VDE And The Factors Impacting Oil Prices

seekingalpha09-27

Vanguard Energy Index Fund ETF Shares has been virtually unchanged since late November 2023.Crude oil prices have fallen to new 2024 lows due to seasonal weakness, the Chinese economic slowdown, and ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nVDE And The Factors Impacting Oil Prices\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-27 02:03 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4723526-vde-and-the-factors-impacting-oil-prices><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Vanguard Energy Index Fund ETF Shares has been virtually unchanged since late November 2023.Crude oil prices have fallen to new 2024 lows due to seasonal weakness, the Chinese economic slowdown, and ...</p>\n\n<a href=\"https://seekingalpha.com/article/4723526-vde-and-the-factors-impacting-oil-prices\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"VDE","symbol_name":"Vanguard Energy ETF","start_time":0,"source_url":"https://seekingalpha.com/article/4723526-vde-and-the-factors-impacting-oil-prices","article_id":"2470763080","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1750451788/image_1750451788.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2470763080","pubTimestamp":1727373780,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Vanguard Energy Index Fund ETF Shares has been virtually unchanged since late November 2023.Crude oil prices have fallen to new 2024 lows due to seasonal weakness, the Chinese economic slowdown, and O","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"VDE":"Vanguard Energy ETF","BK4585":"ETF&股票定投概念","BK4588":"碎股"},"translate_title":"VDE与影响油价的因素","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"VDE":0.9},"content_text":"Vanguard Energy Index Fund ETF Shares has been virtually unchanged since late November 2023.Crude oil prices have fallen to new 2024 lows due to seasonal weakness, the Chinese economic slowdown, and OPEC+ production strategies.The VDE ETF has declined 16.25% since April 2024, mirroring the 25.5% drop in crude oil prices, but remains a potential buying opportunity.The U.S. election, geopolitical events, and economic factors will determine if the current selloff is a buying opportunity or a path to lower prices.ugurhan In a November 28, 2023, Seeking Alpha article on the Vanguard Energy Index Fund ETF Shares (NYSEARCA:VDE) product, I concluded: I am a buyer of Vanguard Energy Index Fund ETF Shares at the current price, leaving plenty of room to add on further declines. VDE's all-time high was $145.97 in June 2014, and I expect the ETF to climb above that level in 2024. VDE was trading at the $119.45 per share level on November 28, 2023. While the ETF rose to a $137.92 high on April 12, 2024, when crude oil prices reached the 2024 high, the ETF ran out of upside steam and was back around the $120 level in late September. As the U.S. election approaches, we could see lots of price variance in the oil-related ETF and crude oil prices over the coming weeks. Crude oil falls to new lows in 2024 Crude oil prices (CL1:COM) have decreased over the past weeks, falling to new lows for 2024. Nine-Month NYMEX WTI Crude Oil Futures Chart (Barchart) The nine-month chart of NYMEX WTI crude oil futures highlights the decline to $64.61 per barrel on September 10, the lowest price since May 2023. The energy commodity came close to the critical technical support at the May 2023 $63.57 low. Five-Year Brent Crude Oil Futures Chart (Barchart) Meanwhile, Brent Crude Oil futures (CO1:COM) for November 2024 delivery reached a $68.30 low on September 10, just above the May 2023 $68.20 low. The leading crude oil benchmarks are under pressure in September 2024, making lower highs and lower lows. Seasonality has been bearish The annual driving reason during the spring and summer is when gasoline demand and prices peak. Gasoline is the most ubiquitous petroleum product. During fall and winter, drivers tend to put fewer miles on their vehicles, causing demand to decline. Lower gasoline demand translates to lower crude oil consumption. Therefore, gasoline and crude oil prices tend to experience seasonal weakness at the end of summer. Ten-Year Gasoline Futures Chart (Barchart) The ten-year NYMEX gasoline futures (XB1:COM) chart highlights the oil product's seasonal highs as the summer vacation season approaches and lows during fall and winter. Ten-Year NYMEX Crude Oil Futures