Oil futures, and exchange traded funds (ETFs) that invest in them, fell today upon news that an uplifting employment report lifted the dollar. Investors sold their oil futures likely because they thought a stronger dollar will curb foreign investors’ demand for crude oil, reports John Wilen for the Associated Press. Oil prices and the dollar have had a close relationship recently, with oil prices tending to rise as the dollar declined. So it comes as no surprise that as the dollar gains strength back, oil prices are beginning to fall. Light, sweet crude oil for November delivery fell to $81 a barrel.
The cause behind the dollar’s increase was the Labor Department’s recent report that said employers boosted payrolls by 110,000 jobs in September, and the economy added 89,000 jobs in August. However, August’s unemployment rate rose slightly to 4.7%.
For investors with money in oil and gas ETFs, below are some of them with their performance year-to-date:
- United States Oil (USO) – up 20.7%
- iPath S&P GSCI Crude Oil Total Return Index ETN (OIL) – up 21.5%
- Claymore MACROshares Oil Up Tradeable ETF (UCR) – up 18.5%
- PowerShares DB Oil (DBO) – up 7.4% for the last three months, having launched in January
- United States Natural Gas (UNG) – down 4.8% for the last three months, having launched in April
- PowerShares DB Energy (DBE) – up 5.8% for the last three months, having launched in January
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.