Former Vice President Al Gore testified before Congress this week about global warming. At the same time, energy markets around the world were heating up.
Human beings may be causing the Earth to warm, but the inconvenient truth is that we are also causing the run-up in energy prices.
With gasoline stockpiles declining and the summer driving season around the corner, refineries must boost production of gasoline to meet demand. The Energy Department announced that refinery utilization is at a five-week high. This absorbs the crude oil supply.
Another factor stoking the flames of the energy and natural resource funds is the outlook for interest rates. The Federal Reserve this week eliminated the bias toward higher interest rates, sparking a broad stock market rally.For energy stocks, the theory is that if interest rates can come down, the economy expands, and more energy will be demanded. The ( ENPIX) ProFunds Oil & Gas UltraSector ProFund (ENPIX) bubbled to the top of our best-performing list with a total return of 7.66% from Thursday, March 15, to Thursday, March 22. Exxon Mobil (XOM), Chevron (CVX - Get Report), ConocoPhillips (COP - Get Report), and Schlumberger (SLB) are the fund's largest holdings. But the stocks with the highest percentage gains include Todco (THE), up 24.2%, and Pride International (PDE), up 10.6%. Todco, being acquired by Hercules (HERO), may clear away one of Pride's competitors for Gulf of Mexico contract drilling. The only losing position for ENPIX was Halliburton (HAL), down 4.3%, on lower expectations of first-quarter profits and declining exposure to North American oil and gas production. On Tuesday, March 20, Gastar Exploration (YGA) was one of 16 energy companies with market caps below $1 billion presenting at the Johnson Rice Emerging Growth Energy Conference in New York City. The audience must have liked what they heard, since the stock soared 26.3% for the period under review. Gastar helped the Fidelity Select Natural Gas Portfolio to a return of 6.02%. If you need immediate gratification and can't wait until the end of the day to make your energy trade, check out the PowerShares Dynamic Energy Exploration & Production Portfolio (PXE). This ETF rose 5.98% on outsized returns of 16.2% from Alon USA Energy (ALJ), 11.1% from Western Refining (WNR) and 10.5% from Rosetta Resources (ROSE - Get Report).
|Best-Performing Energy and Natural Resource Funds|
|Fund||Ticker||Rating||1-Week Total Return||Fund Type|
|ProFunds Oil & Gas UltraSector ProFund||ENPIX||C||7.66%||Open-End|
|Fidelity Select Natural Gas Portfolio||FSNGX||C||6.02%||Open-End|
|PowerShares Dynamic Energy, Expl & Prod||PXE||E+||5.98%||ETF|
|ICON Energy Fund||ICENX||C||5.92%||Open-End|
|Allianz RCM Global Resources Fund||RGLIX||U||5.78%||Open-End|
|PowerShares Dynamic Oil & Gas Services||PXJ||E-||5.76%||ETF|
|Fidelity Select Energy Portfolio||FSENX||B||5.70%||Open-End|
|Fidelity Advisor Energy Fund||FAGNX||C||5.69%||Open-End|
|Rydex Series - Energy Services Fund||RYVIX||C||5.62%||Open-End|
|BlackRock Natural Resources Trust||MAGRX||B-||5.43%||Open-End|
|Source: Bloomberg 3/15/07 to 3/22/07|
|Worst-Performing Energy and Natural Resource Funds|
|Fund||Ticker||Rating||1 Week Total Return||Fund Type|
|ProFunds Short Oil & Gas ProFund||SNPIX||U||-4.83%||Open-End|
|ING Risk Managed Natural Resources Fund||IRR||U||-0.21%||Closed-End|
|Energy Income and Growth Fund||FEN||A||0.11%||Closed-End|
|Kayne Anderson Energy Total Return Fund||KYE||C+||0.27%||Closed-End|
|Kayne Anderson MLP Investment Co||KYN||A-||1.24%||Closed-End|
|Tortoise Energy Capital Corp||TYY||A||1.57%||Closed-End|
|Fidelity Select Paper & Forest Products||FSPFX||D||1.74%||Open-End|
|BlackRock Real Asset Equity Trust||BCF||U||1.91%||Closed-End|
|Tortoise Energy Infrastructure Corp||TYG||B+||2.39%||Closed-End|
|Van Kampen Utility Fund||VKUAX||A+||3.40%||Open-End|
|Source: Bloomberg 3/15/07 to 3/22/07|