At issue are declining hedging positions, particularly for some of the well-known names found in exploration and production ETFs like XOP.
This isn’t the first time the energy sector has been forced to tighten their belts. Through 1987 to 1997, companies suffered through an extended period of lower prices and responded by cutting costs, which ensured “earnings grew strongly,” according to Bernstein research.
“The longer prices stay low, the longer it will take to reverse the effects across the industry of cutbacks in production, capital spending and staffing,” adds CNBC.
SPDR S&P Oil & Gas Exploration & Production ETF
