Co

Eog Resources Inc

Schlumberger Nv.

Marathon Petroleum Corp.

Phillips 66

Valero Energy Corp.

Williams Cos. Inc.

Oneok Inc.

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FENY

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.

Rise in Oil Price Fails to Lift Energy ETFs: What&#39;s Ahead?

Mid Cap

Sector ETFs

MTDR

Designed to provide broad exposure to the Energy ETFs category of the market, the First Trust Energy AlphaDEX ETF (ARCA:FXN) is a smart beta exchange traded fund launched on 05/08/2007.

Is First Trust Energy AlphaDEX ETF a Strong ETF Right Now?

Nicolas Maduro shutter

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Tensions Rise In Venezuela As Opposition Disputes Election Results: Impact On Oil ETFs

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VANGUARD FTSE DEVELOPED WORLD UCITS ETF

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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>

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

Designed to provide broad exposure to the Energy ETFs category of the market, the First Trust Energy AlphaDEX ETF (ARCA:FXN) is a smart beta exchange traded fund launched on 05/08/2007.
<h2>What Are Smart Beta ETFs?</h2>
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
<h2>Fund Sponsor &amp; Index</h2>
FXN is managed by First Trust Advisors, and this fund has amassed over $478.36 million, which makes it one of the larger ETFs in the Energy ETFs. This particular fund, before fees and expenses, seeks to match the performance of the StrataQuant Energy Index.
The StrataQuant Energy Index is a modified equal-dollar weighted index designed by the AMEX to objectively identify and select stocks from the Russell 1000 Index that may generate positive alpha relative to traditional passive style indices through the use of the AlphaDEX screening methodology.
<h2>Cost &amp; Other Expenses</h2>
Investors should also pay attention to an ETF&#39;s expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.62% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.02%.
<h2>Sector Exposure and Top Holdings</h2>
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it&#39;s still important for investors to research a fund&#39;s holdings.
This ETF has heaviest allocation in the Energy sector - about 99.10% of the portfolio.
Looking at individual holdings, Valero Energy Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vlo#NYSE">VLO</a>) accounts for about 4.23% of total assets, followed by Matador Resources Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mtdr#NYSE">MTDR</a>) and Nov Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nov#NYSE">NOV</a>).
Its top 10 holdings account for approximately 39.22% of FXN&#39;s total assets under management.
<h2>Performance and Risk</h2>
The ETF has gained about 1.68% so far this year and is down about -4.04% in the last one year (as of 09/04/2024). In the past 52-week period, it has traded between $15.73 and $19.35.
The fund has a beta of 1.61 and standard deviation of 28.88% for the trailing three-year period, which makes FXN a high risk choice in this particular space. With about 41 holdings, it has more concentrated exposure than peers.
<h2>Alternatives</h2>
First Trust Energy AlphaDEX ETF is an excellent option for investors seeking to outperform the Energy ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Energy ETF (ARCA:VDE) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (ARCA:XLE) tracks Energy Select Sector Index. Vanguard Energy ETF has $8.22 billion in assets, Energy Select Sector SPDR ETF has $36.48 billion. VDE has an expense ratio of 0.10% and XLE charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Energy ETFs.
<a href="https://www.zacks.com/stock/news/2331117/is-first-trust-energy-alphadex-etf-fxn-a-strong-etf-right-now?cid=CS-BENZ-FT-smart_beta_etf-2331117">To read this article on Zacks.com click here.</a>

Venezuelan President Nicolás Maduro faces intense criticism following his declared victory in a <a href="https://www.benzinga.com/news/24/07/40003819/elon-musk-calls-venezuela-elections-a-travesty-as-nicolas-maduro-wins-third-term-amid-fraud-allegati">contentious presidential election.</a>
What Happened: The opposition, led by candidate Edmundo González, disputes the results, claiming they secured a significant win, according to the Associated Press.
Thousands of supporters rallied outside the United Nations' offices in Caracas, asserting González&#8217;s victory. 
Opposition leader Maria Corina Machado, addressing the crowd from atop a truck, called on the National Electoral Council (CNE) to release the voting tally sheets from each precinct, questioning the transparency of the election process.
Machado claimed the opposition coalition had obtained over 84% of the tallies, expressing confidence in González&#8217;s victory. She emphasized the opposition&#8217;s commitment to a peaceful transition, while González predicted his final vote count would exceed 8 million, compared to the 5.1 million reported by the CNE for Maduro. 
González, along with Machado, urged supporters to maintain calm and avoid violence during the protests.
The Organization of American States (OAS) criticized the CNE for not releasing detailed results, labeling the situation as a form of repression and calling for a possible new election under international observation. 
Maduro&#8217;s allies, including National Assembly President Jorge Rodriguez and lawmaker Diosdado Cabello, are defending the president&#8217;s victory and condemning the opposition as fascists. 
See Also: <a href="https://www.benzinga.com/news/24/07/40002632/kamala-harris-the-will-of-the-venezuelan-people-must-be-respected-as-socialist-nicol-s-maduro-faces">Kamala Harris Says &#8216;The Will Of The Venezuelan People Must Be Respected&#8217; </a>
Why It Matters: Venezuela possesses the world's largest proven crude oil reserves. 
But, under Maduro, the nation has suffered severe economic decline since 2013, including plummeting oil prices, shortages, and hyperinflation.
As a result, Venezuela suffers from widespread social unrest and the largest emigration crisis in Latin America&#8217;s recent history — over 7.7 million Venezuelans have <a href="https://www.pbs.org/newshour/show/venezuela-in-political-standoff-after-both-maduro-and-opposition-claim-election-victory">reportedly</a> left the country over the past decade.
Protests erupted nationwide on Monday, with significant unrest in Caracas where riot police clashed with demonstrators. The Attorney General reported <a href="https://www.reuters.com/world/americas/venezuela-ruling-party-opposition-rally-supporters-election-dispute-2024-07-30/">hundreds</a> of arrests, with at least one dead and dozens of security personnel injured.
Notably, opposition leader Freddy Superlano was <a href="https://www.bloomberg.com/news/articles/2024-07-30/venezuela-apprehends-opposition-figure-amid-election-protests">detained</a> under unclear circumstances, raising concerns about the government&#8217;s response to dissent.
The election was considered a critical moment for Venezuela. It offered a chance for change after 25 years of single-party rule.
The Biden administration <a href="https://www.benzinga.com/news/24/04/38290486/team-biden-considers-reinstating-oil-sanctions-on-venezuela-over-election-concerns-report" target="_blank" rel="noreferrer noopener">contemplated reinstating oil sanctions</a> on Venezuela due to concerns over the fairness of the election. The disputed results have once again cast a shadow over the election process.
Long lines formed outside stores in Caracas as people braced for potential food shortages amid ongoing demonstrations.
Maduro accused the opposition of attempting a coup. 
In a symbolic act of defiance, protesters are <a href="https://www.register-herald.com/news/nation_world/hugo-ch-vez-statues-targeted-across-venezuela-in-post-election-unrest/article_539d4528-69ef-57bf-ad06-66310399cc60.html">toppling</a> statues of former President Hugo Chávez — Maduro&#8217;s mentor. 
Price Action: On Tuesday, major oil companies finished in the green:
<ul>
<li>Chevron Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>) was up 1.90% to $159.57.</li>
<li>Exxon Mobil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) was up 1.78% to $118.17.</li>
<li>Marathon Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRO#NYSE">MRO</a>) was up 0.69% to $27.64.</li>
<li>ConocoPhillips (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COP#NYSE">COP</a>) was up 0.72% to $109.91.</li>
<li>EOG Resources (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EOG#NYSE">EOG</a>) was up 0.75% to $126.15.</li>
</ul>
Most ETFs tied to the oil sector also closed higher, <a href="https://pro.benzinga.com/dashboard">according to Benzinga Pro</a>: SPDR Select Sector Fund &#8211; Energy Select Sector (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) was up 1.55%; Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) was up 1.5%; and iShares U.S. Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYE#NYSE">IYE</a>) finished 1.29% higher.
Only United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) traded lower on Tuesday, down 0.97%.
Now Read: 
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/40049081/small-caps-eyes-strongest-month-against-tech-stocks-in-22-years-why-presidential-el">Small Caps Eye Strongest Month Against Tech Stocks In 22 Years: Why Presidential Elections Could Push Russell 2000 To Record Highs</a></li>
</ul>
Image: Shutterstock

