最新ニュース Vanguard Energy ETF (ARCA:VDE)

Vanguard Energy ETF

Energy

Basic Materials

Utilities

Industrials

Consumer Cyclical

Healthcare

The fund employs an indexing investment approach designed to track the performance of the MSCI US Investable Market Index (IMI)/Energy 25/50, an index made up of stocks of large, mid-size, and small U.S. companies within the energy sector, as classified under the Global Industry Classification Standard (GICS). The Advisor attempts to replicate the target index by seeking to invest all, or substantially all, of its assets in the stocks that make up the index, in order to hold each stock in approximately the same proportion as its weighting in the index. The fund is non-diversified.

Exxon Mobil Corp.

Chevron Corp

Conocophillips

Eog Resources Inc

Schlumberger Nv

Marathon Petroleum Corp.

Phillips 66

Valero Energy Corp.

Williams Cos Inc/the

Oneok Inc

Kinder Morgan Inc

Cheniere Energy Inc

Van de Velde NV

The energy sector is facing heightened investor scrutiny as recent developments have added uncertainty to oil markets. 
A combination of rising U.S. crude inventories, geopolitical tensions and trade concerns has triggered volatility in oil prices, leading to mixed reactions across energy-related stocks and ETFs. With these changes in play, investors are closely watching <a href="https://www.benzinga.com/etfs">oil-focused ETFs</a> to gauge their exposure and potential risks.
<h1 class="wp-block-heading">ETFs To Watch Amid These Developments</h1>
For investors looking to navigate these shifting dynamics, several energy-focused ETFs offer exposure to key industry players:
Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>): This ETF tracks large-cap energy stocks, including major oil and gas giants like ExxonMobil Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) and Chevron Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>). Given recent market pressures, XLE has experienced fluctuations, but it remains a popular choice for those seeking broad exposure to the sector, with an expense ratio of 0.09%.
Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>): Offering a more diversified portfolio, VDE covers both upstream and downstream oil and gas companies, providing investors with a balanced approach amid market uncertainty. Apart from Exxon and Chevron, the fund also allocates a significant weightage to companies like ConocoPhillips (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COP#NYSE">COP</a>). The recent volatility in the oil sector has taken most of the stocks in the ETF for a ride.
United States Natural Gas Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UNG#NYSE">UNG</a>): Unlike oil-focused ETFs, UNG provides investors with exposure to natural gas futures. This ETF is particularly relevant for those looking to diversify within the energy sector, as natural gas prices are influenced by different factors than crude oil, including weather patterns, production levels and storage data. Given the increasing reliance on natural gas for power generation and heating, UNG offers a distinct alternative for energy-focused investors.
Also Read: <a href="https://www.benzinga.com/content/44164489/2-energy-stocks-to-play-both-sides-of-tariff-uncertainty">2 Energy Stocks to Play Both Sides of Tariff Uncertainty</a>
<h1 class="wp-block-heading">Oil Prices Plummet, Consumer Sentiment Damp</h1>
Oil prices recently hit a six-month low as <a href="https://www.benzinga.com/news/25/03/44150023/why-exxon-mobil-xom-stock-hit-a-new-52-week-low-today">U.S. crude stockpiles increased </a>by 3.6 million barrels as of March 5. This unexpected rise in supply has weighed heavily on energy stocks, including major players such as ExxonMobil. 
As one of the largest integrated oil and gas companies, Exxon is particularly vulnerable to declining crude prices, which directly impact its upstream profits. Lower prices also squeeze refining margins, making it more difficult for companies to offset losses through downstream operations. Thus, ETFs with significant allocations in Exxon, such as XLE and VDE stand to be affected by oil price slips.
Adding to the pressure, OPEC+ has confirmed its plan to roll back production cuts in April, fueling concerns about a potential supply glut. This decision has further dampened investor sentiment in the energy sector.
Moreover, the Trump administration is considering a strategy to halt and inspect Iranian oil tankers at sea, a move aimed at curbing Tehran's oil revenue and its potential links to nuclear proliferation. If implemented, these inspections could delay crude deliveries, leading to supply chain disruptions. 
Iran has previously retaliated against such measures by seizing foreign vessels, raising concerns about further escalation in maritime tensions.
<a href="https://www.benzinga.com/25/01/42922934/oil-stocks-rally-on-anticipation-of-stricter-russian-sanctions-heres-how-etfs-are-reacting">Trade tensions have resurfaced</a> with the Trump administration imposing import tariffs of 25% on Mexico and Canada and an additional 10% on China. Given that Canada is the top supplier of crude oil to the U.S., these tariffs could have significant implications for energy trade. A third of all U.S. crude imports come from Mexico, further amplifying concerns about the impact of protectionist policies on the energy sector.
With oil prices experiencing turbulence, geopolitical tensions rising and trade policies shifting, energy-focused ETFs are in the spotlight. Whether investors see the current downturn as a buying opportunity or a reason to tread cautiously, it would be prudent to stay informed about market trends and ETF holdings.
Read Next: 
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</ul>
Photo: Shutterstock

Sector ETFs

Commodities

Global

ETFs

Geopolitics, Tariffs, Supply Glut: What's Next For Oil ETFs?

Goldman Sachs analyst Neil Mehta cut the price forecast for Exxon Mobil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) from $125 to $123 ahead of the company&#8217;s fourth-quarter results, which will <a target="_blank" href="https://www.benzinga.com/earnings" rel="noreferrer noopener">be reported on January 31, 2025</a>.
The analyst updates ExxonMobil estimates to reflect mark-to-market commodity prices and incremental Upstream guidance, <a target="_blank" href="https://www.benzinga.com/quote/XOM/analyst-ratings" rel="noreferrer noopener">maintaining a Neutral rating</a>.
While the company benefits from strong execution, shareholder returns (~8% capital returns yield in 2025/2026), and premium Upstream assets (Permian, Guyana, LNG), its relative valuation keeps the analyst on the sidelines.
On January 8, the oil giant stated that it anticipates changes in oil prices to reduce&nbsp;fourth-quarter&nbsp;upstream earnings&nbsp;Q/Q&nbsp;by<a target="_blank" href="https://www.benzinga.com/25/01/42875502/oil-price-drop-to-cut-exxon-mobils-q4-upstream-earnings-by-up-to-09-billion" rel="noreferrer noopener"> $(0.9) billion to&nbsp;$(0.5)&nbsp;billion</a>.
On the other hand, Exxon Mobil projects that variations in industry margins will impact energy products earnings by&nbsp;$(0.7)&nbsp;billion – $(0.3)&nbsp;billion, specialty products earnings by $(0.1) billion – $0.1 billion, and chemical products earnings by&nbsp;$(0.5) billion – $(0.3) billion.
The analyst writes that this implies a ~$1.50 EPS midpoint, with Upstream, Downstream, and Chemicals <a target="_blank" href="https://www.benzinga.com/25/01/42883747/goldman-sachs-cuts-exxon-mobils-q4-eps-forecast-cites-weakness-across-segments" rel="noreferrer noopener">earnings below versus prior GS expectations</a>.
Mehta&#8217;s 2024-2026 EPS estimates are revised to $7.63 (from $7.91), $8.17 (from $8.35) and $9.97 (from $9.71), respectively, reflecting mark-to-market commodity prices and refining margins, production adjustments, and pricing realization tweaks.
Investors can gain exposure to XOM via&nbsp;Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) and SPDR Select Sector Fund – Energy Select Sector&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>).
Price Action: XOM shares are down 1.28% at $108.74 at last check Friday.
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</ul>
Photo via Shutterstock

