Fossil fuels, oil, gas and coal continue their ascent amid higher global demand and tighter supply. Brent Crude futures have been flirting with $80/barrel mark, a 3-year high while WTI has reached 7-year highs. Natural gas prices are also at seven-year highs in the U.S. and record highs in Europe and Asia. Coal futures surged to a fresh record high of $204.8 per metric ton in late September.
Rising post-pandemic global demand, weather-related disruptions in the US and looming European cold winters boosted natural gas prices, which eventually spilled over other fossil fuels as nations look for alternative energy sources.
The trend rippled through Energy commodity ETFs and Energy Equity ETFs. With exposure to oil, WisdomTree WTI Crude Oil ETC (CRUD) and WisdomTree Brent Crude (BRNT) gained more than 3.0% since last Friday. The United States Natural Gas Fund (UNG), which tracks in percentage the movements of natural gas prices rose by +12.33% on Monday. Energy Select Sector SPDR Fund ETF (XLE), the largest energy equity ETF with $23.8 billion in assets gained 15% between Monday and last Friday. The fund invests in S&P 500 oil, gas and consumable fuel, energy equipment and services companies. Its top holdings include Exxon Mobile Corporation (22.61%), Chevron Corporation (20.23%) and EOG Resources (4.91%). In Europe, the Lyxor STOXX Europe 600 Oil & Gas UCITS ETF (OIL), which invests in the top European Oil & Gas companies gained more than 3% this week.
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