This article was originally published on ETFTrends.com.
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, rallied again on Monday, extending December gains that have helped the previously downtrodden funds end 2019 on bullish notes.
USO and BNO were helped higher by the recent commitment of traders data, which indicates professional speculators are increasing long bets on oil futures contracts.
“Hedge funds boosted bets on rising U.S. crude prices to the highest level in more than seven months, helping support oil’s first full week above $60 a barrel since May,” reports Bloomberg. “Their net-bullish wagers on West Texas Intermediate crude climbed 19% in the week ended Dec. 17, data released Friday show. Optimism over a U.S.-China trade truce and OPEC cuts helped push futures to a three-month high, though the rally has fizzled somewhat.”
Crude Oil Upside
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 improved outlook for trade and OPEC’s pledge to deepen output cuts are helping U.S. oil head for a rebound of more than 30% this year, its best performance since 2016. That’s after a 25% slump in 2018,” reports Bloomberg. “It also seems that America’s shale boom is slowing down and several forecasts for the country’s crude output next year have been lowered.”
Oil ETFs, such as USO and BNO, could be supported in 2020 if shale producers, lower output in an effort to conserve capital.
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