5 ETFs That Could Soar If Gas Prices Return to $5 Per Gallon

Oil now trades at $63.75 and is still dropping.

However, the pullback in oil prices may soon become a long opportunity. For one, oil producers across the country may start to cut new drilling projects and cut costs.

Once that begins to happen, it’ll lead to less supply, which could force oil prices higher.

For producers to move forward with new wells, they need oil to average at least $65. If the price of oil is any less, it doesn’t make sense to drill new wells if there’s no profit.

“Some 50 rigs could get cut immediately with more potentially on the chopping block if prices remain at these levels,” says CNBC. Goldman Sachs lowered its WTI price target to $58 by December, and then to $51 by the end of 2026.

Those potential project delays, coupled with geopolitical tension and the potential for higher demand (especially with summer driving season) and oil could gush higher again. Oil prices could also push aggressively higher on any tariff progress, especially with China. We do know that China did reach out to negotiate a potential deal.

Everything is just a wait-and-see at the moment.

However, It May be Time to Buy the Excessive Fear

With a good deal of fear priced in the markets, it may be time to buy.

For one, we have to remember that markets are resilient. They’ve bounced back from far worse situations. Two, remember to be greedy when others are fearful, and fearful when others are greedy, as noted by Warren Buffett.  

Or, as Baron Rothschild would tell you — buy when there’s blood in the streets. Even Sir John Templeton tells us to buy on excessive pessimism when others run scared.

That time may be now – especially before market conditions and investor sentiment improve.

One way to trade a rebound in oil is by betting on exchange-traded funds (ETFs), such as:

SPDR Energy Select Sector ETF

With an expense ratio of 0.08% and a yield of 3.5%, the SPDR Energy Select Sector ETF (NYSEARCA:XLE) provides exposure to companies in the oil, gas, and consumable fuel, energy equipment and services industries, as noted by State Street SPDR. Not only does an ETF allow for diversification, you can buy it for less than a single one of its holdings.

Some of its top holdings include Exxon Mobil, Chevron, Williams Cos., EOG Resources, Kinder Morgan, and Phillips 66, which are just a few of its 23 holdings.

The XLE ETF is also incredibly oversold at $81.50 and is attempting to pivot higher.

SPDR S&P Oil & Gas Exploration & Production ETF

With an expense ratio of 0.35% and a yield of 2.88%, the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEARCA:XOP) provides exposure to the oil and gas exploration and production segment of the S&P TMI, which comprises the following sub-industries: Integrated Oil & Gas, Oil & Gas Exploration & Production, and Oil & Gas Refining & Marketing, as noted by State Street SPDR. 

Some of its top holdings include Callon Petroleum, SM Energy Company, Devon Energy Corporation, EOG Resources, and ConocoPhillips, for example. 

Much like the XLE ETF, XOP is just as oversold. Last trading just below $112, we’d like to see it rally back to $130 a share initially. 

iShares Global Energy ETF

With an expense ratio of 0.41% and a yield of 3.43%, the iShares Global Energy ETF (NYSEARCA:IXC) tracks the investment results of an index composed of global equities in the energy sector. Some of its top holdings include Exxon Mobil, Chevron Corporation, BP PLC, Total SA, and EOG Resources.  

The IXC ETF is also oversold. Last trading at $37.37, we’d like to see it retest $42 initially.

Invesco DB Oil Fund 

We can also take a look at the Invesco DB Oil Fund (NYSEARCA:DBO), which just paid a dividend of $0.66977 on December 27, 2024.

With an expense ratio of 0.76%, the DBO ETF tracks changes in the level of the DBIQ Optimum Yield Crude Oil Index Excess Return (DBIQ Opt Yield Crude Oil Index ER or Index), as noted by Invesco.com. Its portfolio is full of WTI crude futures, namely the NYMEX Light Sweet Crude Oil Futures.

After catching support at around $11.75, the DBO Fund last traded at $12.97. From here, we’d like to see it retest $14.25.

ProShares Ultra Bloomberg Crude Oil

There’s also ProShares Ultra Bloomberg Crude Oil (NYSEARCA:UCO), which seeks daily results that correspond to two times the daily performance of the Bloomberg Commodity Balanced WTI Crude Oil Index. It holds crude oil futures for June 2025, December 2025, and for June 2026.

UCO is just as oversold. Last trading at $22.13, we’d like to see it initially retest $27.

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