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Analyst Ratings

Trading Ideas

Goldman Sachs Stays On The Sidelines On Exxon Mobil - Here's Why

Oil prices are heating up, and so are the stocks of <a href="https://www.benzinga.com/topic/energy">major energy companies</a>. 
Shares of Chevron Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>), Occidental Petroleum (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OXY#NYSE">OXY</a>), and ConocoPhillips (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COP#NYSE">COP</a>) were trading in the green at the last check on Friday. The rally follows a Reuters report suggesting the U.S. is preparing its most <a href="https://www.benzinga.com/etfs/sector-etfs/25/01/42919047/oil-nears-80-as-us-prepares-new-russia-sanctions">stringent sanctions yet</a> against Russian oil.
These sanctions, expected to target 180 vessels, major <a href="https://www.benzinga.com/topic/oil?_gl=1&#x2A;1aeuuae&#x2A;_gcl_au&#x2A;MTQ3Nzg4MTMxMi4xNzM1NTczMTA3&#x2A;_ga&#x2A;R1MxLjEuMTczNjUyMjc2NC4xLjEuMTczNjUyMjg4Ni4wLjAuMA..&#x2A;_ga_V7ZK73W7N0&#x2A;MTczNjUyMDk1NC40Ni4xLjE3MzY1MjY3NDYuMC4wLjA.">oil </a>companies, and top executives, have already pushed oil prices to $80 per barrel — a level not seen since October 2024. 
Traders are responding to the anticipated disruption in global oil supply, and some ETFs with oil and energy exposure stand to reap the benefits.
<h3 class="wp-block-heading">What This Means For ETFs</h3>
<ul>
<li>The United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) was trading 3.73% higher as of 12.13 P.M. EST</li>
<li>The Invesco DB Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBO#NYSE">DBO</a>) rose about 3.84%. </li>
<li>The United States 12 Month Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USL#NYSE">USL</a>) posted a 2.21% gain.</li>
<li>The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>), with an expense ratio of 0.09% and a 91.26% exposure to the Oil, Gas &amp; Consumable Fuels make it a good bet for investors of oil-focused ETFs. The portfolio includes Exxon Mobil, Chevron and ConocoPhillips.</li>
<li>Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) has an expense ratio of 0.10% and like XOP, Exxon Mobil, Chevron and ConocoPhillips enjoys significant weightage in the fund.</li>
</ul>
<h3 class="wp-block-heading">Geopolitics and Market Dynamics</h3>
Sanctions on Russia — one of the world's largest oil producers — are expected to tighten supply. Prices are expected to go higher. Ongoing reduction in U.S. crude stockpiles, particularly at the Cushing, Oklahoma hub, as reported by Reuters, adds to the pressure.
While tighter supplies drive prices upward, concerns about demand persist. China&#8217;s fuel oil imports are likely to fall early 2025 thanks to a hike in oil import tax from Jan. 1. 
Weaker demand from China, one of the biggest crude oil importers, could weigh on prices in the longer term. 
See Next: 
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/12/42340255/opec-extends-oil-output-cuts-to-late-2026-what-it-means-for-markets">OPEC+ Extends Oil Output Cuts To Late 2026: What It Means For Markets</a></li>
</ul>
Photo: Shutterstock

Oil Stocks Rally On Anticipation Of Stricter Russian Sanctions: Here's How ETFs Are Reacting

Goldman Sachs analyst Neil Mehta expressed views on Exxon Mobil Corporation&#8216;s (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>)<a target="_blank" href="https://www.benzinga.com/25/01/42875502/oil-price-drop-to-cut-exxon-mobils-q4-upstream-earnings-by-up-to-09-billion" rel="noreferrer noopener"> trading update reported yesterday.</a>
The oil giant anticipates changes in oil prices to reduce&nbsp;fourth-quarter&nbsp;upstream earnings&nbsp;Q/Q&nbsp;by&nbsp;$(0.9) billion to&nbsp;$(0.5)&nbsp;billion.
Conversely, changes in gas prices are expected to impact its upstream results by between&nbsp;$0.0&nbsp;billion and&nbsp;$0.4 billion.
On the other hand, Exxon Mobil projects that variations in industry margins will impact energy products earnings by&nbsp;$(0.7)&nbsp;billion – $(0.3)&nbsp;billion, specialty products earnings by $(0.1) billion – $0.1 billion, and chemical products earnings by&nbsp;$(0.5) billion – $(0.3) billion.
The analyst writes that implied EPS at the midpoint was ~$1.50, below their estimate of $1.80 and FactSet consensus of $1.76.
The difference is mainly due to weaker-than-expected results in the Upstream, Downstream, and Chemicals segments, adds the analyst.
Mehta writes that implied Upstream earnings were ~$5.7 billion at the mid-point, below their estimate of ~$6.2 billion.
The analyst adds that implied Downstream earnings, including Energy and Specialty Products, were ~$1.0 billion at the mid-point, below their estimate of ~$1.4 billion.
Moreover, implied Chemicals earnings were ~$493 million at the mid-point, falling short of their estimate of ~$853 million.
Goldman Sachs rated the company <a target="_blank" href="https://www.benzinga.com/quote/XOM/analyst-ratings" rel="noreferrer noopener">Neutral with a price target of $125</a>.
Investors can gain exposure to XOM via&nbsp;Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) and SPDR Select Sector Fund – Energy Select Sector&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>).
Price Action: XOM shares are down 2.43% at $106.11 at the last check Wednesday.
Read Next:
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<li><a href="https://www.benzinga.com/news/global/25/01/42777105/russian-natural-gas-delivery-to-europe-halted-us-listed-lng-stocks-gain-as-exports-set-to-increase-in-2025" target="_blank" rel="noreferrer noopener">Russian Natural Gas Delivery To Europe Halted: US-Listed LNG Stocks Gain As Exports Set To Increase In 2025</a></li>
</ul>
Photo via Shutterstock.

Goldman Sachs Flags Weak Q4 Guidance For Exxon Amid Weak Upstream And Chemical Results

Exxon Mobil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) shares are trading lower today. The oil giant anticipates changes in oil prices to reduce&nbsp;fourth-quarter&nbsp;upstream earnings&nbsp;<a target="_blank" href="https://www.benzinga.com/secfilings/25/01/42862516/exxon-mobil-corp-general-corporate-statement-form8" rel="noreferrer noopener">Q/Q</a> by&nbsp;$(0.9) billion to&nbsp;$(0.5)&nbsp;billion.
Conversely, changes in gas prices are expected to impact its upstream results by between&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">$0.0&nbsp;billion and&nbsp;$0.4 billion</a>.
On the other hand, Exxon Mobil projects that variations in industry margins will impact energy products earnings by&nbsp;$(0.7)&nbsp;billion &#8211; $(0.3)&nbsp;billion, specialty products earnings by $(0.1) billion &#8211; $0.1 billion, and chemical products earnings by&nbsp;$(0.5) billion &#8211; $(0.3) billion.
Apart from this, changes in scheduled maintenance are projected to impact all segment earnings by $(0.1) billion- $0.1 billion each.
According to&nbsp;<a target="_blank" href="https://pro.benzinga.com/dashboard" rel="noreferrer noopener">Benzinga Pro</a>, analysts estimate Exxon Mobil to report&nbsp;fourth-quarter&nbsp;adjusted earnings per share of&nbsp;<a target="_blank" href="https://www.benzinga.com/earnings" rel="noreferrer noopener">$1.76&nbsp;and revenues of&nbsp;$88.402 billion.</a>
In a separate release, Chart Industries, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GTLS#NYSE">GTLS</a>) disclosed a global master goods and services agreement with Exxon.
Chart Industries has entered an enabling agreement with Exxon to supply LNG equipment, technology, and services across Exxon&#8217;s global projects. The agreement covers the provision of cold boxes and Chart&#8217;s proprietary IPSMR process technology.
Yesterday, the company filed a federal lawsuit Monday against California Attorney General&nbsp;Rob Bonta&nbsp;and environmental groups, alleging defamation of its advanced plastics recycling initiatives, as the oil giant pushes forward with significant <a target="_blank" href="https://www.benzinga.com/markets/equities/25/01/42867453/exxon-mobil-sues-california-ag-over-defamation-of-recycling-efforts-citing-ties-to-competitors" rel="noreferrer noopener">investments in recycling technology</a>.
Investors can gain exposure to XOM via&nbsp;Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) and SPDR Select Sector Fund &#8211; Energy Select Sector (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>).
Price Action: XOM shares are down 1.35%&nbsp;at&nbsp;$107.28&nbsp;at the last check Wednesday.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/news/global/25/01/42777105/russian-natural-gas-delivery-to-europe-halted-us-listed-lng-stocks-gain-as-exports-set-to-increase-in-2025" target="_blank" rel="noreferrer noopener">Russian Natural Gas Delivery To Europe Halted: US-Listed LNG Stocks Gain As Exports Set To Increase In 2025</a></li>
</ul>
Photo: Del Henderson Jr. via Shutterstock.

