Oil is already one of this year’s best-performing commodities, but professional traders appear comfortable betting on more upside for crude. The United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, is higher by almost 38% this year while the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, is up 33.53%.
Current OPEC compliance with production cut plans remains above their historical average, and it usually takes between two to three quarters for inventories to normalize after the cuts. While demand has yet to catch up to elevated supplies, rebounding economies in Europe and steady economic growth in the U.S. could prompt more upside for oil this year.
“Money managers boosted optimistic wagers on West Texas Intermediate crude to the highest since October in the week ended April 16, according to government data released Friday,” reports Bloomberg. “Total long and short positions swelled to the most in six months, a sign the rally is luring back investors after 2018’s late-year crash. The U.S. benchmark has jumped about 40 percent this year.”
5 Biggest Long Crude Oil ETFs By AUM
|Symbol||ETF Name||Total Assets ($MM)||YTD||Avg Volume||Previous Closing Price||1-Day Change|
|USO||United States Oil Fund||$1,499.89||42.75%||20,432,716.00||$13.79||0.88%|
|UWT||VelocityShares 3x Long Crude Oil ETN||$414.30||169.78%||9,541,655.00||$24.01||2.65%|
|UCO||ProShares Ultra Bloomberg Crude Oil||$412.93||95.86%||2,903,967.00||$26.05||1.92%|
|DBO||Invesco DB Oil Fund||$317.52||31.88%||412,611.00||$11.17||0.81%|
|OILU||ProShares UltraPro 3x Crude Oil ETF||$143.42||165.33%||734,014.00||$35.74||2.85%|
This is a list of all Long Crude Oil ETFs traded in the USA, as of April 24, 2019, which are currently tagged by ETF Database. * Assets in thousands of U.S. Dollars.
Bullish Outlook for Energy, Oil
Looking ahead, fundamentals are improving. The International Energy Agency projects consumption to increase each quarter of 2019 year-over-year, albeit at a slower-than-usual pace for the first quarter. Meanwhile, on the supply side, Saudi Arabia and other members of the Organization of Petroleum Exporting Countries have been cutting output. Additionally, U.S. sanctions on Iran and Venezuela have reduced further bets on international supplies.
“The net-long WTI position — the difference between bets on higher prices and wagers on a decline — rose 10 percent to 303,366 futures and options contracts, the U.S. Commodity Futures Trading Commission said. Long positions climbed 8.4 percent, while shorts declined 6.5 percent,” according to Bloomberg.
Crude prices plunged 44% from a multi-year high in early October through the nadir on Christmas Eve as investors ditched energy in response to rising pessimism over global economic growth and potentially diminished demand across a range of commodities.
“The net-long position on Brent, the international benchmark, rose 6.1 percent to 379,865 contracts, also the highest since October, according to London-based ICE Futures Europe exchange,” according to Bloomberg.
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