After suffering severe losses in the first half of the year, energy funds appear to be maintaining an upward trajectory. Based on available data from seven funds, with assets under management totaling $3 billion, gains of 3.00% were recorded over the week, bringing year-to-date performance to -1.08%, despite annual negative flows (over -$133 million).
The WTI crude oil price climbed by 2.19% for the week, exceeding $77/bbl, stretching this successful trend to four weeks. However, the Energy Information Administration reported on Wednesday that U.S. crude reserves had dropped by 708,000 barrels over the past week, much less than the projected 2.4 million barrel decrease. This suggests fuel consumption is weakening for the world's biggest consumer, even during the travel-heavy summer season, following an unanticipated inventory surge the preceding week. The Energy Information Administration has reiterated its belief that oil markets are set to tighten during the second half of the year. They had forecast that U.S. shale oil and gas production was likely to decline in August for the first time this year, adding to concerns of supply tightness.
Prominent players such as the iShares S&P/TSX Capped Energy Index ETF (XEG), which commands an approximate asset base exceeding $1 billion also reflects this trend. It was up 3.01% for the week, with year-to-date performance of -1.14%.
Group Data: Energy
Funds Specific Data: XEG,ZEO,HUC
This content was originally published by our partners at the Canadian ETF Marketplace.
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