Guidance

GTLS

Oil Price Drop To Cut Exxon Mobil's Q4 Upstream Earnings By Up To $0.9 Billion: Details

Goldman Sachs analyst Neil Mehta rated Exxon Mobil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) Neutral <a target="_blank" href="https://www.benzinga.com/quote/XOM/analyst-ratings" rel="noreferrer noopener">and a price target of $125</a>.
Yesterday, the company unveiled its Corporate Plan to 2030, targeting an additional $20 billion in earnings and $30 billion in <a target="_blank" href="https://www.benzinga.com/24/12/42444546/2030-roadmap-exxonmobil-to-achieve-54m-barrelsday-production-targets-20-billion-earnings-boost" rel="noreferrer noopener">cash flow over the next six years</a>.
The 2030 goals include increasing Pioneer acquisition synergies by 50% to over $3 billion annually, growing <a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">new business earnings to $3 billion</a>.
ExxonMobil is targeting up to $30 billion in lower-emissions investments and will allocate $27 billion – $29 billion in capex for 2025, with annual investments of $28 billion – $33 billion from 2026 to 2030, while reducing the reinvestment rate to 40%.
The analyst says that Exxon highlighted its differentiated Permian position post-Pioneer acquisition, leveraging non-sand proppants for better well performance.
Mehta notes that over the next 12 months, the company plans to deploy the technology in over 200 wells, though supply chain constraints remain a key focus for managing the deployment cadence.
However, Exxon was more cautious than expected regarding its 2030 volume outlook for Guyana, with forecasts set at 1.3 million bpd, compared to Goldman Sachs&#8217; estimate of 1.5 million bpd, adds the analyst.
Mehta says that the company emphasized its ongoing focus on using 4D seismic technology and expanding high-performance computing capacity to enhance resource recovery and maximize value capture. 
Additionally, the analyst notes that ExxonMobil is continuing to collaborate closely with the Guyanese government on gas development projects.
Going forward, the analyst says that it will closely monitor management&#8217;s updates on the execution of various LNG projects, particularly Golden Pass, due to previous challenges with execution and timing.
The analyst estimates EPS of $7.91 for 2024, $8.35 for 2025 and $9.71 for 2026.
Investors can gain exposure to XOM via&nbsp;EA Series Trust Strive U.S. Energy ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DRLL#NYSE">DRLL</a>) and&nbsp;Vanguard Energy Index Fund ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>).
Price Action: XOM shares are down 0.39% at $111.48 at the last check Thursday.
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</ul>
Photo: Del Henderson Jr. via Shutterstock.

DRLL

Exxon Has A Differentiated Permian Position Post-Pioneer Deal: Goldman Sachs Analyst

Exxon Mobil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) plans to invest over $200 million to expand advanced recycling operations at its Baytown <a target="_blank" href="https://www.benzinga.com/pressreleases/24/11/b42109739/exxonmobil-to-expand-advanced-recycling-capacity" rel="noreferrer noopener">and Beaumont facilities in Texas</a>.
The expansions, set to begin in 2026, aim to boost recycling rates and reduce plastic waste in landfills.
The company also intends to add more units to achieve a global recycling capacity of 1 billion pounds annually by 2027.
ExxonMobil's investment will add 350 million pounds of advanced recycling capacity annually at its Baytown and Beaumont facilities, increasing its total capacity to 500 million pounds per year.
The company aims to develop additional projects across North America, Europe, and Asia, targeting 1 billion pounds of global recycling capacity by 2027.
This process complements traditional recycling by converting plastic waste into raw materials for products like fuels, lubricants, chemicals, and plastics, effectively addressing waste that mechanical recycling cannot process.
ExxonMobil&#8217;s first advanced recycling facility in Baytown, launched in 2022, is among the largest in North America, processing over 70 million pounds of plastic waste as of October 2024.
Karen McKee, president of ExxonMobil Product Solutions, said, &#8220;At our Baytown site, we&#8217;ve proven advanced recycling works at scale, which gives us confidence in our ambition to provide the capacity to process more than 1 billion pounds of plastic per year around the world.&#8221;
&#8220;The world&#8217;s plastic waste challenge will be solved with innovation, collaboration, and supportive government policy to improve waste management and circularity.&#8221;
Yesterday, the company inked a non-binding MOU for a multiyear agreement with&nbsp;LG Chem, a&nbsp;chemical company with a&nbsp;<a target="_blank" href="https://www.benzinga.com/news/contracts/24/11/42087743/exxon-mobils-lithium-leap-100000-metric-tons-to-fuel-lg-chems-us-plant" rel="noreferrer noopener">diversified business portfolio</a>.
ExxonMobil will supply up to 100,000 metric tons of lithium carbonate from its planned U.S. project to LG Chem's upcoming cathode plant in Tennessee, which is set to be the largest in the U.S.
Investors can gain exposure to XOM via&nbsp;EA Series Trust Strive U.S. Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DRLL#NYSE">DRLL</a>) and&nbsp;Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>).
Price Action: XOM shares are up 1.63% at $122.28 at the last check Thursday.
Photo: Del Henderson Jr. via Shutterstock
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ExxonMobil Plans $200 Million Expansion To Tackle Plastic Waste: Details

Exxon Mobil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) inked a non-binding MOU for a multiyear agreement with LG Chem, a chemical company with a <a target="_blank" href="https://www.benzinga.com/pressreleases/24/11/b42083477/lg-chem-and-exxonmobil-sign-mou-for-lithium-offtake" rel="noreferrer noopener">diversified business portfolio</a>.
According to this, ExxonMobil will supply up to 100,000 metric tons of lithium carbonate from its planned U.S. project to LG Chem&#8217;s upcoming cathode plant in Tennessee, which is set to be the largest in the U.S.
LG Chem&#8217;s Tennessee cathode plant, which began construction in December 2023, is projected to produce 60,000 tons annually.
The facility&#8217;s strategic location ensures efficient customer deliveries and raw material imports.
The final investment decision will depend on establishing commercially viable regulatory frameworks.
ExxonMobil plans to produce Mobil Lithium using Direct Lithium Extraction (DLE) technology, leveraging its expertise in exploration, drilling, and chemical processing.
This method provides U.S. EV battery manufacturers with a domestic lithium supply option, which is expected to reduce environmental impact with about two-thirds lower carbon intensity compared to hard rock mining.
Shin Hak-cheol, CEO of LG Chem, said, &#8220;Building a lithium supply chain with ExxonMobil, one of the world&#8217;s largest energy companies, holds great significance.&#8221;
&#8220;We will continue to strengthen LG Chem&#8217;s competitiveness in the global supply chain for critical minerals.&#8221;
This month, Exxon Mobil reportedly planned to sell conventional Permian Basin assets for $1 billion,<a target="_blank" href="https://www.benzinga.com/news/asset-sales/24/11/41914956/exxon-mobil-sells-1-billion-in-permian-basin-assets-to-focus-on-shale-report" rel="noreferrer noopener"> producing ~26,000 BOE per day</a>.
Investors can gain exposure to XOM via&nbsp;EA Series Trust Strive U.S. Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DRLL#NYSE">DRLL</a>) and Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>).
Price Action: XOM shares are up 0.38% at $119.08 premarket at the last check Wednesday.
Photo via Midjourney
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<li><a href="https://www.benzinga.com/24/11/42011906/exxon-mobil-set-to-cut-400-texas-jobs-after-pioneer-deal" target="_blank" rel="noreferrer noopener">Exxon Mobil To Cut 400 Texas Jobs In Stages Through 2026</a></li>
</ul>

