Oil-Bullish ETNs Soar as Tensions in Middle East Drive Up Crude Prices

Oil-related exchange-traded notes (ETNs) have seen significant gains in recent weeks due to rising international crude prices. The surge is attributed to renewed Middle East tensions, which have led to a sharp increase in oil prices. According to the Korea Exchange, the 'Meritz Leverage WTI Crude Oil Futures ETN(H)' closed at 51,490 won on the 24th, up 69% from its value at the end of last month.

The product tracks twice the daily return of West Texas Intermediate (WTI) crude futures listed on the New York Mercantile Exchange (NYMEX), effectively doubling the investor's gains when WTI futures prices rise. Other oil-bullish ETNs have also shown impressive returns, including the 'Shinhan Bloomberg Leverage WTI Crude Oil Futures ETN B' (up 61.1%), and the 'Samsung Leverage WTI Crude Oil Futures ETN', 'Korea Investment Leverage WTI Crude Oil Futures ETN B', and 'KB S&P Leverage WTI Crude Oil Futures ETN B' (all up 60.8%).

Seven out of the top 10 ETNs with the highest returns this month are focused on rising international oil prices, a stark contrast to the KOSPI's 21% decline. Goldman Sachs forecasts that Brent crude could exceed $120 per barrel in the fourth quarter if Middle East conflict escalates further.