- WTI crude oil more than erases a week's worth of losses in the space of a few hours, closing the session up $2.61 per barrel, or 4.5% to $60.29.
- As recently as yesterday afternoon, black gold was as low as $56.50 per barrel, and earlier today was still under $58.
- Earlier this week, Ned Davis Research urged caution on oil itself and energy stocks, noting the exit of nearly $500M from the U.S. Oil Fund (USO +3.7%) this month, and $300M from the Energy Select SPDR (XLE -0.1%). At the same time, money has been flowing into bullish dollar ETFs.
- "Investor flows are no longer supportive for energy ETFs. Valuations are not as compelling at this point either. … Seasonality is about to turn ugly for the energy sector. June is historically the worst month for XLE. And finally, while longer-term, the sector remains oversold, shorter-term trend evidence suggests caution for now," says NDR's Tony Welch.
- ETFs: USO, OIL, XLE, UCO, UWTI, VDE, ERX, OIH, SCO, BNO, DBO, DWTI, ERY, DIG, DTO, UGA, DUG, BGR, USL, IYE, DNO, FENY, PXJ, FIF, UHN, OLO, SZO, RYE, FXN, TWTI, OLEM, DDG