Could the industry’s run be winding down? A poor economy, very low natural gas prices and lower export demand have all contributed to the diminished total demand for coal, according to The Business Insider. Additionally, producers failed to match the market with production cuts and inventories are estimated to stand at a minimum of 50 million tons of excess inventory in the United States.

Nevertheless, coal equities have done quite well for the year, with coal companies doubling or tripling off spring lows. The industry is currently trying to salvage revenue by drastically cutting production and an optimistic forecast puts the resolution of the glut by mid-2010.

A heavier hand by federal regulators has improved miner safety, but the high costs attached to the regulations has put many small companies out of business in Central Appalachia. The Environmental Protection Agency is also scrutinizing mine permits, which will likely raise production costs and restrain supply in the future. (Why Coal ETFs?)

Meanwhile, coal ETFs could be adding a new holding if Rio Tinto’s (NYSE: RTP) IPO of its U.S. coal business, Cloud Peak (NYSE: CLD), goes through, Benzinga reports.

For more information on coal, visit our coal category.

• Market Vectors Coal ETF (NYSEArca: KOL): which is up 133.1% year-to-date

• PowerShares Global Coal Portfolio (NASDAQ: PKOL): which is up 125.8% year-to-date.

Max Chen contributed to this article.

Lara Crigger for IndexUniverse caught up with John T. Hyland, chief investment officer and portfolio manager of U.S. Commodity Funds, to talk about the regulatory impact on commodity exchanges, implications of the Saudis’ switch to the Argus Sour Crude Index and the possible move away from U.S.-centric energy ETFs.

Hyland states that the allegations that United States Natural Gas (NYSEArca: UNG) and United States Oil (NYSEArca: USO) caused last year’s extreme volatility in energy prices is unfounded. Critics presumed it was all because of speculators, but it was only opinion. In reality, when oil prices increased, USO’s number of contracts decreased, and vice versa. Investors tended to be net buyers when prices dropped, or the reverse when prices increased. (Natural gas and oil ETFs remain popular).

“Regulators are evolving their thoughts,” says Hyland. If enough regulation persists, investors could move off-exchange and regulators would have to make enough changes to bring back investors.

Saudi Arabia announced its intent to drop the WTI Index in favor of the Argus Sour Crude Index. Hyland sees that the NYMEX and ICE will both contend for the majority of the new index. It is still up in the air which exchange will attract more market makers and traders. U.S. Commodity Funds is still weighing the possible benefits of launching a new ETF based on the index. (Middle East: The next big growth spot?)

The move by the Saudis could also open up the market to additional pricing benchmarks. All that will decide the outcome is the costs associated with the different areas of the world.

Hyland also thinks that ETFs will be become less U.S.-centric and move toward emerging countries, such as China and India. The new ETF products will be assembled and weighed to cater to demand in these other countries.

For more information on commodities, visit our commodity category.

Max Chen contributed to this article.

The U.S. 12 Month Natural Gas Fund (NYSEArca: UNL) has gotten the green light from regulators to issue about 30 million shares, which will purchase natural gas futures for delivery over the next 12 months. Asjylyn Loder for Bloomberg reports that it will sell the near-month contract as it approaches expiration and replace it with a contract for delivery in 12 months.

The ETF comes from U.S. Commodity Funds LLC, which also manages the popular $3.5-billion U.S. Natural Gas Fund (NYSEArca: UNG) and the $1.96-billion U.S. Oil Fund (NYSEArca: USO). (Natural gas ETF shifts strategy).

UNG differs from UNL in that UNG buys the near-month contract, then sells it each month as it nears expiration and buys the next month.

In terms of natural gas prices and futures, what’s the difference between UNG and UNL? UNL can help mitigate some of the impact of contango, which is when the front-month contract is higher priced than the contracts further out. By using the 12-month approach, the impact of contango is, on average, about two-thirds less than it would be in a fund that simply uses a front-month approach.