Contracts

Exxon Mobil's Lithium Leap: 100,000 Metric Tons To Fuel LG Chem's US Plant

Donald Trump has been declared the <a href="https://www.benzinga.com/news/24/11/41768178/donald-trump-defeats-kamala-harris-to-win-2024-election">winner of the 2024 U.S. presidential election</a>, defeating Kamala Harris. This victory, confirmed by the Associated Press, marks Trump&#8217;s return to the White House, raising questions about the future of U.S. energy policy.
What Happened: Trump&#8217;s presidency is anticipated to pivot U.S. energy policy back towards oil and gas production, Reuters reported on Wednesday. However, experts suggest this shift will not significantly hinder the ongoing growth of renewable energy. The Inflation Reduction Act, enacted during the Biden administration, offers substantial subsidies for solar and wind projects, making it challenging to repeal. 
 Carl Fleming from McDermott Will &amp; Emery noted that while Trump&#8217;s administration might slow progress by limiting federal budgets and offshore wind leasing, the momentum remains strong.
&#8220;You could see a new administration come in and they can very quickly begin to cut budgets or restrict budgets or restrict the freedom of agencies to do certain things that are tied to funding,&#8221; he said.
&#8220;But I think that&#8217;s a smaller subset of the larger renewables market that&#8217;s really relying on those, so I don&#8217;t think it would have a shocking effect.&#8221;
See Also: <a href="https://www.benzinga.com/markets/equities/24/11/41767332/trumps-potential-return-to-white-house-sends-ex-president-linked-phunware-stock-upwards-during-p?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Trump&#8217;s Potential Return To White House Sends Ex-President Linked Phunware Stock Upwards During Pre-Market Hours</a>
Trump&#8217;s allies, benefiting from clean energy investments, may resist drastic policy changes. Tony Dutzik from Frontier Group suggested Trump could favor fossil fuel extraction on public lands, potentially impacting offshore wind projects. Despite potential policy shifts, the U.S. is expected to maintain its status as a leading oil and gas producer.
Why It Matters: The 2024 election was a closely watched contest between Trump and Harris, with <a href="https://www.benzinga.com/news/24/11/41768178/donald-trump-defeats-kamala-harris-to-win-2024-election">Trump emerging victorious</a>. This victory comes amid a backdrop of cautious market sentiment, as investors remained wary ahead of Election Day. 
The <a href="https://www.benzinga.com/markets/equities/24/11/41724383/wall-street-struggles-ahead-of-election-day-energy-sector-outperforms-solar-stocks-rise-whats-dr">energy sector outperformed</a>, with solar stocks rising, indicating strong investor confidence in renewables. Trump&#8217;s previous administration prioritized fossil fuels, but the ongoing clean energy boom, bolstered by federal incentives, suggests that the transition to renewables is resilient. As <a href="https://www.benzinga.com/markets/equities/24/10/41213583/what-a-trump-win-could-mean-for-financial-energy-stocks-lessons-from-2016">lessons from 2016</a> indicate, Trump&#8217;s policies may influence energy markets, but the momentum towards clean energy appears robust.
Price Action: On Wednesday, during pre-market hours, <a href="https://pro.benzinga.com">Benzinga Pro </a>data revealed that energy ETFs were trading higher. Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) was up by 2.58%, Alerian MLP ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AMLP#NYSE">AMLP</a>) was trading 1.24% higher, and Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) was moving up by 2.92%.
Read Next:
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<li><a href="https://www.benzinga.com/markets/equities/24/11/41703265/haley-tells-pennsylvania-voters-to-put-emotion-aside-and-rally-behind-trump?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Haley Tells Pennsylvania Voters To Put Emotion Aside And Rally Behind Trump</a></li>
</ul>
Disclaimer: This content was partially produced with the help of&nbsp;<a href="https://www.benzinga.com/author/benzinga-neuro" target="_blank" rel="noreferrer noopener">Benzinga Neuro</a>&nbsp;and was reviewed and published by Benzinga editors.
Image via Flickr

Markets

General

AMLP

Trump's Return To White Won't Have 'Shocking Effect' On US Clean Energy Growth, Say Analysts

After falling to the lowest level since December 2021, on Tuesday, oil recorded its first weekly gain in a month, buoyed by Hurricane Francine, which disrupted production in the Gulf of Mexico. Brent crude rose above $72 per barrel, pushing its weekly climb to about 2%, while West Texas Intermediate traded below $70 per barrel.
However, higher oil prices failed to fuel the rally in the energy space with many ETFs still in red. The popular ETFs &mdash; Energy Select Sector SPDR (ARCA:XLE), Vanguard Energy ETF (ARCA:VDE), SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (ARCA:XOP), Fidelity MSCI Energy Index ETF (ARCA:FENY) and VanEck Vectors Oil Services ETF (ARCA:OIH) &mdash; were down more than 2% each. All these ETFs have a Zacks Rank #1 (Strong Buy) or #2 (Buy).
The storm had prompted a production shutdown of around 730,000 barrels a day (bpd) in the Gulf of Mexico (about 42% of Gulf production), according to the US Bureau of Safety and Environmental Enforcement. The US Bureau of Safety and Environmental Enforcement stated that about 24% of crude production and 26% of natural gas output in the US Gulf of Mexico were offline due to the storm.
<h3>Energy ETFs in Focus</h3>
Energy Select Sector SPDR: It is the largest and the most popular ETF in the energy space, with an AUM of $34.1 billion. It offers exposure to the broad energy space and follows the Energy Select Sector Index. Energy Select Sector SPDR holds 22 securities in its basket and charges 9 bps in annual fees.
Vanguard Energy ETF: It provides exposure to a basket of 113 energy stocks by tracking the MSCI US Investable Market Energy 25/50 Index. Vanguard Energy ETF has amassed $7.6 billion in its asset base and charges 10 bps in annual fees.
SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF: It provides exposure to 53 oil and gas exploration and production companies by tracking the S&amp;P Oil &amp; Gas Exploration &amp; Production Select Industry Index. It has an AUM of $2.6 billion and charges 35 bps in fees per year.
Fidelity MSCI Energy Index ETF: It follows the MSCI USA IMI Energy Index, holding 112 stocks in its basket. FENY charges 8 bps in annual fees and has accumulated $1.5 billion in its asset base.
VanEck Vectors Oil Services ETF: It tracks the MVIS U.S. Listed Oil Services 25 Index, which offers exposure to companies involved in oil services to the upstream oil sector, including oil equipment, oil services or oil drilling. VanEck Vectors Oil Services ETF holds 26 stocks in its basket. With an AUM of $1.5 billion, it charges 35 bps in annual fees.
<h2>Concerns</h2>
<h2>Weak Demand/Supply Trends</h2>
Despite the positive momentum, oil prices are still trading close to three-year lows amid persistent concerns over slowing demand.
International Energy Agency (IEA) lowered the oil demand outlook by 70,000 bpd to 900,000 bpd for this year, citing weak China demand and feeble growth in other regions. The Organisation of Petroleum Exporting Countries (OPEC) also slashed the 2024 oil demand growth forecast for the second time. It expects world oil demand to rise by 2.03 million bpd in 2024, down from last month&#39;s forecast of growth of 2.11 million bpd.
Last week, OPEC and its allies extended the oil production cuts of 2.2 million bpd through November and planned to phase out those beginning in December until November 2025. However, it will increase production in 2025 for the first time since 2022. The first addition to supply, of 180,000 bpd, is now expected in December. Additionally, growing output from the United States, Guyana, Brazil and Canada will continue to take a toll on oil prices.
<h2>Geopolitical Tensions</h2>
Geopolitical risks in the Middle East will continue to provide some support to oil prices. The ongoing conflict in Gaza and the potential for a broader regional escalation, involving Iran, Hamas and Hezbollah are contributing to market uncertainty.
<h2>Analysts Go Bearish</h2>
Analysts in a Reuters poll reduced their oil price forecasts for 2024 for the fourth consecutive month. The poll shows Brent prices to average $82.86 per barrel this year, down from $83.66 a barrel expected in the July forecast. West Texas Intermediate is projected to average $78.82 per barrel in 2024, down from $79.22 a barrel expected in last month&#39;s poll.
Analysts believe the bullish drivers of the ongoing OPEC+ cuts and geopolitical flare-ups in the Middle East will be offset by the bearish demand trends and oil imports in China and Europe.
<h2>Will the Fed Provide Some Respite?</h2>
The Fed is expected to cut interest rates at its meeting scheduled to take place on Sept 17 and 18. Lower interest rates tend to lower the expenses of purchasing goods and services, potentially stimulating economic expansion and driving oil demand.
<a href="https://www.zacks.com/stock/news/2335964/rise-in-oil-price-fails-to-lift-energy-etfs-what-s-ahead?cid=CS-BENZ-FT-etf_news_and_commentary-2335964">To read this article on Zacks.com click here.</a>

FENY

Rise in Oil Price Fails to Lift Energy ETFs: What's Ahead?

Designed to provide broad exposure to the Energy ETFs category of the market, the First Trust Energy AlphaDEX ETF (ARCA:FXN) is a smart beta exchange traded fund launched on 05/08/2007.
<h2>What Are Smart Beta ETFs?</h2>
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
<h2>Fund Sponsor &amp; Index</h2>
FXN is managed by First Trust Advisors, and this fund has amassed over $478.36 million, which makes it one of the larger ETFs in the Energy ETFs. This particular fund, before fees and expenses, seeks to match the performance of the StrataQuant Energy Index.
The StrataQuant Energy Index is a modified equal-dollar weighted index designed by the AMEX to objectively identify and select stocks from the Russell 1000 Index that may generate positive alpha relative to traditional passive style indices through the use of the AlphaDEX screening methodology.
<h2>Cost &amp; Other Expenses</h2>
Investors should also pay attention to an ETF&#39;s expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.62% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.02%.
<h2>Sector Exposure and Top Holdings</h2>
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it&#39;s still important for investors to research a fund&#39;s holdings.
This ETF has heaviest allocation in the Energy sector - about 99.10% of the portfolio.
Looking at individual holdings, Valero Energy Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vlo#NYSE">VLO</a>) accounts for about 4.23% of total assets, followed by Matador Resources Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mtdr#NYSE">MTDR</a>) and Nov Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nov#NYSE">NOV</a>).
Its top 10 holdings account for approximately 39.22% of FXN&#39;s total assets under management.
<h2>Performance and Risk</h2>
The ETF has gained about 1.68% so far this year and is down about -4.04% in the last one year (as of 09/04/2024). In the past 52-week period, it has traded between $15.73 and $19.35.
The fund has a beta of 1.61 and standard deviation of 28.88% for the trailing three-year period, which makes FXN a high risk choice in this particular space. With about 41 holdings, it has more concentrated exposure than peers.
<h2>Alternatives</h2>
First Trust Energy AlphaDEX ETF is an excellent option for investors seeking to outperform the Energy ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Energy ETF (ARCA:VDE) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (ARCA:XLE) tracks Energy Select Sector Index. Vanguard Energy ETF has $8.22 billion in assets, Energy Select Sector SPDR ETF has $36.48 billion. VDE has an expense ratio of 0.10% and XLE charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Energy ETFs.
<a href="https://www.zacks.com/stock/news/2331117/is-first-trust-energy-alphadex-etf-fxn-a-strong-etf-right-now?cid=CS-BENZ-FT-smart_beta_etf-2331117">To read this article on Zacks.com click here.</a>

Mid Cap

MTDR

Is First Trust Energy AlphaDEX ETF a Strong ETF Right Now?