Former President Donald Trump accused the Organization of the Petroleum Exporting Countries (OPEC) of deliberately driving down <a href="https://www.benzinga.com/topic/oil">oil prices</a> to benefit Vice President Kamala Harris, warning that her potential presidency could be a &#8220;disaster&#8221; for the U.S.
What Happened: Trump took to his social media platform, Truth Social, to voice his concerns about OPEC&#8217;s actions. He <a href="https://truthsocial.com/@realDonaldTrump/posts/112871592399001658">wrote</a>, &#8220;OPEC nations are going all out to drive down oil prices in the hope that crazy Kamala Harris will win. Then they will really reap the rewards! She will be a disaster for the USA!&#8221;
<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1024" height="394" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/30020934/image-61-1024x394.png" alt="" class="wp-image-463915" style="width:593px;height:auto" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/30020934/image-61-1024x394.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/30020934/image-61-300x115.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/30020934/image-61-768x295.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/30020934/image-61.png 1227w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Trump&#8217;s comments come in the wake of a recent <a href="https://www.benzinga.com/markets/esg/24/07/39888337/what-a-kamala-harris-presidency-could-mean-for-oil-stocks-chevron-marathon-move-lower">decline in oil stocks</a>, which occurred amid speculation that Harris might adopt a more stringent stance on the oil and gas industry if she were to become the Democratic presidential nominee and win the White House race.
At the time of publication, oil stocks remain in the red after President Joe Biden opted out of the 2024 election race against Trump and endorsed Harris on Jul. 21 as a top presidential nominee. 
WTI Crude has dropped from $78.64 to $75.43 following Harris&#8217;s nomination for the presidential run, according to <a href="https://pro.benzinga.com/dashboard">Benzinga Pro data</a>.
Chevron Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>), Marathon Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRO#NYSE">MRO</a>), Exxon Mobil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>), ConocoPhillips (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COP#NYSE">COP</a>), and EOG Resources (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EOG#NYSE">EOG</a>) are all experiencing declines.
ETFs tied to the oil sector have also mirrored this downward trend, with United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), SPDR Select Sector Fund &#8211; Energy Select Sector (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>), Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>), and iShares U.S. Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYE#NYSE">IYE</a>) all under pressure.
If Harris wins, her administration might focus on climate policies, including reducing carbon emissions and increasing funding for <a href="https://www.benzinga.com/markets/esg/24/07/39888337/what-a-kamala-harris-presidency-could-mean-for-oil-stocks-chevron-marathon-move-lower">renewable energy projects</a>. This shift could result in higher compliance costs and stricter regulatory requirements for the oil industry, potentially affecting profitability.
See Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/40015199/oil-prices-remain-under-pressure-despite-rising-middle-east-tensions-a-bearish-tria?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Oil Prices Remain Under Pressure Despite Rising Middle East Tensions: Analyst Says Bearish Price Trend On Horizon</a>
Why It Matters: A report from Citi on Monday suggested that a Trump presidency could be &#8220;net bearish&#8221; for oil prices. This is due to <a href="https://www.benzinga.com/markets/24/07/40011423/net-bearish-for-oil-citi-warns-investors-of-trump-presidency-risks">his oil-friendly policies</a> and potential tariffs, which could increase oil supply and lower prices.
However, according to the same report, the main threat to oil markets under a <a href="https://www.benzinga.com/news/24/07/39810934/trumps-second-term-could-trigger-global-inflation-warn-analysts-2024-2025-is-going-to-be-very-differ" target="_blank" rel="noreferrer noopener">Trump presidency</a> would be pressure on Iran. If Trump were to adopt his previous maximum-pressure campaign on Iran once again, Iranian oil exports could be reduced by 500 to 900 thousand barrels per day, impacting global markets. 
Furthermore, Goldman Sachs warned last week that the next <a href="https://www.benzinga.com/markets/equities/24/07/39985035/goldman-sachs-warns-of-limited-oil-supply-options-for-next-us-administration">U.S. administration would have limited options</a> to significantly boost domestic oil supply due to low strategic petroleum reserves and potential regulatory easing.
In a broader context, the U.S. has been producing record amounts of oil, averaging 12.9 million barrels <a href="https://www.benzinga.com/markets/commodities/24/06/39510687/3-stocks-to-buy-as-oil-prices-collapse-opec-panics">per day in 2023</a>. This surge in production has led to concerns of a potential glut, reminiscent of the 2020 COVID lockdown period.
Moreover, Trump&#8217;s rift with OPEC is not new. In April 2018, the former president tweeted that OPEC had driven oil prices "artificially very high," a move that "will not be accepted."
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
<div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!
&mdash; Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/987284041304100864?ref_src=twsrc%5Etfw">April 20, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</figure>
Read Next: 
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39992214/russell-2000-notches-third-week-of-gains-strongest-streak-since-august-2022-small-c?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Russell 2000 Notches Third Week Of Gains, Strongest Streak Since August 2022: Small Caps Serve &#8216;As Economic Barometer,&#8217; Analyst Says</a></li>
</ul>
Image Via Shutterstock 
Disclaimer:&nbsp;This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Equities

Politics

Trump Accuses OPEC Of Manipulating Oil Prices To Favor Kamala Harris, Warns 'She Will Be A Disaster For The USA!'

Oil stocks fell early Monday amid concerns that Vice President Kamala Harris could take a tougher stance on the oil and gas industry if she becomes the Democratic presidential nominee and wins the <a href="https://www.benzinga.com/general/politics">race for the White House.</a>
As California attorney general, Harris filed lawsuits against fossil fuel companies, supported reducing greenhouse gas emissions, and pushed for a ban on fracking, <a href="https://www.offshore-technology.com/news/will-kamala-harris-take-a-stronger-stance-than-biden-against-oil-and-gas-industry/?cf-view">according</a> to Offshore Technology. Harris has also been critical of offshore oil exploration and defended California's Low Carbon Fuel Standard.
This potential shift in the political landscape has investors worried, with oil majors seeing declines on Monday.
<h2 class="wp-block-heading">Oil Stocks Feeling The Heat</h2>
At the time of publication, Chevron Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>) was down 0.69% to $158.06, Marathon Oil Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRO#NYSE">MRO</a>) fell by 0.97% to $28.44, Exxon Mobil Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) decreased by 0.15% to $115.92, ConocoPhillips (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COP#NYSE">COP</a>) slipped 1.17% to $112.99, and EOG Resources, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EOG#NYSE">EOG</a>) saw a drop of 0.72% to $128.32.
ETFs tied to the oil sector mirrored this downward trend. The Energy Select Sector SPDR Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) was down 0.23%, Vanguard Energy Index Fund ETF Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) fell by 0.19%, and the iShares U.S. Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYE#NYSE">IYE</a>) declined by 0.27%.
<h2 class="wp-block-heading">Renewables Traded In Green</h2>
Meanwhile, ETFs focused on renewable energy stocks were in the green, reflecting optimism about a potential shift towards clean energy under a potential Harris administration. The iShares Global Clean Energy ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ICLN#NASDAQ">ICLN</a>) was up 0.51%, and the GRID First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GRID#NASDAQ">GRID</a>) rose by 1.11%.
Read Also:<a href="https://www.benzinga.com/news/24/07/39883677/investors-anticipate-unraveling-of-trump-trade-as-biden-exits-presidential-race-but-analyst-says-its"> Investors Anticipate Unraveling Of &#8216;Trump Trade&#8217; As Biden Exits Presidential Race, But Analyst Says &#8216;It&#8217;s A Bit Too Early For The Markets To Declare Victory For Trump&#8217;</a>
<h2 class="wp-block-heading">Harris&#8217; Green Policies, Push For Renewables</h2>
The market&#8217;s reaction highlights investor concerns that Harris, known for her environmental advocacy, could enforce stricter regulations on fossil fuels and bolster support for renewable energy initiatives. As Vice President, Harris has supported various green policies, and her presidential campaign is expected to intensify the push towards renewable energy, potentially at the expense of traditional oil and gas companies.
Oil majors have reason to be cautious. If Harris runs for president and wins, her administration might focus on climate policies, including reducing carbon emissions and increasing funding for renewable energy projects. This shift could result in higher compliance costs and stricter regulatory requirements for the oil industry, potentially affecting their profitability.
<h2 class="wp-block-heading">Harris&#8217; Potential Leadership Signals A Greener Future</h2>
The early trading slump in oil stocks underscores the market&#8217;s sensitivity to political developments, especially those that could significantly alter the energy sector&#8217;s landscape. In contrast, the positive movement in renewable energy ETFs suggests that investors are betting on a greener future under Harris&#8217;s potential leadership.
As the political climate heats up, oil majors might need to brace for a more challenging operating environment. The question on everyone&#8217;s mind: Will Harris&#8217;s potential presidency mean a seismic shift for the energy sector? Industry leaders are closely watching and preparing for any regulatory adjustments that may arise.
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What A Kamala Harris Presidency Could Mean For Oil Stocks: Chevron, Marathon Move Lower