Which fund an investor chooses depends on what’s trying to be accomplished. When the markets are in contango, it’s no guarantee that a 12-month fund would do better. On the other hand, it could be beneficial for investors  looking to lessen the impact contango can have. On the other hand, if someone is trading frequently and heavily, there might not be as much concern about contango. As the energy markets shift, it could be more advantageous to be in one fund over another – but it’s no guarantee in the volatile energy space. Many have learned that a single hurricane can change conditions rapidly.

Natural gas futures were wavering today. Below-normal temperatures in the Midwest and Northeast are anticipated to boost natural gas demand, but there’s only been modest growth in industrial production, reports Christine Buurma for Dow Jones Newswires. Until today, many traders had been betting that natural gas prices would fall in the coming months.

For more stories about natural gas, visit our natural gas category.

According to this year’s 2009 volume of the International Energy Agency’s (IEA) World Energy Outlook, the recession and financial crisis provided us a small respite from our insatiable fossil fuel demand and rising oil prices, remarks Dave Fessler for Investment U. However, the break in oil prices is forecast to end this year and a new growth pattern may start. The IEA projects that world consumption will grow 1% per year till 2030. (Oil ETFs are not over yet).

Possible shortfalls in exploration and production of oil as a result of this year’s low oil prices, coupled with increases in future demand could likely skyrocket oil prices in the future, says the IEA. (How to play world’s hunger for oil).

As stated in the IEA’s World Energy Outlook, “any prolonged investment downturn [in oil exploration and production] threatens to constrain capacity growth, eventually risking a shortfall in supply. This could lead to a renewed surge in prices a few years down the line, when demand is likely to be recovering and become a constraint on global economic growth.”

The oil industry is finding oil harder to come by and they need to drill deeper and deeper to locate oil pockets, which translates into  higher costs. Now that oil is hovering around $80 a barrel and projections put oil above $100 a barrel in the not-so-distant future, oil companies are only just beginning to turn back to exploration and production.

For more information on oil exploration, visit our oil & gas exploration category. For more information on investing with energy using ETFs, sign up for our new special report.

• iShares Dow Jones U.S. Oil & Gas Exploration (NYSEArca: IEO): up 36.3% year-to-date

• SPDR S&P Oil & Gas Exploration & Production (NYSEArca: XOP): up 36.5% year-to-date

• PowerShares Dynamic Oil & Gas Services (NYSEArca: PXJ): up 56.5% year-to-date
  

• United States Oil (NYSEArca: USO): up 21.7% year-to-date

• PowerShares DB Oil (NYSEArca: DBO): up 44.6% year-to-date

Max Chen contributed to this article.

The spike in investor interest in funds like United States Natural Gas (NYSEArca: UNG), PowerShares DB Commodity Index Fund (NYSEArca: DBC), PowerShares DB Agriculture Fund (NYSEArca: DBA) has resulted in creation halts and strategy reconstruction as the Commodity Futures Trading Commision (CFTC) scrutinizes the industry, writes Don Dion for TheStreet. (More on the CFTC’s commodity limits).

The iPath Dow Jones AIG Platinum TR Sub Index (NYSEArca: PGM) recently had to halt creation in order to remain within position limits. (Regulation hits platinum ETN). And most recently, PowerShares DB U.S. Dollar Bullish (NYSEArca: UUP) had to rush to get  approval to create new shares as trading volume suddenly picked up. (Bullish dollar ETF granted new shares).

Traditional ETFs track underlying indexes, which is made possible through the share creation and redemption process. When the creation process is halted, it creates premiums to an ETF’s underlying value. The result is an environment good for shareholders but bad for investors chasing the trend.

As an investor, you should be aware of when an ETF’s share creation has been suspended and understand that if a futures-based ETF runs out of shares, this could happen. If you’re already holding such an ETF, monitor your funds to be sure that all is running smoothly. The risk of holding a fund with suspended share creation is that when normal trading resumes, losses could be incurred as the premium disappears.

