Some analysts expect the energy sector will become a positive contributor to earnings growth for the S&P 500 by the first quarter of 2017 due to a combination of higher expected oil prices and easier comparisons to weak earnings in 2016.

XOP is often one of the most heavily shorted ETFs on the market.

“It seems like the XLE short is more of a core short position hedging out general oil related risk for long and hedged portfolios with its holdings of mostly larger cap names such as Exxon Mobil (XOM US), Chevron (CVX US) and Schlumberger (SLB US). XLE is a general collateral stock borrow, the cheapest borrow cost for the easiest to borrow stocks,” according to the S3 Partners note seen in Barron’s.

For more information on Energy ETFs, visit our Energy category.