ETF Trends
ETF Trends

The falling prices of gasoline have lead to some consumers to return to their gas-thirsty habits, but what effect has it had on exchange traded funds (ETFs)?

Consumers have started to shun conservation and have started to enjoy a comfortable lifestyle which includes discretionary driving and indulging in recreational activities. Earlier this year, such activities were put to a halt when crude oil, and hence, gasoline prices, were at an-all time high. Consumption is still down approximately 6.4%, when compared to the same weeks in the previous year, states analysts at MasterCard.

This depression in demand for gasoline can be attributed to the weak economy and the prices at the pump, says Clifford Krauss for the New York Times.

Tom Kloa, an analyst at the Oil Price Information Service suggests that the state of the country’s economy will be the driving factor behind the future consumption of gasoline. As energy prices continue to recede, more money ends up in the pocket of the consumer, whose spending accounts for a hefty portion of the U.S. economy.

Perhaps this increase in “spending money” for the consumer will lead to an increase in ETF values across other sectors.

United States Gasoline (UGA), which is down 41% since its inception in February 2008.

Gas Exchange Traded Funds (ETFs)

The natural gas ETF could have a fire lit under it no matter who becomes president, as both candidates have called for a reduction in greenhouse gas emissions. As a result, the consumption of natural gas in this country could see a sharp spike, reports Edward McAllister for Reuters.

Natural gas for electricity generation and industry is a key component of the energy plans of both Sens. Barack Obama and John McCain. They consider the fuel a bridge between oil and future renewable energy sources that are in development.

Natural gas accounts for about 20% of the energy used in the United States. United States Natural Gas (UNG) is down 23.3% year-to-date.

Natural Gas ETFs

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.