Venezuelan President Nicolás Maduro faces intense criticism following his declared victory in a <a href="https://www.benzinga.com/news/24/07/40003819/elon-musk-calls-venezuela-elections-a-travesty-as-nicolas-maduro-wins-third-term-amid-fraud-allegati">contentious presidential election.</a>
What Happened: The opposition, led by candidate Edmundo González, disputes the results, claiming they secured a significant win, according to the Associated Press.
Thousands of supporters rallied outside the United Nations' offices in Caracas, asserting González&#8217;s victory. 
Opposition leader Maria Corina Machado, addressing the crowd from atop a truck, called on the National Electoral Council (CNE) to release the voting tally sheets from each precinct, questioning the transparency of the election process.
Machado claimed the opposition coalition had obtained over 84% of the tallies, expressing confidence in González&#8217;s victory. She emphasized the opposition&#8217;s commitment to a peaceful transition, while González predicted his final vote count would exceed 8 million, compared to the 5.1 million reported by the CNE for Maduro. 
González, along with Machado, urged supporters to maintain calm and avoid violence during the protests.
The Organization of American States (OAS) criticized the CNE for not releasing detailed results, labeling the situation as a form of repression and calling for a possible new election under international observation. 
Maduro&#8217;s allies, including National Assembly President Jorge Rodriguez and lawmaker Diosdado Cabello, are defending the president&#8217;s victory and condemning the opposition as fascists. 
See Also: <a href="https://www.benzinga.com/news/24/07/40002632/kamala-harris-the-will-of-the-venezuelan-people-must-be-respected-as-socialist-nicol-s-maduro-faces">Kamala Harris Says &#8216;The Will Of The Venezuelan People Must Be Respected&#8217; </a>
Why It Matters: Venezuela possesses the world's largest proven crude oil reserves. 
But, under Maduro, the nation has suffered severe economic decline since 2013, including plummeting oil prices, shortages, and hyperinflation.
As a result, Venezuela suffers from widespread social unrest and the largest emigration crisis in Latin America&#8217;s recent history — over 7.7 million Venezuelans have <a href="https://www.pbs.org/newshour/show/venezuela-in-political-standoff-after-both-maduro-and-opposition-claim-election-victory">reportedly</a> left the country over the past decade.
Protests erupted nationwide on Monday, with significant unrest in Caracas where riot police clashed with demonstrators. The Attorney General reported <a href="https://www.reuters.com/world/americas/venezuela-ruling-party-opposition-rally-supporters-election-dispute-2024-07-30/">hundreds</a> of arrests, with at least one dead and dozens of security personnel injured.
Notably, opposition leader Freddy Superlano was <a href="https://www.bloomberg.com/news/articles/2024-07-30/venezuela-apprehends-opposition-figure-amid-election-protests">detained</a> under unclear circumstances, raising concerns about the government&#8217;s response to dissent.
The election was considered a critical moment for Venezuela. It offered a chance for change after 25 years of single-party rule.
The Biden administration <a href="https://www.benzinga.com/news/24/04/38290486/team-biden-considers-reinstating-oil-sanctions-on-venezuela-over-election-concerns-report" target="_blank" rel="noreferrer noopener">contemplated reinstating oil sanctions</a> on Venezuela due to concerns over the fairness of the election. The disputed results have once again cast a shadow over the election process.
Long lines formed outside stores in Caracas as people braced for potential food shortages amid ongoing demonstrations.
Maduro accused the opposition of attempting a coup. 
In a symbolic act of defiance, protesters are <a href="https://www.register-herald.com/news/nation_world/hugo-ch-vez-statues-targeted-across-venezuela-in-post-election-unrest/article_539d4528-69ef-57bf-ad06-66310399cc60.html">toppling</a> statues of former President Hugo Chávez — Maduro&#8217;s mentor. 
Price Action: On Tuesday, major oil companies finished in the green:
<ul>
<li>Chevron Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>) was up 1.90% to $159.57.</li>
<li>Exxon Mobil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) was up 1.78% to $118.17.</li>
<li>Marathon Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRO#NYSE">MRO</a>) was up 0.69% to $27.64.</li>
<li>ConocoPhillips (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COP#NYSE">COP</a>) was up 0.72% to $109.91.</li>
<li>EOG Resources (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EOG#NYSE">EOG</a>) was up 0.75% to $126.15.</li>
</ul>
Most ETFs tied to the oil sector also closed higher, <a href="https://pro.benzinga.com/dashboard">according to Benzinga Pro</a>: SPDR Select Sector Fund &#8211; Energy Select Sector (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) was up 1.55%; Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) was up 1.5%; and iShares U.S. Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYE#NYSE">IYE</a>) finished 1.29% higher.
Only United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) traded lower on Tuesday, down 0.97%.
Now Read: 
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/40049081/small-caps-eyes-strongest-month-against-tech-stocks-in-22-years-why-presidential-el">Small Caps Eye Strongest Month Against Tech Stocks In 22 Years: Why Presidential Elections Could Push Russell 2000 To Record Highs</a></li>
</ul>
Image: Shutterstock

Government

iShares Dow Jones US Energy Sector Index Fund

Tensions Rise In Venezuela As Opposition Disputes Election Results: Impact On Oil ETFs

Former President Donald Trump accused the Organization of the Petroleum Exporting Countries (OPEC) of deliberately driving down <a href="https://www.benzinga.com/topic/oil">oil prices</a> to benefit Vice President Kamala Harris, warning that her potential presidency could be a &#8220;disaster&#8221; for the U.S.
What Happened: Trump took to his social media platform, Truth Social, to voice his concerns about OPEC&#8217;s actions. He <a href="https://truthsocial.com/@realDonaldTrump/posts/112871592399001658">wrote</a>, &#8220;OPEC nations are going all out to drive down oil prices in the hope that crazy Kamala Harris will win. Then they will really reap the rewards! She will be a disaster for the USA!&#8221;
<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1024" height="394" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/30020934/image-61-1024x394.png" alt="" class="wp-image-463915" style="width:593px;height:auto" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/30020934/image-61-1024x394.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/30020934/image-61-300x115.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/30020934/image-61-768x295.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/30020934/image-61.png 1227w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Trump&#8217;s comments come in the wake of a recent <a href="https://www.benzinga.com/markets/esg/24/07/39888337/what-a-kamala-harris-presidency-could-mean-for-oil-stocks-chevron-marathon-move-lower">decline in oil stocks</a>, which occurred amid speculation that Harris might adopt a more stringent stance on the oil and gas industry if she were to become the Democratic presidential nominee and win the White House race.
At the time of publication, oil stocks remain in the red after President Joe Biden opted out of the 2024 election race against Trump and endorsed Harris on Jul. 21 as a top presidential nominee. 
WTI Crude has dropped from $78.64 to $75.43 following Harris&#8217;s nomination for the presidential run, according to <a href="https://pro.benzinga.com/dashboard">Benzinga Pro data</a>.
Chevron Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>), Marathon Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRO#NYSE">MRO</a>), Exxon Mobil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>), ConocoPhillips (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COP#NYSE">COP</a>), and EOG Resources (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EOG#NYSE">EOG</a>) are all experiencing declines.
ETFs tied to the oil sector have also mirrored this downward trend, with United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), SPDR Select Sector Fund &#8211; Energy Select Sector (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>), Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>), and iShares U.S. Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYE#NYSE">IYE</a>) all under pressure.
If Harris wins, her administration might focus on climate policies, including reducing carbon emissions and increasing funding for <a href="https://www.benzinga.com/markets/esg/24/07/39888337/what-a-kamala-harris-presidency-could-mean-for-oil-stocks-chevron-marathon-move-lower">renewable energy projects</a>. This shift could result in higher compliance costs and stricter regulatory requirements for the oil industry, potentially affecting profitability.
See Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/40015199/oil-prices-remain-under-pressure-despite-rising-middle-east-tensions-a-bearish-tria?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Oil Prices Remain Under Pressure Despite Rising Middle East Tensions: Analyst Says Bearish Price Trend On Horizon</a>
Why It Matters: A report from Citi on Monday suggested that a Trump presidency could be &#8220;net bearish&#8221; for oil prices. This is due to <a href="https://www.benzinga.com/markets/24/07/40011423/net-bearish-for-oil-citi-warns-investors-of-trump-presidency-risks">his oil-friendly policies</a> and potential tariffs, which could increase oil supply and lower prices.
However, according to the same report, the main threat to oil markets under a <a href="https://www.benzinga.com/news/24/07/39810934/trumps-second-term-could-trigger-global-inflation-warn-analysts-2024-2025-is-going-to-be-very-differ" target="_blank" rel="noreferrer noopener">Trump presidency</a> would be pressure on Iran. If Trump were to adopt his previous maximum-pressure campaign on Iran once again, Iranian oil exports could be reduced by 500 to 900 thousand barrels per day, impacting global markets. 
Furthermore, Goldman Sachs warned last week that the next <a href="https://www.benzinga.com/markets/equities/24/07/39985035/goldman-sachs-warns-of-limited-oil-supply-options-for-next-us-administration">U.S. administration would have limited options</a> to significantly boost domestic oil supply due to low strategic petroleum reserves and potential regulatory easing.
In a broader context, the U.S. has been producing record amounts of oil, averaging 12.9 million barrels <a href="https://www.benzinga.com/markets/commodities/24/06/39510687/3-stocks-to-buy-as-oil-prices-collapse-opec-panics">per day in 2023</a>. This surge in production has led to concerns of a potential glut, reminiscent of the 2020 COVID lockdown period.
Moreover, Trump&#8217;s rift with OPEC is not new. In April 2018, the former president tweeted that OPEC had driven oil prices "artificially very high," a move that "will not be accepted."
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
<div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!
&mdash; Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/987284041304100864?ref_src=twsrc%5Etfw">April 20, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</figure>
Read Next: 
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39992214/russell-2000-notches-third-week-of-gains-strongest-streak-since-august-2022-small-c?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Russell 2000 Notches Third Week Of Gains, Strongest Streak Since August 2022: Small Caps Serve &#8216;As Economic Barometer,&#8217; Analyst Says</a></li>
</ul>
Image Via Shutterstock 
Disclaimer:&nbsp;This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Politics

