This article was originally published on ETFTrends.com.
Energy sector-related exchange traded funds led the charge on Thursday as U.S. crude oil inventories dipped and the global economic recovery helped support an upbeat demand outlook.
Among the best performing non-leveraged ETFs of Thursday, the VanEck Vectors Oil Service ETF (NYSEArca: OIH) gained 1.3% and the iShares U.S. Oil Equipment & Services ETF (NYSEArca: IEZ) increased 1.9%. Meanwhile, the broader Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy exchange traded fund, was up 0.7%.
The Energy Information Administration reported that U.S. crude inventories declined by 5.1 million barrels for the week ended May 28. In comparison, analysts polled by S&P Global Platts forecast projected an average decline of 3.3 million barrels for crude stocks, while the American Petroleum Institute on Wednesday reported a 5.4 million barrel decrease, MarketWatch reports.
However, the EIA also revealed that gasoline supply rose by 1.5 million barrels, and distillate stockpiles was higher by 3.7 million barrels for the week. The S&P Global Platts survey previously expected weekly supply declines of 1.1 million barrels for gasoline and 1.6 million barrels for distillates.
“There’s been a lot of broad-based liquidation in commodities,” with dollar strength acting as a headwind, Phil Streible, chief market strategist at Blue Line Futures LLC, told Bloomberg. “But there’s no shortage of people driving and demand here, so oil’s just a victim of the other markets at the moment.”
Positive comments on the economic recovery from the Organization of Petroleum Exporting Countries and its allies, or OPEC+, and the International Energy Agency also helped buoy the long-term outlook.
“To have a draw that big on the crude oil side is really constructive for overall crude markets,” Brian Kessens, a portfolio manager at Tortoise, told Bloomberg. "However, the refined products build was disappointing and may be due to an increase in refinery utilization ahead of the summer driving season."
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