The oil and natural gas sector is heating up. Besides oil prices, what else should we watch?

This round of the oil and natural gas sector heating up was directly triggered by significant fluctuations in international oil prices. However, many investors have also noticed that the performance of oil and natural gas ETFs does not always synchronize perfectly with international oil prices. The core reason is that their underlying assets are different.

International oil prices generally refer to WTI or Brent crude futures prices, which are commodity assets. Their prices mainly reflect current supply and demand conditions. For example, when regional tensions escalate or transportation routes are blocked, the market worries about short-term supply disruptions, and crude futures tend to react quickly. Therefore, oil prices tend to reflect more short-term, immediate supply and demand changes.

In contrast, oil and natural gas ETFs invest in a basket of stocks of listed companies related to the oil and gas industry chain. Essentially, these are equity assets. Take the Invesco Oil & Gas ETF (159588; OTC Link A: 021822, C: 021823) as an example. It tracks the CSI Oil & Gas Index, which covers two main sectors: oil and natural gas. This includes upstream resource companies involved in exploration, extraction, storage, transportation, sales, processing, and equipment manufacturing, such as China National Petroleum Corporation (CNPC), Sinopec, CNOOC, and other upstream resource firms, as well as natural gas distribution and storage companies like XinAo Holdings and Jiufeng Energy. These assets are influenced not only by oil prices but also by broader market sentiment, capital flows, industry valuation, and company fundamentals. Their pricing anchors tend to be more aligned with medium- to long-term oil price expectations rather than short-term price spikes.

This can also be confirmed by the oil futures term structure. Recently, near-month crude futures have shown significantly larger gains than longer-dated contracts, indicating that the market still perceives this round of shocks as short-term disturbances rather than a complete rewrite of long-term logic. According to the latest assessments from overseas institutions, if the conflict eases in a short period, the overall impact on inflation and growth should be manageable; however, if it prolongs, the effects could significantly amplify.

This also means that when looking at the oil and natural gas theme, one should not focus solely on the daily fluctuations of international oil prices. Instead, it is more important to observe whether this supply disruption will further transmit to the earnings of listed companies and have a substantial impact on their long-term profitability.

It is important to note that the performance of the oil and natural gas sector is affected by multiple factors and carries certain uncertainties. Geopolitical developments, OPEC+ production policy adjustments, and non-OPEC supply changes can all cause disturbances in the sector. Investors should recognize the differences between commodity price volatility and stock asset performance, maintain a rational view of short-term market fluctuations, and be aware of investment risks.

Invesco Oil & Gas ETF (159588) FAQ:

Q: Why does the international oil price surge significantly, but the oil and natural gas ETF does not necessarily rise in tandem?

A: Because international oil prices are commodity prices mainly reflecting current supply and demand; whereas oil and natural gas ETFs are stock assets, whose pricing is more anchored to medium- and long-term oil price expectations, company profitability, and overall market risk appetite. Therefore, their movements are not always perfectly synchronized.

Q: When focusing on the oil and natural gas theme, what should I pay more attention to?

A: Focus on four key indicators: first, OECD commercial inventory changes, which are strong indicators of oil price signals; second, the price difference between near- and far-month futures, which reflects whether the market perceives shocks as short-term or long-term; third, OPEC+ production policies and non-OPEC supply increases; fourth, the actual impact of geopolitical tensions on transportation routes.

Q: What are the differences in net asset value performance between connection funds (like 021822, 021823) and ETFs (like 159588)?

A: ETFs are traded on the secondary market and track indices relatively closely. Connection funds participate through subscription and redemption, and during large-scale subscriptions, funds are not immediately fully invested after capital inflow due to relevant procedures. During this period, the fund’s size increases but the proportion of holdings may passively decline, potentially causing tracking errors. Additionally, connection funds need to hold some cash to handle daily redemptions, which can also lead to tracking deviations. Investors should fully understand the product features and view short-term tracking errors rationally.

The above analysis is for reference only and does not constitute investment advice. The market carries risks; please invest cautiously.