The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, are expected to extend their current production cuts this weekend, as per delegates and analysts.
What Happened: The OPEC+ alliance, which was scheduled to meet in person in Vienna on Jun. 1, has now moved the meeting to a virtual platform on Jun. 2. The group is currently implementing a combined 5.86 million barrels per day of supply cuts, with 2 million barrels per day set to expire at the end of this year, as per a CNBC <a href="https://www.cnbc.com/2024/05/31/oil-alliance-opec-could-extend-production-cuts-this-weekend.html?taid=66595f9eb890320001ff036f&amp;utm_campaign=trueanthem&amp;utm_medium=social&amp;utm_source=twitter%7Cmain">report</a> on Tuesday.
Market participants are closely watching whether the remaining 2.2 million barrels per day of cuts, which are in place until the end of the second quarter, will be extended. This is in light of projected demand increases, particularly in the summer months.
Three OPEC+ delegates, speaking on the condition of anonymity, told CNBC that the 2.2 million-barrels-per-day supply reductions are likely to be prolonged. The group is also monitoring individual members&#8217; quota compliance and has requested overproducers to implement additional cuts, with Iraq and Kazakhstan having detailed compensation plans.
The OPEC+ coalition&#8217;s decision to extend production cuts is influenced by the anticipated rise in summer demand, driven by factors such as the conclusion of China&#8217;s refinery maintenance and increasing U.S. consumption as summer approaches. 
"Come June, China would be largely out of refinery maintenance, U.S. consumption is improving as summer moves closer, so June should already see negative crude balances. And then August is the peak month for tightness," Viktor Katona, lead crude analyst at Kpler, said according to the report.
Investors interested in some of the most profitable oil ETFs on the market to determine if the oil sector aligns with their investment strategy might consider the following options: Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>), VanEck Oil Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OIH#NYSE">OIH</a>), United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), iShares U.S. Oil &amp; Gas Exploration &amp; Production ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/IEO#BATS">IEO</a>), SPDR S&amp;P Oil &amp; Gas Equipment &amp; Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XES#NYSE">XES</a>), and ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>).
See Also: <a href="https://www.benzinga.com/news/24/05/39084577/elon-musk-mocks-steve-jobs-agrees-apple-could-be-light-years-ahead-of-competition-if-it-embraced-ope?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Elon Musk Mocks Steve Jobs, Agrees Apple Could Be &#8216;Light Years&#8217; Ahead Of Competition If It Embraced Open</a>
Why It Matters: Recent geopolitical events, such as the Israeli forces entering <a href="https://www.benzinga.com/markets/emerging-markets/24/05/39048961/all-eyes-on-rafah-as-israeli-forces-enter-safe-zones-spain-ireland-and-norway-officially">safe zones in Gaza</a>, have also added to the uncertainty in the oil market. The ongoing tensions in the Middle East have contributed to global inflation and energy security concerns, further influencing OPEC+&#8217;s decision-making.
Oil prices have remained range-bound in the first half of the year, with the potential for spikes due to developments in the Middle East. 
Rystad&#8217;s Jorge Leon noted that regional escalations could add a risk premium of up to $10 per barrel. OPEC+ delegates told CNBC that while the situation in the Gaza Strip still adds some pressure, the market has mostly absorbed its impact.
OPEC+ must also navigate its relationship with the U.S., which has criticized the coalition&#8217;s supply cuts over gasoline price concerns. Last week, the Biden administration announced the release of 1 million barrels of gasoline from reserves to lower pump prices. Similar measures were taken with the Strategic Petroleum Reserve during the COVID-19 pandemic. 
However, an OPEC+ delegate noted these actions are unlikely to have a long-term impact beyond summer price relief. The U.S. usually aims to replenish its emergency state reserves stockpile, according to the report.
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Image Via Shutterstock 
This story was generated using <a href="https://www.benzinga.com/author/benzinga-neuro">Benzinga Neuro</a> and edited by <a href="https://www.benzinga.com/topic/Kaustubh-Bagalkote" target="_blank" rel="noreferrer noopener">Kaustubh Bagalkote</a>

iShares Dow Jones US Oil & Gas Exploration & Production Index Fund

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OPEC+ Likely To Extend Production Cuts Amid Rising Summer Demand: Report

As <a href="https://www.benzinga.com/topic/2024-presidential-election">the 2024 U.S. Presidential election</a> approaches, the energy sector stands at a crossroads. 
Potential shifts in policy could significantly impact both traditional and <a href="https://www.benzinga.com/topic/clean-energy">clean energy markets</a>.
According to <a href="https://markets.jpmorgan.com/research/email/scx/qijkd11j/LK2zzrWZCAlD7mRxHsWnxA/GPS-4675360-0">insights</a> from JPMorgan's Strategic Research team, the outcome of the election between incumbent President Joe Biden and Ex-President Donald Trump could lead to varying scenarios. 
Each of these scenarios has distinct implications for investors and companies in the sector.
<h3 class="wp-block-heading">1. Biden Presidency, Split Congress</h3>
<ul>
<li>Clean Energy: This scenario is seen as the lowest risk for the clean energy sector. A divided Congress would likely maintain the status quo, making it difficult to roll back or repeal the <a href="https://home.treasury.gov/news/press-releases/jy2376">Inflation Reduction Act</a> (IRA) incentives. This stability is favorable for companies relying on federal clean energy incentives. Under Biden, hundreds of billions of dollars were put toward <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2024/04/04/biden-harris-administration-announces-historic-20-billion-in-awards-to-expand-access-to-clean-energy-and-climate-solutions-and-lower-energy-costs-for-communities-across-the-nation/">incentives</a> for green energy.</li>
<li>Traditional Energy: The regulatory environment under Biden is expected to remain challenging, but stable. Companies have adapted to tighter regulations, which have not hindered record oil and gas output in the U.S. During Biden&#8217;s presidency, the U.S. <a href="https://www.eia.gov/todayinenergy/detail.php?id=61545">set a record</a> for crude oil production. In 2023, it outpaced what all other countries — including Saudi Arabia — have ever produced in one year. </li>
</ul>
<h3 class="wp-block-heading">2. Trump Presidency, Split Congress</h3>
<ul>
<li>Clean Energy: This scenario raises the risk profile slightly. A split Congress would make it challenging to repeal IRA incentives; Trump — who <a href="https://www.nytimes.com/interactive/2020/climate/trump-environment-rollbacks-list.html">rolled</a> back more than 100 pro-environmental policies during his administration — will likely slow their implementation by reducing funding to relevant departments. He may also impact grant and loan spending. </li>
<li>Traditional Energy: Trump — who <a href="https://apnews.com/article/trump-hannity-dictator-authoritarian-presidential-election-f27e7e9d7c13fabbe3ae7dd7f1235c72">vowed</a> to be a dictator on &#8220;day one&#8221; so he can &#8220;drill, drill, drill" — could ease regulations, potentially increase access to resources on federal lands and reduce regulations, thereby supporting more exports.</li>
</ul>
<h3 class="wp-block-heading">3. Trump Presidency, Republican Congress</h3>
<ul>
<li>Clean Energy: This is considered the highest-risk scenario for clean energy. A Republican majority could partially repeal the IRA through a reconciliation bill, particularly targeting unspent funds. However, full repeal is unlikely due to significant investments in Republican states.</li>
<li>Traditional Energy: The sector could benefit from reduced regulations and increased resource access. Policies encouraging more energy exports, such as LNG, could positively impact the long-term gas market.</li>
</ul>
JPMorgan did not explore the scenario of a Biden presidency and Democrat Congress.
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<h3 class="wp-block-heading">Clean Energy Stocks</h3>
<ul>
<li>Valuation and Sentiment: Clean energy stocks, including those in electric vehicle (EV) charging and green hydrogen, have lagged due to weak fundamentals. Election outcomes could exacerbate this trend, especially under a Republican sweep.</li>
<li>Loan Programs: A Republican sweep might curtail the DOE Loan Programs Office's authority, negatively impacting companies seeking non-dilutive funding for capex-intensive projects.</li>
<li>Subsidies and Tariffs: Potential downsizing or repeal of subsidies for EVs and tightening of charging incentives are risks. However, protectionist measures like <a href="https://www.benzinga.com/markets/asia/24/05/38824198/biden-announces-massive-tariffs-on-chinese-imports-to-protect-us-industries-clean-energy-solar-stock">tariffs on Chinese imports</a> are likely to remain, regardless of the administration.</li>
</ul>
Investors in the iShares Global Clean Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ICLN#NYSE">ICLN</a>), the First Trust NASDAQ Clean Edge Green Energy Index Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/QCLN#NYSE">QCLN</a>) and the Invesco WilderHill Clean Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PBW#NYSE">PBW</a>) must take heed of these observations.
<h3 class="wp-block-heading">Traditional Energy Stocks</h3>
<ul>
<li>Regulations: The Trump administration could ease regulations and increase resource access, but ongoing legal and political challenges could continue to <a href="https://www.benzinga.com/news/24/05/38997165/trumps-policies-for-money-transaction-with-big-oil-under-investigation-by-senate-democrats-cronyism">shape the regulatory landscape</a>.</li>
<li>Refiners: Refiners might benefit from the continuation of Trump-era corporate tax cuts. However, geopolitical tensions, such as those in the Middle East, could pose risks to crude supply and impact refiner margins.</li>
</ul>
Investors in the Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>), the Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) and the Alerian MLP ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AMLP#NYSE">AMLP</a>) may want to adjust their positioning based on these observations.
<h3 class="wp-block-heading">Utility and Renewables </h3>
<ul>
<li>Regulated vs. Unregulated: Unregulated renewables are more sensitive to election outcomes, while regulated utilities are less affected. A Biden re-election could be a catalyst for renewables to regain ground lost in 2023.</li>
<li>IRA Resilience: Core utility and renewable energy provisions of the IRA are expected to be resilient, though a Trump victory could create uncertainty until policy clarity emerges.</li>
</ul>
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Utility sector investors such as those invested in the Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>), the Global X US Infrastructure Development ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PAVE#NYSE">PAVE</a>) or the Vanguard Utilities ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VPU#NYSE">VPU</a>) must take note of such observation.
For those looking to get exposure to renewables, the ICLN, QCLN and PBW ETFs are popular capital market funds in the space.
<h3 class="wp-block-heading">Investment Considerations</h3>
Investors should monitor the evolving political landscape as the election approaches. The potential for policy shifts under different election scenarios underscores the importance of a diversified portfolio. 
As always, staying informed and agile in response to political developments will be key to navigating the energy sector&#8217;s challenges and opportunities in the run-up to the 2024 election.
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What A Biden Or Trump Victory Might Mean For The Energy Sector

