Rig counts have recently ticked higher and with credit and earnings issues improving for some U.S. shale drillers, those companies may seize the opportunity to exploit higher pricing in the near-term. Global energy ETFs are struggling, too. Just look at the iShares Global Energy ETF (NYSEArca: IXC), which is also lower on a year-to-date basis.

Rivals to IYE include the Fidelity MSCI Energy Index ETF (NYSEArca: FENY) and the Vanguard Energy ETF (NYSEArca: VDE), which are two of the least expensive energy sector ETFs.

“Energy stocks appear to reflect a more bearish price outlook. This creates opportunities,” according to BlackRock. “We like U.S. shale companies, amid cost cuts, improving technologies and the prospects of looser regulation. We also see value in the diversification offered by integrated-energy firms, including relatively cheap European oil majors. High yield energy bonds offer slightly better value after a recent selloff. We prefer credits of exploration companies due to attractive yields and balance sheet discipline.”

The $1.2 billion IYE holds 70 stocks, but allocates over 37% of its weight Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX), the two largest U.S. oil companies.

For more information on the oil market, visit our oil category.