The ongoing economic expansion and supply concerns over Iran, the Organization of Petroleum Exporting Countries’ third largest producer, have helped bolster crude oil exchange traded funds, with West Texas Intermediate crude hitting three year highs.
On Wednesday, the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, rose 2.2% and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, gained 1.9%.
Meanwhile, WTI crude oil futures was up 2.4% to $61.8 per barrel on Tuesday while Brent crude was 2.0% higher to $67.9 per barrel.
Crude oil strengthened Wednesday, with prices U.S. crude topping $61 a barrel for the first time in two-and-a-half years, CNBC reports.
The broader market strengthened on healthy economic data, including strong U.S. manufacturing data that increased more than expected and figures that showed German unemployment hit a record low. Manufacturing and construction reports also fueled expectations for a robust U.S. economy in 2018, Reuters reports.
“Oil got bought up with everything else. This economic data this morning was impressive to say the least,” John Kilduff, founding partner at energy hedge fund Again Capital, told CNBC. “It just speaks to something we don’t talk about a lot, which is the demand side of the equation.”
Meanwhile, on the supply side, concerns over protests in Iran have also supported oil markets this week, though analysts project the country’s supplies do not face any immediate risks.
“Iranian oil production is unlikely to be disrupted in the near term unless the oil workers go on strike, and there is nothing yet to indicate that this is going to occur,” Helima Croft, global head of commodity strategy at RBC Capital Markets, told CNBC
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