What ETF best tracks the price of gasoline, or else crude oil?
There is no ETF that closely tracks oil or gasoline. This is because all existing oil and gasoline ETFs hold futures contracts or other derivatives. Storing the oil and gasoline would be prohibitively costly. Futures contracts are prone to contango and backwardation, sometimes resulting in large deviations from the price of the physical commodity. Contrast oil ETFs with metal ETFs, which track nicely. EDIT: See this article about contango. The UNG chart is particularly ugly. Do not buy any commodity tracking ETF without reading and understanding the prospectus. Some of these things get exposure to the underlying commodity via swaps or other hocus-pocus derivatives, so you're really buying credit obligations from some bank. Others are futures based, and you need to understand your potential upside AND downside. If you think that oil prices are going to continue to rise, you should look into sector funds, or better yet individual stocks that are in the oil or associated businesses. Alternatively, look at alternative investments like natural gas producers or pipeline operators. UNG    United States Natural Gas Fund  Natural Gas USO    United States Oil Fund  West Texas Intermediate Crude Oil UGA    United States Gasoline Fund     Gasoline DBO    PowerShares DB Oil Fund     West Texas Intermediate Crude Oil UHN    United States Heating Oil Fund  Heating Oil I believe these are as close as you'd get. I'd avoid the double return flavors as they do not track well at all.  Update - I understand James' issue. An unmanaged single commodity ETF (for which it's impractical to take delivery and store) is always going to lag the spot price rise over time.   And therefore, the claims of the ETF issuer aside, these products will almost certain fail over time. As shown above, When my underlying asset rises 50%, and I see 24% return, I'm not happy. Gold doesn't have this effect as the ETF GLD just buys gold, you can't really do that with oil.
First price isn't artificially maintained at a level. When a refining company signs a contract to buy crude from a supplier, it promises to buy at a certain price with options for increase and decrease due to the fluctuating prices in the market. And it buys crude to build up a certain buffer to supply itself for a certain duration, in case of supply problems. As it had bought oil at a higher price, it would be reluctant to lower the prices even if the current crude it buys is at a lower cost. If it buys oil from the open market, it has no other option than to pass on the hike on to the consumers, so a more intense fluctuation in the prices of oil at the point, where you buy it. Some airlines used hedging to take care of the spurts in the price of oil, to mantian their operating margins.  And moreover refining and distribution is a very low margin business, so the company has an incentive to sell at a higher cost if required. So you think the Port of Beaumont is going to be simultaneously loading tankers with crude oil for export and unloading tankers with imported crude. Really.  They're trying to send oil to Texas because that's where the oil refineries are. That's why there's a giant gasoline pipeline there in the first place. Found a [newer source.](http://oilprice.com/Energy/Crude-Oil/Inside-The-Worlds-Most-Sophisticated-Refining-Industry.html) but it backs up your position pretty well.   However, &gt;The U.S. would send its ultra-light crude oil from shale formations up to Canada and Canadian producers would blend that ultra-light oil with heavy crude from Canada’s Oil Sands  That was a good read. Thanks for calling me out, it's been a few years since I've been in the field (South Texas Eagleford almost exclusively). Cheers. Some liquidity Since you're using IB, and you seem to be an investor not a trader, so you won't notice especially if you walk your orders, but you will suffer the bid/ask spread as everyone else albeit wider.   If buying, the best strategy unless if one is time constrained is to walk the entire bid from the best bid to the best ask.  It is highly likely that someone will hit your order before you hit the best ask.  If they don't, as a long term investor, the few pennies won't make or break you, especially if the price per share is 100 USD equivalent, but it is an excellent habit to form and fun. Since you're buying ETFs, even though your orders are small, you would be adding liquidity to your market, helping it become more efficient because your orders could be used to arbitrage against all of the ETF's holdings, in turn providing liquidity for those holdings. No liquidity This could only be done with an extremely low cost broker like IB because the trading commissions would make it prohibitively expensive. There are huge risks when trading an illiquid security such as VEUR.  EWL would be much less risky thus less expensive. Securities with no liquidity can be traded, but they must be traded very carefully.  In the case of a security that can only attract about 20 shares per day in volume, only single shares should be bid.  The market makers, suffering from a dearth in volume may not even be willing to haggle; therefore, the only recourse is a statistical arbitrageur, who will attempt to profit from the spread between other more liquid versions of the security. Considering the available alternative, VEUR is not recommended to trade. great example of levered tracking error is any 2x/3x VIX etf. during periods of high volatility (like last week) you will be able to realize much higher returns on the underlying index as the levered and inverse ETFs are unable to replicate their intended performance using market securities.  it is not uncommon to see the VIX up ~30% with levered ETFs only netting ~10-12% as opposed to the intended 60 or 90%, for example Eh using a benchmark that's designed for Hedge Funds is a little different. I was guessing the other comment was referring to SPX or similar for the 10%. Most people don't understand HF as investment vehicles. They are meant to be market neutral and focused on absolute returns. Yes, you can benchmark them against each other / strategy but most people here seem to think that HFs want to beat the S&amp;P 500. Ohhhh. Well thank you for that info. I know I could've Googled it all and while I'm a sticker for doing your own research, it's nice to hear it from someone in the know. Gotta pass on knowledge to those who don't know. Is it cheap to buy an ETF? "This is the best tl;dr I could make, [original](https://asia.nikkei.com/Markets/Commodities/China-sees-new-world-order-with-oil-benchmark-backed-by-gold?page=1) reduced by 93%. (I'm a bot) ***** &gt; The contract could become the most important Asia-based crude oil benchmark, given that China is the world&amp;#039;s biggest oil importer.  &gt; &amp;quot;It is a mechanism which is likely to appeal to oil producers that prefer to avoid using dollars, and are not ready to accept that being paid in yuan for oil sales to China is a good idea either,&amp;quot; Macleod said.  &gt; Yuan oil futures are expected to attract interest from investors and funds, while state-backed oil majors, such as PetroChina and China Petroleum &amp; Chemical will provide liquidity to ensure trade.   ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/70lu5h/china_announces_the_backing_of_the_yuan_by_gold/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ ""Version 1.65, ~211390 tl;drs so far."") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr ""PM's and comments are monitored, constructive feedback is welcome."") | *Top* *keywords*: **oil**^#1 **China**^#2 **Saudi**^#3 **yuan**^#4 **gold**^#5"