Today, I’m starting a special Alert series I call, “My Top Seven ETFs for 2011.” Each week, I’ll be telling you about a new exchange-traded fund (ETF) that I think is well positioned to take advantage of market conditions this year.

Up first is the SPDR S&P Oil & Gas Exploration (XOP).

This ETF is designed to deliver performance, before fees and expenses, equal to the move in the S&P Oil & Gas Exploration & Production Select Industry Index. This index contains some of the biggest and most profitable oil and gas exploration companies operating today. Some of the top companies in XOP are Cimarex Energy (XEC), Forest Oil Corporation (FST), Atlas Energy, Inc. (ATLS) and Sunoco (SUN).

Owning XOP allows you to participate in both the bullish trends in stocks, and the current increase in the price of crude oil. As oil continues hovering around the $90 a barrel mark, companies engaged in finding oil and servicing existing oil rigs should show enhanced profitability. The best companies that do this kind of work can be found in XOP.

According to the latest report from the U.S. Energy Information Administration, retail gasoline prices rose last week for the eighth straight week. The report said that the U.S. average retail price for a gallon of gasoline increased six-tenths of a cent versus last week to $3.11 per gallon, $0.41 per gallon higher than last year at this time. Those elevated gasoline prices are likely to continue, especially now that the political upheaval in Egypt has become hot again.

In fact, fear over an oil supply disruption caused by any restriction of maritime traffic through the Suez Canal recently pushed oil prices to a new 52-week high. That’s not good for consumers at the pump, but it is good for stocks in XOP.