Energy funds make a splash in the face of the ‘acceleration’ of oil prices

Investment funds become the big winners from the rise in oil prices. With a week and a half left until the end of the quarter, Brent crude oil, the benchmark in Europe, recorded a rise of 26.7%, an acceleration that will help it end a streak of four consecutive quarters of declines. While the ‘rally’ of this raw material is already putting pressure on inflation in some economies after months of moderation, the funds that bet on energy stocks have cashed in this summer with returns that reach double digits.

Within the classification of sector funds and ETFs that can be purchased in Spain, four of them record gains of more than 10%. The list is headed by two exchange-traded funds: Vaneck Uranium & Nuclear ETF, with a return of 16% in this period, more than half of what has been accumulated so far this year (29.3%) and SPDR S&P US Energy Select – managed by State Street- which obtains a return of 16% between June and September.

The Boston-based financial services firm also managed to place another of its ETFs – SPDR Europe Energy – among the top positions with a return of 13.1% in the last three months. It is followed by GS Global Energy Equity X Cap (13.6%) and GS NA Energy Infrastructure Equity Base (9.5%), both from Goldman Sachs. In these five cases it happens that the profit obtained during the summer period exceeds that registered in the last nine months.

This behavior is in line with that of ‘black gold’, in which in cases such as Brent it appreciates by 10% in 2023, less than half of what it has rebounded this summer and which has allowed it to exceed $95. maximums of the exercise. For its part, West Texas has risen 15% over the last nine months thanks to the 30% boost received in recent weeks. A growth spurt that is also squeezed by the ‘big-oils’ of the European Union, a group made up of Repsol, BP, Shell, Total Energies, Equinor, ENI, Galp and OMV.

But the race doesn’t end on September 30. Analysts see it as feasible that the price of a barrel could reach $100 in the short term due to the cuts decreed by OPEC and the increase in demand in Asia. “After the crisis that shook energy markets last year, Asia once again leads global energy demand growth despite concerns about China’s economic prospects,” say Bank of America analysts.

From ING they highlight that although the possibility of surpassing the aforementioned barrier of 100 dollars is true, they warn that a movement of this type is “unsustainable”, since it would cause an increase in political pressure, and both OPEC as a whole , like Saudi Arabia, “will not want to force the market too much.” The market’s concern about its rise in price lies in the inflationary pressures that could be caused by an abrupt jump in the price of crude oil after months of struggle by central banks against the unstoppable increase in prices.

This rise in crude oil prices, together with the resistance of the underlying CPIs, which exclude unprocessed food and energy, emerge as one of the main threats to central banks, whose task may become more complicated now that the monetary cycle of increases seems to be of types comes to an end. Thus, the doubt about whether the peak of interest rates could increase after reaching a level not seen since 2001 in the United States and the eurozone will depend on inflation expectations, ‘Bloomberg Intelligence’ points out.

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