ETF Database » OIL

Oil ETF Investing: Five Ways To Play

Michael Johnston — Mon, 02 Aug 2010 15:29:54 +0000

Commodity ETFs have seen a tremendous surge in popularity in recent years, as the marriage of futures contracts the exchange-traded structure has democratized an asset class that was once accessible only to large, sophisticated investors. Oil ETFs have become particularly popular, as investors have embraced the opportunity to bet on one of the world’s most sought after resources. Because oil is a major cost component for both companies and consumers, many investors have embraced the opportunity to hedge against an increase in costs by establishing exposure to the commodity. And because it is subject to wild price swings–crude has touched both $140 and $35 in recent years–speculators have embraced this resource as an opportunity to generate big profits in a relatively short period of time [also see The Definitive Oil ETF Guide]. Investing in oil through ETFs is not the simple binary process that it once was; there are a [...]

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USO vs. OIL: A Better Crude Oil ETF?

Michael Johnston — Thu, 15 Apr 2010 16:25:20 +0000

With the summer driving season just around the corner, surging GDP growth around the world, and another earnings season off to an impressive start, more and more investors are taking a closer look at oil markets. As OPEC begins to once again flex its collective muscle and demand from emerging markets continues to build, some see crude prices surging in coming months, perhaps teasing the $100 per barrel level last touched in September 2008. Historically, investors looking to make a play on rising oil prices did so through equities of energy companies that often enjoy a jump in profitability when crude prices spike. But the rise of the ETF industry has changed the way many investors approach commodity investing, bringing many securities that were once available primarily to institutional traders within reach. While exposure to spot oil prices still isn’t readily available, the development of futures-based commodity products allows more [...]

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Crude Oil ETFs (USO, OIL) Surge Following OPEC Decision

Michael Johnston — Wed, 17 Mar 2010 13:44:50 +0000

The Organization of Petroleum Exporting Countries (OPEC) has seen its influence over the global energy market wane in recent years, as a prolonged economic downturn caused demand for oil to plummet, limiting the effectiveness of the group’s once eagerly-anticipated supply decisions. But with a seemingly stable recovery underway and many emerging markets demonstrating an insatiable thirst for raw materials and energy, OPEC once again finds itself in a position of power. The bloc of oil rich nations didn’t hesitate to flex its muscles on Wednesday, showing that its decisions are still capable of impacting oil markets. Despite calls from several members (including Africa’s two largest producers) to raise production ceilings, OPEC announced on Wednesday that it would hold its production quota steady. The decision means that oil supplies will remain relatively constant while demand is expected to strengthen as the global economy continues to emerge from the most recent recession. [...]

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Five Ultra Popular ETNs

Michael Johnston — Tue, 16 Mar 2010 19:00:39 +0000

Most of what’s written about ETNs is cautionary in nature, focusing on the credit risk inherent in any debt security. And with good reason; the risks of ETN investing are very real. While most exchange-traded notes are issued by major financial institutions with lofty credit ratings, the last few years have taught investors that credit risk, however negligible, can never be written off completely. But ETNs also offer some potential advantages to investors. For one, they often offer exposure to hard-to-access asset classes and indexes that traditional ETFs may have difficulties tracking accurately or in a cost-efficient manner. Despite the risks involved, several ETNs have become incredibly popular with investors looking for exposure to everything from emerging markets equities to volatility to commodities. Below, we profile five of the most popular ETF products currently available to U.S. investors. 5. iPath S&P GSCI Crude Oil Total Return Index ETN (OIL) The [...]

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IEA Report: Trouble For Oil ETFs?

Michael Johnston — Tue, 10 Nov 2009 14:44:56 +0000

The International Energy Agency (IEA), an energy advisor to rich nations such as the U.S., released its highly-anticipated World Energy Outlook on Tuesday, singling out potential climate change initiatives as a major driver of oil consumption and prices in coming decades. If a major agreement to cut greenhouse gas emissions is signed and implemented in coming years, global crude oil demand could increase by only four million barrels per day by 2030. The increase from current consumption levels of about 85 million barrels to 89 million barrels represents a relatively small bump that could help keep prices lower. “A climate-change agreement would help propel industries and consumers toward using energy more efficiently and incentivize the auto industry to develop electric vehicles and other nonoil technologies,” writes Spencer Swartz for the Wall Street Journal. But that prediction comes with a big “if.” The Kyoto Protocol, a UN treaty aimed at combating [...]

