President Obama announced that he would be extending the moratorium on offshore drilling for at least another 6 months. This announcement just happens to coincide with the time of year that the demand for oil historically spikes – the summer time. Why is it that a decrease in production, combined with a time of historically increasing consumption and a history making oil disaster, oil is not going through the roof? According to Peter Schiff “Oil prices SHOULD BE going through the roof right now. The only reason they’re not is because of the broad-based sell off around the world in equities, commodities, and other currencies due to the fear of contagion in Europe. This is trumping the very very bullish news for oil. But once we hit a bottom, I think we’re gonna see a huge increase in the price of oil.”
Peter see’s oil going over $100 a barrell, a huge increase from the current price of oil. See the video below:
There are a myriad of different ETF options available to participate in the rise in oil as some will do much better than others. We have included some in the list below.
PowerShares DB Oil Fund West Texas Intermediate Crude Oil (DBO)
The investment seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Liquid Commodity Index – Optimum Yield Oil Excess Return. The index is a rules-based index composed of futures contracts on Light Sweet Crude Oil (WTI) and is intended to reflect the performance of crude oil.
United States Oil Fund West Texas Intermediate Crude Oil (USO)
The investment seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The fund will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil.
United States Gasoline Fund Gasoline (UGA)
The investment seeks to track, net of expenses, the changes in percentage terms of the price of gasoline. The trust will invest in the futures contract on unleaded gasoline delivered to the New York harbor traded on the New York Mercantile Exchange that is the near month contract to expire.
iPath S&P GSCI Crude Oil Ttl Ret Idx ETN (OIL)
The investment is linked to the performance of the Goldman Sachs Crude Oil Return Index and reflects the returns that are potentially available through an unleveraged investment in the futures contacts comprising the index plus the Treasury Bill rate of interest that could be earned on funds committed to the trading of the underlying contracts. The index is derived from the West Texas Intermediate (WTI) crude oil futures contract traded on the New York Mercantile Exchange.
United States Heating Oil Fund Heating Oil (UHN)
The investment seeks to track, in percentage terms the movements of heating oil prices. The fund consists of listed heating oil futures contracts and other heating oil related futures, forwards, and swap contracts. These investments will be collateralized by cash, cash equivalents and US government obligations with remaining maturities of two years or less.
ProShares Ultra Crude Oil (UCO)
The investment will seek to replicate, net of expenses, twice the daily performance of the Dow Jones UBS Crude Oil Sub-Index. The fund normally invests assets in financial instruments with economic characteristics twice the return of the index. It may employ leveraged investment techniques in seeking its investment objective.
SPDR Energy Select Sector Fund (XLE)
The investment seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Energy Select Sector Index. The fund will normally invest at least 95% of its total assets in common stocks that comprise the relevant Select Sector Index. The Funds have adopted a policy that requires each fund to provide shareholders with at least 60 days notice prior to any significant material change in a fund’s policy or its underlying index.
Vanguard Energy ETF (VDE)
The investment seeks to track the performance of a benchmark index that measures the investment return of energy stocks. The fund employs a passive management investment approach to track the performance of the MSCI US Investable Market Energy Index, an index made up of stocks of large, medium-size, and small U.S. companies within the energy sector. The sector includes the construction or provision of oil rigs, drilling equipment, and other energy-related equipment and services; or companies engaged in the exploration, production, marketing, refining, and/or transportation of oil and gas products.
iShares Dow Jones U.S. Energy Index Fund (IYE)
The investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Oil & Gas index. The fund uses a representative sampling strategy to try to track the index. The index measures the performance of the oil and gas sector of the U.S. equity market. The index includes companies in the following sectors: oil and gas producers and oil equipment, services and distribution.