Oil Again in Bull Market: 4 Country ETF Winners

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Putting all worries over supply glut to bed, oil prices again entered the bull territory on August 18. Early this month, this liquid commodity was reeling at the $40 level and slid to the bear territory. However, oil sprung to a higher level within just a few days.

On August 18, U.S. crude was at $48.27 level while Brent crude was close to $51. With this, oil prices witnessed a 20% rise from the recent low, indicating a bull market. Hopes of output freeze talks in an informal meeting among Saudi Arabia, Russia and other key oil producers in Algeria next month actually fueled the price of oil (read: Oil ETFs Soar on Positive News: Will the Rally Last?)

Also, the U.S Energy Information Agency’s weekly domestic crude oil inventories have fallen 2.5 million barrels in the week ending August 12, playing further role in pushing up oil as it reduced fears of a surplus. However, at 521.1 million barrels overall, U.S. output remains at “historically high levels for August.” A weaker dollar on abating bets on the near-term Fed rate hike can also get credit for the uptrend in oil.

U.S. crude is on its way for its biggest weekly rise since March. WTI crude ETF United States Oil USO gained over 10% in the last five trading days (as of August 18, 2016) while Brent crude ETF United States Brent Oil BNO advanced 10.4%.

If this $50 level stays for long, it will definitely put some country stocks and ETFs in focus. These are the key oil producing and exporting countries with revenues earned from oil accounting for a major share of their GDP. These country ETFs suffered a lot when oil slid but could be on high gear if oil prices stage a sustained recovery.

As we all know, ETFs offer a great opportunity while it comes to playing a particular nation. In light of this, we have highlighted four country ETFs that could shoot up in the days ahead should oil price cross the $50 mark.

WisdomTree Middle East Dividend ETF (GULF)

The OPEC countries in the Gulf region make up for about 62% of global oil reserves. Quite expectedly, this makes Gulf countries a key beneficiary of the oil price rebound.

This ETF measures the performance of the dividend paying all-cap Middle Eastern stocks. It holds a basket of 72 stocks and has amassed $20.8 million in its asset base. Expense ratio comes in at 0.88%. It yields about 4.35% annually (as of August 18, 2016) (read: Gulf ETFs Rising on Oil Rebound).

Global X MSCI Norway 30 ETF NORW

Norway is among the top 10 nations famous for oil exports. With its comparatively low population, oil forms the key part of the country’s GDP.  The most popular way to play the country is with NORW. The fund has amassed about $113.6 million in assets, charging investors 50 basis points a year in fees. The energy sector comprises about 30% of the fund. In fact, the Norwegian oil giant Statoil accounts for 16.5% of the portfolio.

VanEck Vectors Russia ETF RSX

The Russian economy contracted 0.6% year over year in Q2 after shrinking 1.2% in Q1. Though the country’s economy is in shambles being in recession for six quarters in a row, an oil price recovery has lately favored Russian stocks and ETFs. Oil is seemingly the main commodity of Russia (see all European Equity ETFs here).

RSX is the most popular and liquid option in the Russian equities ETF space with an asset base of $1.79 billion. The energy sector accounts for about 37.9% of RSX with Gazprom – the Russian energy giant – taking more than 7.4% share of the fund.

Guggenheim Canadian Energy Income ETF ENY
 
Canada is also among the world’s top 10 oil producers. The oil, gas and mining sector make up about over a quarter of Canada’s economy. Crude oil has been Canada’s second-biggest export this year and thus the recent run up in oil prices should do good to this economy.

Guggenheim Canadian Energy Income ETF has amassed nearly $31.5 million in assets. The energy-oriented ETF holds about 34 stocks in its basket. The fund yields about 3.10% annually (as of August 18, 2016).

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US-OIL FUND LP (USO): ETF Research Reports
 
US BRENT OIL FD (BNO): ETF Research Reports
 
GUGG-CDN ENERGY (ENY): ETF Research Reports
 
VANECK-RUSSIA (RSX): ETF Research Reports
 
WISDMTR-ME DIV (GULF): ETF Research Reports
 
GLBL-X NORWAY (NORW): ETF Research Reports
 
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