Oil has certainly seen better days as of late, but in Tuesday’s trading session, it got the boost it needed after a Reuters report said the Organization for Petroleum Exporting Countries (OPEC) would consider deeper production cuts when it meets in December.
“It looks like OPEC is confirming that they are going to do whatever it takes to support oil,” Phil Flynn, senior market analyst at Price Futures Group, told financial news site MarketWatch.
West Texas Intermediate crude immediately responded to the upside, gaining about 1.6% to reach above $54 per barrel. Meanwhile, Brent crude headed 1.2% higher to reach $59.69 per barrel.
The news is a welcome sign for oil traders who were barraged with negative news surrounding the U.S.-China trade war and fears that global demand for oil would wane amid an economic downturn.
“Despite all of the doom and gloom talk and the expectations of a big oil supply build, the whisper number on the street may actually give the market a surprise, when the American Petroleum Reports (API) releases its report tonight,” wrote Price Futures’ Flynn, in a daily research note.
Traders are also awaiting fresh data from the American Petroleum Institute and U.S. Energy Information Administration this week to better gauge the prospects for oil through the rest of 2019.
“Despite low refinery runs and an expected build in the Cushing, Oklahoma delivery hub, sources are suggesting that we may get a big surge in U.S. oil exports and a drop in U.S. oil imports and could set the stage for a surprise crude oil draw,” he wrote.
Leveraged Oil Plays to Consider
3 leveraged ETFs to consider include the following:
- United States 3x Oil USOU: seeks the daily changes in percentage terms of its shares’ per share NAV to reflect three times the daily change in percentage terms of the price of a specified short-term futures contract on light, sweet crude oil less the fund’s expenses. USCF will endeavor to have the notional value of the fund’s aggregate exposure to the Benchmark Oil Futures Contract at the close of each trading day approximately equal to 300% of the fund’s NAV. The Benchmark Oil Futures Contract is the futures contract on light, sweet crude oil as traded on the NYMEX, traded under the trading symbol “CL” (for WTI Crude Oil futures).
- VelocityShares 3x Lng Crude Oil ETN New UWT: seeks to replicate, net of expenses, three times of the S&P GSCI® Crude Oil Index ER. The index tracks a hypothetical position in the nearest-to-expiration NYMEX light sweet crude oil futures contract, which is rolled each month into the futures contract expiring in the next month. The value of the index fluctuates with changes in the price of the relevant NYMEX light sweet crude oil futures contracts.
- UBS ETRACS ProShares Dly 3x Lng Crud ETN WTIU: provides a daily long leveraged exposure to the performance of the Bloomberg WTI Crude Oil Subindex ERSM. The index is designed to measure the return from a rolling long position in WTI crude oil futures contracts that trade on major U.S. exchanges.
This article originally appeared on ETFTrends.com