Oil-focused funds lose big on falling crude prices
SEOUL-- South Korea's three oil commodity exchange traded funds (ETFs) have posted abysmal returns over the past month due to falling international crude prices, a fund evaluation firm said Tuesday.
With crude prices on the skids for five weeks running, the oil ETFs chalked up an average return of over minus 16 percent in the month to Friday, according to Zeroin.
Oil ETFs consist of either crude firm stocks or futures and derivative contracts to track the price and performance of oil, or in some cases oil-related indexes.
International oil prices have been dropping in recent months despite an agreement between members of the Organization of Petroleum Exporting Countries (OPEC) and nonmembers to cut production. That results from an increase in U.S. shale oil output and more production by Libya, Nigeria and other countries bypassing the accord.
The benchmark West Texas Intermediate (WTI) for August delivery finished at US$43.01 per barrel Friday, marking the fifth consecutive week of decline.
Analysts said the oil ETFs could suffer bigger losses down the road as some watchers predict international oil prices to plunge to the $30-per-barrel range due to concerns over a supply glut.
Source: Yonhap News Agency