Users of ChatGPT and other competing large language models can be forgiven if they feel the responses are like magic. MIT's Technology Review even recently published an article titled "Nobody Knows How AI Works."
One thing that is known, though, is powering the advanced AI models captivating the world's attention requires massive amounts of energy. OpenAI's Sam Altman discussed this fact, warning that future advances in AI will consume significantly more power than people expect, saying "there&#8217;s no way to get there without a breakthrough."
As it stands, data centers around the world account for between 1-1.5% of global electricity use, according to the International Energy Agency.
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With the AI boom in its nascent days, Alex de Vries, Ph.D. candidate and data scientist at the Central Bank of the Netherlands, predicts that the AI sector alone will use about the same amount of electricity as the Netherlands uses a year by 2027.
Financial blog Zerohedge posted from its X account saying "those AI data centers won&#8217;t run on hopes and dreams," mocking hedge funds shorting energy stocks.
For investors interested in AI but concerned about lofty valuations in technology stocks, there could be opportunities in energy to play the AI boom.
The Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) has had a strong start to the year, up ~11%.
Trending: Long overdue disruption in the moving industry is underway.<a href="https://www.benzinga.com/money/muvr"> Here&#8217;s how to invest in it with just $100</a>.
For many in the tech industry, resorting to fossil fuels to further power tech isn't an optimal solution, especially as the world seeks to reach net zero by 2050.
Sam Altman is known for being at the forefront of AI, but he's also well positioned at what he sees as a possible breakthrough to address the energy crisis, saying "it motivates us to go invest more in fusion."
According to the International Atomic Energy Agency, "If nuclear fusion can be replicated on earth at an industrial scale, it could provide virtually limitless clean, safe and affordable energy to meet the world's demand."
Altman has invested $375 million into Helion, a private company seeking to commercialize nuclear fusion.
He's also helping nuclear fission startup, Oklo, to go public via AltC Acquisition Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ALCC#NYSE">ALCC</a>).
With many of the world's brightest minds working on problems in AI, other exciting companies are working to solve the power needs of these AI companies in a sustainable way.
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<li>This startup coined &#8220;eBay for gamers&#8221; with a breathtaking track record has opened up<a href="https://www.benzinga.com/money/gameflip-2"> a window to invest in its future growth</a>.</li>
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Sam Altman Warns AI Development Needs An Energy 'Breakthrough' As Financial Pundit Says 'AI Data Centers Won't Run On Hopes And Dreams'

Oil prices traded marginally lower during Monday morning&#8217;s Asian trading session as possibilities of a slowdown led by extended rate hikes by the&nbsp;Federal Reserve&nbsp;overshadowed&nbsp;<a target="_blank" href="https://www.benzinga.com/news/earnings/23/06/33081182/crude-oil-rises-over-1-feds-preferred-inflation-gauge-slows-in-may" rel="noreferrer noopener">fears of any supply constraints</a>.
What Happened:&nbsp;West Texas Intermediate futures for August delivery were down 0.16% at $70.53 per barrel, while Brent futures for September delivery traded 0.08% lower at $75.34 per barrel.
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Recent data released on Friday supported the case for further rate hikes by the Fed. Although headline PCE inflation continued to slow to 3.4% year-over-year, the core measure remained relatively unchanged at 4.6% year-over-year. Additionally, factory activity growth in China, the world&#8217;s largest crude importer, showed signs of slowing down in June, according to a Reuters report.
Supply Crunch Boost?&nbsp;Analysts also anticipate tighter supplies and a potential price boost in the second half of the year. Saudi Arabia pledged to cut an additional 1 million barrels per day of output in July, while the U.S. is replenishing its Strategic Petroleum Reserve, as reported. U.S. crude output declined in April to 12.615 million barrels per day, the lowest level since February, according to the U.S. Energy Information Administration.
Market attention will now turn to a conference hosted by the Organization of the Petroleum Exporting Countries (OPEC) later this week, which is expected to provide insights into future supply levels.
Price Action: On Friday, the&nbsp;United States Brent Oil Fund LP&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 1.15% higher, while the&nbsp;Vanguard Energy Index Fund ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 0.68%.
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Oil Market Starts July On Slippery Slope: Here Is A Key Factor To Watch Out For

Oil prices rose during Tuesday morning&#8217;s Asian trading session driven by <a href="https://www.benzinga.com/news/23/06/33009174/whats-next-for-russia-after-wagners-challenge-to-putin">geopolitical concerns surrounding Russia</a> and potential supply disruptions.
Prominent market commentator, Jim Cramer, indicated oil prices may not shoot much higher. ‘Don&#8217;t bite on oil going higher. It will just be another headfake as Russia has transactional friendships with China and India,' he <a href="https://twitter.com/jimcramer/status/1673142051653795840">said</a> in his tweet.
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Cramer's advice comes at a time when oil prices shot higher in the wake of an attempted mutiny by Wagner forces against Russian president Vladimir Putin. Although the situation quickly de-escalated, oil traders are holding themselves back from factoring in the relief.
Price Action: West Texas Intermediate futures maturing in August was trading 0.43% higher at $69.67 per barrel during Tuesday morning Asian trade. Brent futures maturing in August rose 0.34% to trade at $74.43 per barrel. The United States Brent Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 0.56% higher on Monday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 1.65%, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
It is notable that concerns surrounding extended rate hikes by central banks and the fears of a subsequent recession appear to be holding back any unreasonable gains in oil prices. The fears seem to be justified given the recent central banking developments. If the Federal Reserve indicated it will hike rates by another <a href="https://www.benzinga.com/economics/macro-economic-events/23/06/32861662/powell-hits-the-brakes-after-10-straight-interest-rate-increases-but-fed-signals-">50 basis points this year</a>, the Bank of England went ahead and implemented such a hike in its recent policy following a higher-than-expected inflation print for May in the U.K. But the focus recently has been on Russia.
Expert Take: ANZ Research said in a note that despite the rebellion being short-lived, there is likely to be increased focus on geopolitical issues in the coming months.
‘The oil market had become complacent as Russian oil continued to seep into the international market. This can't be assumed to the same extent following the weekend's events. This is likely to lead to a risk premium being applied to the oil price amid the risk of further civil unrest. However, for the moment, the impact is likely to be minimal,' it said according to a research note.
ANZ Research further noted that the market is slowly turning its focus to the upcoming driving season in the U.S. and said preliminary data suggests demand is rising strongly. ‘The American Automobile Association estimates 43m motorists will drive 50 miles or more from their homes this Independence Day weekend. That's 4% more than 2019,' it said.
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Jim Cramer On Oil Going Higher Amid Wagner Mutiny In Russia: 'Just Be Another Headfake'

