Declining prices in recent years have prompted scores of major oil producers to rein in capital spending. Technological improvements and greater efficiency has helped U.S. shale producers pump out crude oil at lower margins – some say it is now profitable at less than $50 per barrel. Additionally, companies are finding easy access to credit and private-equity firms have bought out struggling companies, which have kept production flowing.
“Global demand for oil is expected to rise by 1.5 million barrels per day in 2018, according to the International Energy Agency. The oil watchdog increased its full-year estimates in March,” according to CNBC.
Rivals to XLE include the Vanguard Energy ETF (NYSEArca: VDE), iShares U.S. Energy ETF (NYSEArca: IYE) and the Fidelity MSCI Energy Index ETF (NYSEArca: FENY). Exxon is the largest holding in all of those ETFs with ConocoPhillips figuring prominently in the lineups of each of those funds.
For more information on the oil market, visit our energy category.