Energy ETFs & Stocks Jump in Thursday Trading

After being battered badly due to COVID-19 crisis, the energy sector bounced back strongly in Thursday’s trading session as oil price rallied more than 25% on hopes of a truce in the Saudi-Russian oil price war and China buying crude. The price surge marks the largest single-day percentage gain in history.

President Donald Trump tweeted that Saudi Arabia and Russia will likely cut oil production by about 10 million barrels. In this regard, Saudi Arabia called for emergency meeting between the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia to balance oil markets.

Meanwhile, China plans to buy crude for its Strategic Petroleum Reserves after an epic oil price crash. The world’s biggest importer will take advantage of a 60% plunge in oil price to snatch up cheaper barrels for its stockpiles. Moreover, a slew of massive monetary and fiscal stimulus by the government and the central bank will provide support to the oil price (read: Will China ETFs Gain on New Round of Monetary Easing?).

The couple of news came as a ray of big optimism amid shrinking oil demand and excess supply. The COVID-19 pandemic has resulted in a slowdown in worldwide travel and business activity that is weighing heavily on oil demand. On the other hand, the two powerhouse producers — Saudi Arabia and Russia — have started a price war to ramp up production from this month. Growing oil supply could end up filling all storage tanks worldwide, potentially causing prices to drop even further. Per market researchers, the oil market could face one of the largest supply overhangs in modern oil market history in April (read: Global Oil Price War Begins: ETFs in Focus).

Given this, we have highlighted five ETFs & stocks that gained most in yesterday’s trading session and will continue to head higher with the rise in oil price.

Best ETFs

While these are best performers, they lag behind the broader markets significantly. Our ranking system takes into account the asset class outlook, which was negative for energy and hence most of the ETFs in the space have a #4 (Sell) or 5 (Strong Sell) Zacks Rank.

VanEck Vectors Unconventional Oil & Gas ETF FRAK

This fund follows the MVIS Global Unconventional Oil & Gas Index, which offers exposure to the companies involved in the exploration, development, extraction, and/or production of unconventional oil and natural gas.

Zacks Rank: #5
AUM: $5.7 million
Expense Ratio: 0.54%
1-Day Return: 12.8%

SPDR S&P Oil & Gas Equipment & Services ETF XES

This fund tracks the S&P Oil & Gas Equipment & Services Select Industry Index, which measures the performance of the companies engaged in the oil and gas equipment and services industry (read: Sector ETFs in Focus Amid Coronavirus Rout).

Zacks Rank: #5
AUM: $44.4 million
Expense Ratio: 0.35%
1-Day Return: 9.5%

First Trust Energy AlphaDEX Fund FXN

This ETF follows the StrataQuant Energy Index, which is a modified equal-dollar weighted index designed by the AMEX to objectively identify and select stocks from the Russell 1000 Index that may generate positive alpha relative to traditional passive style indices through the use of the AlphaDEX screening methodology.

Zacks Rank: #5
AUM: $29.7 million
Expense Ratio: 0.65%
1-Day Return: 9.3%

VanEck Vectors Oil Services ETF OIH

This fund tracks the MVIS U.S. Listed Oil Services 25 Index, which offers exposure to companies involved in oil services to the upstream oil sector, including oil equipment, oil services or oil drilling (read: Oil & ETFs: What Investors Need to Know).

Zacks Rank: #4
AUM: $244.1 million
Expense Ratio: 0.35%
1-Day Return: 9.3%

Energy Select Sector SPDR Fund XLE

This fund provides exposure to companies in the oil, gas and consumable fuel, energy equipment and services industries by tracking the Energy Select Sector Index.

Zacks Rank: #4
AUM: $6.3 million
Expense Ratio: 0.13%
1-Day Return: 9.2%

Best Stocks

We have highlighted the best-performing stocks that currently have a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Penn Virginia Corporation PVAC

This oil and gas company is engaged in exploration, development and production of oil, NGLs and natural gas.

Zacks Rank: #3
VGM Score: A
Market Cap: $34.3 million
1-Day Return: 30.5%

Denbury Resources Inc. DNR

This exploration and production company is engaged in the acquisition, development, operation, and exploration of oil and natural gas properties in the Gulf Coast and Rocky Mountain regions of the United States (see: all the Energy ETFs here).

Zacks Rank: #3
VGM Score: A
Market Cap: $86.1 million
1-Day Return: 29.4%

FTS International Inc. FTSI

It is a provider of hydraulic fracturing service primarily in North America.

Zacks Rank: #2
VGM Score: B
Market Cap: $21.4 million
1-Day Return: 27.4%

WPX Energy Inc. WPX

This independent oil and gas operator is engaged in the production of natural gas, oil and natural gas liquids (read: Oil Firms May Cut Dividends Ahead: ETFs & Stocks in Focus).

Zacks Rank: #3
VGM Score: A
Market Cap: $1.1 billion
1-Day Return: 26.9%

Abraxas Petroleum Corporation AXAS

This independent energy company is engaged primarily in the acquisition, exploration, exploitation and production of crude oil and natural gas.

Zacks Rank: #3
VGM Score: B
Market Cap: $18.4 million
1-Day Return: 26.3%

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Denbury Resources Inc. (DNR) : Free Stock Analysis Report
 
Energy Select Sector SPDR ETF (XLE): ETF Research Reports
 
WPX Energy, Inc. (WPX) : Free Stock Analysis Report
 
Abraxas Petroleum Corporation (AXAS) : Free Stock Analysis Report
 
SPDR S&P Oil & Gas Equipment & Services ETF (XES): ETF Research Reports
 
First Trust Energy AlphaDEX ETF (FXN): ETF Research Reports
 
VanEck Vectors Unconventional Oil & Gas ETF (FRAK): ETF Research Reports
 
VanEck Vectors Oil Services ETF (OIH): ETF Research Reports
 
Penn Virginia Corporation (PVAC) : Free Stock Analysis Report
 
FTS International, Inc. (FTSI) : Free Stock Analysis Report
 
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