“Energy ETPs saw strong inflows in 2014, concentrated in the final three months as price declines of both crude and natural gas appeared exaggerated.Crude oil ETPs accounted for the lion’s share of inflows, while natural gas represented around 25% in 2014. However, these inflows were largely driven by US investors, who accounted for 85% of the global inflows. The entirety of inflows into natural gas came from US investors, as elevated inventory and mild weather forced prices to the lowest levels since 2012,” said ETF Securities.
With that, investors should remember that simply because money is flowing into energy ETFs, that does not mean all market participants have turned bullish on oil.
A valuable lesson taught by the United States Oil Fund (NYSEArca: USO) is that ETF’s often expanding shares outstanding counts when oil prices plunge. That was the case late last year, but much of USO’s asset expansion was attributable to traders shorting the ETF, which creates the appearance of new money flowing into the ETF because shares must go out on loan to the short sellers. [Bottom Fishing With Oil ETFs]
ETFS Physical Palladium Shares
Tom Lydon’s clients own shares of GLD.