“The oil market is tightening, and it’s tightening very quickly,” Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd., told Bloomberg “We see very strong demand, and it’s really broad based.”
The heightened oil prices has also translated to improved gains in broad commodity-based ETFs, such as DBC and GSG, since these diversified commodity investments include hefty energy allocations. For example, GSG holds 63.1% in energy and DBC includes 50.5% energy exposure.
“The price rises because of continued world growth and unexpected demand from developing markets,” Byron R. Wien, an executive at Blackstone Group LP, wrote in a note to investors.
Further supporting the commodities outlook, supply constraints, such as supply caps out of major global oil producers and wage negotiations at Chile’s copper mines, could support higher pricing.
For more information on the commodities market, visit our commodity ETFs category.