After a long decline, natural gas has rebounded and is now trading at levels not seen since March. At the same time, oil continues to decline in concert with the Euro, despite a moratorium on new offshore drilling.
Commodity ETFs are different than traditional, plain vanilla ETFs and investors need to be made aware of the risks. Exchange-Traded Funds come in many different “flavors” and therefore, are useful in many different ways for a large variety of investors.
After a long decline, oil is gushing higher. The decline began last summer when oil was trading above $145 a barrel.
After a long decline that ended in February, oil prices are starting to climb back up despite the fact that the dollar is at its strongest point in 2 years. The United States Oil Fund (USO), a $3 billion ETF that tracks spot oil prices, hit a low of $22.74 on February 18 before bouncing back to close at $27.99 on March 6.
One of the big stories in 2008 was the rise and fall of commodity prices including the biggest commodity of them all – oil. After a short lived comeback at the beginning of 2009, spot prices for oil have dropped back to their December lows and threaten to go lower.
Whether you believe the price of oil is going to continue to rise or is poised for a fall, oil ETFs are a good way for investors to establish exposure to dynamic oil prices.