During this week, the stock markets experienced losses in most sectors. Thus it is no surprise that the cleantech and alternative energy sectors were among the bearish sectors.
PowerShares Cleantech Portfolio (PZD) was one of the losing exchange traded funds as can be seen in the following graph.
The solar energy ETFs did even worse than the Cleantech Portfolio. Both Market Vectors Solar Energy (KWT) and Claymore / MAC Solar Index showed considerable weakness that can be explained by the fall in the crude oil price after a long rally.
The development of the alternative energy sector stocks will continue to be dependent on the price of oil. According to a report by International Energy Agency, the global oil demand will drop 2.9 percent this year to an average 83.3 million barrels a day and U.S. consumption will fall 4.9 percent to 18.55 million barrels a day.
The analysts cited by Bloomberg predict the oil will continue to be weak in the next week. This does not, of course, change the long-term potential of the alternative energy sectors, as in the long run the price of fuel will probably continue to rise.
If the price of oil shows considerable weakness during the next weeks, the alternative energy sector will lose, as well. This would provide a good opportunity for buying some of the interesting solar energy exchange traded funds at a price considerable lower than after the rally of last three months.
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