These Top Oil Trades Could Gush to Higher Highs

Sep 12, 2023
3d illustration of barrels with oil

Oil is getting squeezed.

Last checked, crude was near $90 a barrel, and could gush even higher.

Not only could we see a supply crunch from Saudi-Russia output reductions, but now there are Libyan supply fears. All following catastrophic flooding in the region, which broke dams and swept away homes. Worse for the folks in Libya, we’re hearing “the death toll is huge,” as noted by CNN. Libya is facing an “unprecedented” situation, they added.

That will, of course, impact Libya’s oil output of 1.1 million barrels a day.

Pushing oil prices even higher was an OPEC report that showed the oil market could be a lot tighter than initially thought. Meanwhile, demand is expected to remain high, according to CNN. “The Organization of the Petroleum Exporting Countries (OPEC) stuck to its forecasts for robust growth in global oil demand in 2023 and 2024, citing signs that major economies are stronger than expected. OPEC’s monthly report forecast world oil demand will rise by 2.25 million barrels per day (bpd) in 2024.”

With all of that chaos, it comes as no surprise oil stocks are gushing higher. Exxon for example is up $3.16 on the day. Chevron is up $3.05 on the day. Occidental Petroleum is up $2.50. Even the ETFs we mention in many of these oil updates are gushing higher, including:

SPDR Energy Select Sector ETF (XLE)

With an expense ratio of 0.12%, the XLE ETF provides exposure to companies in the oil, gas and consumable fuel, energy equipment and services industries, as noted by State Street SPDR. Not only does an ETF allow for diversification, you can buy it for less than a single one of its holdings. Since our initial mention on June 5, the XLE ETF ran from about $80 to $92.86 so far.

SPDR S&P Oil & Gas Exploration & Production ETF (XOP)

With an expense ratio of 0.35%, the ETF provides exposure to the oil and gas exploration and production segment of the S&P TMI, which comprises the following sub-industries: Integrated Oil & Gas, Oil & Gas Exploration & Production, and Oil & Gas Refining & Marketing, as noted by State Street SPDR. Some of its top holdings include Callon Petroleum, SM Energy Company, Devon Energy Corporation, EOG Resources, and ConocoPhillips, for example.

Since June 5, the XOP ran from about $123 to $153.44.

iShares Global Energy ETF (IXC)

The iShares Global Energy ETF tracks stocks, such as Exxon Mobil, Chevron Corporation, BP PLC, Total SA, and EOG Resources. Since June 5, the IXC ran from about $36 to $41.76.