For more information on ETF trading, visit our ETF 101 category.

Max Chen contributed to this article.

Last year, financing seized up and demand went off a cliff. Today, demand for solar modules, a unit of interconnected solar cells, is so high that most of the industry is sold out. Germany is leading the way, making up about 36% of market demand. France, Italy, the United States and Japan are seeing their own demand rising quickly, reports Jessica Rao for CNBC.

On the supply side, the shortage of polysilicon, the building block for solar panels, is a thing of the past. (Why solar ETFs will shift to a brighter future). A massive oversupply of the material is anticipated over the next three years, giving solar panels a dramatic drop in cost to produce, and therefore utilize. This could lead to greater adoption of solar energy on the consumer level. (Read about the green energy sector here).

For more stories about solar energy, visit our solar category. If you want the scoop on anything and everything energy-related, sign up for our newest special report.

• Market Vectors Solar Energy ETF (NYSEArca:KWT): down 5.4% year-to-date



• Claymore/MAC Global Solar Energy (NYSEArca: TAN): up 1.7% year-to-date

ETFs are a good way for investors to capitalize on policy initiatives of the Obama administration while reducing the day-to-day volatility compared to other investment options, such as stocks, remarks Daniel Harrison for IndexUniverse. (Play Obama’s new energy plan).

Health Care opportunities. Jim Oberweis, chief executive of Oberweis Asset Management, believes that “there is a possible positive [outcome] for pharmaceutical companies” since sales of prescription drugs will increase as health care coverage widens. Furthermore, Oberweis argues that health care providers may benefit from more patient visits and biotechs are in a more positive position than previously thought. (More on the health care sector).

Broad-based and niche market ETFs that could benefit from the growth in the number of patients receiving coverage include:

• Health Care Select Sector SPDR (NYSEArca: XLV): up 14.3% year-to-date
• iShares Dow Jones U.S. Healthcare (NYSEArca: IYH): up 15.1% year-to-date
• iShares Dow Jones U.S. Medical Devices (NYSEArca: IHI): up 32.4% year-to-date; IHI is well-diversified, with 58% of assets under management in its top 10 holdings, and a maximum single-stock weighting of 10%. Companies included should benefit from the increase in the number of hospital patient visits.
• PowerShares Dynamic Pharmaceuticals (NYSEArca: PJP): up 10.3% year-to-date; PJP is a well-diversified ETF on large, mostly dividend-paying pharmaceutical companies that have lots of cash on hand and may see an increase in sales of core prescription drugs.
• SPDR S&P Pharmaceuticals (NYSEArca: XPH): up 19.2% year-to-date; XPH is more broadly diversified.
• iShares Dow Jones US Pharmaceuticals (NYSEArca: IHE): up 22.2% year-to-date; IHE focuses more on the oversold traditional pharma brands like PJP.
• SPDR S&P Biotech (NYSEArca: XBI): down 4.3% year-to-date; XBI is well-diversified, with 45% of its funds invested in its top 10 holdings. The fund is also mostly invested in nontraditional pharma companies.
• iShares Nasdaq Biotechnology (NasdaqGM: IBB): up 11.2% year-to-date; IBB has a higher weighting in its top holdings and it focuses exclusively on Nasdaq-listed securities; some large biotech companies may be excluded.

Clean energy. It is no big secret that clean energy is a big policy initiative of the Obama administration. The more notable technologies being pushed into the forefront of the sector are nuclear and solar energy. Solar tech investing is still considered risky because of the industry’s mini boom/bust cycles, but ETFs help minimize volatility. (More on alternative energy).

• Market Vectors Solar Energy ETF (NYSEArca: KWT): down 6.5% year-to-date
• Claymore/MAC Global Solar Energy (NYSEArca: TAN): up 0.3% year-to-date
• Market Vectors Nuclear Energy ETF (NYSEArca: NLR): up 19.7% year-to-date

Max Chen contributed to this article.

Consumer sentiment fell in the early part of this month to the weakest in three months. Concerns about jobs and income continue to weigh on consumers’ minds, Reuters reports. This could mean restrained spending around the holidays. (How to play retailer’s price wars).

The U.S. trade deficit widened in September by a larger-than-expected 18%, the highest level since January. Imports also jumped by the most in 16 years. The trade deficit’s growth reflected increasing demand for oil and cars amid the economic rebound, reports Bob Willis for Bloomberg.

Oil prices dipped to their lowest point in a month as investors began to pay more close attention to the slump in demand for energy. Although for much of the year many thought demand would resume, consumers and businesses are still using less gasoline than they were a year ago, says Chris Kahn for the Associated Press. United States Oil (NYSEArca: USO) is trading flat this morning.

Europe has officially left its recession. The eurozone economy was largely propelled back to health on the strength of export growth and improving industrial production in Germany, its largest economy. GDP for the 16 countries making up the region expanded by 0.4% in the second quarter, reports Matt Saltmarsh for The New York Times. iShares MSCI Germany (NYSEArca: EWG) is up 1.2% this morning. For more stories about Europe, visit our Europe category.

PowerShares DB U.S. Dollar Bullish (NYSEArca: UUP)

Last week, trading in PowerShares DB U.S. Dollar Bullish (NYSEArca: UUP) was halted after it ran out of available shares. Trading was resumed after a filing with the SEC for 100 million additional shares was made.

At the close on Thursday, the fund was trading at a 1.8% premium. As normal trading resumes, the premium should slowly start to dissipate, but it may not happen immediately.

Some funds have limits on how many shares can be created at a time. Heavy trading volume can deplete the supply, in which case the provider files an 8-K with the SEC for more shares. While existing shares of an ETF can be traded while approval is awaited, funds run the risk of trading at a premium to their net asset value (NAV) in the meantime. Approval can take days, weeks or months.

A similar situation was seen with United States Natural Gas (NYSEArca: UNG) when the fund ran out of shares. (What happened?)

For more stories on currency ETFs, visit our category.

According to the World Bank, the post-crisis environment in Russia provided the necessary catalyst for reforms when it comes to the country’s structural constraints and weak domestic demand, writes Gleb Bryanski for Reuters. Without reforms, the World Bank believes Russia’s growth will remain sluggish. (Ways to play Russia’s recovery).

Russia’s Central Bank is expected to continue to cut interest rates to ease lending, but the cost of lending still remains high. The Russian Central Bank is trying to dampen the appreciation of the ruble and will soon have to choose “between maintaining a competitive exchange rate for tradable industries and avoiding inflationary pressures,” says the World Bank.

A return of capital inflows to Russia is expected by the first quarter of 2010 as oil prices increase and the global outlook improves. Russia’s inflation rate will range between 9% and 10% in 2010, but stimulus policies may raise it further in the second quarter. The unemployment rates may also rise based on seasonal factors. (Russia’s potential stumbling block).

Prime Minister Vladimir Putin stated said the government will continue to enact measures aimed at boosting domestic demand, strengthening the banking system and decreasing the budget deficit, as stated in BusinessWeek.

According to the Economic Development Ministry, Russia’s GDP is projected to contract 8.5% for 2009. The economy grew 0.6% in the third quarter, signaling an end to their recession.

For more information on Russia, visit our Russia category.

• Market Vectors Russia ETF (NYSEArca: RSX): up 137.2% year-to-date

• iShares Emerging Markets Eastern Europe Index Fund (NYSEArca: ESR): up 5% in the last month; Russia is 75%

• SPDR S&P Emerging Europe (NYSEArca: GUR): up 81% year-to-date ; Russia is 65%

• Dow Jones Emerging Markets Energy Titans (NYSE: EEO): up 16.8% in the last three months; Russia is 36.3%

Max Chen contributed to this article.