The Market Vectors Oil Refiners ETF (NYSEArca: CRAK), the first dedicated exchange traded fund play on refiners equities, is off to a slow start in 2016, but that does not imply investors should ignore the ETF and its holdings.

The oil refinery business benefits from lower crude oil prices, or lower input costs. Meanwhile, the price of finished products such as gasoline, diesel and fuel oil can affect a refinery’s profitability. Consequently, the difference between the cost of crude oil and the price of the products, or so-called crack spread, is a common indicator of the potential profits.

OPEC has kept up production to pressure high-cost rivals, such as the developing U.S. shale oil producers. The International Energy Agency expects it will take several years before OPEC can effectively price out high-cost producers. [Oil ETFs Face World-Record Supply Glut]

Even with the headwinds created by OPEC and the rising dollar, some of CRAK’s marquee holdings are poised to rise in 2016, including Phillips 66 (NYSE: PSX) and Tesoro Petroleum (NYSE: TSO).

CRAK “has the additional advantage of offering worldwide refining exposure, with just 37.88% of assets weighted in the United States as of Dec. 31, 2015. Japan, South Korea, India and Australia fill out the top five slots for a combined 64% weighting. Notably, it has no current exposure in the Middle East or Russia, two of the largest refining locations in the world,” according to Investopedia.

OPEC has exceeded its output target of 30 million barrels per day since June 2014 as the group pumps record amounts of crude in an attempt to squeeze out high-cost competitors, such as the upstart U.S. shale oil industry.

The output target could rise further after the U.S. lifted sanctions on Iran over its nuclear energy program, clearing the way for Iranian oil to hit the markets.

CRAK “topped out quickly at 20.25 and sold off to 17.34. A subsequent uptrend pushed above the initial trading range and posted a new high at 20.88 in November, giving way to a decline that’s dropped the fund back into last summer’s low. A breakdown through that level will signal a new downtrend that supports short sale positions—while a rally above 20 lasting more than a week or two will favor a new uptrend,” adds Investopedia.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.