Energy sector-related exchange traded funds rallied on Monday on hopes that an expanding economy could fuel further demand in 2022 despite supply concerns from the Organization of Petroleum Exporting Countries and rising infections rates of the ongoing COVID-19 pandemic.

Among the best performing non-leveraged ETFs of Monday, the VanEck Vectors Oil Service ETF (NYSEArca: OIH) gained 6.7% and the iShares U.S. Oil Equipment & Services ETF (NYSEArca: IEZ) increased 6.4%. Meanwhile, the broader Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy exchange traded fund, was up 3.1%.

In addition, the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, were up 0.9% and 1.2%, respectively. WTI crude oil futures were up 1.1% to $76.0 per barrel, and Brent crude gained 1.5% to $79.0 per barrel.

“The monthly OPEC + meeting that will be developing during the next couple of days is more likely to prove bullish than bearish since several of the OPEC members are having difficulty achieving assigned quotas,” Jim Ritterbusch, president of Ritterbusch and Associates, told Reuters.

OPEC and its allies, or OPEC+, will meet on Tuesday and will likely agree on an output hike.

Meanwhile, rising cases COVID-19 cases in part due to the spreading Omicron variant has dampened the start of the new year.

“Infection rates are on the rise globally, restrictions are being introduced in several countries, the air travel sector, amongst others, is suffering, yet investors’ optimism is tangible,” Tamas Varga of oil broker PVM, told Reuters.

Nevertheless, the energy market has been on a strong rebound over the past year, with Brent crude oil prices 50% higher last year as the start of a global recovery from the COVID-19 pandemic and OPEC+ supply cuts helped support prices, even while infections hit record highs.

“Crude and oil product prices should benefit from oil demand moving above 2019 levels,” according to UBS analysts including Giovanni Staunovo. “We expect Brent to rise into a $80–90 range in 2022.”

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