Storage and Transportation Subsector Rose Marginally Last Week

As shown in the table below, the Morningstar Long/Short Commodity Index outperformed the Gresham Long/Short Commodity Index both in July and on a YTD (year-to-date) basis. Both indices use the persistence, or momentum, of commodity price trends to determine if each commodity in the index is to be held short or long. Long-only strategies took a major beating in July, as the greater-than-11% loss on the Morningstar Long-Only Commodity Index shows.

As you can see in the table below, energy ETFs such as the Energy Select Sector SPDR Fund (XLE) and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) posted weekly losses. In contrast, the general market, as tracked by the S&P 500 Index (SPY), rose 1.77%.

The storage and transportation subsector within XLE rose by 0.66% during the week. Spectra Energy (SE) and Kinder Morgan (KMI) were the best and worst performers, respectively, in this subsector. Meanwhile, Consol Energy (CNX) posted the most weekly losses in the coal and consumable fuels subsector.

In the next part of this series, we’ll analyze the state of US crude oil inventories and the US oil rig count to gauge their impact on short-term movements in crude oil prices.