Trump Accuses OPEC Of Manipulating Oil Prices To Favor Kamala Harris, Warns 'She Will Be A Disaster For The USA!'

Oil stocks fell early Monday amid concerns that Vice President Kamala Harris could take a tougher stance on the oil and gas industry if she becomes the Democratic presidential nominee and wins the <a href="https://www.benzinga.com/general/politics">race for the White House.</a>
As California attorney general, Harris filed lawsuits against fossil fuel companies, supported reducing greenhouse gas emissions, and pushed for a ban on fracking, <a href="https://www.offshore-technology.com/news/will-kamala-harris-take-a-stronger-stance-than-biden-against-oil-and-gas-industry/?cf-view">according</a> to Offshore Technology. Harris has also been critical of offshore oil exploration and defended California's Low Carbon Fuel Standard.
This potential shift in the political landscape has investors worried, with oil majors seeing declines on Monday.
<h2 class="wp-block-heading">Oil Stocks Feeling The Heat</h2>
At the time of publication, Chevron Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVX#NYSE">CVX</a>) was down 0.69% to $158.06, Marathon Oil Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRO#NYSE">MRO</a>) fell by 0.97% to $28.44, Exxon Mobil Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) decreased by 0.15% to $115.92, ConocoPhillips (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COP#NYSE">COP</a>) slipped 1.17% to $112.99, and EOG Resources, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EOG#NYSE">EOG</a>) saw a drop of 0.72% to $128.32.
ETFs tied to the oil sector mirrored this downward trend. The Energy Select Sector SPDR Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) was down 0.23%, Vanguard Energy Index Fund ETF Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) fell by 0.19%, and the iShares U.S. Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYE#NYSE">IYE</a>) declined by 0.27%.
<h2 class="wp-block-heading">Renewables Traded In Green</h2>
Meanwhile, ETFs focused on renewable energy stocks were in the green, reflecting optimism about a potential shift towards clean energy under a potential Harris administration. The iShares Global Clean Energy ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ICLN#NASDAQ">ICLN</a>) was up 0.51%, and the GRID First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GRID#NASDAQ">GRID</a>) rose by 1.11%.
Read Also:<a href="https://www.benzinga.com/news/24/07/39883677/investors-anticipate-unraveling-of-trump-trade-as-biden-exits-presidential-race-but-analyst-says-its"> Investors Anticipate Unraveling Of &#8216;Trump Trade&#8217; As Biden Exits Presidential Race, But Analyst Says &#8216;It&#8217;s A Bit Too Early For The Markets To Declare Victory For Trump&#8217;</a>
<h2 class="wp-block-heading">Harris&#8217; Green Policies, Push For Renewables</h2>
The market&#8217;s reaction highlights investor concerns that Harris, known for her environmental advocacy, could enforce stricter regulations on fossil fuels and bolster support for renewable energy initiatives. As Vice President, Harris has supported various green policies, and her presidential campaign is expected to intensify the push towards renewable energy, potentially at the expense of traditional oil and gas companies.
Oil majors have reason to be cautious. If Harris runs for president and wins, her administration might focus on climate policies, including reducing carbon emissions and increasing funding for renewable energy projects. This shift could result in higher compliance costs and stricter regulatory requirements for the oil industry, potentially affecting their profitability.
<h2 class="wp-block-heading">Harris&#8217; Potential Leadership Signals A Greener Future</h2>
The early trading slump in oil stocks underscores the market&#8217;s sensitivity to political developments, especially those that could significantly alter the energy sector&#8217;s landscape. In contrast, the positive movement in renewable energy ETFs suggests that investors are betting on a greener future under Harris&#8217;s potential leadership.
As the political climate heats up, oil majors might need to brace for a more challenging operating environment. The question on everyone&#8217;s mind: Will Harris&#8217;s potential presidency mean a seismic shift for the energy sector? Industry leaders are closely watching and preparing for any regulatory adjustments that may arise.
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What A Kamala Harris Presidency Could Mean For Oil Stocks: Chevron, Marathon Move Lower

The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, are expected to extend their current production cuts this weekend, as per delegates and analysts.
What Happened: The OPEC+ alliance, which was scheduled to meet in person in Vienna on Jun. 1, has now moved the meeting to a virtual platform on Jun. 2. The group is currently implementing a combined 5.86 million barrels per day of supply cuts, with 2 million barrels per day set to expire at the end of this year, as per a CNBC <a href="https://www.cnbc.com/2024/05/31/oil-alliance-opec-could-extend-production-cuts-this-weekend.html?taid=66595f9eb890320001ff036f&amp;utm_campaign=trueanthem&amp;utm_medium=social&amp;utm_source=twitter%7Cmain">report</a> on Tuesday.
Market participants are closely watching whether the remaining 2.2 million barrels per day of cuts, which are in place until the end of the second quarter, will be extended. This is in light of projected demand increases, particularly in the summer months.
Three OPEC+ delegates, speaking on the condition of anonymity, told CNBC that the 2.2 million-barrels-per-day supply reductions are likely to be prolonged. The group is also monitoring individual members&#8217; quota compliance and has requested overproducers to implement additional cuts, with Iraq and Kazakhstan having detailed compensation plans.
The OPEC+ coalition&#8217;s decision to extend production cuts is influenced by the anticipated rise in summer demand, driven by factors such as the conclusion of China&#8217;s refinery maintenance and increasing U.S. consumption as summer approaches. 
"Come June, China would be largely out of refinery maintenance, U.S. consumption is improving as summer moves closer, so June should already see negative crude balances. And then August is the peak month for tightness," Viktor Katona, lead crude analyst at Kpler, said according to the report.
Investors interested in some of the most profitable oil ETFs on the market to determine if the oil sector aligns with their investment strategy might consider the following options: Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>), VanEck Oil Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OIH#NYSE">OIH</a>), United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), iShares U.S. Oil &amp; Gas Exploration &amp; Production ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/IEO#BATS">IEO</a>), SPDR S&amp;P Oil &amp; Gas Equipment &amp; Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XES#NYSE">XES</a>), and ProShares Ultra Bloomberg Crude Oil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>).
See Also: <a href="https://www.benzinga.com/news/24/05/39084577/elon-musk-mocks-steve-jobs-agrees-apple-could-be-light-years-ahead-of-competition-if-it-embraced-ope?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Elon Musk Mocks Steve Jobs, Agrees Apple Could Be &#8216;Light Years&#8217; Ahead Of Competition If It Embraced Open</a>
Why It Matters: Recent geopolitical events, such as the Israeli forces entering <a href="https://www.benzinga.com/markets/emerging-markets/24/05/39048961/all-eyes-on-rafah-as-israeli-forces-enter-safe-zones-spain-ireland-and-norway-officially">safe zones in Gaza</a>, have also added to the uncertainty in the oil market. The ongoing tensions in the Middle East have contributed to global inflation and energy security concerns, further influencing OPEC+&#8217;s decision-making.
Oil prices have remained range-bound in the first half of the year, with the potential for spikes due to developments in the Middle East. 
Rystad&#8217;s Jorge Leon noted that regional escalations could add a risk premium of up to $10 per barrel. OPEC+ delegates told CNBC that while the situation in the Gaza Strip still adds some pressure, the market has mostly absorbed its impact.
OPEC+ must also navigate its relationship with the U.S., which has criticized the coalition&#8217;s supply cuts over gasoline price concerns. Last week, the Biden administration announced the release of 1 million barrels of gasoline from reserves to lower pump prices. Similar measures were taken with the Strategic Petroleum Reserve during the COVID-19 pandemic. 
However, an OPEC+ delegate noted these actions are unlikely to have a long-term impact beyond summer price relief. The U.S. usually aims to replenish its emergency state reserves stockpile, according to the report.
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Image Via Shutterstock 
This story was generated using <a href="https://www.benzinga.com/author/benzinga-neuro">Benzinga Neuro</a> and edited by <a href="https://www.benzinga.com/topic/Kaustubh-Bagalkote" target="_blank" rel="noreferrer noopener">Kaustubh Bagalkote</a>

