Andrew Wagner

Energy ETFs have declined faster than U.S. crude oil prices as investor sentiment on the sector becomes more negative.

U.S. oil prices have lost about 26 percent over the past year, while the SPDR S&P Oil & Gas Exploration & Production exchange-traded fund (ETF), has lost nearly half its value, according to The Wall Street Journal.

The PHLX Oil Service Index, a collection of 15 companies that help oil producers unearth oil and gas, is down 54 percent. The Wall Street Journal tracks 73 U.S. based exploration and production companies and reported that only one has shares that have gained value over the past year. More than 40 of these companies have lost at least 50 percent of their stock market value over the past 12 months.

“Interest remains anemic, and there appears a growing consensus that the exploration-and-production business model just won’t ever work (for investors) in a $50-to-$55-a-barrel world," analysts stated. The pessimistic view of the oil-and-gas business' future is shared by energy executives.

Every quarter, the Federal Reserve Bank of Dallas polls energy executives located in drilling lands in New Mexico, Lousiana, and Texas. On September 25, respondents reported declining production, employment, and wages. More than two-thirds stated that they expected U.S. crude prices to end the year below $60 a barrel.

The oil-and-gas business is in trouble, and Energy ETFs have been hit harder than U.S. crude oil prices.

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Economics, Finance and Investing

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