So why aren't these funds down even more? Well, because sometimes, wildcatters still strike it rich. XOP also owns a position in Athlon Energy, a shale oil production company that went public in 2013, started producing tons of crude, and is currently in the process of being gobbled up by Canadian giant Encana. That led to a 92 percent return for the 1.3 percent position in Athlon XOP held.
In fact, the irony of oil and gas exploration companies is that no matter how logical it is that they should be whipsawed by the price of oil, correlations are far from perfect. Here's the monthly correlation of the S&P Oil Exploration index to the price of crude over the past 10 years.
Certainly, during the steady rise and the stable highs of oil, producers and oils moved close to lock step. But not this year, and not all that often in the past.
The reasons are multifold—certainly some of the companies held by the larger energy ETFs have interests not tied directly to the price of crude: natural gas, for instance, which has been rising for its own reasons while the price of oil falls.
Others, like Exxon Mobile and Anadarko, have counteracting forces—they may be in refinery and transportation, which often benefit from the lower input costs of cheap crude, dampening the effect of short-term price declines.
Oil Transport Could Benefit
So are there clear winners and losers? Basic economics would suggest yes. While it's tough to make a buy recommendation on XOP right now, low crude prices over any extended period of time might suggest more demand, stabilizing prices and increasing the profitability of anyone in the business not just of selling the barrel of oil, but moving the barrel of oil from place to place.
For that reason, it seems unlikely that the master limited partnership ETFs are an instant short—the MLP indexes are chock full of companies that profit not on higher prices for energy, but increased utilization. More volume through pipelines and terminals means more transport fees, and lower prices, as I said, likely mean increased demand.
But to my mind, the real winners and losers in a cheap oil world aren't even directly in the business: