It seems as if credit concerns and the subprime disease have infiltrated oil and energy exchange traded funds (ETFs) now. In general, oil and gas prices have been up this year but late last month, oil stocks started to slip on subprime fears, according to Joanne Von Alroth for Investor’s Business Daily. This week that slip deteriorated into a free fall as OPEC announced Tuesday that oil consumption might decrease because of the slowing U.S. economy. That news coupled with concerns about Tropical Storms Erin and Dean made for a sharp decline. Three ETFs hit hardest this week as of yesterday include:
- iShares S&P Global Energy (IXC) – down 4.9%
- Vanguard Energy ETF (VDE) – down 3.5%
- PowerShares Dynamic Energy (PXI) – down 2.9%
However, these ETFs currently are up today possibly because of the Fed’s recent market intervention where it cut the discount rate by a half percentage point.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.