Energy exchange traded fund traders will be watching so-called Big Oil as industry leaders reveal fourth quarter results.
The energy sector has been the worst performing area of the market, plunging along with oil prices. Over the past year, the Energy Select Sector SPDR (NYSEArca: XLE) declined 27.2%, Vanguard Energy ETF (NYSEArca: VDE) dropped 28.9%, iShares U.S. Energy ETF (NYSEArca: IYE) fell 27.9% and Fidelity MSCI Energy Index ETF (NYSEArca: FENY) decreased 27.9%.
The sector will be put the test once again as Chevron (NYSE: CVX) and ExxonMobil (NYSE: XOM) help provide clarity into how the energy industry was holding up while crude oil pushed toward record lows.
Chevron will report earnings before market open Friday, January 29. ExxonMobil will reveal fourth quarter results before market open Tuesday, February 2.
The two companies make up a significant chunk of broad market capitalization-weighted energy sector ETFs. For instance, XLE holds 19.5% XOM and 14.7% CVX. IYE has 27.0% XOM and 13.5% CVX. VDE includes 24.4% XOM and 13.0% CVX. FENY has 26.4% XOM and 13.2% CVX.
These large integrated oil companies are expected to hold up better than drilling stocks as these giants have both upstream exploration and production, along with downstream refining operations.