The Lower Oil Falls, the Greater the DUG Benefits

Oil is down to $68 and the oil companies shares are feeling the pinch.  However the ProShares UltraShort Oil & Gas (ETF) (AMEX:DUG) is up 16% today thanks to oil and oil stocks falling hard.

OPEC is not happy, Friday's emergency meeting of the Organization of Petroleum Exporting Countries has them in a tailspin, and the world expects them to lower production. 

Chakib Khelil, Algeria's oil minister and OPEC's current president, speaks of a "significant" reduction from the present daily output of around 29 million barrels, and expectations are that the group could pare up to 2 million barrels from that figure.

Rare cuts of that magnitude have in the past led to significant crude price hikes.

So you can you benefit if the oil companies and their stocks continue to fall?

That would be the ProShares UltraShort Oil & Gas (ETF) (AMEX:DUG). ProShares UltraShort Oil & Gas (the Fund) seeks daily investment results that correspond to twice the inverse daily performance of the Dow Jones U.S. Oil & Gas Index. The Dow Jones U.S. Oil & Gas Index measures the performance of the oil and gas industry of the United States equity market. Component companies include oil drilling equipment and services, oil companies (major and secondary), pipelines, liquid, solid or gaseous fossil fuel producers and service companies.

As of today, that means the DUG is betting against these players, this can all be found at ProShare's website: http://www.proshares.com/funds/dug.html?Index

 Discliamer: No positions in any of the securities mentioned in this publication.