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OPEC+ Likely To Extend Production Cuts Amid Rising Summer Demand: Report

As <a href="https://www.benzinga.com/topic/2024-presidential-election">the 2024 U.S. Presidential election</a> approaches, the energy sector stands at a crossroads. 
Potential shifts in policy could significantly impact both traditional and <a href="https://www.benzinga.com/topic/clean-energy">clean energy markets</a>.
According to <a href="https://markets.jpmorgan.com/research/email/scx/qijkd11j/LK2zzrWZCAlD7mRxHsWnxA/GPS-4675360-0">insights</a> from JPMorgan's Strategic Research team, the outcome of the election between incumbent President Joe Biden and Ex-President Donald Trump could lead to varying scenarios. 
Each of these scenarios has distinct implications for investors and companies in the sector.
<h3 class="wp-block-heading">1. Biden Presidency, Split Congress</h3>
<ul>
<li>Clean Energy: This scenario is seen as the lowest risk for the clean energy sector. A divided Congress would likely maintain the status quo, making it difficult to roll back or repeal the <a href="https://home.treasury.gov/news/press-releases/jy2376">Inflation Reduction Act</a> (IRA) incentives. This stability is favorable for companies relying on federal clean energy incentives. Under Biden, hundreds of billions of dollars were put toward <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2024/04/04/biden-harris-administration-announces-historic-20-billion-in-awards-to-expand-access-to-clean-energy-and-climate-solutions-and-lower-energy-costs-for-communities-across-the-nation/">incentives</a> for green energy.</li>
<li>Traditional Energy: The regulatory environment under Biden is expected to remain challenging, but stable. Companies have adapted to tighter regulations, which have not hindered record oil and gas output in the U.S. During Biden&#8217;s presidency, the U.S. <a href="https://www.eia.gov/todayinenergy/detail.php?id=61545">set a record</a> for crude oil production. In 2023, it outpaced what all other countries — including Saudi Arabia — have ever produced in one year. </li>
</ul>
<h3 class="wp-block-heading">2. Trump Presidency, Split Congress</h3>
<ul>
<li>Clean Energy: This scenario raises the risk profile slightly. A split Congress would make it challenging to repeal IRA incentives; Trump — who <a href="https://www.nytimes.com/interactive/2020/climate/trump-environment-rollbacks-list.html">rolled</a> back more than 100 pro-environmental policies during his administration — will likely slow their implementation by reducing funding to relevant departments. He may also impact grant and loan spending. </li>
<li>Traditional Energy: Trump — who <a href="https://apnews.com/article/trump-hannity-dictator-authoritarian-presidential-election-f27e7e9d7c13fabbe3ae7dd7f1235c72">vowed</a> to be a dictator on &#8220;day one&#8221; so he can &#8220;drill, drill, drill" — could ease regulations, potentially increase access to resources on federal lands and reduce regulations, thereby supporting more exports.</li>
</ul>
<h3 class="wp-block-heading">3. Trump Presidency, Republican Congress</h3>
<ul>
<li>Clean Energy: This is considered the highest-risk scenario for clean energy. A Republican majority could partially repeal the IRA through a reconciliation bill, particularly targeting unspent funds. However, full repeal is unlikely due to significant investments in Republican states.</li>
<li>Traditional Energy: The sector could benefit from reduced regulations and increased resource access. Policies encouraging more energy exports, such as LNG, could positively impact the long-term gas market.</li>
</ul>
JPMorgan did not explore the scenario of a Biden presidency and Democrat Congress.
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<h3 class="wp-block-heading">Clean Energy Stocks</h3>
<ul>
<li>Valuation and Sentiment: Clean energy stocks, including those in electric vehicle (EV) charging and green hydrogen, have lagged due to weak fundamentals. Election outcomes could exacerbate this trend, especially under a Republican sweep.</li>
<li>Loan Programs: A Republican sweep might curtail the DOE Loan Programs Office's authority, negatively impacting companies seeking non-dilutive funding for capex-intensive projects.</li>
<li>Subsidies and Tariffs: Potential downsizing or repeal of subsidies for EVs and tightening of charging incentives are risks. However, protectionist measures like <a href="https://www.benzinga.com/markets/asia/24/05/38824198/biden-announces-massive-tariffs-on-chinese-imports-to-protect-us-industries-clean-energy-solar-stock">tariffs on Chinese imports</a> are likely to remain, regardless of the administration.</li>
</ul>
Investors in the iShares Global Clean Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ICLN#NYSE">ICLN</a>), the First Trust NASDAQ Clean Edge Green Energy Index Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/QCLN#NYSE">QCLN</a>) and the Invesco WilderHill Clean Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PBW#NYSE">PBW</a>) must take heed of these observations.
<h3 class="wp-block-heading">Traditional Energy Stocks</h3>
<ul>
<li>Regulations: The Trump administration could ease regulations and increase resource access, but ongoing legal and political challenges could continue to <a href="https://www.benzinga.com/news/24/05/38997165/trumps-policies-for-money-transaction-with-big-oil-under-investigation-by-senate-democrats-cronyism">shape the regulatory landscape</a>.</li>
<li>Refiners: Refiners might benefit from the continuation of Trump-era corporate tax cuts. However, geopolitical tensions, such as those in the Middle East, could pose risks to crude supply and impact refiner margins.</li>
</ul>
Investors in the Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>), the Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) and the Alerian MLP ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AMLP#NYSE">AMLP</a>) may want to adjust their positioning based on these observations.
<h3 class="wp-block-heading">Utility and Renewables </h3>
<ul>
<li>Regulated vs. Unregulated: Unregulated renewables are more sensitive to election outcomes, while regulated utilities are less affected. A Biden re-election could be a catalyst for renewables to regain ground lost in 2023.</li>
<li>IRA Resilience: Core utility and renewable energy provisions of the IRA are expected to be resilient, though a Trump victory could create uncertainty until policy clarity emerges.</li>
</ul>
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Utility sector investors such as those invested in the Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>), the Global X US Infrastructure Development ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PAVE#NYSE">PAVE</a>) or the Vanguard Utilities ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VPU#NYSE">VPU</a>) must take note of such observation.
For those looking to get exposure to renewables, the ICLN, QCLN and PBW ETFs are popular capital market funds in the space.
<h3 class="wp-block-heading">Investment Considerations</h3>
Investors should monitor the evolving political landscape as the election approaches. The potential for policy shifts under different election scenarios underscores the importance of a diversified portfolio. 
As always, staying informed and agile in response to political developments will be key to navigating the energy sector&#8217;s challenges and opportunities in the run-up to the 2024 election.
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What A Biden Or Trump Victory Might Mean For The Energy Sector

