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Tuesday, October 25, 2011 9:12:16 PM
Even in today's trade the XLE's top two holdings—Exxon Mobil [XOM] and Chevron [CVX] are outpacing the performance in the spot price of crude oil. (Exxon is up over 2 percent!)
The U.S. crude oil futures contract continues to be rolled into a contango (as the front month price is trading at a price that is less than in the coming months in 2011), and for that reason, Jakob says the USO ETF will continue to underperform oil equity ETFs in 2011.
My view: Stay long the XLE versus short the USO for an expected yearly return of at least 10 percent.
This is not an offer to buy or sell securities or any kind of investment advice. Oil investment carries very high risks so consult a licensed professional making any decisions. My resume is real time on Twitter @OilStockReport
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