Crude oil futures trading on the Nymex rose above $102 a barrel on Wednesday, lifting energy exchange traded funds that have rallied sharply from the October low.
U.S. Oil Fund (NYSEArca: USO) climbed about 3% in afternoon action Wednesday. Crude futures are trading above $100 a barrel for the first time since the summer.
Over the past month, the top four unleveraged ETFs all track oil prices. The iPath S&P GSCI Crude Oil ETN (NYSEArca: OIL), U.S. Oil Fund, PowerShares DB Oil (NYSEArca: DBO) and U.S. 12 Month U.S. Oil Fund (NYSEArca: USL) are up more than 12% the last month.
Since dipping below $80 a barrel on Oct. 3, West Texas Intermediate prices have increased almost 28% heading into Wednesday’s trade, Forbes reports. “One of the key drivers for rising oil prices is demand, which has held steady despite the turmoil in Europe, sluggish economic growth in the United States and a slowdown in China,” according to the article.
Meanwhile, hedge funds have increased their bullish bets on oil to the highest level since May on speculation Europe will resolve its debt crisis, Bloomberg reported.
Tensions in oil-producing countries are also contributing to the price spike. Iran is suspected of developing nuclear weapons, while Nigeria has been hit by sabotage and theft, the Associated Press reports.
U.S. Oil Fund