Oil and energy sector-related ETFs led the charge on Thursday, with oil prices touching a three-month high, as an improving demand outlook driven by trade hopes helped offset rising U.S. inventories.
Among the best performing non-leveraged ETFs on Thursday, the Invesco S&P SmallCap Energy ETF (NasdaqGM: PSCE) increased 1.5% and SPDR Oil & Gas Equipment & Services ETF (NYSEArca: XES) gained 1.6% while the broader Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy exchange traded fund, was flat.
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 also 0.3% and 0.5% higher, respectively, on Thursday while WTI crude oil futures were up 0.5% to $61.2 per barrel and Brent crude rose 0.5% to $6.5 per barrel.
Oil futures pushed above their 100-day moving average, providing chart-watching technical investors see a bullish break, despite updated data that showed rising U.S. gasoline, diesel and heating oil stockpiles, Bloomberg reports.
“A resilient performance in the coming two weeks will flip the monthly technical picture unreservedly positive for next year,” PVM oil market analysts told Reuters.
Crude oil has strengthened more than 11% this month after the Organization of Petroleum Exporting Countries and allied producers like Russian agreed to cut output, along with hopes of an improving global economic outlook as the U.S.-China trade dispute moved toward a resolution.
The U.S. energy sector also found support from rising American crude exports, which hit its highest level since October last week, according to the Energy Information Administration.
“Oil is still looking overbought on the exuberance of the trade deal, but when you breakdown fundamentals, there’s still an a massive amount of supply,” Scott Bauer, CEO of Prosper Trading Academy, told Bloomberg. “I’m looking at the build ups that could outweigh the positivity that we’ve seen.”
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