The largest exchange-traded fund focused on the energy sector is bleeding cash after oil's best run since October came to an end.
The $13.4 billion Energy Select Sector SPDR Fund (XLE) lost $632 million last week, its largest weekly outflow since July 2017, data compiled by Bloomberg show.
The move occurred as West Texas Intermediate oil curtailed three straight weeks of gains, after a report showed rigs drilling oil in the U.S. increased for the first time this year, bolstering supply.
Oil fell below $52 a barrel Monday after advancing nearly 27% from its Dec. 24 low as OPEC cut production. But news that the U.S. is pumping more has helped reignite supply concerns based on record American output, climbing stockpiles, and uncertainty about whether trade tensions between the U.S. and China will be resolved. Venezuelan President Nicolas Maduro also abandoned a plan to sever economic ties with the U.S., a move that could have impacted supply.
"Within XLE, which is highly dependent upon oil's recovery, I think there's some skeptics about whether or not there's going to be too much supply putting downward pressure on oil prices moving further into 2019," said Todd Rosenbluth, director of ETF research at CFRA Research.
Still, the fund could get some support from earnings due later this week. Exxon Mobil Corp. and Chevron Corp., XLE's two largest holdings at about 21% and 18% respectively, are both scheduled to report on Friday.