The broad U.S. markets are setting new intraday records on the better-than-expected third quarter economic expansion. However, oil-related exchange traded funds remain among the worst performing assets Tuesday after members of the Organization of Petroleum Exporting Countries failed to reach a consensus on output in a pre-meeting.
Of the worst 25 performing exchange traded products, which include exchange traded notes and ETFs, on Tuesday, 14 tracked energy-related stocks, oil futures and natural gas producers. Additionally, 4 were Russia-related ETFs, which also include heavy exposure to the energy sector, notably oil giants Gazprom and Lukoil.
For instance, the First Trust ISE-Revere Natural Gas Index Fund (NYSEArca: FCG) dipped 1.6%, iPath S&P GSCI Crude Oil Total Return Index ETN (NYSEArca: OIL) fell 2.3% and PowerShares S&P SmallCap Energy Portfolio (NasdaqGS: PSCE) declined 1.7% on Tuesday.
Additionally, the iShares MSCI Russia Capped ETF (NYSEArca: ERUS), which includes a 48.1% position in energy stocks, decreased 2.4% on Tuesday. [Russia ETFs’ Fate Lies in Recovering Oil Prices]
Meanwhile, West Texas Intermediate crude oil futures traded 1.5% lower to $74.6 per barrel while Brent crude oil futures was down 1.1% to $78.8 per barrel.
Ahead of the November 27 meeting, Igor Sechin, who runs Russian state oil producer OAO Rosneft, said that Venezuela, Saudi Arabia, Mexico and Russia did not commit to diminishing output in an attempt to offset falling oil prices, reports Moming Zhou for Bloomberg.
“Even those four countries are not agreeing to any kind of cut, and the last thing the Saudis want is to be the ones doing all the cutting,” Tariq Zahir, a commodity fund manager at Tyche Capital Advisors, said in the Bloomberg article. “You have to get an above 2-million-barrel cut from OPEC to stabilize the market.”