Oil is on track to log in its biggest weekly gains in more than two years with U.S. crude climbing 9.5% this week and Brent advancing 7.8%. Hopes over the trade deal between the United States and China have lifted investor sentiments. Additionally, falling production and OPEC-led fresh crude output cuts have added to the strength.

This is especially true as oil output from the OPEC plunged 530,000 barrels per day to 32.6 million a day, last month. This marks the sharpest pullback since January 2017. Saudi Arabia, the world’s biggest crude exporter, curtailed output by 420,000 barrels a day to 10.65 million last month from a record of above 11 million in November.

Libya’s production fell 110,000 barrels a day to 1 million a day as Sharara, the country’s biggest oil field, has been offline since it was captured by an armed group and demonstrators demanding better government services in mid-December. Iran’s production also fell 120,000 barrels a day last month to 2.92 million a day.

Meanwhile, major oil producers have agreed to curb production by 1.2 million barrels per day during the first six months of 2019 in order to tackle global supply glut and rebalance the oil market. The 15-member OPEC cartel has agreed to reduce its output by 800,000 barrels per day, while Russia and the allied producers will take off 400,000 barrels per day from the market (read: Is Fresh OPEC+ Output Cut Enough to Boost Oil & Energy ETFs?).

This week’s gains followed the oil’s biggest weekly gain since December 2016. This made energy the best performing sector to start 2019.

Given the rebounding fundamentals, many energy ETFs and stocks have generated handsome returns so far this year. Below we have highlighted them:

Best ETFs

Invesco Dynamic Oil & Gas Services ETF PXJ

This product follows the Dynamic Oil Services Intellidex Index, which thoroughly evaluates companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value (read: 4 Worst ETF Areas of Q4).

Zacks Rank: #4 (Sell)
AUM: $17.8 million
Expense Ratio: 0.63%
YTD Return: 18.9%

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: Best & Worst Zones of 2018 and Their ETFs).

Zacks Rank: #4
AUM: $225 million
Expense Ratio: 0.35%
YTD Return: 18.9%

Invesco S&P SmallCap Energy ETF PSCE

This fund offers exposure to the small-cap segment of the energy sector by tracking the S&P Small Cap 600 Capped Energy Index.

Zacks Rank: #4
AUM: $28.4 million
Expense Ratio: 0.29%
YTD Return: 18.2%

VanEck Vectors Oil Services ETF OIH

This fund tracks the MVIS U.S. Listed Oil Services 25 Index, which offers exposure to the companies involved in oil services to the upstream oil sector, including oil equipment, oil services or oil drilling.

Zacks Rank: #3 (Hold)
AUM: $1.3 billion
Expense Ratio: 0.35%
YTD Return: 17.6%

iShares U.S. Oil Equipment & Services ETF IEZ

This ETF offers exposure to U.S. companies that provide equipment and services for oil exploration and extraction by tracking the Dow Jones U.S. Select Oil Equipment & Services Index (see: all the Energy ETFs here).

Zacks Rank: #4
AUM: $181.6 million
Expense Ratio: 0.43%
YTD Return: 17.3%

Best Stocks

Ferrellgas Partners, L.P. FGP

This is engaged in the sale, distribution, marketing and trading of propane and other natural gas liquids.

Zacks Rank: #3
VGM Score: D
Market Cap: $121.4 million
YTD Return: 133.6%

Ion Geophysical Corporation IO

This company is a leading provider of geophysical technology, services, and solutions for the global oil & gas industry.

Zacks Rank: #3
VGM Score: D
Market Cap: $140.9 million
YTD Return: 92.7%

Calumet Specialty Products Partners, L.P. CLMT

This company is a leading independent producer of high-quality, specialty hydrocarbon products in North America.

Zacks Rank: #3
VGM Score: A
Market Cap: $289.3 million
YTD Return: 69.7%

Chaparral Energy Inc. CHAP

This company is engaged in the oil and natural gas exploration and production (read: Biggest ETF Stories of 2018 Worth Watching in 2019).

Zacks Rank: #3
VGM Score: A
Market Cap: $380.5 million
YTD Return: 63.4%

Basic Energy Services Inc. BAS

This company provides a range of services to America’s oil and gas producers.

Zacks Rank: #4
VGM Score: A
Market Cap: $162 million
YTD Return: 58.8%

Bottom Line

Though many of the products have an unfavorable Zacks Rank of #4, these are the winners to start the year. This suggests that the fundamentals for the energy market are extremely strong with the ability to stir up every kind of ETFs & stocks in the sector.

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VANECK-OIL SVC (OIH): ETF Research Reports

PWRSH-SP SC EGY (PSCE): ETF Research Reports

PWRSH-DYN OIL&G (PXJ): ETF Research Reports

SPDR-SP O&G EQP (XES): ETF Research Reports

ISHARS-US OIL E (IEZ): ETF Research Reports

Ion Geophysical Corporation (IO): Free Stock Analysis Report

Ferrellgas Partners, L.P. (FGP): Free Stock Analysis Report

Calumet Specialty Products Partners, L.P. (CLMT): Free Stock Analysis Report

Basic Energy Services, Inc. (BAS): Free Stock Analysis Report

Chaparral Energy, Inc. (CHAP): Free Stock Analysis Report

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Source: Custom News Article from Zacks Investment Research for ETFHeatMap.com

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