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The Definitive Oil ETF Guide: List of Oil ETFs and More

Andy H — Thu, 22 Oct 2009 23:00:56 +0000

Direct investment in crude oil products used to be limited to major financial institutions and oil companies themselves, but the development of the ETF industry in the U.S. has democratized the investment process in many ways, including making investments in various oil products accessible to average investors. There are a number of exchange-traded products that offer exposure to prices of various types of oil utilizing an array of investment strategies. Whether you’re looking to bet on short-term movements in oil prices or hedge against skyrocketing prices, ETFs offer an efficient, cheap, and easy way to gain exposure to commodity prices. How Oil ETFs Work At a high level, oil ETFs function just like any other exchange-traded product: they track an underlying index. But unlike traditional equity ETFs that hold a basket of securities comprising the underlying indexes, most oil ETFs achieve exposure in a very different manner. Because physically buying [...]

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This Week In ETFs: October 16th Edition

Eric Dutram — Fri, 16 Oct 2009 19:04:34 +0000

It’s been an interesting week the world of ETFs: ETFs trended upwards at the beginning of the week but fell back in trading late Thursday and Friday. Here are the ETF Database staff picks of the week’s most important and interesting stories from around the Web: VWO vs. EEM: Which Should You Buy? at Index Universe: Although the Vanguard Emerging Markets ETF (VWO) and iShares MSCI Emerging Markets Index Fund (EEM) track the same benchmark (the MSCI Emerging Markets Index), the two funds have delivered very different returns. VWO has outperformed EEM in 2009, a trend that can be explained by a few unique factors. VWO uses what is called “full replication” to track its index, meaning it holds all the stocks in its index. EEM, by contrast, uses an “optimization” strategy, holding only a subset of those stocks to replicate the performance of the index. Also, EEM uses a [...]

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Iraq Opens Its Doors: Oil & Gas ETFs In Focus

Michael Johnston — Thu, 25 Jun 2009 05:07:32 +0000

Big oil is turning its attention to Iraq once again. But this time, instead of fear and dread, oil companies are looking to the Gulf state with hope and optimism. In recent years, the Iraqi oil industry usually made the news for all the wrong reasons: sabotages of pipelines, bomb attacks at drilling sites, employee kidnappings, and government corruption. But U.S. and international oil firms are now focusing on the oil-rich nation as the site of expansion efforts that could prove to be very profitable. Beginning next week, the Iraqi government will auction off oil contracts to foreign firms for the first time since Western companies were kicked out of the country in 1972 in a broad wave of Mideast oil nationalization. By welcoming in foreign contractors, Iraq hopes to boost production at six developed oil fields to levels not seen even before the country’s invasion of Kuwait in 1990. From [...]

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Iran Goes To The Polls: Three ETFs To Watch

Michael Johnston — Fri, 12 Jun 2009 15:15:38 +0000

Millions of Iranians headed to local polling places on Friday to participate in the most heated presidential race since the founding of the Islamic Republic 30 years ago. The passions of Iranians surrounding this election have been evidenced by numerous (mostly peaceful) rallies and demonstrations spilling into the streets throughout the country in recent days. Three candidates are challenging incumbent Mahmoud Ahmadinejad, with Mir Hossein Mousavi, the former prime minister, emerging as the primary competitor. Results will likely begin to leak as early as Saturday morning, although official results won’t be available until that evening at the earliest. If no candidate captures more than 50% of the vote, there will be a June 19 run-off between the top two vote getters. Mousavi is a stark contrast to the hardline Ahmadinejad, promising to seek improved relations with the U.S. and soften Iran’s global image. He’s even floated the idea of a [...]

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Basics of ETN Investing

Michael Johnston — Tue, 19 May 2009 16:00:29 +0000

Perhaps you’ve noticed that many of the investment vehicles in the ETF industry are technically referred to as exchange-traded notes, or ETNs. While ETNs are similar to ETFs in many ways, there are also some key differences that should be considered before investing. More Alike Than Different ETNs share many of the same advantages of ETFs compared to traditional actively-managed mutual funds. ETNs track the performance of an index (or individual asset). They also maintain relatively low expense ratios, may offer some unique tax advantages (more on this below), and feature lower minimum investment levels and greater transparency. So in many important respects, ETNs are similar to their ETF cousins. Underlying Assets Whereas ETFs typically offer investors exposure to various equity markets, many ETNs seek to mimic the return of certain commodity and currency markets (there are, however, several ETNs that offer exposure to various equity markets). The chart below lists several ETNs, along with [...]

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ETF Database » OIL

Oil ETF Investing: Five Ways To Play

Related Posts:

USO vs. OIL: A Better Crude Oil ETF?

Related Posts:

Crude Oil ETFs (USO, OIL) Surge Following OPEC Decision

Related Posts:

Five Ultra Popular ETNs

Related Posts:

IEA Report: Trouble For Oil ETFs?

Related Posts:

The Definitive Oil ETF Guide: List of Oil ETFs and More

Related Posts:

This Week In ETFs: October 16th Edition

Related Posts:

Iraq Opens Its Doors: Oil & Gas ETFs In Focus

Related Posts:

Iran Goes To The Polls: Three ETFs To Watch

Related Posts:

Basics of ETN Investing

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