International ETFs For Oil Rebound

The price of crude oil continues to fall as supply increases and demand is waning.

There are pros and cons to the price of oil hitting the lowest level in four years. For example, the consumer is seeing lower gas prices when they fill up their gas tank. However, energy-reliant countries are getting hurt by the fall in energy prices.

Russia is one of the largest oil producers in the world, just behind the United States and Saudi Arabia. The country has had to deal with falling energy prices as well as a slew of sanctions against it from the United States and eurozone. The Market Vectors Russia ETF Trust RSX recently hit a five-year low and the sellers appear to remain in control. If energy prices rebound it could help slow the fall, however, the sanctions remain a major issue.

Nigeria, a member of OPEC, saw its August oil production jump to the highest level since January 2006 and the country continues to rely on the commodity to boost its economy. The Global X Nigeria Index ETF NGE hit its lowest level since it began trading in April 2013 as it fell with the price of oil. If one country ETF stands to benefit from an oil rebound, it could be NGE as its trading patterns have mimicked oil over the last few months. The 30 percent fall in the last four months could be a great long-term opportunity for the fast-growing frontier country.

Norway is the world’s seventh-largest oil exporter and supplies the European Union with one-fifth of its gas. There are concerns as the countries oil production peaks, it could spell trouble for the economy. The last few months are not a good sign of what may be on the horizon. The Global X FTSE Norway 30 ETF NORW has moved lower with oil prices and hit a two-year low in October before beginning to rebound. Because the country is more stable than both Russia and Nigeria, the risk is not as high as the former countries.

The direct rebound in oil prices could be played with ETFs that track the commodity or related stocks, but the country ETFs are a secondary option for the individual investor. The diversification with this strategy helps lower the direct exposure to oil prices.