First, there has been little in the way of significant output reductions from the world’s major oil-producing nations. Second, even if dramatic output reductions arrive, some energy market observers see the impact as being negligible for energy equities and ETFs.
“While we continue to believe the near-term commodity path will be volatile and a pullback is likely, we have confidence the oil market recovery is occurring and oil prices will need to be higher ($80) to deliver the production growth the world will need,” according to Morgan Stanley.
Other ETFs with exploration and production exposure include the PowerShares Dynamic Energy Exploration & Production Portfolio (NYSEArca: PXE) and the Guggenheim S&P Equal Weight Energy ETF (NYSEArca: RYE).
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SPDR S&P Oil & Gas Exploration & Production ETF