What Happened To Surging Prices In Commodity ETFs? (USO, UNG, UCO, DTO)

“With the reporting of financial markets, there is only one truth: First price, then news. When oil exploded through $100.00 and raced up towards $150.00 in 2008, then and only then, did stories about peak oil erupt all over the web. People took note and some began to prepare for the end of the world as we know it. Solar and wind power farms gained massive and rapid funding. Individuals loaded up storage facilities with canned goods and toilet paper. Panic ensued at the pump. And for a time, automobiles the size of a barbecue grills were seen puttering along the road, careful to avoid being smashed by the army of SUVs,” John Carter Reports From The Street.

Carter goes on to say, “First price. Then news. Then extreme reactions. Now with oil hovering near $75.00 a barrel, there is nary a trickle about the coming world’s demise. In fact, the energy markets are downright quiet and boring these days. And there is plenty of toilet paper in stock at stores all over the world — no need to hoard the stuff. What gives and how to play this “quiet news?”  Oil prices have been quietly falling lower, much to the chagrin of those who have been longing to say, “I told you so.” What’s happening? Take a look around and you will note that economic growth is currently a tepid beast without much of an appetite for all things energy. As a result, oil supply is comfortably outpacing demand. Inflation concerns are also on the quiet side. When inflation is a concern, nature’s “black gold” will rise as money flees into tangible investments. During inflationary times, cash is trash as inflation reeks havoc on the buying power of fiat currency. But for now, that is not a huge concern and oil prices are trending lower. ”

“There are four main energy related ETFs that I like to use in my own trading. For oil, the best bet is the United States Oil Fund (NYSE:USO) and for natural gas, the United States Natural Gas Fund (NYSE:UNG). These are good for faster markets that are trending nicely. However, when things get slow, as they are now, I like to get a little more bang for my buck. In this case, I will look at the either the ProShares Ultra DJ-UBS Crude Oil (NYSE:UCO) or the PowerShares DB Crude Oil Dble Short ETN (NYSE:DTO). Since oil prices are currently headed lower and are not showing any signs of strength, I like the double short DTO as a way to participate in any continued downward price movement,” Carter Reports.

Take a look at our ETF categories on each ETF for more detailed articles below:

United States Oil Fund (NYSE:USO) – Visit Our (USO) Category: HERE

United States Natural Gas Fund (NYSE:UNG)  – Visit Our (UNG) Category: HERE

ProShares Ultra DJ-UBS Crude Oil (NYSE:UCO)  – Visit Our (UCO) Category: HERE

PowerShares DB Crude Oil Dble Short ETN (NYSE:DTO)  – Visit Our (DTO) Category: HERE

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