I’ve been bullish on commodities and the energy sector in particular since last year and currently hold a mix of commodity short-term future ETFs (UCO, BOIL, WEAT etc) and equities (CHK, DVN, AR, OXY, BTU… and outside energy ADM, MOS, ZIM, Glencore).
I listen to earnings calls and understand that depending on the particular company some are much more hedged for volatility in commodity prices than others (ie CHK vs AR).
But I’m a little unclear at the core on whether it makes sense to continue to hold the upstream producers or the underlying commodities (oil and US natgas).
It seems the equity prices are at least in part influenced by broader indices? Assuming a return of ES to 3000 this year as the base case, what are the relevant considerations? Would a basket of commodities or equities or both make the most sense in terms of both potential upside and downside?