There are reasons for investors to be cautious with volatile energy ETFs. Moreover, if oil prices falls to new lows and the shale industry is unable to turn a profit, the highly leveraged industry may find it harder to repay debt obligations. The IEA said the “massive cushion has inflated” on record supplies from Iraq, Russia and Saudi Arabia.

“The Saudi Arabian authorities had negligible debts in 2014 and an arsenal of assets coming into the price shock. Saudi Arabia can use these assets to fund current spending. However the accumulation of deficits will see its debts increase substantially. Its net assets will erode by 2018, as debts are increased and assets are run down. By 2018 gross debt to GDP is likely to hit 33% while net debts will rise to 17% and potentially continue to rise beyond this point,” adds ETF Securities.

United States Brent Oil Fund