Related: E&P ETFs Still Merritt Consideration
In the recent energy sector rally, oil and gas exploration and production companies have been leading the charge, which does not come as a surprise as this segment was among the worst off during the selling when oil prices plunged. Exploration and production companies were among the worst hit due to their close ties to the upstart hydraulic fracturing or fracking industry that has developed alongside advancements in the shale oil industry.
“The performance variance between E&P companies and the three key independent variables has recently narrowed significantly from widths not seen for nearly a decade. However, oil servicers still appear to be trading at a discount when we compare actual performance of oil servicers with their predicted performance based on oil and U.S. stock market returns,” according to VanEck.
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