Oil prices rose during Monday morning&#8217;s Asian trading session as investors and traders began digesting the impact of the <a href="https://www.benzinga.com/news/23/06/32999410/prigozhins-attempted-mutiny-against-russia-is-the-beginning-of-the-endgame-for-putin-says-expert">attempted mutiny</a> against Russian President Vladimir Putin while <a href="https://www.benzinga.com/news/23/06/32978843/janet-yellen-sees-lower-odds-of-us-recession-says-inflation-has-declined-significantly">worries about a global slowdown remained</a>.
West Texas Intermediate futures maturing in August rose 0.65% during Monday morning Asian trading session to trade at $69.68 per barrel. Brent futures maturing in August rose 0.73% to trade at $74.36 per barrel, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
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Rystad Energy Senior Vice President Jorge Leon wrote in a note that the internal military struggle in Russia adds limited oil price pressure amid heightened tensions in Moscow, <a href="https://www.bloomberg.com/news/articles/2023-06-25/latest-oil-market-news-and-analysis-for-june-26?srnd=markets-vp&amp;leadSource=uverify%20wall">according</a> to a Bloomberg report. "We do, however, believe that the geopolitical risk amid internal instability in Russia has increased," Leon said.
Fears of a recession due to extended rate hikes amid sticky inflation appear to be balancing any upward price pressure due to geopolitical and supply risks. This is given the fact that Federal Reserve Chair Jerome Powell has indicated rates may be hiked by a further 50 basis points this year.
At the same time, higher-than-expected inflation and a subsequent surprise 50 basis points rate hike by the Bank of England seem to have unnerved investors who have begun weighing in on <a href="https://www.benzinga.com/news/23/06/32978843/janet-yellen-sees-lower-odds-of-us-recession-says-inflation-has-declined-significantly">the possibility of extended rate rises in the U.S</a>.
Supply Concerns: RBC Capital Markets analyst Helima Croft said there were worries that Putin would declare martial law that would stop workers from showing up to major loading ports and energy facilities, potentially impacting millions of barrels of exports, according to a Reuters report. 
&#8220;It is our understanding that the White House was actively engaged yesterday in reaching out to key domestic and foreign producers about contingency planning to keep the market well supplied if the crisis impacted Russian output,&#8221; she said in a note.
The United States Brent Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 0.16% lower on Friday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) shed 0.88%.
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How Oil Markets Reacted After Wagner Group Attempted Coup Against Vladimir Putin In Russia

GOP presidential candidate Tim Scott believes the best way to reduce gas prices at pumps is by ramping up energy production <a href="https://www.benzinga.com/government/22/11/29493279/biden-warns-big-oil-over-outrageous-profits-if-they-dont-pass-it-theyre-going-to-pay">and not by punishing producers</a>.
"The best way to bring down sky-high prices at the gas pump is by unleashing American energy production —not punishing energy producers. I am proud to work with my colleagues to help keep energy prices low for the American people," Scott said on Twitter.
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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">The best way to bring down sky-high prices at the gas pump is by unleashing American energy production —not punishing energy producers. I am proud to work with my colleagues to help keep energy prices low for the American people.<a href="https://t.co/7rO6pD1YO4">https://t.co/7rO6pD1YO4</a>
&mdash; Tim Scott (@SenatorTimScott) <a href="https://twitter.com/SenatorTimScott/status/1668709831966900225?ref_src=twsrc%5Etfw">June 13, 2023</a></blockquote>
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The Senator from South Carolina, along with eight of his Senate colleagues, introduced the Pay Less at the Pump Act, according to a statement. Scott's colleagues include Senators John Barrasso (R-Wyo.), Marsha Blackburn (R-Tenn.), John Hoeven (R-N.D.), James Lankford (R-Okla.), Mike Lee (R-Utah), Cynthia Lummis (R-Wyo.), Jim Risch (R-Idaho), and John Thune (R-S.D.).
"This legislation will lower energy prices for Americans by repealing the Inflation Reduction Act's reinstatement of the $10.5 billion "Superfund Tax" on crude oil and imported petroleum products. By overturning the Democrats' reckless tax hike on oil and petroleum products, the Pay Less at the Pump Act would bring down energy costs and fuel American energy independence," the <a href="https://www.scott.senate.gov/media-center/press-releases/scott-colleagues-introduce-bill-to-save-taxpayers-billions-at-the-pump-and-fuel-american-energy-independence">statement</a> said.
Price Action: Oil prices fell on Wednesday after data showed an unexpected rise in U.S. crude stocks, which indicated weak demand, according to a Reuters report. West Texas Intermediate futures maturing in July were trading 0.06% lower at $69.38 per barrel during Wednesday afternoon Asian trading session. On Wednesday, however, oil prices rose 3% after China&#8217;s central bank reduced a short-term lending rate for the first time in 10 months.
The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 3.09% higher on Tuesday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 0.56%, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
Scott has been critical of President Joe Biden&#8216;s policies and has voiced his concerns about the current administration's economic stance. "With prices of everything from groceries to gas surging, it's clear that Bidenomics is not working. The American people need relief from this President's inflationary policies," Scott <a href="https://twitter.com/SenatorTimScott/status/1668333086072004608">said</a> in his tweet.
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Economics

Presidential Candidate Tim Scott Says Best To Unleash US Energy Production To Bring Down 'Sky High' Prices At Pumps

Goldman Sachs Group Inc., which has been among the most bullish banks on oil price outlook, has reportedly lowered its price forecasts once again in the wake of increasing <a href="https://www.benzinga.com/news/23/05/32617312/iran-is-a-responsible-player-says-opec-secretary-general-heres-what-he-said-on-the-nations-full-retu">global supplies and reducing demand</a>.
The bank has now lowered its Brent oil price forecast for December to $86 a barrel compared to its previous estimate of $95 a barrel, <a href="https://www.bloomberg.com/news/articles/2023-06-11/goldman-sachs-slashes-brent-outlook-to-below-90-by-year-end?srnd=premium-asia&amp;leadSource=uverify%20wall">according</a> to a Bloomberg report. This is Goldman's third downward price revision in six months.
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Oil prices declined on Monday as investors and traders remained cautious ahead of the Federal Reserve's <a href="https://www.benzinga.com/news/23/06/32790467/imf-says-fed-may-need-to-push-interest-rates-higher-for-longer-inflation-does-remain-a-pressing-conc">policy decision this week</a>. Brent futures maturing in August were trading 1.08% lower at $73.98 per barrel during Monday morning Asian trading session.
Supply increases from countries facing sanctions — Russia, Iran and Venezuela — are an important driver in the lower price outlook, according to Goldman. Russia&#8217;s supply production, in particular, has "nearly fully recovered" despite sanctions from the West, the report said.
"We have never been this wrong for this long without seeing evidence to change our views," Jeff Currie, Goldman's head of commodities research told Bloomberg TV last week.
Fed Policy: Recession fears are also having an impact on oil prices, with higher interest rates likely to be a "persistent headwind" to higher prices, wrote Goldman analysts including Callum Bruce and Currie in the note.
Market participants will be keenly watching out for any hints regarding the Fed's future policy path as further hikes will hurt an <a href="https://www.benzinga.com/economics/macro-economic-events/23/06/32719092/us-economy-alarmed-new-york-fed-indicates-highest-likelihood-of-recession-in-over">already weak U.S. economy</a>, leading to demand concerns from the world's largest oil consumer.
The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 0.98% lower on Friday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) lost 0.63%.
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Cheaper Gas For The Holidays? Goldman Sachs Predicts Brent Oil Below $90 By Year-End

