Oil ETFs Gush Higher on Hopes for a U.S.-China Trade Deal, OPEC Cuts | ETF Trends

Energy stocks and oil-related exchange traded funds led market gains Wednesday as investors shifted over to a more risk-on mood in anticipation of a U.S.-China trade deal.

Among the best performing non-leveraged ETFs on Wednesday, the Invesco S&P SmallCap Energy ETF (NasdaqGM: PSCE) rose 2.1% and the iShares U.S. Oil & Gas Exploration & Production ETF (Cboe: IEO) gained 1.6%.

The United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, advanced 1.8% and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, increased 1.8%.

Meanwhile, WTI crude oil futures were up 1.7% to $54.0 per barrel and Brent crude was 1.8% higher to $63.5 per barrel on Wednesday.

Despite the bearish inventory data that showed U.S. crude storage jumped by 3.6 million barrels last week to 450.8 million barrels, a 15-month high, Wall Street extended previous gains on optimism for a conclusion to the U.S.-China trade negotiations, along with signs that President Trump will likely sign a border-security deal to keep the government opened, the Wall Street Journal reports.

“The question is can Congress push through the deal and get it to the president before Friday to avert another government shutdown,” Dan Flynn at Price Futures told WSJ. “We also are hoping the U.S.-China talks resume with both sides intent on reaching a long-term agreement.”