We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In this episode of ETF Spotlight, I speak with John Love, President & CEO at USCF, about the outlook for commodity ETFs, particularly oil ETFs.
The war, now in its seventh month, has had an enormous impact on oil prices. Oil prices surged again last week after Saudi Arabia shut down its East-West crude oil pipeline following drone strikes. According to Capital Economics, oil prices could remain above $100 a barrel well into next year if the conflict in the Middle East drags on.
The United States Oil Fund (USO - Free Report) and United States Brent Oil ETF (BNO - Free Report) have significantly outperformed the price of crude oil they are designed to track, thanks mainly to backwardation. USO, which holds futures contracts on WTI crude oil, and BNO, which provides exposure to Brent crude oil, have surged more than 100% year-to-date.
Since the war began, the oil market has been in backwardation, with near-month contracts trading at higher prices than later-month contracts amid expectations that the disruption would be temporary. This benefits ETFs that invest in futures because each month, the fund sells its expiring near-term contracts and replaces them with cheaper, later-month contracts.
Diesel, jet fuel and gasoline prices have also risen due to disruptions to refined-product supply and transportation caused by the war. The United States Gasoline Fund (UGA - Free Report) aims to track the daily price movements of gasoline.
Copper is benefiting from a combination of tight supply and strong structural demand, particularly from electrification, power grids and AI data centers. The war has added to supply constraints. The United States Copper Index Fund (CPER - Free Report) holds copper futures contracts.
Gold has posted remarkable performance over the past few years, supported by geopolitical uncertainty, strong central bank purchases, and expectations around the dollar and future monetary policy. It has struggled lately, with higher rates being one of the reasons. But it still deserves a place in an investor's portfolio.
Tune in to the podcast to learn more.
Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.
View the Zacks #1 Rank List
Image: Bigstock
Oil ETFs Surge: What's Next for Commodity Investors?
In this episode of ETF Spotlight, I speak with John Love, President & CEO at USCF, about the outlook for commodity ETFs, particularly oil ETFs.
The war, now in its seventh month, has had an enormous impact on oil prices. Oil prices surged again last week after Saudi Arabia shut down its East-West crude oil pipeline following drone strikes. According to Capital Economics, oil prices could remain above $100 a barrel well into next year if the conflict in the Middle East drags on.
The United States Oil Fund (USO - Free Report) and United States Brent Oil ETF (BNO - Free Report) have significantly outperformed the price of crude oil they are designed to track, thanks mainly to backwardation. USO, which holds futures contracts on WTI crude oil, and BNO, which provides exposure to Brent crude oil, have surged more than 100% year-to-date.
Since the war began, the oil market has been in backwardation, with near-month contracts trading at higher prices than later-month contracts amid expectations that the disruption would be temporary. This benefits ETFs that invest in futures because each month, the fund sells its expiring near-term contracts and replaces them with cheaper, later-month contracts.
Diesel, jet fuel and gasoline prices have also risen due to disruptions to refined-product supply and transportation caused by the war. The United States Gasoline Fund (UGA - Free Report) aims to track the daily price movements of gasoline.
Copper is benefiting from a combination of tight supply and strong structural demand, particularly from electrification, power grids and AI data centers. The war has added to supply constraints. The United States Copper Index Fund (CPER - Free Report) holds copper futures contracts.
Gold has posted remarkable performance over the past few years, supported by geopolitical uncertainty, strong central bank purchases, and expectations around the dollar and future monetary policy. It has struggled lately, with higher rates being one of the reasons. But it still deserves a place in an investor's portfolio.
Tune in to the podcast to learn more.
Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.