Top Ways to Trade Gushing Oil Prices

Sep 7, 2023

Oil prices are gushing higher.

All after Saudi Arabia and Russia said they were extending their voluntary cuts in oil production through the rest of the year. That’ll take about 1.3 million barrels off the global market. It could also put more pressure on the U.S. relationship with the Saudis.

As noted by the AP, “The countries’ moves could increase inflation and the cost for motorists at gasoline pumps. It also puts new pressure on Saudi Arabia’s relationship with the United States, as President Joe Biden last year warned the kingdom there would be unspecified “consequences” for partnering with Russia on cuts as Moscow wages war on Ukraine.”

The news sent crude oil prices up to $87.74 on the day. While investors can always bet on oil stocks, such as Exxon Mobil and Chevron on the news, ETFs are a good idea, too. After all, they allow you to diversify with dozens of stocks at a lower cost.

Some of the top ones we’ve mentioned a few times include:

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 $90.95 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 $150.95.

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 $41.05.

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