Industry Updates

Oil and gas ETF performances crash back down

George Geddes

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Following several oil attacks in the Middle East earlier this year, oil ETCs and equity ETFs exposed to the oil and gas industry saw their

prices spike significantly

, but as tensions calm, so do demand and performances.

According to data from Ultumus, both natural gas and crude oil ETCs have seen their net asset values (NAV) slide in the week commencing 30 September.

Specifically, the WisdomTree Natural Gas (NGAS) and the WisdomTree WTI Crude Oil (CRUD) saw their NAVs fall 5.9% and 3.8%, respectively.

A significant factor for these negative performances is because of a drop in demand, most notably from China which is one of the world’s largest consumers. However, trade talks between China and the US restarting could kickstart another price rally this month.

Oil ETPs flounder amid supply concerns

The slump in performance for natural gas products has been ongoing in 2019. NGAS’s year-to-date returns is -28.5% whereas CRUD’s has been positive for the year at 13.7%.

Over the same period, equity ETFs offering exposure to the industry also slumped. The iShares Oil & Gas Exploration & Production UCITS ETF (SPOG) similarly saw its NAV fall 4.8%. SPOG’s returns year-to-date fall into negative grounds, sitting at just below -2%. Its 12-month returns are dramatically lower at -32.4%.

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