Oil Is Relatively Cheap Again; Time To Buy? (USO, DBO, RSX)
Don't look now, but WTI crude is back below $86 after making a couple of trips above $90 in short order. Could now be a buying opportunity? In all likelihood, yes. Two separate but equally bullish developments should push crude oil prices back towards the $100 level in 2011. The first is a strengthening global economic recovery and the second is continued inflation fears.
The purest way to play higher oil prices is through the futures market, but investors who wish to use ETFs may want to look at the United States Oil Fund ETF (NYSE: USO) and the PowerShares DB Oil Fund ETF (NYSE: DBO). Another interesting idea for gaining exposure to crude prices is to buy the Market Vector Russia ETF (NYSE: RSX), which is an ETF that tracks Russian stocks. The Russian economy is quite sensitive to changes in the price of crude oil.
Furthermore, while most emerging markets have been getting hit hard in 2011, the RSX is up around 3%. If crude makes its way above $90 again in the coming weeks and then makes a run at $100 later in the year, the RSX should provide solid returns.
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