All developed economies and the majority of emerging economies depend on oil to drive their growth. The majority of oil is used as a fuel for the power generation and transportation industries. It is also used to pave roads, as a raw material for plastic, and as a source to heat for homes with.
A Research Paper submitted to the of the University of Surrey indicates that “It is generally accepted that oil has been vitally important to the global economy and the world has experienced growth in oil consumption for the majority of years since the early 1900s. In all probability, this trend will continue with the majority of the growth coming from the emerging economies – hence the global importance of oil is likely to continue.”
An article from the indicated energy-traded funds are getting as much as seven times more investments despite the oil prices being lower than the end-of-year prices of 2013. The attitude of investors may be in part to the increase projections made by the for 2014 as it increased to about 1.3 million barrels per day.
Apart from higher oil and gas consumption, indicated that jobs in the oil and gas sector have been on the rise. Between 2007 and 2013, employment was placed at 40% which is way above the negative 3% recorded by the United States. Chief Operating Officer Saman Ahsani of indicated that workforce may house as many as 3,000 personnel. These sites can include everything from living quarters, dining areas, leisure equipment, and even training facilities.
The consumption projection of oil and gas may not be the only thing guiding ETFs. A positive outlook on the employment of this sector may also be sending a much stronger signal as it has been outperforming overall figures for the United States.