Predictably, the Organization of Petroleum Exporting Countries looms large for energy stocks and oil ETFs. The cartel meets later this month.
The oil market strengthened on news that Iraq and Iran, two of OPEC’s most reluctant members in favor of reducing production, may be backing the cartel’s proposal, the Wall Street Journal reports. Anticipating OPEC will announce and implement a production cut, Goldman Sachs raised its forecast for oil prices in the first half of 2017. A Bank of America Merrill Lynch research note also anticipates a supply cut is highly likely.
Integrated oil stocks have refining exposure, a segment that benefits when oil prices are low due to improved margins. That can help steady diversified energy ETFs like XLE because these are not dedicated exploration and production funds.
Energy Select Sector SPDR
