Why Some Energy ETF Investors Are Staying Cautious of Oil Prices
Between May 18 and May 25, the VanEck Vectors Oil Services ETF’s correlation with US oil prices was 95.2%—the highest among these select energy ETFs.
In the trailing week, the S&P 500 Index has risen 2.1%. Between May 18 and May 25, US crude oil July futures fell 1.5%, while natural gas July futures fell 0.2%.
In the week ended May 13, US initial jobless claims reached 233,000. The four-week moving average was at 235,250—at a record low since April 14, 1973.
On May 25, 2017, US crude oil July futures settled at $48.9 per barrel—4.8% below its closing price on May 24.
Precious metals once again witnessed choppy waters on May 24, 2017, and ended the day lower than the previous day’s close. Gold fell ~0.19% and ended up at $1,253.1 per ounce.
The market has been gripped by fears surrounding the implementation of promises that President Donald Trump made during his election campaign.
Fears surrounding a potential upcoming interest rate hike took over precious metals recently, and they fell at the beginning of May 2017.
Investors are speculating about the impact of the Federal Reserve’s decisions on precious metals. There are a few technical indicators to consider when analyzing mining stocks’ performances.
Precious metals prices saw a sudden fall in mid-April 2017, along with precious metals mining stocks and funds. However, precious metals’ revival in the past week has benefited mining companies.
Hedge funds increased their net long position in US natural gas futures and options contracts by 27,776 contracts on May 9–16, 2017—the highest level ever.
On May 26, 2017, Baker Hughes will release its weekly US natural gas rig count report. For the week ending May 19, 2017, rigs rose by eight to 180 rigs.
On May 25, the EIA released its weekly natural gas inventory report. US natural gas inventories rose by 75 Bcf to 2,444 Bcf on May 12–19, 2017.
July natural gas (UGAZ) (UNG) (FCG) futures rose 0.4% and were trading at $3.28 per MMBtu in electronic trading at 6:40 AM EST on May 26, 2017.
June natural gas futures fell 0.6% and closed at $3.18 per MMBtu (million British thermal units) on May 25, 2017. The contracts will expire on May 30, 2017.
Crude oil prices were as low as 5% on Thursday amid weaker market sentiment. Prices started to recover and were stable in the early hours on Friday.
For the week ending May 19, 2017, the natural gas (BOIL) (GASX) (FCG) (GASL) rig count was 180—eight rigs more than the previous week.
Natural gas (GASX) (FCG) (GASL) July futures rose 0.5% on May 17–May 24, 2017. During this period, the US dollar (UUP) (UDN) (USDU) fell 0.3%.
According to EIA data announced on May 18, there was an addition of 68 Bcf to natural gas (GASX) (FCG) (GASL) inventories for the week ending May 12, 2017.
On May 24, 2017, natural gas July futures closed at ~$3.30 per MMBtu (million British thermal units)—0.4% below the previous closing price.
The anticipation of another interest rate hike by the Fed has, as usual, begun to dominate the movements among precious metals.