Users of ChatGPT and other competing large language models can be forgiven if they feel the responses are like magic. MIT's Technology Review even recently published an article titled "Nobody Knows How AI Works."
One thing that is known, though, is powering the advanced AI models captivating the world's attention requires massive amounts of energy. OpenAI's Sam Altman discussed this fact, warning that future advances in AI will consume significantly more power than people expect, saying "there&#8217;s no way to get there without a breakthrough."
As it stands, data centers around the world account for between 1-1.5% of global electricity use, according to the International Energy Agency.
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With the AI boom in its nascent days, Alex de Vries, Ph.D. candidate and data scientist at the Central Bank of the Netherlands, predicts that the AI sector alone will use about the same amount of electricity as the Netherlands uses a year by 2027.
Financial blog Zerohedge posted from its X account saying "those AI data centers won&#8217;t run on hopes and dreams," mocking hedge funds shorting energy stocks.
For investors interested in AI but concerned about lofty valuations in technology stocks, there could be opportunities in energy to play the AI boom.
The Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) has had a strong start to the year, up ~11%.
Trending: Long overdue disruption in the moving industry is underway.<a href="https://www.benzinga.com/money/muvr"> Here&#8217;s how to invest in it with just $100</a>.
For many in the tech industry, resorting to fossil fuels to further power tech isn't an optimal solution, especially as the world seeks to reach net zero by 2050.
Sam Altman is known for being at the forefront of AI, but he's also well positioned at what he sees as a possible breakthrough to address the energy crisis, saying "it motivates us to go invest more in fusion."
According to the International Atomic Energy Agency, "If nuclear fusion can be replicated on earth at an industrial scale, it could provide virtually limitless clean, safe and affordable energy to meet the world's demand."
Altman has invested $375 million into Helion, a private company seeking to commercialize nuclear fusion.
He's also helping nuclear fission startup, Oklo, to go public via AltC Acquisition Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ALCC#NYSE">ALCC</a>).
With many of the world's brightest minds working on problems in AI, other exciting companies are working to solve the power needs of these AI companies in a sustainable way.
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<li>This startup coined &#8220;eBay for gamers&#8221; with a breathtaking track record has opened up<a href="https://www.benzinga.com/money/gameflip-2"> a window to invest in its future growth</a>.</li>
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Sam Altman Warns AI Development Needs An Energy 'Breakthrough' As Financial Pundit Says 'AI Data Centers Won't Run On Hopes And Dreams'

Oil prices traded marginally lower during Monday morning&#8217;s Asian trading session as possibilities of a slowdown led by extended rate hikes by the&nbsp;Federal Reserve&nbsp;overshadowed&nbsp;<a target="_blank" href="https://www.benzinga.com/news/earnings/23/06/33081182/crude-oil-rises-over-1-feds-preferred-inflation-gauge-slows-in-may" rel="noreferrer noopener">fears of any supply constraints</a>.
What Happened:&nbsp;West Texas Intermediate futures for August delivery were down 0.16% at $70.53 per barrel, while Brent futures for September delivery traded 0.08% lower at $75.34 per barrel.
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Recent data released on Friday supported the case for further rate hikes by the Fed. Although headline PCE inflation continued to slow to 3.4% year-over-year, the core measure remained relatively unchanged at 4.6% year-over-year. Additionally, factory activity growth in China, the world&#8217;s largest crude importer, showed signs of slowing down in June, according to a Reuters report.
Supply Crunch Boost?&nbsp;Analysts also anticipate tighter supplies and a potential price boost in the second half of the year. Saudi Arabia pledged to cut an additional 1 million barrels per day of output in July, while the U.S. is replenishing its Strategic Petroleum Reserve, as reported. U.S. crude output declined in April to 12.615 million barrels per day, the lowest level since February, according to the U.S. Energy Information Administration.
Market attention will now turn to a conference hosted by the Organization of the Petroleum Exporting Countries (OPEC) later this week, which is expected to provide insights into future supply levels.
Price Action: On Friday, the&nbsp;United States Brent Oil Fund LP&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 1.15% higher, while the&nbsp;Vanguard Energy Index Fund ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 0.68%.
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Oil Market Starts July On Slippery Slope: Here Is A Key Factor To Watch Out For

Oil prices rose during Tuesday morning&#8217;s Asian trading session driven by <a href="https://www.benzinga.com/news/23/06/33009174/whats-next-for-russia-after-wagners-challenge-to-putin">geopolitical concerns surrounding Russia</a> and potential supply disruptions.
Prominent market commentator, Jim Cramer, indicated oil prices may not shoot much higher. ‘Don&#8217;t bite on oil going higher. It will just be another headfake as Russia has transactional friendships with China and India,' he <a href="https://twitter.com/jimcramer/status/1673142051653795840">said</a> in his tweet.
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Cramer's advice comes at a time when oil prices shot higher in the wake of an attempted mutiny by Wagner forces against Russian president Vladimir Putin. Although the situation quickly de-escalated, oil traders are holding themselves back from factoring in the relief.
Price Action: West Texas Intermediate futures maturing in August was trading 0.43% higher at $69.67 per barrel during Tuesday morning Asian trade. Brent futures maturing in August rose 0.34% to trade at $74.43 per barrel. The United States Brent Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 0.56% higher on Monday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 1.65%, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
It is notable that concerns surrounding extended rate hikes by central banks and the fears of a subsequent recession appear to be holding back any unreasonable gains in oil prices. The fears seem to be justified given the recent central banking developments. If the Federal Reserve indicated it will hike rates by another <a href="https://www.benzinga.com/economics/macro-economic-events/23/06/32861662/powell-hits-the-brakes-after-10-straight-interest-rate-increases-but-fed-signals-">50 basis points this year</a>, the Bank of England went ahead and implemented such a hike in its recent policy following a higher-than-expected inflation print for May in the U.K. But the focus recently has been on Russia.
Expert Take: ANZ Research said in a note that despite the rebellion being short-lived, there is likely to be increased focus on geopolitical issues in the coming months.
‘The oil market had become complacent as Russian oil continued to seep into the international market. This can't be assumed to the same extent following the weekend's events. This is likely to lead to a risk premium being applied to the oil price amid the risk of further civil unrest. However, for the moment, the impact is likely to be minimal,' it said according to a research note.
ANZ Research further noted that the market is slowly turning its focus to the upcoming driving season in the U.S. and said preliminary data suggests demand is rising strongly. ‘The American Automobile Association estimates 43m motorists will drive 50 miles or more from their homes this Independence Day weekend. That's 4% more than 2019,' it said.
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Jim Cramer On Oil Going Higher Amid Wagner Mutiny In Russia: 'Just Be Another Headfake'

Oil prices rose during Monday morning&#8217;s Asian trading session as investors and traders began digesting the impact of the <a href="https://www.benzinga.com/news/23/06/32999410/prigozhins-attempted-mutiny-against-russia-is-the-beginning-of-the-endgame-for-putin-says-expert">attempted mutiny</a> against Russian President Vladimir Putin while <a href="https://www.benzinga.com/news/23/06/32978843/janet-yellen-sees-lower-odds-of-us-recession-says-inflation-has-declined-significantly">worries about a global slowdown remained</a>.
West Texas Intermediate futures maturing in August rose 0.65% during Monday morning Asian trading session to trade at $69.68 per barrel. Brent futures maturing in August rose 0.73% to trade at $74.36 per barrel, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
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Rystad Energy Senior Vice President Jorge Leon wrote in a note that the internal military struggle in Russia adds limited oil price pressure amid heightened tensions in Moscow, <a href="https://www.bloomberg.com/news/articles/2023-06-25/latest-oil-market-news-and-analysis-for-june-26?srnd=markets-vp&amp;leadSource=uverify%20wall">according</a> to a Bloomberg report. "We do, however, believe that the geopolitical risk amid internal instability in Russia has increased," Leon said.
Fears of a recession due to extended rate hikes amid sticky inflation appear to be balancing any upward price pressure due to geopolitical and supply risks. This is given the fact that Federal Reserve Chair Jerome Powell has indicated rates may be hiked by a further 50 basis points this year.
At the same time, higher-than-expected inflation and a subsequent surprise 50 basis points rate hike by the Bank of England seem to have unnerved investors who have begun weighing in on <a href="https://www.benzinga.com/news/23/06/32978843/janet-yellen-sees-lower-odds-of-us-recession-says-inflation-has-declined-significantly">the possibility of extended rate rises in the U.S</a>.
Supply Concerns: RBC Capital Markets analyst Helima Croft said there were worries that Putin would declare martial law that would stop workers from showing up to major loading ports and energy facilities, potentially impacting millions of barrels of exports, according to a Reuters report. 
&#8220;It is our understanding that the White House was actively engaged yesterday in reaching out to key domestic and foreign producers about contingency planning to keep the market well supplied if the crisis impacted Russian output,&#8221; she said in a note.
The United States Brent Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 0.16% lower on Friday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) shed 0.88%.
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