|Bid||18.14 x 1300|
|Ask||18.15 x 1400|
|Day's Range||17.44 - 18.55|
|52 Week Range||12.43 - 41.19|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||3.70|
|Expense Ratio (net)||1.09%|
Oil prices enjoyed one of their best intraday performances in decades following drone strikes on Saudi Arabian oil assets that knocked 5% of the world's daily supply offline. This was good news for traders using bullish leverage oil funds and great news for those that had the foresight and fortitude to hold such products over the weekend.
As an attack on Saudi's oilfields massively disrupted production and shot up oil prices, leveraged oil and energy ETFs are likely to surge in the short term.
Oil ETFs surged upwards of 10 percent Monday after attacks on Saudi oil production facilities Saturday knocked out 5.7 million barrels of daily production.
Whether oil prices rise or fall is not a major factor to the U.S., according to Dan Brouillette, the Deputy Secretary of the U.S. Department of Energy. What is of higher importance is that the U.S. achieves energy dominance. While a protracted U.S.-China trade war and slowing global growth could affect demand, resulting in lower oil prices, being the dominant player in energy is the modus operandi for the U.S.
It was a case of now you see it and now you don’t for oil traders this week as the Energy Information Administration on Thursday reported that U.S. crude supplies declined by 4.8 million barrels for the ...
China is the world’s largest oil consumer and as such, oil prices can hinge upon how well its economy is performing. For example, positive economic data from China helped spur a rise in oil prices on Wednesday. Per a CNBC report, “A private survey showed that activity in China’s services sector expanded at the fastest pace in three months in August as new orders rose, prompting the biggest increase in hiring in more than a year.
According to one analyst, oil prices must decline to $10 and $20 per barrel in order remain competitive in the ever-changing mobility sector. Oil prices have been racked by the market volatility due to fears of easing global demand due to the U.S.-China trade war. “We have to be very clear here,” said Mark Lewis, who is global head of sustainability research at BNP Paribas Asset Management, added.
On Wednesday, oil prices were up more than 1% after the latest data from the U.S. Energy Information Administration revealed a steep fall in U.S. crude stockpiles. Brent crude futures were1.7% higher to reach a price of $60.52 a barrel while WTI crude futures were 1.5% higher to $55.75 a barrel. Leveraged bull traders certainly cheered the move when it looked like worries of oversupply and weaker global demand would put downward pressure on oil prices.
In the last 10 years, the U.S. has been ramping up its oil production exponentially and its ready to produce even more, which could cause oil prices to underperform. Per a report by CNBC, “In the last decade, the U.S. has more than doubled oil production to 12.3 million barrels a day, making it the world’s largest producer. The Plains All American Pipeline’s Cactus II pipeline could exacerbate supply levels to the point of glut hurting oil prices.
As the Dow Jones Industrial Average had its worst day of 2019 with an 800-point loss on Wednesday, the market woes spilled over into oil prices. In addition, the U.S.-China trade war is making Chinese traders from making bets in U.S. crude. Per an OilPrice.com report, “Chinese refiners and traders have been staying away from U.S.-origin crude cargoes for months amid the trade war, despite the fact that China doesn’t have tariffs imposed on U.S. oil.
While in general, the U.S.-China trade war may be seen as a net negative for the capital markets, traders have been embracing the volatility that's returning. While the tariff-for-tariff war wages on, China could target U.S. oil next, which could make way for some interesting energy plays. “I think it is a virtual shoo-in that volumes will slow to a trickle and may even grind to a complete halt,” Stephen Brennock, oil analyst at PVM Oil Associates, told CNBC via email.
Just as the capital markets were responding to the upside on the heels of the 25-basis point rate cut by the Federal Reserve, U.S. President Donald Trump’s imposition of tariffs sent the markets back down. Oil prices saw their worst performance in four years, but opportunities could be ahead for leveraged, energy-focused exchange-traded funds (ETFs). The Dow finished 300 points in the red following the rate cut announcement on Wednesday and then went up over 300 at the beginning of the following market session on Thursday.
Amid the renewed optimism, many investors have turned bullish on the energy sector and are seeking to tap this opportunity. For them, a leveraged play on energy or oil could be an excellent idea.