Concerns over the global economy dragged oil prices on Tuesday afternoon Asian trade after a knee-jerk surge the day before in the aftermath of the <a href="https://www.benzinga.com/news/23/06/32707274/saudi-arabia-announces-massive-oil-production-cut-minister-says-will-do-whatever-is-necessary-for-pr">unexpected production cut announced by Saudi Arabia</a>.
West Texas Intermediate futures maturing in July were trading 2.04% lower at $70.70 per barrel. Brent futures maturing in August were trading 1.67% lower at $75.42 per barrel. 
The fall in oil prices comes at a time when investors and traders are keenly awaiting the Federal Reserve's interest rate decision during its June policy meeting scheduled next week which will also give hints <a href="https://www.benzinga.com/news/23/06/32708241/imf-md-kristalina-georgiev-thinks-fed-isnt-done-with-rate-hikes-we-are-in-an-exceptionally-uncertain">about its future policy path</a>. The central bank's policy decisions will have a huge bearing on the demand outlook of the world's largest oil consumer U.S.
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The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 0.078% higher on Monday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) lost 0.71%, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
CMC Markets analyst Leon Li told Reuters that oil prices are still in a bear market. "&#8230;we can see that some advanced economies have already started to fall into recession such as Germany,&#8221; Li said.
Saudi Budget: The fall in oil prices is definitely not conducive for Saudi Arabia, a key member of OPEC+. According to an IMF report released in May, the kingdom won't balance its budget if oil is below $80 a barrel, <a href="https://www.bloomberg.com/news/articles/2023-05-03/saudi-arabia-needs-pricier-oil-to-balance-its-budget-imf-says#xj4y7vzkg">reported</a> Bloomberg. The fund's latest estimates put this year's breakeven oil price for the kingdom at $80.9, the report said.
It, therefore, does not come as a surprise that the Middle Eastern nation recently announced it will cut production by an extra one million barrels per day in July. 
The unexpected move by Saudi Arabia comes at the cost of ceding ground to two of its key allies including Russia, which made no commitment to trim output further, and the United Arab Emirates, which got a higher production quota for 2024.
Notably, Saudi Energy Minister Prince Abdulaziz bin Salman had stated he &#8220;will do whatever is necessary to bring stability to this market.&#8221;
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Oil Slides As Economic Worries Eclipse Saudi Output Cut — Why $80/Bbl Price Is Crucial For The Kingdom

Oil prices rose by over $2 per barrel during Monday morning&#8217;s Asian trading session after Saudi Arabia reportedly announced it will cut production by an extra <a href="https://www.benzinga.com/news/23/06/32706543/saudi-arabia-russia-extend-voluntary-cuts-until-end-of-2024-as-part-of-opec-deal">one million barrels per day in July</a>.
West Texas Intermediate futures maturing in July were trading 1.74% higher at $72.99 per barrel at the time of writing. Similarly, Brent futures maturing in August were trading 1.55% higher at $77.31 per barrel. The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 2.88% higher on Friday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 3.12%.
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The unexpected move by Saudi Arabia comes at the cost of ceding ground to two of its key allies including Russia, which made no commitment to trim output further, and the United Arab Emirates, which got a higher production quota for 2024, <a href="https://www.bloomberg.com/news/articles/2023-06-04/saudis-shoulder-burden-of-stabilizing-oil-market-with-extra-cuts">reported</a> Bloomberg. OPEC+ has agreed to extend the voluntary cuts it announced in April to the end of 2024.
Saudi Energy Minister Prince Abdulaziz bin Salman stated he "will do whatever is necessary to bring stability to this market."
The additional cuts announced on Sunday will bring Saudi production to nearly 9 million barrels a day in July, which is the lowest level witnessed since June 2021 when output was still recovering from the lows of the Covid-19 pandemic, the report said.
Expert Take: The additional cut could be extended further but the Saudis will keep the market "in suspense" about the decision according to Prince Abdulaziz. The minister has repeatedly<a href="https://www.benzinga.com/economics/macro-economic-events/23/05/32530281/saudi-energy-minister-warns-oil-short-sellers-they-will-be-ouching-ahead-of-opec-"> cautioned bearish oil speculators.</a>
Bob McNally, president of consultant Rapidan Energy Group, told Bloomberg for the near term, crude prices will largely depend on a test of wills. It will be a battle between stability-seeking Saudi Arabia and bearish paper traders," he said.
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Saudi Arabia Announces Massive Oil Production Cut, Minister Says 'Will Do Whatever Is Necessary' For Price Stability

Oil prices rose during Thursday afternoon Asian trade after the <a href="https://www.benzinga.com/economics/macro-economic-events/23/05/32662042/hurrah-house-passes-debt-ceiling-deal-biden-urges-senate-to-pass-legislation-quic">passage of the debt ceiling bill</a> in the House brought relief to traders. West Texas Intermediate futures maturing in July were trading 0.6% higher at $68.6 per barrel, at the time of writing.
Another factor that helped lift prices was the fact that Federal Reserve officials on Wednesday indicated a potential rate hike &#8220;skip&#8221; in June, reversing market <a href="https://www.benzinga.com/news/23/05/32641072/feds-loretta-mester-sees-no-compelling-reason-to-pause-rate-hike-we-may-have-to-go-further">expectations of an imminent hike</a> that could weaken economic growth and lead to a subsequent decline in oil demand.
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Fed Governor and vice chair nominee Philip Jefferson said any decision to hold rates steady should not be seen as the end of the tightening cycle, according to a Reuters report. A section of the market appeared to view these comments as a message from the central bank's leadership <a href="https://www.benzinga.com/news/23/05/32611720/feds-goolsbee-believes-inflation-still-higher-than-where-it-needs-to-be-we-are-improving-havent-succ">about the upcoming policy</a>.
However, strong labor data released on Wednesday countered these expectations about a pause. There were 1.8 job openings for every unemployed person in April, <a href="https://www.benzinga.com/markets/equities/23/05/32662006/tesla-c3-ai-salesforce-crowdstrike-okta-why-these-5-stocks-are-drawing-investor-attention-today">up from 1.7 in the previous month</a>.
The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 2.28% lower on Wednesday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) lost 1.79%.
OPEC Intervention: Analysts believe the recent sell-off in crude oil markets has led to speculation that The Organisation of the Petroleum Exporting Countries and its allies, known as OPEC+, <a href="https://www.benzinga.com/news/23/05/32617312/iran-is-a-responsible-player-says-opec-secretary-general-heres-what-he-said-on-the-nations-full-retu">will intervene to support prices</a>.
"We don't expect the group to announce production cuts at the 4 June meeting, but bullish rhetoric is likely to continue as it waits to see the impact of the current production agreement and Chinese demand growth," ANZ Research said in a note. OPEC+ is scheduled to meet June 3-4 in Vienna.
Oil prices are also facing bearish supply-side factors. U.S. crude oil inventories rose by about 5.2 million barrels last week, reported Reuters, citing market sources. Market participants are now eyeing government data on U.S. crude stocks scheduled to be released later on Thursday.
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How Oil Markets Reacted After House Cleared Debt Ceiling Bill: Crucial Data Due On Thursday

Haitham Al-Ghais, the Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), has reportedly said the alliance will welcome Iran's full return <a href="https://www.benzinga.com/news/23/05/32611807/debt-ceiling-deal-heres-how-oil-gold-reacted-after-biden-mccarthy-reached-an-agreement">to the oil market</a> when sanctions are lifted.
Al-Ghais, who is visiting Tehran for the first time, stated Iran has the capacity to bring on significant production volumes within a short period of time, according to a Reuters report that cited the Iranian oil ministry&#8217;s website SHANA.
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&#8220;We believe that Iran is a responsible player amongst its family members, the countries in the OPEC group. I am sure there will be good work together, in synchronization, to ensure that the market will remain balanced as OPEC has continued to do over the past many years,&#8221; Al-Ghais said.
When asked about the <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/04/31640827/oil-prices-surge-following-opec-production-cut-analyst-unveils-5-top-oil-stock-pick">alliance's decision to cut production</a> and its impact on oil prices, Al-Ghais said OPEC doesn't target a certain price level. "All our actions, all our decisions are made in order to have a good balance between global oil demand and global oil supply," he said, according to the report.
Price Action: Oil was trading higher during Tuesday morning&#8217;s Asian trading session. West Texas Intermediate futures maturing in July were trading 0.14% higher at $72.78 per barrel, at the time of writing. The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 1.21% higher on Friday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) lost 0.42%, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
Last week, Russia's Deputy Prime Minister Alexander Novak stated OPEC+ wasn't likely to take further measures <a href="https://www.benzinga.com/markets/commodities/23/05/32589365/russias-deputy-pm-has-this-to-say-on-upcoming-opec-meeting-in-vienna">at its gathering in Vienna in June</a>. The OPEC+ alliance is scheduled to meet June 3-4 in Vienna.
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'Iran Is A Responsible Player,' Says OPEC Secretary General: Here's What He Said On The Nation's Full Return To Oil Market

