Among sector ETFs, the Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy ETF, and rival energy funds have been duds this year and while there is some chatter that the downtrodden sector can rebound, other traders aren’t convinced that energy stocks will bounce back anytime soon.

XLE targets the Energy Select Sector Index and “seeks to provide precise exposure to companies in the oil, gas and consumable fuel, energy equipment and services industries,” according to State Street.

“If you look at the XLE it’s been so unenthusiastic on the year, overall,” said Bill Baruch, president of Blue Line Capital, in an interview with CNBC. “What I’m more worried about is seeing this market break down below here and stay contained through here. So if we see this stay contained, this is tightening up, we’re going to get a directional move at some point very, very soon.”

Examining XLE’s Prospects

One reason some investors may be revisiting XLE is that the energy sector is being viewed as a value destination and there has recently been a rotation to value away from growth.

Analysts also expect the volume of U.S. crude oil in storage should diminish in the weeks ahead before reversing course at the end of peak driving season, along with the start of the seasonal refinery maintenance period.

“For now, I want to be a buyer when this thing washes out., I’m expecting a washout, and it could be in the first quarter of next year, and that’s where I’m going to wait and be the buyer,” said Baruch of XLE.

Energy forecasters anticipate a deteriorating supply in 2020, placing OPEC+ in a bind. But beyond that, the slackening could result in a boom as supply growth slows down.

OPEC encounters a similar situation as it readies for its December meeting, and the prospect of another year of oversupply continues

Related: Energy ETFs Rally as OPEC Supports Firm Floor on Crude Oil Prices 

Additionally, XLE offers some value and an attractive yield.

“The XLE ETF yields 3.7%, higher than the 1.9% average on the S&P 500. The group trades at 16.6 times forward earnings, below the forward multiple for the rest of the market,” according to CNBC.

For more information on the energy sector, visit our energy category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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