The recent surge in global oil prices has significantly impacted the performance of various oil exchange-traded funds (ETFs), particularly those linked to crude oil, leading to unprecedented price premiumsThis has raised concerns among investors and prompted multiple advisories from fund managers regarding the potential risks associated with these developments.

Take, for instance, the performance of the Jiashi S&P Oil and Gas ETF (159518), which experienced a staggering closing premium of 11.34% on January 14. In response to this rapidly increasing premium, the fund announced a temporary suspension of trading, effective from the opening of the market on January 15 until 10:30 AMThis marked the second consecutive day that the fund issued such a suspension due to high premiums, highlighting the volatility in the marketSimilarly, the Fortune S&P Oil and Gas ETF (513350) declared a trading halt after experiencing a premium of 14.76% the previous day

Even after resuming trading, the fund's share price remained significantly above its net asset value, showcasing an 11.87% premium—a clear indication of investor interest amidst rising oil prices.

According to data from Wind, since the beginning of 2025, the Jiashi S&P Oil and Gas ETF has collectively risen by over 7%. Other notable QDII funds that focus on oil, such as the Huabao S&P Oil and Gas QDII, Bosera S&P Oil and Natural Gas QDII, and Jiashi Crude Oil QDII, have also seen their cumulative gains exceed 5%. This trend signifies a strong interest in oil-related investments as oil prices have fluctuated due to geopolitical uncertainties and supply restrictions.

Economist Zhu Bin from Nanhua Futures provided insights into the current situation, emphasizing that while the recent uptick in oil prices is partly driven by supply concerns, the key determinant of long-term oil price trends lies in demand

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He stated that although geopolitical factors may cause short-term fluctuations, a stable demand side is essential for sustained price risesConsequently, he anticipates that oil prices will continue to oscillate at high levels without significant long-term increases.

The current high premiums on crude oil QDIIs have led to frequent warnings from financial institutionsThe tightening of oil supply has fueled this recent uptrend in oil pricesAs of January 14, WTI crude futures and Brent crude futures reached approximately $78 and $80 per barrel, representing close to an 8% increase since the start of the yearThe significant profitability of these QDIIs means that the trading price consistently exceeds their net asset values, with both the Jiashi and Fortune S&P Oil and Gas ETFs witnessing single-day gains of around 9% and an astonishing premium rate of 15% on January 13 alone.

If we analyze the situation over a broader timescale, from January 2 to January 14, the Fortune S&P Oil and Gas ETF published premium risk alerts for nine consecutive trading days, while the Jiashi S&P Oil and Gas ETF issued seven such warnings and announced two trading suspensions

Fund companies have urged caution, warning that purchasing funds at inflated premiums could lead to potential losses, advising investors to approach such situations with care.

One fund manager based in Shanghai highlighted that ETF prices generally fluctuate around their net asset valuesHowever, various systemic risks, liquidity issues, and market dynamics can distort this relationshipWhen the arbitrage mechanism fails in the short run, it often results in excessive premiumsIt is crucial to underscore that such high premiums are not sustainable; they tend to diminish rapidly, which may expose investors to significant risks of loss.

Despite the exuberance of rising oil prices, there is skepticism about the longevity of these trends due to potential disruptions in supplyIn recent months, crude oil prices rebounded as Brent crude broke through the $80 per barrel mark, contrasting sharply with its previous downward trajectory.

Examining the performance of oil-focused QDII funds reveals that many have surged at the start of the year, particularly those that concentrate on oil investments

Wind's statistics indicate that out of approximately 653 QDII funds, the top 21 in terms of net asset growth since 2025 have all been oil-focusedSpecifically, the Jiashi S&P Oil and Gas ETF has surpassed a 7% increase since the year began, alongside several other funds that have also reported more than a 5% rise.

In terms of fund holdings, data from the U.SCommodity Futures Trading Commission states that as of the week ending December 17, 2024, long positions in NYMEX crude oil futures rose by 23,800 contracts, or 1.37%, reaching a total of 1,763,960 contractsAdditionally, the non-commercial net long positions increased by 39,878 contracts, making up 12.5% of the total open interest, which stands at 1,827,905 contracts—a month-over-month increase of 19,678 contracts or 1.09%.

Zhu Bin also pointed out that oil price fluctuations in 2025 will be closely tied to global demand

Predictions from major institutions such as the IPEC, IEA, and EIA suggest a significant decline in demand growth compared to 2024, despite some variances in their forecastsThis aligns with an overall trend indicating a cooling off of demand as energy consumption patterns evolve.

From a mid to long-term perspective, Huabao's oil and gas fund manager, Yang Yang, asserted that the world is entering a new energy transition cycle, leading oil and gas companies to adopt a more conservative approach toward future capital expendituresA prolonged shortage in supply could maintain elevated oil prices, particularly within the context of a global energy transitionTraditional energy sources may remain high amid insufficient investments from upstream companies until renewable sources can effectively replace conventional energy and dominate the market.

In terms of demand outlook, Zhu believes that the United States, the world’s largest oil consumer, currently shows low cracking margins, indicating weak profitability between downstream and upstream products