Energy-related exchange traded funds climbed on Monday on expectations of improving demand and a slower production increase out of the Organization of Petroleum Exporting Countries.
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 1.0%, respectively, on Monday. Western Texas Intermediate crude oil futures were up 0.5% to $84.0 per barrel, and Brent crude gained 1.0% to $84.5 per barrel.
Oil prices are expected to remain at elevated levels of $80 toward the end of the year as tight supplies and higher gas bills fuel a switch to crude for power generation, Reuters reports.
“We feel that their position will be one where the status quo will be maintained while a ‘wink and a nod’ will be provided in accepting violation of quotas should Brent values gravitate back up into new 7-year high territory,” Jim Ritterbusch, president of Ritterbusch and Associates LLC, told Reuters.
Meanwhile, OPEC and its allies, or OPEC+, is sticking to its planned output increases, but supplies have only risen 140,000 barrels per day last month due to difficulties in Angola and Nigeria, Bloomberg reports. OPEC+ was projected to hit a 400,000 barrel per day production increase at its upcoming November 4 meeting.
The elevated oil prices have caused global leaders like President Joe Biden to urge OPEC and its allies to alleviate the surging fuel prices by raising output.
The combination of a rebound in fuel consumption with a growing global economy and ongoing supply issues have contributed to a global energy crunch that has forced energy prices up across the board and added to inflation fears.
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