Higher Oil and Gas Prices Mean More Gains for Energy Traders | ETF Trends

Higher oil and gas prices aren’t just affecting consumers in the United States, which is giving energy traders much to cheer about this year.

Europe, for example, is seeing gas prices surge to new record highs. It’s a welcome sign for traders, but not so much for consumers.

“The benchmark European gas prices continue their rally this week, surging to new record highs on Tuesday to an equivalent of $205 a barrel oil, amid a wider energy commodity rally driven by supply concerns ahead of the winter,” an OilPrice.com article noted.

“The gas price at the Dutch TTF hub, the benchmark gas price for Europe, soared on Tuesday to above 100 euro per MWh for the first time ever, as gas and coal prices rally in Europe and Asia and as nuclear power generation in France fell due to a strike,” the article added.

The rally doesn’t look to be letting up anytime soon. If traders can withstand the volatility, the energy sector could provide enviable gains.

“Everything looks set for another week of price climbs, as the fiercely nervous sentiment on the market continues due to fears of reduced supply during the winter. The most traded contracts on the important Dutch TTF hub once again climbed to all-time highs, and could easily continue the uptrend today,” Energi Danmark said in a note.

“All energy prices – coal, oil, gas, power – are up. There doesn’t seem to be any let up to the rallying,” a gas trader told Reuters.

100% Gains for This Leveraged ETF

Double the leverage means amplified gains for the Direxion Daily Energy Bull 2X Shares (ERX). With momentum clearly on the side of the energy sector, the ETF is up 100% based on Morningstar performance numbers.

ERX seeks daily investment results equal to 200% of the daily performance of the Energy Select Sector Index. The index is provided by S&P Dow Jones Indices and includes domestic companies from the energy sector, which includes the following industries: oil, gas, consumable fuels, and energy equipment and services.

The recovery in energy prices is apparent when you stretch out the performance over the last 12 months, which translates to over 200% in gains. The energy sector was one of the few shining stars during a volatile September month that saw stock market indexes mostly in the red.

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