Rising tensions in the Middle East is no doubt the prime mover right now when it comes to soaring oil prices, but oil tycoon Harold Hamm says that prices could move as high as 19%–irrespective of what happens in the Middle East.
Following a U.S. air strike on Iraq that killed a high-ranking Iranian general last week, oil prices moved higher on the notion that further conflict would cause disruptions in oil production. Hamm foresees further price moves to the upside, with oil going as high as $75 per barrel.
‘I think we’re probably headed for $75 oil price in the next six months,” said Hamm. “That’s where the market’s going, and we’ll get there. It’s not too much to ask.”
Following the incident, things didn’t calm down over the weekend as oil hit a seven-year high in Monday’s trading session. Bullish oil ETF investors rejoiced as funds like the SPDR S&P Oil & Gas Exploration & Production ETF (XOP ) moved higher–XOP rising 1.04% after Monday’s market close.
The S&P Oil & Gas Exploration & Production Select Industry Index represents the oil and gas exploration and production segment of the S&P Total Market Index. This index is designed to track the broad U.S. equity market.
The oil and gas exploration and production segment of the S&P TMI comprises the following sub-industries: Integrated Oil & Gas, Oil & Gas Exploration & Production, and Oil & Gas Refining & Marketing. The Index is one of 21 of the S&P Select Industry Indices, with each designed to measure the performance of a narrow sub-industry or group of sub-industries determined based on the Global Industry Classification Standard.
Leveraging Energy Sector Strength
For a leveraged broad market play on energy, traders can consider funds like the Direxion Daily Energy Bull 3X Shares (ERX ) for bullish plays and the Direxion Daily Energy Bear 3X Shares (ERY) for bearish opportunities should they arise. ERX rose 2.19% at the close of Mondays session.
- ERX seeks daily investment results equal to 300% of the daily performance of the Energy Select Sector Index. The index is provided by S&P Dow Jones Indices and includes domestic companies from the energy sector which includes the following industries: oil, gas and consumable fuels; and energy equipment and services.
- On the other end of the spectrum, ERY seeks daily investment results that equate to 300% of the inverse of the daily performance of the Energy Select Sector Index. The index is provided by S&P Dow Jones Indices and includes domestic companies from the energy sector which includes the following industries: oil, gas and consumable fuels; and energy equipment and services.
This article originally appeared on ETFTrends.com.