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Oil prices have soared to their highest levels in many years as geopolitical tensions in the Middle East and Europe threaten to disrupt supply while demand continues to rise. The OPEC+ alliance is meeting tomorrow to decide their output policy.
Many analysts expect oil demand to return to pre-pandemic levels, but inventories and spare capacity remain low. Per WSJ, some traders are again betting that crude would top $100 a barrel by summer.
The shortage of natural gas, particularly in Europe and Asia, has pushed many power stations to switch from gas to oil, further exacerbating oil demand.
In general, investments in oil and natural gas have been declining as governments and investors prefer green energy but the transition to renewables would take many years.
Popular energy equity ETFs like the Energy Select Sector SPDR Fund (XLE - Free Report) and the Vanguard Energy ETF (VDE - Free Report) that invest in shares of energy companies are relatively stable and driven mainly by fundamentals. Chevron (CVX - Free Report) and Exxon Mobil (XOM - Free Report) are among their top holdings.
Leveraged products like the MicroSectors U.S. Big Oil Index 3X Leveraged ETN (NRGU - Free Report) have become very popular with day traders but they could also be very volatile.
Oil commodity ETFs like the United States Oil Fund LP (USO - Free Report) , the United States Brent Oil Fund LP (BNO - Free Report) and the United States 12 Month Oil Fund LP (USL - Free Report) bet on oil prices using futures contacts. These are generally suitable only for short term trading or hedging.
To learn more about these ETFs, please watch the short video above.
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3 Oil ETFs to Ride the Crude Rally
Oil prices have soared to their highest levels in many years as geopolitical tensions in the Middle East and Europe threaten to disrupt supply while demand continues to rise. The OPEC+ alliance is meeting tomorrow to decide their output policy.
Many analysts expect oil demand to return to pre-pandemic levels, but inventories and spare capacity remain low. Per WSJ, some traders are again betting that crude would top $100 a barrel by summer.
The shortage of natural gas, particularly in Europe and Asia, has pushed many power stations to switch from gas to oil, further exacerbating oil demand.
In general, investments in oil and natural gas have been declining as governments and investors prefer green energy but the transition to renewables would take many years.
Popular energy equity ETFs like the Energy Select Sector SPDR Fund (XLE - Free Report) and the Vanguard Energy ETF (VDE - Free Report) that invest in shares of energy companies are relatively stable and driven mainly by fundamentals. Chevron (CVX - Free Report) and Exxon Mobil (XOM - Free Report) are among their top holdings.
Leveraged products like the MicroSectors U.S. Big Oil Index 3X Leveraged ETN (NRGU - Free Report) have become very popular with day traders but they could also be very volatile.
Oil commodity ETFs like the United States Oil Fund LP (USO - Free Report) , the United States Brent Oil Fund LP (BNO - Free Report) and the United States 12 Month Oil Fund LP (USL - Free Report) bet on oil prices using futures contacts. These are generally suitable only for short term trading or hedging.
To learn more about these ETFs, please watch the short video above.