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“But we see reasons to believe price gains will moderate even with an OPEC extension,” said BlacRock. “Major global oil agencies predict non-OPEC supply will rise next year, pressuring oil prices. Increased hedging activity in the futures market by U.S. shale producers may signal an intent to ramp up production, we believe. A clearing up of logistical bottlenecks caused by recent hurricanes should also boost U.S. oil exports, increasing global supply.”

While the Organization of Petroleum Exporting Countries have moved to cut production, expectations of continued U.S. shale production remain a deterring factor. Nevertheless, recent U.S. inventory drawdowns, which if sustained, could support the current price levels.

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