October 22, 2008 at 3:00 pm by Tom Lydon
Oil keeps heading lower most days, but that doesn’t mean investors don’t have a change to profit with exchange traded funds (ETFs).
Oil is heading toward $50 per barrel and there’s sentiment that any OPEC production cuts will not be able to stop this slip downward, reports Andrew Snyder for Contrarian Profits.
An ETF to help you profit from oil’s downturn is the ProShares UltraShort Oil and Gas (DUG). Year-to-date, the fund is up 32.6% and it’s number 12 in trading volume, according to the Morningstar rankings. It currently holds $942 million in assets.
Oil prices are dropping rapidly (below $68 a barrel today), so OPEC is meeting this week to discuss a cut to pumping quotas. It is a last-ditch effort to try to keep crude prices from plummeting all the way to $40.
The cartel is expected to reduce production output by as much as two million barrels per day, which would be considered a major cut. There are even rumors that Russia may reduce its output as well, leaving many to wonder if countries that are rich off petro dollars will be able to sustain their lifestyle.
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