The last time Stacey Morris was a guest on ETF Prime, the Energy Select Sector SPDR Fund (XLE A) was up about 50%. Just a few months later and XLE is currently sitting close to its high for the year, up 65%. Morris contextualized this rapid rise by pointing out that the OPEC+ meeting resulted in a cut of two million barrels a day. Oil prices saw a move up in the lead-up to and aftermath of the meeting, going from below $80 a barrel to over $90, lifting the energy sector broadly. “The biggest takeaway in the OPEC+ meeting is that they are willing to intervene to support oil markets, even at a very high political cost,” Morris said. The energy space also saw generally good results during the Q3 earnings season, which continued to push energy ETFs higher. November saw the broader market improving, with the S&P up about 6% over the month. Morris noted that energy lagged a bit behind that and oil prices did start to come down, but that overall the last few months have been good for energy stocks. Geraci widened the time frame out, observing that energy has done well despite crude oil’s journey from $120 per barrel to around $80. Morris said that crude’s struggles are coming due to a confluence of factors. She said, “a lot of what we’ve seen is concerns around recession and what that means for oil demand. There’s been a lot of concern around Chinese demand and when will China reopen and when will we see Chinese oil demand meaningfully improve. And then you’ve had releases from the U.S. strategic petroleum reserve, other countries participating in that as well, doing strategic releases and that’s putting more barrels on the market.”  Morris also noted that Russia’s exports have been surprisingly resilient as well. Despite this, energy companies are having solid years, putting up good free cash flow numbers. According to Morris, “there’s an important point to make and distinction to be made between what oil is doing and what energy stocks are doing.” Morris believes that energy stocks aren’t necessarily pricing in what oil does. When it moves up to $120 a barrel, for example, energy stocks have largely reacted like it is still under $80. Broad, low-cost energy ETFs have done remarkably well. Aside from XLE, Morris pointed to the Vanguard Energy ETF (VDE A) as another energy fund up 62%, joining XLE in edging out the iShares U.S. Oil & Gas Exploration & Production ETF (IEO B+) which is up 61% and the VanEck Oil Services ETF (OIH B+) which is up 59%. Interestingly, Morris noted the largest oil and exploration ETF, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP B+) is only up about 50%. She sees this as likely due to its equal weighting scheme, as the iShares product is market cap weighted. Morris observed that Exxon is up 80% this year, meaning ETFs with exposure to that stock are benefiting from its big performance. Flows have been a different story for XLE and VDE, and not matching up with performance. The Alerian MLP ETF (AMLP A-) has taken in half a billion in flows despite not matching XLE and VDE in performance.