The Largest Energy ETF Has Its Worst Week in 18 Months

(Bloomberg) -- The largest exchange-trade fund focused on the energy sector is bleeding cash after oil’s best run since October came to an end.

The $13.4 billion Energy Select Sector SPDR Fund, which trades as XLE, lost $632 million last week, its largest weekly outflow since July 2017, data compiled by Bloomberg show. West Texas Intermediate oil curtailed three-straight weeks of gains last week, after a report showed rigs drilling oil in the U.S. increased for the first time this year, bolstering supply.

Oil fell below $52 a barrel on Monday after advancing nearly 27 percent from its Dec. 24 low as OPEC cut production. But news that the U.S. is pumping more has helped reignite supply concerns based on record American output, climbing stockpiles, and uncertainty about whether trade tensions between the U.S. and China will be resolved. Venezuelan President Nicolas Maduro also abandoned a plan to sever economic ties with the U.S., a move that could have impacted supply.

“Within XLE, which is highly dependent upon oil’s recovery, I think there’s some skeptics about whether or not there’s going to be too much supply putting downward pressure on oil prices moving further into 2019,” said Todd Rosenbluth, director of ETF research at CFRA Research.

Still, the fund could find some support from earnings due later this week. Exxon Mobil Corp. and Chevron Corp., XLE’s two largest holdings at about 21 percent and 18 percent respectively, are both scheduled to report on Friday.

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