Chart (Barchart) The ten-year NYMEX WTI crude oil chart displays a similar pattern. Seasonality is one reason why crude oil prices have been trending lower since April 2024 and have declined to new lows for this year in September. The anticipation of falling gasoline demand has weighed on the energy commodity. China's economy is weighing on prices China is the world's second-leading economy by GDP and competes with India for the most populous nation. Weak economic conditions in China have weighed on crude oil demand. A September 10, 2024, Reuters article highlighted that OPEC, the international oil cartel, cut its forecast of Chinese growth to 650,000 barrels per day (bpd) from 700,000 bpd. While OPEC said global oil demand will rise by 2.03 million bpd in 2023, the growth forecast was lower than the projection for 2.11 million bpd in the previous month. OPEC trimmed its demand forecasts based on Chinese economic weakness, leading to lower requirements. Meanwhile, this week, China announced substantial stimulus measures, including rate cuts that could ignite the economy, increasing the demand for energy and crude oil. OPEC+ is increasing production for two reasons OPEC+ recently told markets it will increase production. However, the decline in petroleum prices caused the cartel to delay the output increase by two months. OPEC+ has kept production cuts in place since the 2020 pandemic. Two concerns could drive the decision to eventually lift the cuts and return to increased output:  U.S. output is currently running at 13.3 million barrels per day. In April 2024, Saudi Arabia produced just under 9.5 mbpd, and Russia produced 9.871 mbpd. Increased U.S. output could be a move to increase revenues by selling more petroleum. The upcoming U.S. election could mean even more U.S. oil output if former President Trump wins the White House. He has pledged a return to \"drill-baby-drill\" and \"frack-baby-frack\" energy policies. OPEC+ could be stepping up output to pocket as much short-term revenue as possible if the U.S. returns to a dominant production and export position.  U.S. energy policy returned pricing dominance to the cartel in 2020, but the election could change the leadership role over the coming years beginning in 2025. From 2016 through 2020, under the Trump administration, the range in the continuous contract NYMEX crude oil futures market was from below zero in April 2020 to $76.90 per barrel in October 2018. From January 2021 through today, the range has been from $47.18 in January 2021 to $130.50 in March 2022. The bottom line is that OPEC+ could be selling more oil to depress prices in the hope that the former President will lose the election. The climate change initiatives that have handed the pricing dominance to OPEC+ would remain under a Harris administration for the coming four years. VDE is under pressure - Levels to watch the downside Oil-related companies move higher and lower with the petroleum price. The fund profile for the Vanguard Energy Index Fund ETF Shares states: Fund Summary for the VDE ETF Product (Seeking Alpha) VDE's top holdings include: Top Holdings of the VDE ETF Product (Seeking Alpha) VDE has a 35.65% exposure to the two leading U.S. oil companies, Exxon Mobil Corporation (XOM) and Chevron Corporation (CVX). At $120.50 per share, VDE had over $10 billion in assets and trades an average of over 409,000 shares daily. VDE charges a 0.10% management fee, but its $3.83 annual blended dividend translates to a 3.18% yield. The dividend covers the expense ratio in under one month. Continuous contract NYMEX crude oil prices have dropped 25.5% from $87.63 in April 2024 to the most recent September $65.27 low. Six-Month Chart of the VDE ETF Product (Barchart) The chart shows that VDE has declined 16.25% over the same period, falling from $137.92 on April 12, 2024, to a $115.51 low on September 10.  Crude oil prices have declined more than the VDE ETF, but a continuation of the bearish trend in petroleum prices that sends them to lower lows will likely weigh on VDE. Meanwhile, seasonal factors, Chinese economic weakness, OPEC's strategy, geopolitical events, and the U.S. election will determine if the current selloff is a buying opportunity or a gateway to lower prices for the coming years. In late September 2024, the path of least resistance of crude oil and oil-related assets is a coin toss.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2470763080"}