Oil at $70: Play it with DIG and DUG

Thanks to BP (NYSE:BP) and falling oil prices, the oil & gas stocks have been under pressure as the ProShares UltraShort Oil & Gas (ETF) (NYSE:DUG) has gained 26% in the last month and the ProShares Ultra Oil & Gas (ETF) (NYSE:DIG) has fallen 23%.  Why pick individual oil stocks when you can bet on a ETF that contains the best in the sector.

(CNNMoney.com) What prices are doing: Crude for July delivery, which becomes the active contract Friday, slipped 76 cents, or 1.07%, to settle at $70.04 a barrel.

The day before, the June futures contract settled at $68.01 when it expired. Gasoline prices fell for the 15th consecutive day, slipping to $2.827 a gallon from $2.840 the day before, according to a survey by motorist group AAA.

What's moving the market: U.S. equities posted modest gains in the afternoon after a choppy morning. Investors have pulled out of oil amid volatile stock market, seeking safe-havens like Treasurys or the dollar.

Traders have been worried that economic instability in Europe may cut demand for fuel. Oil prices, as a result, have fallen about $15 per barrel in a month.

Investors also harbor some concerns about growing oil stockpiles that seem to be rising too fast to keep up with demand. Weekly supply reports issued on Wednesdays by the U.S. Energy Information Administration, have shown current oil supplies exceed inventory limits across all three major categories: crude, gasoline and distillates.

Back to the 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. The Fund takes positions in securities and/or financial instruments that, in combination, should have similar daily return characteristics as –200% of the daily return of the index.

The DUG is made up of the following securities: