Tag Archive | USO

How to Play Rising Gasoline Prices

as published at  http://www.stockpickr.com/how-play-rising-gasoline-prices.html

NEW YORK (SmartStops) — President Obama made some commentsover the weekend that there is no “silver bullet” to help bring down gas prices. While this isn’t what most Americans want to hear, investors and traders can profit from rising gasoline prices to help hedge their daily expenses.

If you believe that Obama is right, here are a few ways to profit from rising gas prices, either by playing certain ETFs or specific equities.

In his weekly radio address, Obama said: “Now, whenever gas prices shoot up, like clockwork, you see politicians racing to the cameras, waving three-point plans for $2 gas. You see people trying to grab headlines or score a few points. The truth is, there’s no silver bullet that can bring down gas prices right away.”

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Supply Concerns To Boost Crude Oil ETFs

Supply concerns pushed crude futures contacts north of $90 per barrel on Tuesday, providing positive price support to the US Oil Fund (USO), PowerShares DB Oil Fund (DBO) and the iShares Dow Jones US Oil & Gas Ex Index (IEO).

As for crude supply in the US, there are two forces that could result in a supply shock.  First, is the recent closure of the Trans Alaska Pipeline, which is an artery for oil transport to refineries on the US West Coast.  The flow through this 800-mile pipeline, which links Prudhoe Bay on the Arctic Ocean with the terminal at Valdez accounts for nearly 20 percent of US oil production annually.  In fact, according to the Wall Street Journal, upon news of the leak, BP (BP), ConocoPhillips (COP) and Exxon Mobil (XOM) all cut their oil production from Alaska’s Prudhoe Bay field by 95 percent.  With this in mind, if the leak is not controlled and fixed within the next few days, there could be a negative impact on US crude reserves.   In regards to when the fix is supposed to be complete, there is some ambiguity as that more problems could arise due to ice or wax buildups in the actual pipeline.   Read More…

5 ETFs To Hedge Against Inflation

As the US government has resorted to excessive spending measures to keep the economy from completely crumbling, many investors suggest that inflation is inevitable and could even prevail in the coming months. 

Current economic data suggest that inflation is running lower than expected; however there are numerous reasons to think that inflation will eventually be inevitable.  Some of these reasons include the Federal Reserve’s implementation of QE2, which launched in early November, the increases in money supply in the earlier stages of the Great Recession to ignite a spark in the US economy and rising commodity prices are likely to take their toll on the consumer price index (CPI).  In fact, rising prices have already started to emerge, evident through the recent rise in energy prices (i.e. crude oil and gasoline), food prices (i.e. wheat, sugar, coffee and soybeans) and airline tickets.  Read More…

Three Possible New ETFs To Play Commodities

As commodity ETFs have witnessed increased investor demand and increased returns over this year, there have many new resource-specific ETFs brought to market and now the United States Commodity Funds plans to introduce three more funds giving exposure to copper, agriculture and metals. 

The three aforementioned resource-specific commodity sub-sectors have been at the pinnacle of performance during the last 12 months and are expected to continue to shine in the near future.  Copper, which is used in pipes, tubing, wires and other industrial uses, is expected to witness increased demand over the next few years as global economies, in particularly in emerging markets like China and India, continue to grow.  In fact, global demand of copper is expected to outpace supply in 2011, the first time in four years, giving the metal even further positive price support. Read More…

Weak Dollar Could Boost Oil ETFs

As commodities like cotton, wheat and copper have witnessed price surges this year, the actions and decisions of the Federal Reserve combined with sustainable global demand could boost crude oil providing positive price support to the United States Oil Fund (USO), the United States 12 Month Oil Fund (USL), the PowerShares DB Oil Fund (DBO) and the iPath S&P GSCI Crude Oil TR Index ETN (OIL). Read More…

Four ETFs To Play Black Gold

Global economic growth is expected to boost demand for crude oil in the near term future, paving the path to opportunity for the US Oil Fund (USO), the United States 12 Month Oil Fund (USL), the PowerShares DB Oil Fund (DBO), and the iPath S&P GSCI Crude Oil TR Index ETN (OIL).

According to the Energy Information Agency (EIA), global demand for black gold for the remainder of the year is expected to increase to 86.06 million barrels per day, a 2.1 percent increase from last year.  Furthermore, the EIA expects global consumption to jump to 87.44 million barrels per day in 2011, an increase of nearly 300,000 barrels per day from previous forecasts due to resurgent demand in the US, Germany and Japan over the past three months.  Read More…

China To Bolster Black Gold

Last month, China superseded the United States as the world’s largest energy consumer and the nation’s expected appetite for black gold is likely to provide positive price support to crude oil and the US Oil Fund (USO), PowerShares DB Oil Fund (DBO) and the iShares Dow Jones US Energy (IYE).

Over the last year, China’s consumption of crude has risen more than 18 percent to an average of 8.71 million barrels per day, driven by its double-digit growth rates and increased per-capita wealth.  Of this total consumption more than half comes from foreign supply, as that imports of crude oil to China have risen by more than 30 percent over the last year to an average of 4.77 million barrels per day.  As for the near-term future, this growth is expected to sustain. Read More…

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