ETC investors still long WTI despite price fall

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Data from ETF Securities suggests that investors are still going long on benchmark West Texas Intermediate (WTI) despite yet another fall in the price, even against other oil prices, on fears that shale production has created an ongoing glut in the US market.

ETFS associate research analyst Josh Tiwana wrote in a note that there have been 22 consecutive weeks of inflows into long WTI exchange traded products, with another $50.7m invested this way in the past week. However, this comes despite the fact that “this week WTI fell considerably more than its global counterpart causing the spread between crude benchmarks to widen to the highest level in 13 months.”

“The 5.8% weekly decline in WTI was driven by reports that US crude inventory increased by twice as much as forecasted last week, stoking fears that shale oil is causing a supply glut in the US oil market.”

Other commodities experiencing inflows include wheat – as investors see buying opportunity on current depressed prices – and platinum – in response to news that the world’s second biggest producer Impala is to cut its capital expenditure.

Key outflows were measured against gold ETPs, which Tiwana suggests is down to the market reaction to the latest bailout deal agreed with Greece, which caused investors to shed safehaven assets.


Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

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