With President Joe Biden and House Speaker Kevin McCarthy reaching <a href="https://www.benzinga.com/government/23/05/32610557/biden-says-good-news-for-america-as-president-kevin-mccarthy-agree-on-tentative-debt-deal-to-avert-c">a tentative deal on the borrowing</a> limit, gold and oil have moved in different directions.
Oil prices rose in Monday morning&#8217;s Asian trading session as the world's largest oil consumer reached a deal to avert a default on its national debt. West Texas Intermediate futures maturing in July were trading over 1% higher at $73.42 per barrel at the time of writing. The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 1.21% higher on Friday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) lost 0.42%, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
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Oil's rise on Monday comes after a sluggish week when prices declined after Russia's Deputy Prime Minister Alexander Novak stated OPEC+ wasn't likely to take further measures <a href="https://www.benzinga.com/markets/commodities/23/05/32589365/russias-deputy-pm-has-this-to-say-on-upcoming-opec-meeting-in-vienna">at its gathering in Vienna in June</a>.
Novak's remarks stood in contrast to warnings from Saudi Energy Minister Prince Abdulaziz bin Salman's earlier last week. "I keep advising them that they will be ouching — they did ouch in April," the <a href="https://www.benzinga.com/economics/macro-economic-events/23/05/32530281/saudi-energy-minister-warns-oil-short-sellers-they-will-be-ouching-ahead-of-opec-">Minister cautioned speculators</a>, while speaking at the Qatar Economic Forum in Doha on Tuesday. "I would just tell them: Watch out!" he said. The OPEC+ alliance is scheduled to meet June 3-4 in Vienna.
Gold: The debt ceiling deal, however, did not augur well for bullion prices as the commodity's safe haven status took a back seat with the crisis getting closer to resolution. Spot gold was trading 0.11% lower during Monday morning Asian trade at levels close to $1,944 per ounce.
Analysts from Guotai Junan Securities said in a research note that gold will likely continue to fall if the Biden-McCarthy debt-ceiling deal is approved by both houses of Congress before the "X-date, according to <a href="https://www.wsj.com/articles/gold-falls-as-optimism-rises-on-u-s-debt-ceiling-deal-58cd0e0e">The Wall Street Journal</a>.
The SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>) closed 0.4% higher on Friday while the iShares Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IAU#NYSE">IAU</a>) gained 0.44%.
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Debt Ceiling Deal — Here's How Oil, Gold Reacted After Biden, McCarthy Reached An Agreement

Oil prices continued to fall after registering close to a 3% decline on Thursday after Russia indicated The Organisation of the Petroleum Exporting Countries and its allies, known as OPEC+, weren't likely <a href="https://www.benzinga.com/news/23/04/31624195/opec-just-announced-oil-output-cuts-in-a-surprise-move-heres-how-it-could-really-affect-you">to alter production levels</a> at its next meeting.
Russia's Deputy Prime Minister Alexander Novak stated OPEC+ wasn't likely to take further measures at its gathering in Vienna in June, <a href="https://www.bloomberg.com/news/articles/2023-05-25/crude-oil-prices-hold-decline-as-investors-digest-moscow-s-message-on-opec?srnd=markets-vp&amp;leadSource=uverify%20wall">according</a> to a Bloomberg report.
Price Action: West Texas Intermediate futures maturing in July were trading 0.11% lower at $71.77 per barrel during Friday afternoon Asian trading session. The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 2.25% lower on Thursday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) lost 1.89%. Oil prices have been on a downward trend since mid-April and have not been able to breach the $80 per barrel mark on the upside.
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Novak's remarks stood in contrast to warnings from Saudi Energy Minister Prince Abdulaziz bin Salman's <a href="https://www.benzinga.com/economics/macro-economic-events/23/05/32530281/saudi-energy-minister-warns-oil-short-sellers-they-will-be-ouching-ahead-of-opec-">earlier during the week</a>.
"I keep advising them that they will be ouching — they did ouch in April," the Minister cautioned speculators, while speaking at the Qatar Economic Forum in Doha on Tuesday. "I would just tell them: Watch out!" he said. OPEC+ alliance is scheduled to meet June 3-4 in Vienna.
Crude oil has lost over 10% this year as downbeat economic recovery in top importer China and an <a href="https://www.benzinga.com/economics/macro-economic-events/23/05/32534993/what-to-watch-when-fomc-minutes-drop-pain-for-stocks-bonds-looms-if-market-expect">aggressive monetary policy</a> action by the Federal Reserve put pressure on the prices.
Outlook: James Whistler, Managing Director at Vanir Global Markets Pte told Bloomberg, while referring to the comments from Russia, oil lost recent gains amid OPEC's reluctance to cut production further. "We see things softening a bit further from here as cautious sentiment permeates the markets," he said.
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Russia's Deputy PM Has This To Say On Upcoming OPEC+ Meeting In Vienna

Oil is on track to register first weekly gains in over a month as market participants remain optimistic Congress will find a resolution to the <a href="https://www.benzinga.com/news/23/05/32480292/wall-streets-trillion-dollar-headache-will-arrive-when-debt-ceiling-crisis-gets-resolved-heres-how">impending debt limit impasse</a>.
West Texas Intermediate futures maturing in July are trading higher by close to 1% at $72.62 per barrel during Friday afternoon Asian trading session. Brent futures expiring in July registered similar gains to trade at $76.58 per barrel.
President Joe Biden has reportedly urged his negotiators to keep following a debt-limit deal after House Speaker Kevin McCarthy indicated both parties may reach an agreement as soon as this weekend. Crude purchased by some Asian refiners also added to the bullish sentiment, <a href="https://www.bloomberg.com/news/articles/2023-05-19/crude-oil-prices-set-for-best-week-since-mid-april-on-us-debt-deal-optimism">reported</a> Bloomberg.
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The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 1.12% lower on Thursday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 0.78%, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
Recession Fears: Yeap Jun Rong, a market strategist for IG Asia Pte. told Bloomberg that oil prices seem to be taking its cue from the broader risk environment. Optimism about debt ceiling talks, the upcoming U.S. summer driving season and the nation's plan to replenish its Strategic Petroleum Reserve (SPR) could lend support to futures, he added.
However, fears of a recession – a major factor driving oil demand &#8212; are still prevalent among market participants with contrarian opinions on the Federal Reserve's future policy path doing rounds. For instance, Johanna Chua, chief APAC economist at Citigroup Global Markets, reportedly said inflation is likely to be quite persistent and the Fed may go for <a href="https://www.benzinga.com/news/23/05/32308941/citigroup-global-markets-economist-says-2-more-rate-hikes-lined-up-we-think-the-feds-not-done-until">two more rate hikes in coming times</a>.
At the same time, JPMorgan Asset Management is of the view that a recession in the U.S. is a virtual certainty and the central bank is likely to cut interest rates by the <a href="https://www.benzinga.com/news/23/05/32439419/jpmorgan-asset-management-executive-believes-market-is-right-to-be-penciling-in-rate-cuts">third quarter as growth fizzles out.</a>
Read Next: <a href="https://www.benzinga.com/news/23/05/32480292/wall-streets-trillion-dollar-headache-will-arrive-when-debt-ceiling-crisis-gets-resolved-heres-how">Wall Street&#8217;s Trillion Dollar Headache Will Arrive When Debt Ceiling Crisis Gets Resolved. Here&#8217;s How</a>

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VDE: Oil's Bounce Warrants A Energy-Sector Refresh (Rating Upgrade)

