Energy ETFs Rally Ahead of OPEC+ Meeting | ETF Trends

Energy-related exchange traded funds jumped Friday ahead of the Organization of Petroleum Exporting Countries and their allies, or OPEC+, meeting over the Labor Day weekend.

Among the best-performing non-leveraged ETFs on Friday, the SPDR Oil & Gas Equipment & Services ETF (XES) advanced 4.5%, the iShares U.S. Oil Equipment & Services ETF (IEZ) increased 4.0%, and the VanEck Vectors Oil Service ETF (OIH) gained 3.9%. The broader Energy Select Sector SPDR (XLE), the largest equity-based energy exchange traded fund, was up 1.8%.

Meanwhile, the United States Oil Fund (USO), which tracks West Texas Intermediate crude oil futures, and the United States Brent Oil Fund (BNO), which tracks Brent crude oil futures, were up 0.7% and 1.6%, respectively. WTI crude oil futures were up 1.1% to $87.5 per barrel, and Brent crude gained 1.4% to $93.6 per barrel.

OPEC+ will meet on September 5 to discuss a potential production cut to better stabilize oil markets at a higher level.

“We expect the group to leave output targets unchanged. Their own numbers show a tighter-than-expected market. And they would probably also want some more clarity on Iranian supply before making any big changes to output policy,” Warren Patterson, head of commodities strategy at ING, told the Wall Street Journal.

Meanwhile, the Group of Seven finance ministers agreed to implement a price cap on Russian oil exports to curb Moscow’s access to funding for the war effort in Ukraine.

“We aim to align implementation with the timeline of related measures within the EU´s sixth sanctions package,” according to a statement from the finance ministers representing the G-7, CNBC reports.

The initial price cap would be set “at a level based on a range of technical inputs.”

Russia has warned that it will halt sales to countries imposing a price cap on Russian crude exports, arguing that limits on the price of oil would further destabilize the global economy.

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