Energy ETFs are becoming increasingly appealing due to rising oil prices and growing energy demand. Supply disruptions and potential Fed rate cuts further enhance profitability and investment potential in the energy sector. Therefore, it could be wise to consider watching energy ETFs: iShares Global Energy (IXC), Vanguard Energy Index Fund ETF (VDE), and The Energy Select Sector SPDR (XLE). Read on... The energy market is poised for growth, driven by rising oil prices, increasing demand for petrochemicals, and higher global incomes. Emerging markets in Asia are playing a key role in this expansion. As oil prices surge, energy companies, especially oil producers, stand to benefit from higher revenues.
In this environment, investors might want to keep an eye on top energy ETFs, such as iShares Global Energy ETF (<a href="https://stocknews.com/stock/IXC/">IXC</a>), Vanguard Energy Index Fund ETF Shares (<a href="https://stocknews.com/stock/VDE/">VDE</a>), and The Energy Select Sector SPDR Fund (<a href="https://stocknews.com/stock/XLE/">XLE</a>).
Despite weak economic data from China, <a href="https://www.accuweather.com/en/hurricane/hurricane-francine-disrupted-oil-industry-and-roared-ashore-in-louisiana-with-high-winds-flooding/1691417">Hurricane Francine</a> disrupted the oil industry in September 2024, leading to <a href="https://www.reuters.com/markets/commodities/oil-prices-inch-up-fed-rate-cut-outlook-2024-09-16/">higher oil prices</a> due to halted production and supply concerns. This environment benefits companies with available production capacity. Additionally, supply disruptions have also driven up natural gas prices, creating broader opportunities in the energy market.
Meanwhile, speculation about potential Fed rate cuts could stimulate economic activity and increase oil demand, fostering an optimistic outlook for the energy market. Despite recent <a href="https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/091024-opec-trims-global-oil-demand-forecasts-as-prices-tumble#:~:text=Global%20oil%20demand%20will%20grow,40%2C000%20b%2Fd%20downward%20revision.">downward revisions</a> in global oil demand, optimism persists due to strong growth in non-OECD countries and a rebound in OECD economies. This positive momentum could drive global oil demand beyond current expectations into 2025.
Furthermore, global oil demand is set to reach a record <a href="https://www.reuters.com/business/energy/us-eia-lifts-oil-demand-forecast-says-prices-will-recover-above-80bbl-2024-09-10/">103.10 million barrels per day</a> in 2024, with oil prices projected to rise above $80 per barrel due to a growing supply deficit. Given this backdrop, let's evaluate the three <a href="https://stocknews.com/category/energy-equities-etfs/">Energy Equities ETFs</a> picks, starting with number three.
ETF #3: iShares Global Energy ETF (<a href="https://stocknews.com/stock/IXC/">IXC</a>)
IXC is an exchange-traded fund launched by BlackRock, Inc. It is managed by BlackRock Fund Advisors. The fund invests in the public equity markets of the global region. It invests in stocks of companies operating across the energy sectors, focusing on growth and value stocks of large-cap companies. It seeks to track the performance of the S&amp;P Global 1200 Energy 4.5/22.5/45 Capped Index using a representative sampling technique.
With $1.99 billion in assets under management (AUM), IXC's top holding is Exxon Mobil Corporation (<a href="https://stocknews.com/stock/XOM/">XOM</a>) with an 18.83% weighting, followed by Chevron Corporation (<a href="https://stocknews.com/stock/CVX/">CVX</a>), with a 9.04% weighting, and Shell Plc (<a href="https://stocknews.com/stock/SHEL/">SHEL</a>), with 8.01%. It has a total of 53 holdings.
It has an expense ratio of 0.41%, lower than the category average of 0.47%. It currently has a <a href="https://www.investopedia.com/terms/n/nav.asp">NAV</a> of $39.48. IXC's fund outflows were $1.05 billion over the past six months.
The fund's annual dividend of $1.53 yields 3.89% on the current share price. Its four-year average yield is 4.68%. Moreover, its dividend payouts have increased at a CAGR of 14.5% over the past three years and 4.8% over the past five years.
IXC has gained 2.2% year-to-date but declined 4.4% over the past year, closing the last trading session at $39.94.
IXC's <a href="https://stocknews.com/powr-ratings/">POWR Ratings</a> reflect this uncertain outlook. The ETF's overall C rating equates to a Neutral in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
IXC has a C grade for Peer and Trade. Of the 46 ETFs in the <a href="https://stocknews.com/category/energy-equities-etfs/">Energy Equities ETFs</a> group, it is ranked #17. <a href="https://stocknews.com/stock/IXC/">Click here</a> to access all of IXC's POWR Ratings.
ETF #2: Vanguard Energy Index Fund ETF Shares (<a href="https://stocknews.com/stock/VDE/">VDE</a>)
VDE is an exchange-traded fund launched and managed by The Vanguard Group, Inc. The fund invests in the public equity markets, focusing on stocks of companies operating across the energy sectors. It invests in growth and value stocks of companies with diversified market capitalizations. The fund seeks to track the performance of the MSCI US Investable Market Index (IMI)/Energy 25/50 using a full replication technique.
With $7.58 billion in AUM, the fund has a total of 114 holdings. VDE's top holding is XOM with a 22.56% weighting, followed by CVX with a 13.58% weighting, and ConocoPhillips (<a href="https://stocknews.com/stock/COP/">COP</a>) with 6.66%.
VDE has an expense ratio of 0.10%, lower than the category average of 0.47%. It currently has a NAV of $119.25. Its fund outflows came in at $402.08 million over the past year.
VDE's annual dividend of $3.83 yields 3.21% on the current share price. Its four-year average yield is 3.65%. Likewise, the fund's dividend payouts have increased at a CAGR of 15.3% over the past three years and 7.3% over the past five years.
VDE has gained 3% year-to-date; however, it declined 5.3% over the past six months, closing the last trading session at $120.84.
VDE's bleak fundamentals are reflected in its POWR Ratings. The ETF has an overall rating of C, translating to a Neutral in our proprietary rating system.
It has a C grade for Peer and Trade. It is ranked #15 in the same group. To access all the POWR Ratings for VDE, <a href="https://stocknews.com/stock/VDE/">click here</a>.
ETF #1: The Energy Select Sector SPDR Fund (<a href="https://stocknews.com/stock/XLE/">XLE</a>)
XLE is an exchange-traded fund launched by State Street Global Advisors, Inc., and managed by SSGA Funds Management, Inc. It invests in the public equity markets of the United States, focusing on stocks of companies operating across the energy sectors. The fund targets growth and value stocks of companies with diversified market capitalizations. It seeks to track the performance of the Energy Select Sector Index using a full replication technique.
With $33.5 billion in assets under management (AUM), XLE's top holding is XOM with a 23.84% weighting, followed by CVX, with a 16.89% weighting, and EOG Resources, Inc. (<a href="https://stocknews.com/stock/EOG/">EOG</a>), with 6.24%. XLE has a total of 24 holdings.
XLE has an expense ratio of 0.09%, higher than the category average of 0.47%. It currently has a NAV of $85.58. Its fund outflows came in at $1.48 billion over the past year.
The ETF pays an annual dividend of $2.92, which yields 3.38% on the current price. It has a four-year average dividend yield of 4.33%. Also, XLE's dividend payouts have increased at a CAGR of 11.4% over the past three years and 6.5% over the past five years.
XLE has gained 3.3% year-to-date and declined 5.5% over the past six months, closing the last trading session at $86.57.
XLE's POWR Ratings reflect its mixed prospects. The ETF's overall A rating equates to a Strong Buy in our proprietary rating system.
XLE has a C grade for Peer and Trade. In the Energy Equities ETFs group, it is ranked #14. <a href="https://stocknews.com/stock/XLE/">Click here</a> to access all of XLE's POWR Ratings.
What To Do Next?
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XLE shares were trading at $87.46 per share on Tuesday afternoon, up $0.89 (+1.03%). Year-to-date, XLE has gained 6.01%, versus a 18.98% rise in the benchmark S&amp;P 500 index during the same period.
<hr><div style="clear:both;"></div> <h2>About the Author: Abhishek Bhuyan</h2> <img src='https:/wp-content/uploads/2023/07/ABhuyan.jpg' style="float:left; padding:5px;width:125px;">Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments.<a href="https://stocknews.com/authors/?author=abhishek-bhuyan">More...</a>The post <a href=https://stocknews.com/news/xle-vde-ixc-3-top-energy-etfs-to-watch-as-oil-prices-rise/>3 Top Energy ETFs to Watch as Oil Prices Rise</a> appeared first on <a href=https://stocknews.com/>StockNews.com</a>

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Vanguard Energy ETF

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Vanguard Energy ETF (ARCA:VDE), Quote.Headers.trade-ideas